Exhibit 10.18
MASTER LEASE AGREEMENT
MASTER LEASE AGREEMENT (the "Master Lease") dated March 31, 2000 by and between
COMDISCO, INC. ("Lessor") and XXXXXX.XXX ("Lessee").
IN CONSIDERATION of the mutual agreements described below, the parties agree as
follows (all capitalized terms are defined in Section 14.17):
1. PROPERTY LEASED.
Lessor leases to Lessee all of the Equipment described on each Summary Equipment
Schedule. In the event of a conflict, the terms of the applicable 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
Summary Equipment 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 on the first day of each Rent Interval at
the address specified in Lessor's invoice. Interim Rent is due and payable
when invoiced. If any payment is not made when due, Lessee will pay a Late
Charge on the overdue amount. 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, other than as set
forth in the Schedule.
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
Summary Equipment 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 caused by the willful
misconduct or 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, and at Lessor's expense, 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 Summary Equipment 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 the Owner, Lessor, any Assignee and Secured Party harmless
from and against any loss caused by Lessee's failure to do so, except where such
is caused by Lessor.
5.2 RELOCATION OR SUBLEASE. Upon prior written notice, 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, and (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) Lessee executes
sublease documents acceptable to Lessor.
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:
(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 Summary Equipment Schedule constitutes a net lease.
Lessee's obligation to pay Rent and all other amounts due hereunder 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 Summary Equipment Schedule against Lessor, Lessee or the
Equipment by any governmental authority (except only Federal, state, local and
franchise taxes on the capital or the net income of Lessor). Lessor will file
all personal property tax returns for the Equipment and pay all such property
taxes due. Lessee will reimburse Lessor for property taxes within thirty (30)
days of receipt of an invoice.
7. CARE, USE AND MAINTENANCE; 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 and considered common business practice for each item
of Equipment, 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 or
self maintains, Lessee agrees to pay any cost 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, provided re-certification is
available and is required by Lessor. The lease term will continue upon the
same terms and conditions until recertification has been obtained.
7.2 INSPECTION BY LESSOR. Upon reasonable advance notice, 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, except for where
such lack of qualification would not have a material adverse effect on the
Lessee's business; 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 the Master Lease and each Schedule.
(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 Articles 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, subject to the effect of applicable bankruptcy and
other similar laws affecting the rights of creditors generally and rules of law
concerning equitable remedies.
(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 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 Summary Equipment 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 0000 Xxxxx Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000 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 to 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 xxxx the Equipment indicating Lessor's interest with
labels provided by Lessor. Lessee will keep all Equipment free from any other
marking or labeling which might be interpreted as a claim of ownership.
11. INDEMNITY.
With regard to bodily injury and property damage liability only, 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 during the
term of this Master Lease or until Lessee's obligations under the Master Lease
terminate. 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 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 Lessee'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 with respect to
that item of Equipment, 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 Summary Equipment Schedule:
(a) Lessee's failure to pay Rent or other amounts payable by Lessee when
due if that failure continues for five (5) business 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) business 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, Summary
Equipment 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;
(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
-2-
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 percent (3%) over the
U.S. Treasury Notes of comparable maturity to the term of the re-lease) 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 FINANCIAL STATEMENTS. As soon as practicable at the end of each month
(and in any event within thirty (30) days), Lessee will provide to Lessor 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 prepared in accordance with generally accepted accounting principles,
consistently applied (the "Financial Statements"). As soon as practicable at the
end of each fiscal year, Lessee will provide to Lessor audited Financial
Statements setting forth in comparative form the corresponding figures for the
fiscal year (and in any event within ninety (90) days), 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.
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.
14.2 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 any material 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 or any Schedule.
14.3 MERGER AND SALE PROVISIONS. Lessee will notify Lessor of any proposed
Merger at lease sixty (60) days prior to the closing date, and include with such
notice all reasonably necessary documentation in connection with any such
proposed Merger. 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 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. Lessor hereby consents to any
Merger in which the surviving entity has a Xxxxx'x Bond Rating of BA3 or better
or a commercially acceptable equivalent measure of creditworthiness as
reasonably determined by Lessor.
14.4 ENTIRE AGREEMENT. This Master Lease and associated Schedules and
Summary Equipment 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.
14.5 NO WAIVER. No action taken by Lessor Lessee will be deemed to
constitute a waiver of compliance with any representation, warranty or covenant
contained in this Master 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.
14.6 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.
14.7 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, Summary Equipment 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.
14.8 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 (1)
actual receipt or (3) three days after mailing if mailed postage prepaid by
regular or airmail to Lessor (to the attention of "the Comdisco Venture Group")
or Lessee, at the address set out in the Schedule, (3) one day after it is sent
by courier or (4) on the same day as sent via facsimile transmission, provided
that the original is sent by personal delivery or mail by the sending party.
14.9 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.
14.10 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.
14.11 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."
14.12 LICENSED PRODUCTS. Lessee will obtain no title to Licensed Products
which will at all times remain the property of the owner of the Licensed
Products. A 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.
14.13 SECRETARY'S CERTIFICATE. Lessee will, upon execution of this Master
Lease, provide Lessor with a secretary's certificate of incumbency and
authority.
14.14 ELECTRONIC COMMUNICATIONS. Each of the parties may communicate with the
other by electronic means under mutually agreeable terms.
14.15 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.
14.16 EQUIPMENT PROCUREMENT CHARGES/PROGRESS PAYMENTS. Lessee hereby agrees
that Lessor shall not, by virtue of its entering into this Master Lease, be
required to remit any payments to any manufacturer or other third party until
Lessee accepts the Equipment subject to this Master Lease.
14.17 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.
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.
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.
-3-
EQUIPMENT - means the property described on a Summary Equipment Schedule and any
replacement for that property required or permitted by this Master Lease or a
Schedule.
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.
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.
LATE CHARGE - means the lesser of five percent (5%) of the payment due or the
maximum amount permitted by the law of the state where the Equipment is located.
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.
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 or stock of the Lessee by or to any other person or entity in which
Lessee is not the surviving entity.
NOTICE PERIOD - means not less than ninety (90) days nor more than twelve (12)
months prior to the expiration of the lease term.
OWNER - means the owner of Equipment.
RENT - means the rent Lessee will pay for each item of Equipment expressed in a
Summary Equipment 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 either an Equipment Schedule or a Licensed Products Schedule
which incorporates all of the terms and conditions of this Master Lease.
SECURED PARTY - means an entity to whom Lessor has granted a security interest
for the purpose of securing a loan.
SUMMARY EQUIPMENT SCHEDULE - means a certificate provided by Lessor summarizing
all of the Equipment for which Lessor has received Lessee approved vendor
invoices, purchase documents and/or evidence of delivery during a calendar
quarter or month as the case may be, which will incorporate all of the terms and
conditions of the related Schedule and this Master Lease and will constitute a
separate lease for the equipment leased thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Master Lease on or as
of the day and year first above written.
XXXXXX.XXX, COMDISCO, INC.,
AS LESSEE AS LESSOR
By: By:
----------------------------- ----------------------------
Title: CFO Title:
-------------------------- -------------------------
-4-
ADDENDUM TO
MASTER LEASE AGREEMENT DATED AS OF MARCH 31, 2000
BETWEEN XXXXXX.XXX, AS LESSEE
AND COMDISCO, INC., AS LESSOR
The undersigned hereby agree that the terms and conditions of the
above-referenced Master Lease are hereby modified and amended as follows:
1) SECTION 14.1 "FINANCIAL STATEMENTS"
First Sentence, line 2-3, delete the words "the same information which
Lessee provides to its Board of Directors, but which will include not
less than".
2) SECTION 14.3 "MERGER AND SALE PROVISIONS."
In line 2, delete "sixty (60)" and replace with "twenty (20)".
3) SECTION 14.8 "NOTICES"
In line 3, after "(3) three" insert "business".
Except as amended hereby, all other terms and conditions of the Master Lease
Agreement remain in full force and effect.
XXXXXX.XXX COMDISCO, INC.,
AS LESSEE AS LESSOR
By: /s/ [ILLEGIBLE] By:
------------------------- -------------------------
Title: CFO Title:
---------------------- ---------------------
Date: 3/14/00 Date:
----------------------- ----------------------
-1-
EQUIPMENT SCHEDULE VL-1
DATED AS OF MARCH 31, 2000
TO MASTER LEASE AGREEMENT
DATED AS OF MARCH 31, 2000 (THE "MASTER LEASE")
LESSEE: XXXXXX.XXX LESSOR: COMDISCO, INC.
ADMIN. CONTACT/PHONE NO.: ADDRESS FOR ALL NOTICES:
Contact: Xxxx XxXxxxx 0000 Xxxxx Xxxxx Xxxx
Telephone: (000) 000-0000 Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000 ATTENTION: Venture Group
ADDRESS FOR NOTICES:
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
CENTRAL BILLING LOCATION: RENT INTERVAL: Monthly
Same as above
ATTENTION:
LESSEE REFERENCE NO.:________________
(24 digits maximum)
LOCATION OF EQUIPMENT: INITIAL TERM: 42 Months
See attached Exhibit II (Number of Rent Intervals)
LEASE RATE FACTOR: 2.709%
ATTENTION:
EQUIPMENT (AS DEFINED BELOW): ADVANCE: Payable with each Summary
Equipment Schedule
INTERIM RENT: None
Equipment specifically approved by Lessor, which shall be delivered to and
accepted by Lessee during the period March 31, 2000 through March 31, 2001
("EQUIPMENT DELIVERY PERIOD"), for which Lessor receives vendor invoices
approved for payment, up to an aggregate purchase price of $2,237,871.57
("COMMITMENT AMOUNT"); excluding custom use equipment, leasehold
improvements, installation costs and delivery costs, rolling stock, special
tooling, "stand-alone" software, application software bundled into computer
hardware, hand held items, molds and fungible items.
-1-
1. EQUIPMENT PURCHASE
This Schedule contemplates Lessor's acquisition of Equipment for lease to
Lessee, either by one of the first three categories listed below or by
providing Lessee with Equipment from the fourth category, in an aggregate
value up to the Commitment Amount referred to on the face of this Schedule.
If the Equipment acquired is of category (i), (ii), or (iii) below, the
effectiveness of this Schedule as it relates to those items of Equipment is
contingent upon Lessee's acknowledgment at the time Lessor acquires the
Equipment that Lessee has either received or approved the relevant purchase
documentation between vendor and Lessor for that Equipment.
(i) NEW ON-ORDER EQUIPMENT. Lessor will purchase new Equipment which
is obtained from a vendor by Lessee for its use subject to
Lessor's prior approval of the Equipment.
(ii) SALE-LEASEBACK EQUIPMENT. Any in-place Equipment installed at
Lessee's site and to which Lessee has clear title and ownership
may be considered by Lessor for inclusion under this Lease (the
"SALE-LEASEBACK TRANSACTION"). Any request for a Sale-Leaseback
Transaction must be submitted to Lessor in writing (along with
accompanying evidence of Lessee's Equipment ownership
satisfactory to Lessor for all Equipment submitted) no later
than May 1, 2000*. Lessor will not perform a Sale-Leaseback
Transaction for any request or accompanying Equipment ownership
documents which arrive after the date marked above by an
asterisk (*). Further, any sale-leaseback Equipment will be
placed on lease subject to: (1) Lessor prior approval of the
Equipment; and (2) if approved, at Lessor's actual net appraised
Equipment value pursuant to the schedule below:
PERCENT OF ORIGINAL MANUFACTURER'S
ORIGINAL EQUIPMENT INVOICE DATE NET EQUIPMENT COST PAID BY LESSOR
---------------------------------------- ----------------------------------
Between 10/03/99 and 03/31/00 (180 days) 100%
Lessee represents that it has paid all California sales tax due
on the cost of that portion of Equipment to be installed in
California and agrees to provide evidence of such payment to
Lessor, if specifically requested. As a result of the election,
Lessor agrees that it will not invoice Lessee for use tax on the
monthly rental rate. Lessee understands that this is an
irrevocable election to measure the tax by the Equipment cost
and cannot be changed except prior to installation of the
Equipment.
(iii) USED ON-ORDER EQUIPMENT. Lessor will purchase used Equipment
which is obtained from a third party by Lessee for its use
subject to Lessor's prior approval of the Equipment and at
Lessor's appraised value for such used Equipment.
(iv) 800 NUMBER EQUIPMENT. Upon Lessee's use of Comdisco's 1-800
Direct Service, Lessor will purchase new or used Equipment from a
third party or Lessor will supply new or used Equipment from its
inventory for use by Lessee at rates provided by Lessor.
2. COMMENCEMENT DATE
The Commencement Date for each item of new on-order or used on-order
Equipment will be the install date as confirmed in writing by Lessee as set
forth on the vendor invoice of which a facsimile transmission will constitute
an original document. The Commencement Date for sale-leaseback Equipment
shall be the date Lessor tenders the purchase price. The Commencement Date
for 800 Number Equipment shall be fifteen (15) days from the ship date, such
ship date to be set forth on the vendor invoice or if unavailable on the vendor
invoice the ship date will be determined by Lessor upon other supporting
shipping documentation. Lessor will summarize all approved invoices, purchase
documentation and evidence of delivery, as applicable, received in the same
calendar month into a Summary Equipment Schedule in the form attached to this
Schedule as Exhibit 1, and the Initial Term will begin the first day of the
calendar month thereafter. Each Summary Equipment Schedule will contain the
Equipment location, description, serial number(s) and cost and will
incorporate the terms and conditions of the Master Lease and this Schedule
and will constitute a separate lease.
-2-
3. MISCELLANEOUS
In consideration of Lessor financing the equipment hereunder, Lessee agrees in
addition to its last Monthly Rent Payment to remit to Lessor an amount equal
to twelve and one half percent (12.5%) of Lessor's aggregate cost of
equipment provided hereunder.
4. TECHNOLOGY EXCHANGE OPTION
If Lessee is not in default, and there is no material adverse change in
Lessee's credit, on or after the expiration of the 12th month of any Summary
Equipment Schedule, Lessee shall have the option to replace any of the
Equipment subject to such summary Equipment Schedule with new technology
equipment ("NEW TECHNOLOGY EQUIPMENT") utilizing the following guidelines:
A. Equipment being replaced with New Technology Equipment shall have an
aggregate original cost equal to or greater than $20,000 and be comprised of
full configurations of equipment.
B. This Technology Exchange Option shall be limited to a maximum in the
aggregate of fifty percent (50%) of the original equipment cost and shall not
apply to software or any soft costs financed hereunder including but not
limited to tenant improvements and custom equipment.
C. The cost of the New Technology Equipment must be equal to or greater
than the original equipment costs of the replaced equipment, but in no event
shall exceed 150% of the original equipment cost.
D. The remaining lease payments applicable to the equipment being
replaced by the New Technology Equipment will be discounted to present value
at six percent (6%).
The wholesale market value of the equipment being replaced will be
established by Comdisco based upon then current market conditions. Upon the
return of the replaced equipment, the wholesale price will be deducted from
the present value of the remaining rentals and the differential will be added
to the cost of the New Technology Equipment in calculating the new rental.
The lease for the New Technology Equipment will contain terms and conditions
substantially similar to those for the replaced equipment and will have an
Initial Term not less than the balance of the remaining Initial Term for the
replaced equipment.
5. EQUITY
In consideration of Lessor financing this Schedule and Equipment Schedule
VL-2, Lessee hereby grants to Lessor the right to invest a minimum of two
hundred-fifty thousand dollars ($250,000.00), at Lessor's sole option, in
Lessee's next round of preferred stock equity financing (anticipated to be
Series C Preferred), and further agrees that it shall provide Lessor with
thirty (30) days prior written notice of the proposed date thereof, which
notice shall include the terms, conditions and pricing of the financing.
6. SPECIAL TERMS
The terms and conditions of the Master Lease as they pertain to this Schedule
are hereby modified and amended as follows:
(a) SECTION 9. DELIVERY AND RETURN OF EQUIPMENT
Delete second, third and fourth sentences in their entirety.
-3-
MASTER LEASE: This Schedule is issued pursuant to the Master Lease identified
on page 1 of this Schedule. All of the terms and conditions of the Master
Lease are incorporated in and made a part of this Schedule as if they were
expressly set forth in this Schedule. The parties hereby reaffirm all of the
terms and conditions of the Master Lease (including, without limitation, the
representations and warranties set forth in Section 8) except as modified
herein by this Schedule. This Schedule may not be amended or rescinded except
by a writing signed by both parties.
XXXXXX.XXX, COMDISCO, INC.,
AS LESSEE AS LESSOR
By: /s/ Xxxx XxXxxxx By:
---------------------------- ----------------------------
Title: CFO Title:
-------------------------- -------------------------
Date: 3/14/00 Date:
-------------------------- --------------------------
-4-
EXHIBIT 1
SUMMARY EQUIPMENT SCHEDULE
This Summary Equipment Schedule dated _________________ is executed pursuant
to Equipment Schedule No. VL-1 to the Master Lease Agreement dated March 31,
2000 between Comdisco, Inc. ("Lessor") and Xxxxxx.xxx, Inc. ("Lessee"). All
of the terms, conditions, representations and warranties of the Master Lease
Agreement and Equipment Schedule No. VL-1 are incorporated herein and made a
part hereof, and this Summary Equipment Schedule constitutes a Schedule for
the Equipment on the attached invoices.
1. FOR PERIOD BEGINNING: AND ENDING:
2. INITIAL TERM STARTS ON: INITIAL TERM:
(Number of Rent Intervals)
3. TOTAL SUMMARY EQUIPMENT COST:
4. LEASE RATE FACTOR:
5. RENT:
6. ACCEPTANCE DOC TYPE:
-5-
EXHIBIT II
Xxxxxx.xxx (Main Office)
0000 Xxxxxxx Xxxxxxx Xx.
Xxxxx 000
Xxxxxxxx, XX 00000
T: 000-000-0000
F: 760-602-2910
iXL Memphis (hosting equip.)
0000 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
AboveNet (hosting equip.)
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
T: 000-000-0000
Xxxxxxxx Xxxxx*
0000 Xxxxxxx Xxx
Xxxxxx, XX 00000
T: (000) 000-0000
F: (000) 000-0000
Xxxx Xxxxxxxxxx*
0000 Xxxxxx Xxx Xx.
Xxxxxxxx, XX
T: (000) 000-0000
F: (000) 000-0000
Xxx Xxxxxxx*
000 Xxxxxxx Xxx. #0
Xxxxxxxxx, XX 00000
T: 617-876-1673
F: 000-000-0000
Xxxxx Xxxx*
0000 Xxxxxx Xx.
Xxx Xxxx, XX 00000
T: (000) 000-0000
F: (000) 000-0000
Xxx Xxxxxxx*
000 Xxxxxx
Xxx Xxxxxxx, XX 00000
T: 000-000-0000
Xxxxxxxx Xxxxx*
Eastern Regional Xxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
Xxxxx Xxxxxxx*
Lower Mid-West Region
0000 Xxxxxxxxxx Xxxxx
X. Xxxxxxxx Xxxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
Xxxx Xxxxxx*
00000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
T: (000) 000-0000
F: (000) 000-0000
Xxxxxxx Xxxxxx*
00000-X Xxxxx Xxx Xxx
Xxx Xxxx Xxxxxxxxxx, XX 00000
T: (000) 000-0000
F: (000) 000-0000
Xxxx Xxxx*
0000 Xxxxxxxxxx Xxx
Xxxxxxx, XX 00000
F: (000) 000-0000
T: (000) 000-0000
San Xxxx Office (Sales Office)
000 X. Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
* Indicates home office locations for sales reps.
EQUIPMENT SCHEDULE VL-2
DATED AS OF MARCH 31, 2000
TO MASTER LEASE AGREEMENT
DATED AS OF MARCH 31, 2000 (THE "MASTER LEASE")
LESSEE: XXXXXX.XXX LESSOR: COMDISCO, INC.
ADMIN. CONTACT/PHONE NO.: ADDRESS FOR ALL NOTICES:
Contact: Xxxx XxXxxxx 0000 Xxxxx Xxxxx Xxxx
Telephone: (000) 000-0000 Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000 ATTENTION: Venture Group
ADDRESS FOR NOTICES:
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
CENTRAL BILLING LOCATION: RENT INTERVAL: Monthly
Same as above
ATTENTION:
LESSEE REFERENCE NO.:____________
(24 digits maximum)
LOCATION OF EQUIPMENT: INITIAL TERM: 42 months
See attached Exhibit II (Number of Rent Intervals)
LEASE RATE FACTOR: 7.75%
ATTENTION:
ADVANCE: Payable with Each Summary
Equipment Schedule
INTERIM RENT: None
EQUIPMENT (AS DEFINED BELOW):
Software, tenant improvements, custom equipment, installation costs and delivery
costs, special tooling and molds, "stand-alone" software, application software
bundled into computer hardware, handheld items and other soft costs specifically
approved by Lessor, which shall be delivered to and accepted by Lessee during
the period March 31, 2000 through March 31, 2001 ("EQUIPMENT DELIVERY PERIOD")
for which Lessor receives vendor invoices approved for payment, up to an
aggregate purchase price of $469,598.00 ("COMMITMENT AMOUNT"); excluding rolling
stock and fungible items.
-1-
1. EQUIPMENT PURCHASE
This Schedule contemplates Lessor's acquisition of Equipment for lease to
Lessee, either by one of the first three categories listed below or by providing
Lessee with Equipment from the fourth category, in an aggregate value up to the
Commitment Amount referred to on the face of this Schedule. If the Equipment
acquired is of category (i), (ii), (iii) below, the effectiveness of this
Schedule as it relates to those items of Equipment is contingent upon Lessee's
acknowledgment at the time Lessor acquires the Equipment that Lessee has either
received or approved the relevant purchase documentation between vendor and
Lessor for that Equipment.
(i) NEW ON-ORDER EQUIPMENT. Lessor will purchase new Equipment
which is obtained from a vendor by Lessee for its use subject
to Lessor's prior approval of the Equipment.
(ii) SALE-LEASEBACK EQUIPMENT. Any in-place Equipment installed at
Lessee's site and to which Lessee has clear title and
ownership may be considered by Lessor for inclusion under this
Lease (the "Sale-Leaseback Transaction"). Any request for a
Sale-Leaseback Transaction must be submitted to Lessor in
writing (along with accompanying evidence of Lessee's
Equipment ownership satisfactory to Lessor for all Equipment
submitted) no later than May 1, 2000*. Lessor will not perform
a Sale-Leaseback Transaction for any request or accompanying
Equipment ownership documents which arrive after the date
marked above by an asterisk (*). Further, any sale-leaseback
Equipment will be placed on lease subject to: (1) Lessor prior
approval of the Equipment; and (2) if approved, at Lessor's
actual net appraised Equipment value pursuant to the shcedule
below:
ORIGINAL EQUIPMENT INVOICE PERCENT OF ORIGINAL MANUFACTURER'S
DATE NET EQUIPMENT COST PAID BY LESSOR
--------------------- ----------------------------------
Between 10/3/99 and 03/31/00 (180 days) 100%
Lessee represents that it has paid all California sales tax
due on the cost of that portion of Equipment to be installed
in California and agrees to provide evidence of such payment
to Lessor, if specifically requested. As a result of the
election, Lessor agrees that it will not invoice Lessee for
use tax on the monthly rental rate. Lessee understands that
this is an irrevocable election to measure the tax by the
Equipment cost and cannot be changed except prior to
installation of the Equipment.
(iii) USED ON-ORDER EQUIPMENT. Lessor will purchase used Equipment
which is obtained from a third party by Lessee for its use
subject to Lessor's prior approval of the Equipment and at
Lessor's appraised value for such used Equipment.
(iv) 800 NUMBER EQUIPMENT. Upon Lessee's use of Comdisco's 1-800
Direct Service, Lessor will purchase new or used Equipment
from a third party or Lessor will supply new or used Equipment
from its inventory for use by Lessee at rates provided by
Lessor.
2. COMMENCEMENT DATE
The Commencement Date for each item of new on-order or used on-order Equipment
will be the install date as confirmed in writing by Lessee as set forth on the
vendor invoice of which a facsimile transmission will constitute an original
document. The Commencement Date for sale-leaseback Equipment shall be the date
Lessor tenders the purchase price. The Commencement Date for 800 Number
Equipment shall be fifteen (15) days from the ship date, such ship date to be
set forth on the vendor invoice or if unavailable on the vendor invoice the ship
date will be determined by Lessor upon other supporting shipping documentation.
Lessor will summarize all approved invoices, purchase documentation and evidence
of delivery, as applicable, received in the same calendar month into a Summary
Equipment Schedule in the form attached to this Schedule as Exhibit 1, and the
Initial Term will begin the first day of the calendar month thereafter. Each
Summary Equipment Schedule will contain the Equipment location, description,
serial number(s) and cost and will incorporate the terms and conditions of the
Master Lease and this Schedule and will constitute a separate lease.
3. MISCELLANEOUS
In consideration of Lessor financing software and tenant improvements hereunder,
Lessee agrees in addition to its last Monthly Rent Payment to remit to Lessor an
amount equal to twelve and one half percent (12.5%) of Lessor's aggregate cost
of software and tenant improvements provided hereunder.
-2-
4. SPECIAL TERMS
The terms and conditions of the Lease as they pertain to this Schedule are
hereby modified and amended as follows:
(a) SECTION 9. DELIVERY AND RETURN OF EQUIPMENT
Delete second, third and fourth sentences in their entirety.
MASTER LEASE: This Schedule is issued pursuant to the Master Lease identified on
page 1 of this Schedule. All of the terms and conditions of the Master Lease are
incorporated in and made a part of this Schedule as if they were expressly set
forth in this Schedule. The parties hereby reaffirm all of the terms and
conditions of the Master Lease (including, without limitation, the
representations and warranties set forth in Section 8) except as modified herein
by this Schedule. This Schedule may not be amended or rescinded except by a
writing signed by both parties.
XXXXXX.XXX, COMDISCO, INC.,
AS LESSEE AS LESSOR
By: /s/ Xxxx XxXxxxx By:
--------------------------- --------------------------
Title: CFO Title:
------------------------ -----------------------
Date: 3/14/00 Date:
------------------------- ------------------------
-3-
EXHIBIT 1
SUMMARY EQUIPMENT SCHEDULE
This Summary Equipment Schedule dated _________________ is executed pursuant
to Equipment Schedule No. VL-2 to the Master Lease Agreement dated March 31,
2000 between Comdisco, Inc. ("Lessor") and Xxxxxx.xxx, Inc. ("Lessee"). All
of the terms, conditions, representations and warranties of the Master Lease
Agreement and Equipment Schedule No. VL-2 are incorporated herein and made a
part hereof, and this Summary Equipment Schedule constitutes a Schedule for
the Equipment on the attached invoices.
1. FOR PERIOD BEGINNING: AND ENDING:
2. INITIAL TERM STARTS ON: INITIAL TERM:
(Number of Rent Intervals)
3. TOTAL SUMMARY EQUIPMENT COST:
4. LEASE RATE FACTOR:
5. RENT:
6. ACCEPTANCE DOC TYPE:
-4-
EXHIBIT II
Xxxxxx.xxx (Main Office)
0000 Xxxxxxx Xxxxxxx Xx.
Xxxxx 000
Xxxxxxxx, XX 00000
T: 000-000-0000
F: 760-602-2910
iXL Memphis (hosting equip.)
0000 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
AboveNet (hosting equip.)
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
T: 000-000-0000
Xxxxxxxx Xxxxx*
0000 Xxxxxxx Xxx
Xxxxxx, XX 00000
T: (000) 000-0000
F: (000) 000-0000
Xxxx Xxxxxxxxxx*
0000 Xxxxxx Xxx Xx.
Xxxxxxxx, XX
T: (000) 000-0000
F: (000) 000-0000
Xxx Xxxxxxx*
000 Xxxxxxx Xxx. #0
Xxxxxxxxx, XX 00000
T: 617-876-1673
F: 000-000-0000
Xxxxx Xxxx*
0000 Xxxxxx Xx.
Xxx Xxxx, XX 00000
T: (000) 000-0000
F: (000) 000-0000
Xxx Xxxxxxx*
000 Xxxxxx
Xxx Xxxxxxx, XX 00000
T: 000-000-0000
Xxxxxxxx Xxxxx*
Eastern Regional Xxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
Xxxxx Xxxxxxx*
Lower Mid-West Region
0000 Xxxxxxxxxx Xxxxx
X. Xxxxxxxx Xxxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
Xxxx Xxxxxx*
00000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
T: (000) 000-0000
F: (000) 000-0000
Xxxxxxx Xxxxxx*
00000-X Xxxxx Xxx Xxx
Xxx Xxxx Xxxxxxxxxx, XX 00000
T: (000) 000-0000
F: (000) 000-0000
Xxxx Xxxx*
0000 Xxxxxxxxxx Xxx
Xxxxxxx, XX 00000
F: (000) 000-0000
T: (000) 000-0000
San Xxxx Office (Sales Office)
000 X. Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxxx, XX 00000
T: 000-000-0000
F: 000-000-0000
* Indicates home office locations for sales reps.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY
COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS.
WARRANT AGREEMENT
TO PURCHASE SHARES OF THE SERIES B PREFERRED STOCK OF
XXXXXX.XXX
DATED AS OF MARCH 31, 2000 (THE "EFFECTIVE DATE")
WHEREAS, Xxxxxx.xxx, a California corporation (the "Company") has
entered into a Master Lease Agreement dated as of March 31, 2000, Equipment
Schedule No. VL-1 and VL-2 dated as of March 31, 2000 and related Summary
Equipment Schedules (collectively, the "Leases") with Comdisco, Inc., a
Delaware corporation (the "Warrantholder"); and
WHEREAS, the Company desires to grant to Warrantholder, in
consideration for such Leases, the right to purchase shares of its Series B
Preferred Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Leases and in consideration of mutual covenants and
agreements contained herein, the Company and Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.
The Company hereby grants to the Warrantholder, and the
Warrantholder is entitled, upon the terms and subject to the conditions
hereinafter set forth, to subscribe to and purchase, from the Company, 26,250
fully paid and non-assessable shares of the Company's Series B Preferred
Stock ("Preferred Stock") at a purchase price of $4.00 per share (the
"Executive Price"). The number and purchase price of such shares are subject
to adjustment as provided in Section 8 hereof.
2. TERM OF THE WARRANT AGREEMENT.
Except as otherwise provided for herein, the term of this Warrant
Agreement and the right to purchase Preferred Stock as granted herein shall
commence on the Effective Date and shall be exercisable for a period of (i)
seven (7) years or (ii) five (5) years from the effective date of the
Company's initial public offering, whichever is earlier.
3. EXERCISE OF THE PURCHASE RIGHTS.
(a) EXERCISE. The purchase rights set forth in this Warrant
Agreement are exercisable by the Warrantholder, in whole or in part, at any
time, or from time to time, prior to the expiration of the term set forth in
Section 2 above, by tendering to the Company at its principal office a notice
of exercise in the form attached hereto as EXHIBIT I (the "Notice of
Exercise"), duly completed and executed. Promptly upon receipt of the Notice
of Exercise and the payment of the purchase price in accordance with the
terms set forth below, and in no event later than twenty-one (21) days
thereafter, the Company shall issue to the Warrantholder a certificate for
the number of shares of Preferred Stock purchased and shall execute the
acknowledgment of exercise in the form attached hereto as EXHIBIT II (the
"Acknowledgment of Exercise") indicating the number of shares which remain
subject to future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election
either (i) by cash or check, or (ii) by surrender of Warrants ("Net
Issuance") as determined below. If the Warrantholder elects the Net Issuance
method, the Company will issue Preferred Stock in accordance with the
following formula:
X = Y(A-B)
------
A
WHERE: X = the number of shares of Preferred Stock to be issued
to the Warrantholder.
Y = the number of shares of Preferred Stock required to
be exercised under this Warrant Agreement.
A = the fair market value of one (1) share of Preferred
Stock.
B = the Exercise Price.
For purposes of the above calculation, current fair market value of
Preferred Stock shall mean with respect to each share of Preferred Stock:
(i) if the exercise is in connection with an initial
public offering of the Company's Common Stock, and if the Company's
Registration Statement relating to such public offering has been
declared effective by the SEC, then the fair market value per share
shall be the product of (x) the initial "Price to Public" specified
in the final prospectus with respect to the offering and (y) the
number of shares of Common Stock into which each share of Preferred
Stock is convertible at the time of such exercise;
(ii) if this Warrant is exercised after, and not in
connection with the Company's initial public offering, and:
(a) if traded on a securities exchange, the fair
market value shall be deemed to be the product of (x) the
average of the closing prices over a five (5) day period
ending three days before the day the current fair market
value of the securities is being determined and (y) the
number of shares of Common Stock into which each share of
Preferred Stock is convertible at the time of such exercise;
or
(b) if actively traded over-the-counter, the fair
market value shall be deemed to be the product of (x) the
average of the closing bid and asked prices quoted on the
NASDAQ system (or similar system) over the five (5) day
period ending three days before the day the current fair
market value of the securities is being determined and (y)
the number of shares of Common Stock into which each share
of Preferred Stock is convertible at the time of such
exercise;
(iii) if at any time the Common Stock is not listed on any
securities exchange or quoted in the NASDAQ System or the
over-the-counter market, the current fair market value of Preferred
Stock shall be the product of (x) the highest price per share which
the Company could obtain from a willing buyer (not a current
employee or director) for shares of Common Stock sold by the
Company, from authorized but unissued shares, as determined in good
faith by its Board of Directors and (y) the number of shares of
Common Stock into which each share of Preferred Stock is convertible
at the time of such exercise, unless the Company shall become
subject to a merger, acquisition or other consolidation pursuant to
which the Company is not the surviving party, in which case the fair
market value of Preferred Stock shall be deemed to be the value
received by the holders of the Company's Preferred Stock on a common
equivalent basis pursuant to such merger or acquisition.
Upon partial exercise by either cash or Net Issuance, the Company
shall promptly issue an amended Warrant Agreement representing the remaining
number of shares purchasable hereunder. All other terms and conditions of
such amended Warrant Agreement shall be identical to those contained herein,
including, but not limited to the Effective Date hereof.
(b) EXERCISE PRIOR TO EXPIRATION. To the extent this Warrant is
not previously exercised as to all Preferred Stock subject hereto, and if the
fair market value of one share of the Preferred is greater than the Exercise
Price then in effect, this Warrant shall be deemed automatically exercised
pursuant to Section 3(a) above (even if not surrendered) immediately before
its expiration. For purposes of such automatic exercise, the fair market
value of
-2-
one share of the Preferred Stock upon such expiration shall be
determined pursuant to Section 3(a) above. To the extent this Warrant of any
portion thereof is deemed automatically exercised pursuant to this Section
3(b), the Company agrees to promptly notify the Warrantholder of the number
of Preferred Stock, if any, the Warrantholder is to receive by reason of such
automatic exercise.
4. RESERVATION OF SHARES.
During the term of this Warrant Agreement, the Company will at all
times have authorized and reserved a sufficient number of shares of its
Preferred Stock to provide for the exercise of the rights to purchase
Preferred Stock as provided for herein.
5. NO FRACTIONAL SHARES OR SCRIP.
No fractional shares of scrip representing fractional shares shall be
issued upon the exercise of the Warrant, but in lieu of such fractional
shares the Company shall make a cash payment therefor upon the basis of the
Exercise Price then in effect.
6. NO RIGHTS AS SHAREHOLDER.
This Warrant Agreement does not entitle the Warrantholder to any
voting rights or other rights as a shareholder of the Company prior to the
exercise of the Warrant.
7. WARRANTHOLDER REGISTRY.
The Company shall maintain a registry showing the name and address of
the registered holder of this Warrant Agreement.
8. ADJUSTMENT RIGHTS.
The purchase price per share and the number of shares of Preferred
Stock purchasable hereunder are subject to adjustment, as follows:
(a) MERGER AND SALE OF ASSETS. If at any time there shall be a
capital reorganization of the shares of the Company's stock (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or a merger or consolidation of the Company with or
into another corporation whether or not the Company is the surviving
corporation, or the sale of all or substantially all of the Company's
properties and assets to any other person (hereinafter referred to as a
"Merger Event"), then, as a part of such Merger Event, lawful provision shall
be made so that the Warrantholder shall thereafter be entitled to receive,
upon exercise of the Warrant, the number of shares of preferred stock or
other securities of the successor corporation resulting from such Merger
Event, equivalent in value to that which would have been issuable if
Warrantholder had exercised this Warrant immediately prior to the Merger
Event. In any such case, appropriate adjustment (as determined in good faith
by the Company's Board of Directors) shall be made in the application of the
provisions of this Warrant Agreement with respect to the rights and interest
of the Warrantholder after the Merger Event to the end that the provisions of
this Warrant Agreement (including adjustments of the Exercise Price and
number of shares of Preferred Stock purchasable) shall be applicable to the
greatest extent possible.
(b) RECLASSIFICATION OF SHARES. If the Company at any time shall,
by combination, reclassification, exchange, conversion or subdivision of
securities or otherwise, change any of the securities as to which purchase
rights under this Warrant Agreement exist into the same or a different number
of securities of any other class or classes, this Warrant Agreement shall
thereafter represent the right to acquire such number and kind of securities
as would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
Agreement immediately prior to such combination, reclassification, exchange,
subdivision or other change.
(c) SUBDIVISION OR COMBINATION OF SHARES. If the Company at any
time shall combine or subdivide its Preferred Stock, the Exercise Price shall
be proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
(d) STOCK DIVIDENDS. If the Company at any time shall pay a
dividend payable in, or make any other distribution (except any distribution
specifically provided for in the foregoing subsections (a) or (b)) of the
Company's
-3-
stock, then the Exercise Price shall be adjusted, from and after the
record date of such dividend or distribution, to that price determined by
multiplying the Exercise Price in effect immediately prior to such record
date by a fraction (i) the numerator of which shall be the total number of
all shares of the Company's stock outstanding immediately prior to such
dividend or distribution, and (ii) the denominator of which shall be the
total number of all shares of the Company's stock outstanding immediately
after such dividend or distribution. The Warrantholder shall thereafter be
entitled to purchase, at the Exercise Price resulting from such adjustment,
the number of shares of Preferred Stock (calculated to the nearest whole
share) obtained by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Preferred Stock issuable upon
the exercise hereof immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment.
(e) ANTIDILUTION RIGHTS. Additional antidilution rights applicable to
the Preferred Stock purchasable hereunder are as set forth in the Company's
Certificate of Incorporation, as amended through the Effective Date, a true
and complete copy of which is attached hereto as EXHIBIT IV (the "Charter").
The Company shall promptly provide Warrantholder with any restatement,
amendment, modification or waiver of the Charter. The Company shall provide
Warrantholder with such written notice, after the Effective Date of this
Warrant Agreement, which it is required to provide its shareholders under the
terms of the Charter.
(f) NOTICE OF ADJUSTMENTS. If: (i) the Company shall declare any
dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) there shall be any Merger Event; (iii) there shall be
an initial public offering; or (iv) there shall be any voluntary dissolution,
liquidation or winding up of the Company; then, in connection with each such
event, the Company shall send to the Warrantholder: (A) at least twenty (20)
days' prior written notice of the date on which the books of the Company
shall close or a record shall be taken for such dividend, distribution,
subscription rights (specifying the date on which the holders of Preferred
Stock shall be entitled thereto) or for determining rights to vote in respect
of such Merger Event, dissolution, liquidation or winding up; (B) in the case
of any such Merger Event, dissolution, liquidation or winding up, at least
twenty (20) days' prior written notice of the date when the same shall take
place (and specifying date on which the holders of Preferred Stock shall be
entitled to exchange their Preferred Stock for securities or other property
deliverable upon such Merger Event, dissolution, liquidation or winding up);
and (C) in the case of a public offering, the Company shall give the
Warrantholder at least twenty (20) days written notice prior to the effective
date thereof.
Each such written notice shall set forth, in reasonable detail, (i)
the event requiring the adjustment, (ii) the amount of the adjustment, (iii)
the method by which such adjustment was calculated, (iv) the Exercise Price,
and (v) the number of shares subject to purchase hereunder after giving
effect to such adjustment, and shall be given by first class mail, postage
prepaid, addressed to the Warrantholder, at the address as shown on the books
of the Company.
(g) TIMELY NOTICE. Failure to timely provide such notice required by
subsection (g) above shall entitle Warrantholder to retain the benefit of the
applicable notice period notwithstanding anything to the contrary contained
in any insufficient notice received by Warrantholder. The notice period shall
begin on the date Warrantholder actually receives a written notice containing
all the information specified above.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) RESERVATION OF PREFERRED STOCK. The Preferred Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved
and, when issued in accordance with the provisions of this Warrant Agreement,
will be validly issued, fully paid and non-assessable, and will be free of
any taxes, liens, charges or encumbrances of any nature whatsoever; provided,
however, that the Preferred Stock issuable pursuant to this Warrant Agreement
may be subject to restrictions on transfer under state and/or Federal
securities laws. The Company has made available to the Warrantholder true,
correct and complete copies of its Charter and Bylaws, as amended. The
issuance of certificates for shares of Preferred Stock upon exercise of the
Warrant Agreement shall be made without charge to the Warrantholder for any
issuance tax in respect thereof, or other cost incurred by the Company in
connection with such exercise and the related issuance of shares of Preferred
Stock. The Company shall not be required to pay any tax which may be payable
in respect of any transfer involved and the issuance and delivery of any
certificate in a name other than that of the Warrantholder.
(b) DUE AUTHORITY. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire
the shares of Preferred Stock, have been authorized by all necessary
corporate action on the part of the Company, and the Leases and this Warrant
Agreement are not inconsistent with the Company's Charter or Bylaws, do not
contravene any law or governmental rule, regulation or order applicable to
it, do not and will not contravene
-4-
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 Leases and this Warrant Agreement constitute legal, valid and binding
agreements of the Company, enforceable in accordance with their respective
terms.
(c) CONSENTS AND APPROVALS. No consent or approval of, giving of
notice to, registration with, or taking of any other action in respect of any
state, Federal or other governmental authority or agency is required with
respect to the execution, delivery and performance by the Company of its
obligations under this Warrant Agreement, except for the filing of notices
pursuant to Regulation D under the 1933 Act and any filing required by
applicable state securities law, which filings will be effective by the time
required thereby.
(d) ISSUED SECURITIES. All issued and outstanding shares of Common
Stock, Preferred Stock or any other securities of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. All
outstanding shares of Common Stock, Preferred Stock and any other securities
were issued in full compliance with all Federal and state securities laws. In
addition:
(i) The authorized capital of the Company consists of (A)
30,000,000 shares of Common Stock, of which 6,414,754 shares are issued and
outstanding; (B) 5,847,895 shares of Series A Preferred Stock, of which
5,847,895 shares are issued and outstanding and are convertible into
5,847,895 shares of Common Stock at $0.90 per share; and (C) 5,000,000
shares of Series B Preferred Stock, of which 3,911,358 shares are issued
and outstanding and are convertible into 3,911,358 shares of Common Stock
at $4.00 per share
(ii) The Company has reserved 6,300,000 shares of Common Stock for
issuance under its Nonqualified Stock Option Plan, under which 2,678,000
options are outstanding. There are no other options, warrants, conversion
privileges or other rights presently outstanding to purchase or otherwise
acquire any authorized but unissued shares of the Company's capital stock
or other securities of the Company.
(iii) Except as set forth in the Amended and Restated Investors'
Rights Agreement, dated December 9, 1999, (the "Investors' Rights
Agreement"), no shareholder of the Company has preemptive rights to
purchase new issuances of the Company's capital stock.
(e) INSURANCE. The Company has in full force and effect insurance
policies, with extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
(f) OTHER COMMITMENTS TO REGISTER SECURITIES. Except as set forth in
the Investors' Rights Agreement, the Company is not, pursuant to the terms of
any other agreement currently in existence, under any obligation to register
under the 1933 Act any of its presently outstanding securities or any of its
securities which may hereafter be issued.
(g) EXEMPT TRANSACTION. Subject to the accuracy of the
Warrantholder's representations in Section 10 hereof, the issuance of the
Preferred Stock upon exercise of this Warrant will constitute a transaction
exempt from (i) the registration requirements of Section 5 of the 1933 Act,
in reliance upon Section 4(2) thereof, and (ii) the qualification
requirements of the applicable state securities laws.
(h) COMPLIANCE WITH RULE 144. At the written request of the
Warrantholder, who proposes to sell Preferred Stock issuable upon the
exercise of the Warrant in compliance with Rule 144 promulgated by the
Securities and Exchange Commission, the Company shall furnish to the
Warrantholder, within ten days after receipt of such request, a written
statement confirming the Company's compliance with the filing requirements of
the Securities and Exchange Commission as set forth in such Rule, as such
Rule may be amended from time to time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
This Warrant Agreement has been entered into by the Company in
reliance upon the following representations and covenants of the
Warrantholder:
(a) INVESTMENT PURPOSE. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights
contained herein will be acquired for investment and not with a view to the
sale
-5-
or distribution of any part thereof, and the Warrantholder has no present
intention of selling or engaging in any public distribution of the same
except pursuant to a registration or exemption.
(b) PRIVATE ISSUE. The Warrantholder understands (i) that the
Preferred Stock issuable upon exercise of this Warrant is not registered
under the 1933 Act or qualified under applicable state securities laws on the
ground that the issuance contemplated by this Warrant Agreement will be
exempt from the registration and qualifications requirements thereof, and
(ii) that the Company's reliance on such exemption is predicated on the
representations set forth in this Section 10.
(c) DISPOSITION OF WARRANTHOLDER'S RIGHTS. In no event will the
Warrantholder make a disposition of any of its rights to acquire Preferred
Stock or Preferred Stock issuable upon exercise of such rights unless and
until (i) it shall have notified the Company of the proposed disposition, and
(ii) if requested by the Company, it shall have furnished the Company with an
opinion of counsel (which counsel may either be inside or outside counsel to
the Warrantholder) satisfactory to the Company and its counsel to the effect
that (A) appropriate action necessary for compliance with the 1933 Act has
been taken, or (B) an exemption from the registration requirements of the
1933 Act is available. Notwithstanding the foregoing, the restrictions imposed
upon the transferability of any of its rights to acquire Preferred Stock or
Preferred Stock issuable on the exercise of such rights do not apply to
transfers from the beneficial owner of any of the aforementioned securities
to its nominee or from such nominee to its beneficial owner, and shall
terminate as to any particular share of Preferred Stock when (1) such
security shall have been effectively registered under the 1933 Act and sold
by the holder thereof in accordance with such registration or (2) such
security shall have been sold without registration in compliance with Rule
144 under the 1933 Act, or (3) a letter shall have been issued to the
Warrantholder at its request by the staff of the Securities and Exchange
Commission or a ruling shall have been issued to the Warrantholder at its
request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security
is transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever
the restrictions imposed hereunder shall terminate, as hereinabove provided,
the Warrantholder or holder of a share of Preferred Stock then outstanding as
to which such restrictions have terminated shall be entitled to receive from
the Company, without expense to such holder, one or more new certificates for
the Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.
(d) FINANCIAL RISK. The Warrantholder has such knowledge and
experience in financial and business matters as to be capable of evaluating
the merits and risks of its investment, and has the ability to bear the
economic risks of its investment.
(e) RISK OF NO REGISTRATION. The Warrantholder understands that if
the Company does not register with the Securities and Exchange Commission
pursuant to Section 12 of the 1934 Act (the "1934 Act"), or file reports
pursuant to Section 15(d), of the 1934 Act, or if a registration statement
covering the securities under the 1933 Act is not in effect when it desires
to sell (i) the rights to purchase Preferred Stock pursuant to this Warrant
Agreement, or (ii) the Preferred Stock issuable upon exercise of the right to
purchase, it may be required to hold such securities for an indefinite period.
The Warrantholder also understands that any sale of its rights of the
Warrantholder to purchase Preferred Stock or Preferred Stock which might be
made by it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.
(f) ACCREDITED INVESTOR. Warrantholder is an "accredited
investor" within the meaning of the Securities and Exchange Rule 501 of
Regulation D, as presently in effect.
11. TRANSFERS.
Subject to the terms and conditions contained in Section 10 hereof,
this Warrant Agreement and all rights hereunder are transferable in whole or
in part by the Warrantholder and any successor transferee, provided, however,
in no event shall the number of transfers of the rights and interests in all
of the Warrants exceed three (3) transfers. The transfer shall be recorded on
the books of the Company upon receipt by the Company of a notice of transfer
in the form attached hereto as EXHIBIT III (the "Transfer Notice"), at its
principal offices and the payment to the Company of all transfer taxes and
other governmental charges imposed on such transfer.
-6-
12. MISCELLANEOUS
(a) EFFECTIVE DATE. The provisions of this Warrant Agreement
shall be construed and shall be given effect in all respects as if it had
been executed and delivered by the Company on the date hereof. This Warrant
Agreement shall be binding upon any successors or assigns of the Company.
(b) ATTORNEY'S FEES. In any litigation, arbitration or court
proceeding between the Company and the Warrantholder relating hereto, the
prevailing party shall be entitled to attorneys' fees and expenses and all
costs of proceedings incurred in enforcing this Warrant Agreement.
(c) GOVERNING LAW. This Warrant Agreement shall be governed by
and construed for all purposes under and in accordance with the laws of the
State of California (without giving effect to principles of conflicts of law).
(d) COUNTERPARTS. This Warrant Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(e) NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal
delivery, facsimile transmission (provided that the original is sent by
personal delivery or mail as hereinafter set forth) or seven (7) days after
deposit in the United States mail, by registered or certified mail, addressed
(i) TO THE WARRANTHOLDER at 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000,
ATTENTION: Venture Lease Administration, CC: LEGAL DEPARTMENT, ATTENTION:
General Counsel, (and/or, if by Facsimile, (000) 000-0000 and (000) 000-0000)
and (ii) TO THE COMPANY at 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx, XX
00000 ATTENTION: Xxxx XxXxxxx (and/or if by Facsimile, (000) 000-0000) or at
such other address as any such party may subsequently designate by written
notice to the other party.
(f) REMEDIES. In the event of any default hereunder, the
non-defaulting party may proceed to protect and enforce its rights either by
suit in equity and/or by action at law, including but not limited to an
action for damages as a result of any such default, and/or an action for
specific performance for any default where Warrantholder will not have an
adequate remedy at law and where damages will not be readily ascertainable.
The Company expressly agrees that it shall not oppose an application by the
Warrantholder or any other person entitled to the benefit of this Agreement
requiring specific performance of any or all provisions hereof or enjoining
the Company from continuing to commit any such breach of this Agreement.
(g) NO IMPAIRMENT OF RIGHTS. The Company will not, by amendment
of its Charter or through any other means, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in
the taking of all such actions as may be necessary or appropriate in order to
protect the rights of the Warrantholder against impairment.
(h) SURVIVAL. The representations, warranties, covenants and
conditions of the respective parties contained herein or made pursuant to
this Warrant Agreement shall survive the execution and delivery of this
Warrant Agreement.
(i) SEVERABILITY. In the event any one or more of the provisions
of this Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision,
which comes closest to the intention of the parties underlying the invalid,
illegal or unenforceable provision.
(j) AMENDMENTS. Any provision of this Warrant Agreement may be
amended by a written instrument signed by the Company and by the
Warrantholder.
-7-
(k) ADDITIONAL DOCUMENTS. The Company, upon execution of this
Warrant Agreement, shall provide the Warrantholder with certified resolutions
with respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (d), (f) and (g) of Section 9 above. The Company
shall also supply such other documents as the Warrantholder may from time to
time reasonably request.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be executed by its officers thereunto duly authorized as of the
Effective Date.
COMPANY: XXXXXX.XXX
By: /s/ Xxxx XxXxxxx
----------------------
Title: CFO
----------------------
WARRANTHOLDER: COMDISCO, INC.
By:
----------------------
Title:
----------------------
-8-
EXHIBIT I
NOTICE OF EXERCISE
TO: ___________________
(1) The undersigned Warrantholder hereby elects to purchase ______ shares of
the Series B Preferred Stock of ______________, pursuant to the terms of
the Warrant Agreement dated the 31st day of March, 2000 (the "Warrant
Agreement") between Xxxxxx.xxx, Inc. and the Warrantholder, and tenders
herewith payment of the purchase price for such shares in full, together
with all applicable transfer taxes, if any.
(2) In exercising its rights to purchase the Series B Preferred Stock of
Xxxxxx.xxx, Inc. the undersigned hereby confirms and acknowledges the
investment representations and warranties made in Section 10 of the Warrant
Agreement.
(3) Please issue a certificate or certificates representing said shares of
Series B Preferred Stock in the name of the undersigned or in such other
name as is specified below.
_________________________
(NAME)
_________________________
(ADDRESS)
WARRANTHOLDER: COMDISCO,INC.
By: __________________
Title: __________________
Date: __________________
-9-
EXHIBIT II
ACKNOWLEDGMENT OF EXERCISE
The undersigned_______________________, hereby acknowledge receipt of the
"Notice of Exercise" from Comdisco, Inc., to purchase _____ shares of the
Series B Preferred Stock of Xxxxxx.xxx, Inc. pursuant to the terms of the
Warrant Agreement, and further acknowledges that _____ shares remain subject
to purchase under the terms of the Warrant Agreement.
COMPANY: XXXXXX.XXX, INC.
By:
-----------------------------
Title:
-----------------------------
Date:
-----------------------------
-10-
EXHIBIT III
TRANSFER NOTICE
(TO TRANSFER OR ASSIGN THE FOREGOING WARRANT AGREEMENT EXECUTE THIS FORM AND
SUPPLY REQUIRED INFORMATION. DO NOT USE THIS FORM TO PURCHASE SHARES.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights evidenced
thereby are hereby transferred and assigned to
---------------------------------------
(PLEASE PRINT)
WHOSE ADDRESS IS
-----------------------
---------------------------------------
DATED:
-----------------------------
HOLDER'S SIGNATURE:
----------------
HOLDER'S ADDRESS:
------------------
------------------------------------
SIGNATURE GUARANTEED:
------------------------------------
NOTE: The signature to this Transfer Notice correspond with the name as it
appears on the face of the Warrant Agreement, without alteration or
enlargement or any change whatever. Officers of corporations and those
acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing Warrant Agreement.
-11-
EXHIBIT IV
(INSERT CHARTER)
-12-
------------------------------------------------------------------------------------- THIS SPACE FOR USE OF FILING OFFICER
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
FINANCING STATEMENT - FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant
to the Uniform Commercial Code and will remain effective,
with certain exceptions, for 5 years from date of filing.
-----------------------------------------------------------------------------------------------------
A. NAME & TEL. # OF CONTACT AT FILER (optional) B. FILING OFFICE ACCT. # (optional)
PHONE 000-000-0000 FAX 000-000-0000
C. RETURN COPY TO: (Name and Mailing Address)
Data File Services, Inc.
0094474000196001
X.X. Xxx 000
Xxx Xxxx, XX 00000-0000
-----------------------------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION (if applicable): [ ] LESSOR/LESSEE [ ]CONSIGNOR/CONSIGNEE [ ]NON-UCC FILING
-----------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) FILED WITH: CALIFORNIA
-----------------------------------------------------------------------------------------------------------------------------------
1a. ENTITY'S NAME
XXXXXX.XXX
or --------------------------------------------------------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
-----------------------------------------------------------------------------------------------------------------------------------
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
0000 Xxxxxxx Xxxxxxx, Xxxxx 000 Xxxxxxxx XX 00000
-----------------------------------------------------------------------------------------------------------------------------------
1d. S.S. OR TAX I.D. # OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY'S STATE 1g. ENTITY'S ORGANIZATIONAL I.D. #, if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION [ ] NONE
-----------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME -- insert only one debtor name (2a or 2b)
-----------------------------------------------------------------------------------------------------------------------------------
2a. ENTITY'S NAME
or --------------------------------------------------------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
-----------------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
-----------------------------------------------------------------------------------------------------------------------------------
2d. S.S. OR TAX I.D. # OPTIONAL 2e. TYPE OF ENTITY 2f. ENTITY'S STATE 2g. ENTITY'S ORGANIZATIONAL I.D. #, if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION [ ] NONE
-----------------------------------------------------------------------------------------------------------------------------------
3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME -- insert only one secured party name (3a or 3b)
-----------------------------------------------------------------------------------------------------------------------------------
3a. ENTITY'S NAME
COMDISCO, INC.
or --------------------------------------------------------------------------------------------------------------------------------
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
-----------------------------------------------------------------------------------------------------------------------------------
3c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
0000 Xxxxx Xxxxx Xxxx Xxxxxxxx XX 00000
-----------------------------------------------------------------------------------------------------------------------------------
4. This FINANCING STATEMENT covers the following types or items of property:
See Exhibit I attached hereto and made a part hereof.
2 pages attached
-----
-----------------------------------------------------------------------------------------------------------------------------------
5. CHECK X This FINANCING STATEMENT is signed by the Secured Party 7. If filed in Florida (check one)
BOX instead of the Debtor to perfect a security interest Documentary Documentary stamp
(if applicable) (a) in collateral already subject to a security interest in [ ] stamp tax paid [ ] tax not applicable
another jurisdiction when it was brought into this state, or
when the debtor's location was changed to this state, or
(b) in accordance with other statutory provisions
(additional data may be required)
-----------------------------------------------------------------------------------------------------------------------------------
6. REQUIRED SIGNATURE(S) 8. [ ] This FINANCING STATEMENT is to be filed (for record)
XXXXXX.XXX (or recorded) in the REAL ESTATE RECORDS
Attach Addendum (if applicable)
COMDISCO, INC. -------------------------------------------------------------
9. Check to REQUEST SEARCH CERTIFICATES(S) on Debtor(s)
(ADDITIONAL FEE)
(optional) [ ] All Debtors [ ] Debtor 1 [ ] Debtor 2
-----------------------------------------------------------------------------------------------------------------------------------
(1) FILING OFFICER COPY-NATIONAL FINANCING STATEMENT (FORM UCC 1)(TRANS)(REV. 12/18/95) Prepared by Data File Services, Inc.
X.X. Xxx 000
Xxx Xxxx, XX 00000-0000
Tel (000) 000-0000
EXHIBIT 1
This Financing Statement covers the following Collateral pledged by
Xxxxxx.xxx ("Debtor") to Comdisco, Inc. ("Secured Party") pursuant to the
Loan and Security Agreement dated as of March 31, 2000 between Xxxxxx.xxx as
Borrower and Comdisco, Inc. as Lender ("Loan Agreement") for purposes of
securing payment of the Obligations (as defined in the Loan Agreement) now
and hereafter owing by Debtor to Secured Party pursuant to that Secured
Promissory Noted dated April 21, 2000.
All of the Debtor's right, title and interest in: (i) the equipment and other
property (the "Equipment") described on Exhibit B attached hereto; and (ii)
all proceeds, products, replacements, additions to, substitutions for and
accessories to any and all Equipment including, without limitation, proceeds
applicable to insurance.
EXHIBIT B
SCHEDULE OF FIXED ASSETS
INVOICE
DATE VENDOR DESCRIPTION INVOICE# SERIAL NO.
___________________________________________________________________________________________________________________________________
COMPUTER HADRDWARE
09/24/99 ACS Solutions Uns Ultra 5 server 333MHZ 256MB 9.1GB 47125 FW93920092
10/14/99 TCSS Networks HP Sure Store DLT40GB External Tape 20834 TAPE-HP-C1579A
10/18/99 Sony VAIO Direct NB PII 366 128RAM 6.4GB HD 7173871 1623288001
10/27/99 TCSS Networks Intel Niteshade N440BX Server 20828
10/15/99 Micro Systems Integration Remote Annex Terminal Server 4879 CM1001025
10/08/99 Micro Systems Integration Catalyst 6509 Chassis, A/C 4873 WS-C6509-S1
10/18/99 Dell Marketing Dell Dimension XPS T550MHZ Pentium III 289134181
10/11/99 TCSS Networks Intel Niteshade N440BX Server Board 20793
10/30/99 CDW Computer Centers Sony VAIO F350 6.4GB 64M AW41023 S0131035727
11/17/99 Sony VAIO and monitor NB PV 366 MHZ PII 128M 6.4G 12.1" SCR 4116905559 7192826
11/10/99 CDW Computer Centers Sony VAIO Z505R 6/366 6.4GB 64 BA76737 S013205807B
10/31/99 Micro Systems Integration D380/2 way Enterprise Server/256 Memory 4943 A3579A/A3564A
00/00/00 XXX Xxxxxxxx Xxxxxxx Xxx Xxxxxxx 0000XX 6/366 6 4GB BA44043 S99043445
10/27/99 TCSS Networks Network Card / Mt. Rack Servers 20839
09/13/99 CDW Computer Centers Sony Vaio 505S 6/333 6.4G AU27234 S0132031476
12/10/99 TCSS Intel server with dual CPU 20920
12/10/99 Computer International Toshiba 4090 XDVD Notebook 131
00/00/00 Xxxxxxx Xxxx 000xxx PC; 18" monitor 80795774 0016582441
12/30/99 Micro Systems Integration Catalyst 6509 w/1-1300 AC 5062 C6509-1300AC
12/23/99 Dell Marketing Dell Dimension XPS T500MHZ Pentium III 314505611 220-1394
11/30/99 Micro Systems Integration HP DLT 40 Tape Drive 4982
11/30/99 Micro Systems Integration DVD ROM Drive 4982
FURNITURE AND EQUIPMENT
10/05/99 Office Furniture Network New office Master BC-44 Task Chair 19554
11/16/99 Xxxxxxxx Audio Visual Toshiba TLP 650 LCD Data/Video Projector 101456
11/22/99 Xxxxxx Xxxxxxx Xxxxxx Bretform Conference Table 48"X120"X29"H 7044
11/22/99 Xxxxxx Xxxxxxx Xxxxxx Bretford Media Tower 77"HX32"DX45"W 7044
11/22/99 Xxxxxx Xxxxxxx Xxxxxx Bretford Hospitality Cart 24"X45"HX47"W 7044
11/30/99 Xxxxxx Xxxxxxx Xxxxxx Xxxxxx Xxxxxx Aeon Work Chair 7046
SECURED PROMISSORY NOTE
$292,529.79 Date: April 21, 2000
Due: November 1, 2003
FOR VALUE RECEIVED, Xxxxxx.xxx, a California corporation (the "Borrower")
hereby promises to pay to the order of Comdisco, Inc., a Delaware corporation
(the "Lender"), at X.X. Xxx 00000, Xxxxxxx, XX 00000, or such other place of
payment as the holder of this Secured Promissory Note (this "Note") may
specify from time to time in writing, in lawful money of the United States of
America, the principal amount of Two Hundred Ninety-Two Thousand Five Hundred
Twenty-Nine and 79/100 Dollars ($292,529.79) together with interest at seven
and three quarters percent (7.75%) per annum on the principal hereof
remaining from time to time unpaid, from the date of this Note until paid in
full, such principal and interest to be paid in forty-two (42) equal monthly
installments of $7,991.66 each, commencing June 1, 2000, and on the same day
of each month thereafter to and including November 1, 2003, the (the
"Maturity Date"), such installments to be applied first to accrued and unpaid
interest and the balance to unpaid principal. Interest shall be computed on
the basis of a year consisting of twelve months of thirty days each.
Borrower shall pay to Lender on the Maturity Date an additional fee in the
amount of $36,566.22 (the "End Fee"). The End Fee shall be fully earned as of
the date of this Note and non-refundable when paid.
This Note is the Note referred to in, and is executed and delivered in
connection with, that certain Loan and Security Agreement of even date
herewith by and between Borrower and Lender (as the same may from time to
time be amended, modified or supplemented in accordance with its terms, the
"Loan Agreement"), and is entitled to the benefit and security of the Loan
Agreement and the other Loan Documents (as defined in the Loan Agreement), to
which reference is made for a statement of all of the terms and conditions
thereof. All terms defined in the Loan Agreement shall have the same
definitions when used herein, unless otherwise defined herein.
The Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest and any other notice as permitted under the UCC
or any applicable law.
-1-
This Note has been negotiated and delivered to Lender and is payable in the
State of Illinois, and shall not become effective until accepted by Lender in
the State of Illinois. This Note shall be governed by and construed and
enforced in accordance with, the laws of the State of Illinois, excluding any
conflicts of law, rules or principles that would cause the application of the
laws of any other jurisdiction.
BORROWER: XXXXXX.XXX
0000 XXXXXXX XXXXXXX XXXXX 000
XXXXXXXX, XX 00000
Signature: /s/ XXXX X. XXXXXXX
--------------------------
Print Name: Xxxx X. XxXxxxx
--------------------------
Title: CTO
--------------------------
-2-
===============================================================================
XXXXXX.XXX
Prepared by X. Xxxxxx
Loan Amount: 292,529.79
==========
Interest Rate: 7.750%
==========
Payment: 7,991.66
PAYMENT NUMBER DATE PRINCIPAL INTEREST PAYMENT BALANCE
===============================================================================
04/21/00 292,529.79
-------------------------------------------------------------------------------
1 06/01/00 5,472.66 2,519.01 7,991.66 287,057.13
-------------------------------------------------------------------------------
2 07/01/00 6,137,75 1,853.91 7,991.66 280,919.38
-------------------------------------------------------------------------------
3 08/01/00 6,177.39 1,814.27 7,991.66 274,741.99
-------------------------------------------------------------------------------
4 09/01/00 6,217.29 1,774.38 7,991.66 268,524.70
-------------------------------------------------------------------------------
5 10/01/00 6,257.44 1,734.22 7,991.66 262,267.26
-------------------------------------------------------------------------------
6 11/01/00 6,297.85 1,693.81 7,991.66 255,969.41
-------------------------------------------------------------------------------
7 12/01/00 6,338.53 1,653.14 7,991.66 249,630.88
-------------------------------------------------------------------------------
8 01/01/01 6,379.46 1,612.20 7,991.66 243,251.42
-------------------------------------------------------------------------------
9 02/01/01 6,420.66 1,571.00 7,991.66 236,830.75
-------------------------------------------------------------------------------
10 03/01/01 6,462.13 1,529.53 7,991.66 230,368.62
-------------------------------------------------------------------------------
11 04/01/01 6,503.87 1,487.80 7,991.66 223,864.76
-------------------------------------------------------------------------------
12 05/01/01 6,545.87 1,445.79 7,991.66 217,318.89
-------------------------------------------------------------------------------
13 06/01/01 6,588.14 1,403.52 7,991.66 210,730.74
-------------------------------------------------------------------------------
14 07/01/01 6,630.69 1,360.97 7,991.66 204,100.05
-------------------------------------------------------------------------------
15 08/01/01 6,673.52 1,318.15 7,991.66 197,426.53
-------------------------------------------------------------------------------
16 09/01/01 6,716.62 1,275.05 7,991.66 190,709.92
-------------------------------------------------------------------------------
17 10/01/01 6,759.99 1,231.67 7,991.66 183,949.92
-------------------------------------------------------------------------------
18 11/01/01 6,803.65 1,188.01 7,991.66 177,146.27
-------------------------------------------------------------------------------
19 12/01/01 6,847.59 1,144.07 7,991.66 170,298.68
-------------------------------------------------------------------------------
20 01/01/02 6,891.82 1,099.85 7,991.66 163,406.86
-------------------------------------------------------------------------------
21 02/01/02 6,936.33 1,055.34 7,991.66 156,470.53
-------------------------------------------------------------------------------
22 03/01/02 6,981.12 1,010.54 7,991.66 149,489.41
-------------------------------------------------------------------------------
23 04/01/02 7,026.21 965.45 7,991.66 142,463.20
-------------------------------------------------------------------------------
24 05/01/02 7,071.59 920.07 7,991.66 135,391.61
-------------------------------------------------------------------------------
25 06/01/02 7,117.26 874.40 7,991.66 128,274.35
-------------------------------------------------------------------------------
26 07/01/02 7,163.22 828.44 7,991.66 121,111.13
-------------------------------------------------------------------------------
27 08/01/02 7,209.49 782.18 7,991.66 113,901.64
-------------------------------------------------------------------------------
28 09/01/02 7,256.05 735.61 7,991.66 106,645.59
-------------------------------------------------------------------------------
29 10/01/02 7,302.91 688.75 7,991.66 99,342.68
-------------------------------------------------------------------------------
30 11/01/02 7,350.07 641.59 7,991.66 91,992.61
-------------------------------------------------------------------------------
31 12/01/02 7,397.54 594.12 7,991.66 84,595.06
-------------------------------------------------------------------------------
32 01/01/03 7,445.32 546.34 7,991.66 77,149.74
-------------------------------------------------------------------------------
33 02/01/03 7,493.40 498.26 7,991.66 69,656.34
-------------------------------------------------------------------------------
34 03/01/03 7,541.80 449.86 7,991.66 62,114.54
-------------------------------------------------------------------------------
35 04/01/03 7,590.51 401.16 7,991.66 54,524.03
-------------------------------------------------------------------------------
36 05/01/03 7,639.53 352.13 7,991.66 46,884.51
-------------------------------------------------------------------------------
37 06/01/03 7,688.87 302.80 7,991.66 39,195.64
-------------------------------------------------------------------------------
38 07/01/03 7,738.52 253.14 7,991.66 31,457.11
-------------------------------------------------------------------------------
39 08/01/03 7,788.50 203.16 7,991.66 23,668.61
-------------------------------------------------------------------------------
40 09/01/03 7,838.80 152.86 7,991.66 15,829.81
-------------------------------------------------------------------------------
41 10/01/03 7,889.43 102.23 7,991.66 7,940.38
-------------------------------------------------------------------------------
42 11/01/03 7,940.38 51.28 7,991.66 0.00
-------------------------------------------------------------------------------
43 12/01/03 36,566.22 End Fee
===============================================================================
LOAN AND SECURITY AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of March 31, 2000 is entered
into by and between Xxxxxx.xxx, a California corporation having a principal
place of business at 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000 (the
"Borrower") and Comdisco, Inc., a Delaware corporation having a principal
place of business at 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (the
"Lender"). In consideration of the mutual agreements contained herein, the
parties hereto agree as follows:
WHEREAS, Borrow desires to borrow from the Lender hereunder the amount of
Two Hundred Ninety-Two Thousand Five Hundred Twenty-Nine and 79/100 DOLLARS
($292,529.79) and Lender is willing to lend said amount to Borrower on March
31, 2000 (the "Funding Date");
NOW, THEREFORE, it is agreed:
SECTION 1. THE LOAN
1.1 Subject to the terms and conditions set forth herein, Lender shall
lend to Borrower the aggregate original principal amount of Two Hundred
Ninety-Two Thousand Five Hundred Twenty-Nine and 79/100 DOLLARS
($292,529.79)(the "Loan") with interest at the rate of seven and three
quarters percent (7.75%) per annum payable in monthly installments as set
forth in the promissory note (the "Note") in the form attached hereto and
made a part hereof as Exhibit A, dated March 31, 2000.
1.2 Upon the occurrence of and during an Event of Default (as defined
herein), interest shall thereafter be calculated at a rate of five percent
(5%) in excess of the rate that would otherwise be applicable ("Default
Rate"). All such interest shall be due and payable in arrears, on the first
day of the following month.
1.3 Notwithstanding any provision in this Agreement, the Note, or any
other "Loan Document" (as defined herein), it is not the parties' intent to
contract for, charge or receive interest at a rate that is greater than the
maximum rate permissible by law which a court of competent jurisdiction shall
deem applicable hereto (which under the laws of the State of Illinois shall be
deemed to be the laws relating to permissible rates of interest on commercial
loans) (the "Maximum Rate"). If the Borrower actually pays Lender an amount
of interest, chargeable on the total aggregate principal Secured Obligations
of Borrower under this Agreement and the Note (as said rate is calculated over
a period of time that is the longer of (i) the time from the date of this
Agreement through the maturity time as set forth on the Note, or (ii) the
entire period of time that any principal is outstanding on the Note), which
amount of interest exceeds interest calculated at the Maximum Rate on said
principal chargeable over said period of time, then such excess interest
actually paid by Borrower shall be applied FIRST, to the payment of principal
outstanding on the Note; SECOND, after all principal is repaid, to the
payment of Lender's out of pocket costs, expenses, and professional fees
which are owed by Borrower to Lender under this Agreement or the Loan
Documents; and THIRD, after all principal, costs, expenses, and professional
fees owed by Borrower to Lender are repaid, the excess (if any) shall be
refunded to Borrower.
1.4 In the event any interest is not paid when due hereunder, delinquent
interest shall be added to principal and shall bear interest on interest,
compounded at the rate set forth in Section 1.1.
-1-
1.5 Upon and during the continuation of an Event of Default hereunder (as
defined herein), all Secured Obligations, including principal, interest,
compounded interest, and reasonable professional fees, shall bear interest at
a rate per annum equal to the Default Rate.
1.6 Borrower shall have the option to prepay the Note, in whole or in
part, at any time after the date hereof by paying the principal amount
together with all accrued and unpaid interest with respect to such principal
amount, as of the date of such prepayment and the End Fee as described in the
Note together with a prepayment premium equal to the difference, if any,
between (x) the amount being prepaid and (y) the present value, discounted at
the Treasury Rate, of each installment of principal and interest being
prepaid discounted to the date of prepayment. If the amount in (x) is greater
than the amount in (y), no prepayment premium shall be due. The "Treasury
Rate" shall mean the then prevailing yield on US Treasury Constant Maturities
for the most recent business day, as quoted in the Federal Reserve Statistical
Release H15, as of the date of prepayment for an obligation of comparable
maturity to the maturity date of the Note.
SECTION 2. SECURITY INTEREST
As security for the payment of all indebtedness ("Indebtedness") of the
Borrower to the Lender hereunder and under the Note, as the same may be
renewed, extended for any period or rearranged, and the performance by the
Borrower of its other obligations hereunder (the Indebtedness and such other
obligations being hereinafter sometimes collectively referred to as the
"Secured Obligations"), the Borrower hereby assigns to the Lender, and grants
to the Lender a first priority security interest in, all the Borrower's
right, title, and interest in and to the following property ("Collateral"):
(i) the equipment and other property (the "Equipment") described in Exhibit B
attached hereto; and (ii) all proceeds, products, replacements, additions to,
substitutions for and accessions to any and all Equipment including, without
limitation, the proceeds applicable to the insurance referred to in Section 4
hereof.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BORROWER
The Borrower represents, warrants and agrees that:
3.1 it has good title in and to the Equipment, fee of all liens, security
interests, encumbrances and claims whatsoever, except for the interest of the
Lender therein;
3.2 it has the full power and authority to, and does hereby grant and
convey to the Lender, a valid first priority perfected security interest in
the Collateral as security for the Secured Obligations, fees of all liens,
security interests, encumbrances and claims, and shall execute such Uniform
Commercial Code ("UCC") financing statements in connection herewith as the
Lender may reasonably request. No other lien, security interest, adverse
claim or encumbrance has been created by Borrower or is known by Borrower to
exist with respect to any Collateral;
3.3 it is a corporation duly organized, legally existing and in good
standing under the laws of the State of California and is duly qualified as a
foreign corporation in all jurisdictions where the failure to so qualify
would have a material adverse effect on the Collateral or the business of the
Borrower taken as a whole;
-2-
3.4 the execution, delivery and performance of the Note, this
Agreement and all financing statements, certificates and other documents
required to be delivered or executed in connection herewith (collectively,
the "Loan Documents") have been duly authorized by all necessary corporate
action of Borrower, the individual or individuals executing the Loan
Documents were duly authorized to do so, the Equipment is personal property
and as used by the Borrower will not be or become fixtures under applicable
law, and the Loan Documents constitute legal, valid and binding obligations
of the Borrower, enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization or other similar
laws generally affecting the enforcement of the rights of creditors;
3.5 the Loan Documents do not and will not violate any provisions
of its Articles/Certificate of Incorporation, bylaws or any contract,
agreement, law, regulation, order, injunction, judgment, decree or writ to
which the Borrower is subject, or result in the creation or imposition of any
lien, security interest or other encumbrance upon the Collateral, other than
those created by this Agreement;
3.6 the execution, delivery and performance of the Loan Documents
do not require the consent or approval of any other person or entity
including, without limitation, any regulatory authority or governmental body
of the United States or any state thereof or any political subdivision of the
United States or any state thereof.
3.7 as of the date hereof no fact or condition exists that would
(or could, with the passage of time, the giving of notice, or both)
constitute an Event of Default under this Agreement or any of the Loan
Documents and no event which has had or could reasonably be expected to have
a Material Adverse Effect has occurred and is continuing. For purposes of
this Agreement, "Material Adverse Effect" means a material adverse effect
upon (i) the business, operations, properties, assets or financial condition
of Borrower; or (ii) the ability of Borrower to perform the Secured
Obligations.
SECTION 4. INSURANCE AND RISK OF LOSS
4.1 Risk of loss of, damage to or destruction of the Collateral
shall be borne by the Borrower and effective from the date of this Agreement
and until the payment and performance in full of all Secured Obligations,
Borrower shall at its own expense cause to be carried and maintained all risk
casualty insurance (covering risk of fire, theft and other such risks as the
Lender may require, including standard and extended coverage) with respect to
each item of Collateral in an amount no less than the replacement costs
applicable to such item of Collateral during the term of this Agreement. All
policies evidencing such casualty insurance shall contain a standard
mortgagee's endorsement and shall provide for at least thirty days prior
written notice by the underwriter or insurance company to the Lender in the
event of cancellation or expiration. Borrower shall provide Lender with
insurance certificates evidencing the foregoing at time of closing.
4.2 If any item of Collateral is lost or rendered unusable as a
result of any physical damage to or destruction of such item of Equipment
during the period from the date hereof to and including the maturity date
under the Note or the date all Secured Obligations hereunder have been fully
satisfied, whichever is later, Borrower shall give to Lender prompt notice
thereof. Borrower shall determine, within fifteen (15) days after the date of
occurrence of such loss, damage or destruction, whether such item of
Equipment can be repaired and restored to
-3-
the condition in which such item of Collateral was required to be maintained
as of the date immediately preceding such damage. If Borrower determines that
such item of Collateral can be repaired, Borrower, at its expense, shall
cause such item of Collateral to be promptly repaired. If Borrower determines
that such item of Collateral is lost or cannot be repaired, Borrower shall
promptly notify the Lender and such item of Collateral shall be deemed to
have suffered a "Casualty Loss" for purposes of this Section as of the date
of the occurrence of such loss. Within fifteen (15) days following the
occurrence of any such loss, damage or destruction, Borrower shall notify the
Lender of the item(s) of Collateral which has suffered such Casualty Loss
("Loss Item"), and within thirty (30) days thereafter (the "Settlement
Date"), Borrower shall either (a) replace such item(s) of Collateral with
equipment of the same model, type and feature configuration, in an operating
condition and repair no less than that required hereunder of the damaged or
lost equipment immediately prior to the date of such damage or loss, and
having a fair market value no less than the Casualty Value (as defined
herein) applicable to such item of Collateral as of the date immediately
prior to such damage, in which case such replacement equipment shall for all
purposes hereunder become part of the Collateral and (without limiting the
preceding provisions) Borrower shall grant to Lender a first lien and
security interest in respect of such replacement equipment pursuant to the
terms of this Agreement, and Borrower shall provide the Lender evidence
satisfactory to the Lender of Borrower's good and marketable title to such
replacement equipment (free of any liens, security interests or encumbrances
other than those created by this Agreement and Borrower shall be entitled to
receive the amount of any insurance or other recovery received by Lender up
to cost of obtaining the replacement equipment; or (b) so long as no Event of
Default or event which with the giving of notice or passage of time, or both,
would constitute an Event of Default, has occurred and is continuing,
Borrower may provide substitute equipment satisfactory to Lender to become
part of the Collateral and Borrower shall grant to Lender a first lien and
security interest in respect of such substitute equipment pursuant to the
terms of this Agreement, and Borrower shall provide the Lender evidence
satisfactory to Lender of Borrower's good and marketable title to such
substitute equipment (free of any liens, security interests or encumbrances
other than created by this Agreement and Lender shall provide any required
endorsements in connection with any insurance proceeds received by Borrower
pursuant to such insurance policies; or (c) Borrower shall pay Lender the
insurance proceeds payable pursuant to such insurance policies ("Insurance
Proceeds") with respect to such Loss Item(s) and the principal amount of the
Note (and interest accrued on the principal amount so prepayable) shall
become due and payable on the Settlement Date to the extent of the
replacement cost for all such Loss Item(s). For purposes of this Section 4.2,
Casualty Value shall mean an amount equal to the greater of the fair market
value of the Equipment as of the date of the Casualty Loss or the outstanding
principal and accrued interest on the Loan. Moneys so received shall be
applied, on the date of such receipt, as follows: first, to pay any accrued
interest on the outstanding principal amount of the Note on such date;
second, to prepay, the outstanding principal amount of the Note (to the
extent of the fair market value attributable to such Loss Item(s)); third, to
pay any other indebtedness of amounts then due and owing to the Lender
hereunder; and fourth, so long as there has occurred no Event of Default
under Section 8 hereof and no event which with the giving of notice or
passage of time or both would constitute an Event of Default, has occurred
and is continuing, Borrower and Lender hereby agree that the balance of any
such Insurance Proceeds shall be paid promptly to the Borrower.
4.3 Effective upon the date hereof under the Note and while there are
any Secured Obligations outstanding, Borrower shall cause to be carried and
maintained comprehensive general liability insurance with regard to the
Collateral against risks customarily insured against in
-4-
the Borrower's business. Such risks shall include, without limitation, the
risks of death, bodily injury and property damage associated with the
Collateral. All policies evidencing such insurance shall provide for at least
thirty (30) days prior written notice by the underwriter or insurance company
to the Lender in the event of cancellation or expiration.
4.4 Borrower shall and does hereby indemnify and hold Lender, its agents
and shareholders harmless from and against any and all claims, costs,
expenses, damages and liabilities (including without limitation such claims,
costs, expenses, damages and liabilities based on liability in tort including
without limitation strict liability in tort) including reasonable attorneys'
fees, arising out of Borrower's ownership, possession, operation, control,
use, maintenance, delivery, or other disposition of the Collateral.
Notwithstanding the foregoing, Borrower shall not be responsible under the
terms of this Section 4.4 to a party indemnified hereunder for any claims,
costs, expenses, damages and liabilities occasioned by the negligence or
willful misconduct of such indemnified party.
SECTION 5. COVENANTS OF BORROWER
Borrower covenants and agrees as follows at all times while any of the
Secured Obligations remain outstanding:
5.1 Borrower shall maintain the Equipment in good operating order,
repair, condition and appearance and protect the Equipment from
deterioration, other than normal wear and tear. Borrower shall not use
Equipment or permit its use for any purpose other than that for which it was
designed. Borrower's obligation regarding the maintenance of the Equipment
shall include, without limitation, all maintenance, repair, refurbishment and
the replacement recommended or advised either by the manufacturer, or that
commonly performed by prudent business and/or professional practice. Any
exceptions or qualifications expressed in this Agreement relating to normal
or ordinary wear and tear shall not be deemed to limit Borrower's obligations
pursuant to the preceding sentence.
5.2 Borrower shall only relocate any item of the Collateral provided
that: (a) it shall have caused to be filed and/or delivered to the Lender all
UCC financing statements, certificates or other documents or instruments
necessary to continue in effect the first prior perfected security interest
of the Lender in the Collateral, and (b) it shall have given the Lender no
less than fifteen (15) days prior written notice of such relocation.
5.3 Upon the request of Lender, Borrower shall, during business hours,
make the Equipment available to Lender for inspection at the place where it
is normally located and shall make Borrower's log and maintenance records
pertaining to the Equipment available to Lender for inspection. Borrower
shall take all action necessary to maintain such logs and maintenance records
in a correct and complete fashion.
5.4 Upon the request of Lender, Borrower shall cause the Equipment to be
plainly, permanently and conspicuously marked, by stenciling or by metal tag
or plate affixed thereto, indicating Lender's security interest in the
Equipment. Borrower shall replace any such stenciling, tag or plate which may
be removed or destroyed or become illegible. Borrower shall keep all
Equipment free from any marketing or labeling which might be interpreted as a
claim of ownership adverse to Borrower's.
-5-
5.5 Borrower covenants and agrees to pay when due, all taxes, fees or
other charges of any nature whatsoever (together with any related interest or
penalties) now or hereafter imposed or assessed against Borrower, Lender or
the Collateral or upon Borrower's ownership, possession, use, operation or
disposition thereof or upon Borrower's rents, receipts or earnings arising
therefrom. Borrower shall file on or before the due date therefor all
personal property tax returns in respect of the Collateral.
5.6 Borrower shall furnish to Lender the financial statements listed
hereinafter, prepared in accordance with generally accepted accounting
principles consistently applied (the "Financial Statements"):
(a) as soon as practicable (and in any event within thirty (30)
days) after the end of each month: an internally prepared income
statement, balance sheet, and cash flow statement, (including the
commencement of any material litigation by or against Borrower), each
certified by Borrower's Chief Executive or Financial Officer to be true
and correct;
(b) as soon as practicable (and in any event within ninety (90)
days) after the end of each fiscal year, audited Financial Statements,
setting forth in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by any audit report and opinion
of the independent certified public accountants selected by Borrower; and
(c) promptly any additional information (including but not limited
to tax returns, income statements, balance sheets, and names of
principal creditors) as Lender reasonably believes necessary to evaluate
Borrower's continuing ability to meet financial obligations.
5.7 Notwithstanding the foregoing, after the effective date of the
initial registration statement covering a public offering of Borrower's
securities, the term "Financial Statements" shall be deemed to refer to only
those statements required by the Securities and Exchange Commission, to be
provided no less frequently than quarterly. Borrower will from time to time
execute, deliver and file, alone or with Lender, any financing statements,
security agreements or other documents; and take all further action that may
be necessary, or that Lender may reasonably request, to confirm, perfect,
preserve and protect the security interests intended to be granted hereby,
and in addition, and for such purposes only, Borrower hereby authorizes
Lender to execute and deliver on behalf of Borrower and to file such
financing statements, security agreement and other documents without the
signature of Borrower either in Lender's name or in the name of Borrower as
agent and attorney-in-fact for Borrower.
5.8 Borrower shall protect and defend Borrower's title as well as the
interest of the Lender against all persons claiming any interest adverse to
Borrower or Lender and shall at all times keep the Collateral free and clear
from any attachment or levy, liens or encumbrances whatsoever (except any
placed thereon by Lender, or any liens arising by operation of law with
respect to any obligations not yet overdue or any other liens consented to in
writing by Lender) and shall give Lender immediate written notice thereof.
5.9 Borrower shall not sell, transfer, assign, hypothecate or otherwise
encumber its Intellectual Property without Lender's prior written consent.
-6-
SECTION 6. CONDITIONS PRECEDENT TO LOAN
On or prior to the Funding Date, Borrower will provide to Lender the
following, in form and substance satisfactory to Lender:
6.1 Such documentation, including without limitation, a Xxxx of Sale,
and other documents as shall reasonably evidence Borrower's right, title and
interest in and to the Equipment;
6.2 A certified resolution or other certificate of corporate
authority for the execution and the delivery of, and the performance of all
Secured Obligations under the Loan Documents and all related documentation;
6.3 Incumbency certificate evidencing the authority and facsimile
signatures of the individuals executing the Loan Documents;
6.4 UCC financing statements as deemed appropriate by Lender to
perfect its security interest in the Collateral;
6.5 Certified copies of the Articles of incorporation of Borrower;
6.6 Certificate of good standing for Borrower from its state of
incorporation and similar certificates from all jurisdictions in which it
does business and where the failure to be qualified would have a material
adverse effect on Borrower's business; and
6.7 Insurance certificates as required by Section 4 hereof.
SECTION 7. ASSIGNMENT BY LENDER
7.1 Borrower acknowledges and understands that Lender may sell and
assign all or a part of its interest hereunder and under the Note and Loan
Documents to any person or entity (an "Assignee"). After such assignment the
term Lender shall mean such Assignee, and such Assignee shall be vested with
all rights, powers and remedies of Lender hereunder with respect to the
interest so assigned; but with respect to any such interest not so
transferred, the Lender shall retain all rights, powers and remedies hereby
given. No such assignment by Lender shall relieve Borrower of any of its
obligations hereunder. Borrower shall acknowledge such assignment or
assignments as shall be designated by written notice given by Lender to
Borrower. The Lender agrees that in the event of any transfer by it of the
Note, it will endorse thereon a notation as to the portion of the principal
of the Note which shall have been paid at the time of such transfer and as to
the date to which interest shall have been last paid thereon.
SECTION 8. DEFAULT
The occurrence of any one or more of the following events (herein
called "Events of Default") shall constitute a default hereunder and under
the Note:
-7-
8.1 The borrower defaults in the payment of any principal or interest
payable under this Agreement, the Note or any of the other Loan Documents
and such default continues for more than five (5) days after the due date
thereof;
8.2 The Borrower defaults in the payment or performance of any other
covenant or obligation of the Borrower hereunder or under the Note or any
other Loan Documents for more than ten (10) days after the Lender has given
notice of such default to the Borrower;
8.3 Any representation or warranty made herein by the Borrower shall prove
to have been false or misleading in any material respect;
8.4 The making of an assignment by Borrower for the benefit of its
creditors or the admission by Borrower in writing of its inability to pay its
debts as they become due, or the insolvency of Borrower, or the filing by
Borrower of a voluntary petition in bankruptcy, or the adjudication of
Borrower as a bankrupt, or the filing by Borrower of any petition or answer
seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present
or future statute, law or regulation, or the filing of any answer by Borrower
admitting, or the failure by Borrower to deny, the material allegations of a
petition filed against it for any such relief, or the seeking or consenting
by Borrower to, or acquiescence by Borrower in, the appointment of any
trustee, receiver or liquidator of Borrower or of all or any substantial part
of the properties of Borrower, or the inability of Borrower to pay its debts
when due, or the commission by Borrower of any act of bankruptcy as defined
in the Federal Bankruptcy Act, as amended;
8.5 The failure by Borrower, within sixty (60) days after the
commencement of any proceeding against Borrower seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, to obtain the
dismissal of such proceeding or, within sixty (60) days after the
appointment, without the written consent or acquiescence of Lender, of any
trustee, receiver or liquidator of Borrower or of all or any substantial part
of the properties of Borrower, to vacate such appointment; or
8.6 The default by Borrower under any other notes or other agreement for
borrowed money, lease or other agreement between Borrower and Lender.
SECTION 9. REMEDIES
Upon the occurrence hereof of any one or more Events of Default, Lender,
at its option, may declare the Note to be accelerated and immediately due and
payable, (provided, that upon the occurrence of an Event of Default of the
type described in 8.4 or 8.5, the Note and all other Secured Obligations
shall automatically be accelerated and made due and payable without any
further act) whereupon the unpaid principal of and accrued interest on such
Note shall become immediately due and payable, and shall thereafter bear
interest at the Default Rate and calculated in accordance with Section 1.2.
Lender may exercise all rights and remedies with respect to the Collateral
granted pursuant hereto for such Note, or otherwise available to it under
applicable law, including the right to release, hold or otherwise dispose of
all or any part of the Collateral and the right to utilize, process and
commingle the Collateral.
-8-
Upon the happening and during the continuance of any Event of
Default, Lender may then, or at any time thereafter and from time to time,
apply, collect, sell in one or more sales, lease or otherwise dispose of, any
or all of the Collateral, in its then condition or following any commercially
reasonably preparation or processing, in such order as Lender may elect, and
any such sale may be made either at public or private sale at its place of
business or elsewhere. Borrower agrees that any such public or private sale
may occur upon five (5) calendar day's notice to Borrower. Lender may require
Borrower to assemble the Collateral and make it available to Lender at a
place designated by Lender which is reasonably convenient to Lender and
Borrower. The proceeds of any sale, disposition or other realization upon all
or any part of the collateral shall be distributed by Lender in the following
order of priorities:
First, to Lender in an amount sufficient to pay in full Lender's
reasonable costs and professionals' and advisors' fees and expenses;
Second, to Lender in an amount equal to the then unpaid amount of
the Secured Obligations in such order and priority as Lender may
choose in its sole discretion; and
Finally, upon repayment in full of all of the Secured Obligations,
to Borrower or its representatives or as a court of competent
jurisdiction may direct.
The Lender shall return to the Borrower any surplus Collateral remaining
after payment of all Secured Obligations.
SECTION 10. MISCELLANEOUS
10.1 Borrower shall remain liable to Lender for any unpaid Secured
Obligations, advances, costs, charges and expenses, together with interest
thereon and shall pay the same immediately to Lender at Lender's offices.
10.2 The powers conferred upon Lender by this Agreement are solely
to protect its interest in the Collateral and shall not impose any duty upon
Lender to exercise any such powers.
10.3 This is a continuing Agreement and the grant of a security
interest hereunder shall remain in full force and effect and all the rights,
powers and remedies of Lender hereunder shall continue to exist until the
Secured Obligations are paid in full as the same become due and payable. When
Borrower has paid in full all Secured Obligations, Lender will, promptly upon
request of Borrower, execute a written termination statement, reassigning to
Borrower, without recourse, the Collateral and all rights conveyed hereby and
return possession (if Lender has possession) of the Collateral to Borrower.
The rights, powers and remedies of Lender hereunder shall be in addition to
all rights, powers and remedies given by statute or rule of law and are
cumulative. The exercise of any one or more of the rights, powers and
remedies provided herein shall not be construed as a waiver of any other
rights, powers and remedies of Lender. Furthermore, regardless of whether or
not the UCC is in effect in the jurisdiction where such rights, powers and
remedies are asserted, Lender shall have the rights, powers and remedies of a
secured party under the UCC.
10.4 Upon payment in full of all Secured Obligations, the Lender
shall cancel the Note, this Agreement and all UCC financing statements, if
any, and shall promptly deliver all such canceled documents to the Borrower.
-9-
10.5 GOVERNING LAW. This Agreement, the Note and the other Loan
Documents have been negotiated and delivered to Lender in the State of
Illinois and shall not become effective until accepted by Lender in the State
of Illinois. Payment to Lender by Borrower of the Secured Obligations is due
in the State of Illinois. This Agreement shall be governed by, and construed
and enforced in accordance with the laws of the State of Illinois excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
10.6 CONSENT TO JURISDICTION AND VENUE. All judicial proceedings
arising in or under or related to this Agreement, the Note or any of the
other Loan Documents may be brought in any state or federal court of
competent jurisdiction located in the State of Illinois. By execution and
delivery of this Agreement, each party hereto generally and unconditionally:
(a) consents to personal jurisdiction in Xxxx County, State of Illinois; (b)
waives any objection as to jurisdiction or venue in the aforesaid courts; and
(d) irrevocably agrees to be bound by any judgement rendered thereby in
connection with this Agreement, the Note and the other Loan Documents.
Service of process on any party hereto in any action arising out of or
relating to this Agreement shall be effective if given in accordance with the
requirements for notice set forth in Section 10.8 below and shall be deemed
effective and received as set forth in Section 10.8 below. Nothing herein
shall affect the right to serve process in any other manner permitted by law
or shall limit the right of either party to bring proceedings in the courts
of any other jurisdiction.
10.7 Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid
under such law, such provision shall be ineffective only to the extent and
duration of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
10.8 Any notice required or given hereunder shall be deemed properly
given upon the earlier of: (i) the first business day after transmission by
facsimile or hand delivery or deposit with an overnight express service or
overnight mail delivery service; or (ii) or three (3) days after mailed,
postage prepaid, in each case, addressed to the designated recipient at its
address set forth herein or such other address as such party may advise the
other party by notice given in accordance with this provision.
10.9 Lender and Borrower acknowledge that there are no agreements or
understandings, written or oral, between Lender and Borrower with respect to
the Loan, other than as set forth herein, in the Note and the other Loan
Documents and that this Agreement, the Note and the other Loan Documents
contain the entire agreement between Lender and Borrower with respect
thereto. Note of the terms of this Agreement, the Note and the other Loan
Documents may be amended except by an instrument executed by each of the
parties hereto.
10.10 No omission, or delay, by Lender at any time to enforce any right
or remedy reserved to it, or to require performance of any of the terms,
covenants or provisions hereof by Borrower at any time designated, shall be a
waiver of any such right or remedy to which Lender is entitled, nor shall it
in any way affect the right of Lender to enforce such provision thereafter.
10.11 All agreements, representations and warranties contained in this
Agreement or the Note, or in any Loan Documents delivered pursuant hereto or
in connection herewith shall be for
-10-
the benefit of Lender and any Assignee and shall survive the execution and
delivery of this Agreement or the Note and the expiration or other
termination of this Agreement or the Note.
10.12 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but such counterparts together shall
constitute but one and the same instrument.
10.13 This Agreement shall be binding upon, and shall inure to the
benefit of, Borrower and its permitted assigns (if any). Borrower shall not
assign its obligations under this Agreement, the Note or any of the other
Loan Documents without Lender's express written consent and any such
attempted assignment shall be void and of no effect. Any assignment by
Borrower in connection with a "Merger" (as defined below) shall be subject to
Lender's prior consent which shall not be reasonably withheld. Any consent
granted by Lender shall be conditioned upon such surviving entity or
transferee assuming Borrower's Secured Obligations hereunder pursuant to
assignment documents reasonably acceptable to Lender. If Lender reasonably
withholds its consent to such assignment in connection with a Merger, the
outstanding principal and accrued and unpaid interest shall be prepaid in
whole.
For purposes of this Agreement, a "Merger" shall mean any consolidation
or merger of the Borrower with or into any other corporation or entity, any
sale or conveyance of an or substantially all of the assets or stock of the
Borrower by or to any other person or entity in which Borrower is not the
surviving entity.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-11-
IN WITNESS WHEREOF, the Borrower and the Lender have duly executed and
delivered this Agreement as of the day and year first above written.
BORROWER: XXXXXX.XXX
By: /s/ [Illegible]
--------------------------------
Title: CFO
--------------------------------
Date: 3/14/00
--------------------------------
ACCEPTED IN ROSEMONT, ILLINOIS:
LENDER: COMDISCO, INC.
By:
--------------------------------
Title:
--------------------------------
Date:
--------------------------------
-12-
EXHIBIT A
SECURED PROMISSORY NOTE
$292,529.79 Date: April 21, 2000
Due: November 1, 2003
FOR VALUED RECEIVED, Xxxxxx.xxx, a California corporation (the "Borrower")
hereby promises to pay to the order of Comdisco, Inc., a Delaware corporation
(the "Lender"), at X.X. Xxx 00000, Xxxxxxx, XX 00000, or such other place of
payment as the holder of this Secured Promissory Note (this "Note") may
specify from time to time in writing, in lawful money of the United States of
America, the principal amount of Two Hundred Ninety-Two Thousand Five Hundred
Twenty-Nine and 79/100 Dollars ($292,529.79) together with interest at seven
and three quarters percent (7.75%) per annum on the principal hereof
remaining from time to time unpaid, from the date of this Note until paid in
full, such principal and interest to be paid in forty-two (42) equal monthly
installments of $7,991.66 each, commencing June 1, 2000, and on the same day
of each month thereafter to and including November 1, 2003, (the "Mature
Date"), such installments to be applied first to accrued and unpaid interest
and the balance to unpaid principal. Interest shall be computed on the basis
of a year consisting of twelve months of thirty days each.
Borrower shall pay to Lender on the Maturity Date an additional fee in the
amount of $36,566.22 (the "End Fee"). The End Fee shall be fully earned as of
the date of this Note and non-refundable when paid.
This Note is the Note referred to in, and is executed and delivered in
connection with, that certain Loan and Security Agreement of even date
herewith by and between Borrower and Lender (as the same may from time to
time be amended, modified or supplemented in accordance with its terms, the
"Loan Agreement"), and is entitled to the benefit and security of the Loan
Agreement and the other Loan Documents (as defined in the Loan Agreement), to
which reference is made for a statement of all of the terms and conditions
thereof. All terms defined in the Loan Agreement shall have the same
definitions when used herein, unless otherwise defined herein.
The Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest and any other notice as permitted under the UCC
or any applicable law.
This Note has been negotiated and delivered to Lender and is payable in the
State of Illinois, and shall not become effective until accepted by Lender in
the State of Illinois. This Note shall be governed by and construed and
enforced in accordance with, the laws of the State of Illinois, excluding any
conflicts of law rules or principles that would cause the application of the
laws of any other jurisdiction.
BORROWER: XXXXXX.XXX
0000 XXXXXXX XXXXXXX, XXXXX 000
XXXXXXXX, XX 00000
Signature: ___________________
Print Name: ___________________
Title: ___________________
-1-
