EXHIBIT 10.8
MASTER LEASE AGREEMENT
DATED AS OF July 7,2000
The Master Lease AGREEMENT ("Master Lease"), is entered into as of July 7, 2000,
between Imperial Bank Equipment Leasing Division, a division of Aerial Bank
(hereinafter called "Lessor", having its principal place of business at 0000 Xx
Xxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, and Chorum Technologies, Inc., a
Corporation (hereinafter called "Lessee"), having its principal place of
business at 0000 X. Xxxxxxx Xxxx, Xxxxxxxxxx, XX 00000-0000.
I. LOCATION OF DEFINED TERMS
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Lease Lease
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Defined Term Section Sub-Section Defined Term Section Sub-Section
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Acceptance Date II D Interim Rent IV A
Assignee X A Interim Rental Term III C
Casualty Value VII C Item of Equipment II A
Certificate of Acceptance II D Lease Rate Factor IV A
Claims IX Lease Term III D
Damage VII A Lien VIII C
Daily Lease Rate Factor IV A Loss VII A
End of Term Notice XII A Master Lease Introduction
Equipment II A Purchase Documents II C
Event of Default XI A Rent IV A
Fair Market Value XII C Rent Due Date IV B
Improvement V C Renewal Term XII D
Initial Term III B Rental Period Option IV B
Equipment Repair Notice XIII B Schedule II B
Equipment Inspection Fee XIII B Seller II C
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II. LEASE OF EQUIPMENT
(A) Lease. Lessor agrees to lease to Lessee, and Lessee agrees to lease from
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Lessor, subject to the terms and conditions of the Master Lease, the equipment
and related operating systems and other software (collectively, together with
all substitutions and replacements, the "Equipment," and individually, an "Item
of Equipment" described in the equipment schedules (each a "Schedule") executed
from time to time pursuant to the Master Lease.
(B) Schedules. Each Schedule substantially in the form of that attached, when
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executed by Lessor and Lessee, shall constitute a separate lease and shall
incorporate by reference the terms and conditions of the Master Lease and any
additional terms and conditions agreed upon by the parties. In the event of a
conflict between the provisions of the Master Lease and a Schedule, the
provisions of the Schedule shall control.
(C) Equipment Procurement. Provided that no Event of Default or event which with
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notice or lapse of time or both would constitute an Event of Default has
occurred and is continuing and subject to the representations and warranties set
forth in Section VIII, Lessor may from time to time procure equipment requested
by Lessee and lease it to Lessee pursuant to the Master Lease and a Schedule;
provided, however, Lessor shall not purchase any Equipment unless Lessee is
unconditionally bound to lease it under the terms of the Master Lease and a
Schedule. Lessee
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authorizes Lessor, in reliance on Lessee's written request, to enter into
purchase orders, contracts or other documents ("Purchase Documents") for
acquisition of the Equipment with the seller of the Equipment ("Seller").
(D) Delivery Installation and Acceptance. Lessor or its designated
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representative shall arrange for delivery and installation of the Equipment at
the location specified in the applicable Schedule. Lessee shall pay all costs
associated with packing, transportation, taxes, duties, insurance, delivery,
installation, testing and support of the Equipment. Lessor will have no
liability for any delay or failure of the Seller to deliver or service the
Equipment or, license any software. Acceptance shall also be deemed to occur
upon the date of execution by Lessee of a Certificate of Acceptance in the form
of that attached. Lessee hereby authorizes Lessor to insert in any Schedule the
date of acceptance (the "Acceptance Date") for any Item of Equipment as well as
such items as serial numbers and the Equipment description and cost resulting
from any orders or change orders occurring after the Schedule is executed. In
the event of replacement by the supplier or manufacturer of any Equipment that
is determined after acceptance to be defective, the Equipment list and serial
numbers on the applicable Schedule shall be deemed amended to rafted the
substitute Equipment.
III. TERM
(A) Master Lease Term. Unless otherwise extended by the parties hereto, the term
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of the Master Lease shall begin upon execution hereof by Lessor and Lessee and
continue through the last date on which any Schedule entered into pursuant to
the Master Lease remains in effect.
(B) Initial Term. The initial term under each Schedule shall begin on the first
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Rent Due Date occurring after the Acceptance Date under such Schedule and shall
continue through the end of the month of the number of months set forth in the
Schedule as the initial term ("Initial Term").
(C) Interim Rental Term. Prior to the commencement of the Initial Term under
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each Schedule, Rent shall be due and payable to Lessor for the period beginning
on the Acceptance Date and continuing to the first Rent Due Date of the Initial
Term ("Interim Rental Term").
(D) Lease Term. "Lease Term" shall mean for each Schedule the Interim Rental
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Term, the Initial Term, and all Renewal Terms.
IV. RENT
(A) Rent. Rent for the Equipment under each Schedule for each Rental Period
(Rents shall be an amount equal to the product of the percentage ("Lease Rate
Factor") set forth in such Schedule multiplied by the total cost of the
Equipment, as set forth in such Schedule. Rent for the Interim Rental Term
("interim Rent" or any other partial rent period will be prorated on a daily
basis in an amount equal to 1/30/th/ of the monthly Rent ("Daily Lease Rate
Factor"). Rent is payable in immediately available funds to Lessor at the
address or in accordance with the wire transfer instructions set forth in such
Schedule or as otherwise directed by Lessor.
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(B) Rent Due Date. Rent under each Schedule (other than Rent for the Interim
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Rental Term) shall be payable in advance, on each rent due date ("Rent Due
Date") of the period ("Rental Period"), as set forth in such Schedule. Rent for
the Interim Rental Term shall be due and payable on the first Rent Due Date of
the Initial Term.
(C) Past Due Amounts. To the extent permitted by applicable law, Lessee will pay
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on demand a late charge as stipulated under each schedule on each installment of
Rent and any other sums payable hereunder which remain unpaid for more than ten
days after the due date thereof.
(D) NONCANCELABLE RENT AND LEASE OBLIGATIONS. ALL LEASES HEREUNDER SHALL BE NET
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LEASES. LESSEE'S OBLIGATION TO PAY RENT AND OTHER AMOUNTS DUE UNDER THE MASTER
LEASE AND EACH SCHEDULE SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE
SUBJECT TO ANY SET OFF, COUNTERCLAIM, ABATEMENT, REDUCTION, RECOUPMENT,
INTERRUPTION OR DEFENSE FOR ANY REASONS WHATSOEVER THIS AGREEMENT SHALL NOT
TERMINATE NOR SHALL THE OBLIGATIONS OF LESSEE BE AFFECTED BY REASON OF ANY
DEFECT IN OR DAMAGE TO, OR LOSS OF USE OR POSSESSION OF, OR DESTRUCTION OF ANY
EQUIPMENT FROM ANY CAUSE WHATSOEVER. IT IS THE INTENTION OF THE PARTIES THAT,
RENTS AND OTHER AMOUNTS DUE HEREUNDER SHALL CONTINUE TO BE PAYABLE IN ALL EVENTS
IN THE MANNER AND AT THE TIMES SET FORTH HEREIN UNLESS THE OBLIGATION IS
TERMINATED PURSUANT TO THE EXPRESS TERMS HEREOF. THE MASTER LEASE AND THE
SCHEDULES CANNOT BE PREPAID OR TERMINATED BY LESSEE DURING THE TERM THEREOF
UNLESS AGREED TO IN WRITING BY LESSOR.
V. EQUIPMENT OWNERSHIP, USE, MAINTENANCE AND PROTECTION
(A) Ownership and Use. Lesser shall use the Equipment in a manner which will not
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disqualify it for manufacturer maintenance, and in compliance with all laws,
rules and regulations of every governmental authority having jurisdiction over
the Equipment and within the provisions of all polities of insurance carried by
Lessee. Lessee shall obtain all permits, licenses or other authorizations
necessary for the operation and use of the Equipment Lessee shall pay all costs,
expenses, fees and charges incurred in connection with the use and operation of
the Equipment Upon Lessors request, Lessee will affix and maintain, in a
prominent place on each Item of Equipment, plates, tags or other identifying
markings indicating Lessor's ownership of the Equipment. Lessee shall not move
any Item of Equipment from the location set forth on the applicable Schedule
without the prior written consent of Lessor, which consent shall not be
unreasonably withheld. Lessor may upon reasonable prior notice to Lessee and
during regular business hours inspect the Equipment
(B) Lessors Entitlement to Tax Benefits. Lessee acknowledges that Lessor is the
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only party entitled to claim tax benefits provided by federal, state and local
income tax law to the owner of the Equipment ("Tax Benefits"); and Lessee agrees
to characterize the relationship herein established as a lease. If requested by
Lessor, Lessee shall furnish Lessor with records and other information necessary
to claim such Tax Benefits. Lessee shall not, and shall not permit any permitted
sub-lessee or assignee to, take or omit to take any action that may result in
the
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disqualification of the Equipment for, or any recapture of all or any portion of
the Tax Benefits afforded the Equipment
(C) Improvements. Lessee shall have the right, or the right to cause the Seller
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or another nationally recognized and experienced maintenance provider, to affix
or install any accessory, feature, device, improvement, modification, addition,
accession or upgrade ("Improvement") that is compatible with the Equipment In
the event an Improvement is financed, a party other than Lessor may not finance
it. If Lessor finances any Improvement, it will be leased under the Schedule
covering the related Equipment and the Master Lease term for the Improvement
will be coterminous with such Schedule. Prior to the return of the Equipment
Lessee may (if it so chooses and if the Improvement is not financed by Lessor)
and shall (if Lessor so requests) remove the Improvements or cause the
Improvements to be removed by the Setter or another nationally recognized and
experienced maintenance provider, and restore or cause to be restored the
Equipment to its original state, ordinary wear and tear excepted. Lessee shall
not remove any original parts from the Equipment without Lessor's prior written
consent Any Improvements not removed from the Equipment upon its return or upon
the occurrence of an Event of Default shall, at Lessor's option, become the
property of Lessor.
(D) Maintenance. Lessee shall, at its own cost and expense and at all times
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during the Master Lease Term, take all actions necessary to maintain or cause to
be maintained by the Seller, manufacturer or a third party maintenance provider
reasonably acceptable to Lessor, the Equipment and all Improvements in good
working order, condition and repair, at the Equipment manufacturer's most
current engineering levels (including replacement of all parts which become
damaged or worn out), and in compliance with such maintenance and repair
standards as are set forth in the manufacturers manual pertaining to the
Equipment and as otherwise may be required to enforce warranty claims against
each vendor and manufacturer of each item of Equipment and in compliance with
all requirements of law. Lessee will not discriminate such maintenance between
owned and leased equipment Lessee shall comply with all instructions issued by
the manufacturer of the Equipment, and Lessee assumes and agrees to pay any cost
necessary to have the manufacturer re-certify that the Equipment will be
eligible upon resale or release by Lessor, for the manufacturers maintenance
contract at the manufacturers standard rates as required under Section XII(B).
(E) Insurance. (1) Lessee will insure for the following risks with insurers of
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recognized responsibility: (a) All risk of loss and physical damage to the
Equipment to an amount not less than the greater of (i) the fair market
replacement value or (ii) the aggregate Casualty Value of all Equipment from
time to time and; (b) Comprehensive public liability and property damage
insurance with respect to the condition, possession, maintenance operation and
use of the Equipment in an amount not less than $1,000,000 for each occurrence.
Such insurance shall be in full force and effect by not later than the
Installation Date for each item of Equipment and shall remain in effect until
such time as each item of Equipment has been returned to, and accepted by,
Lessor in accordance with the provisions of Section XII(B) hereof.
(F) Delivery of Insurance Certificates. Lessee shall deliver to Lessor and any
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Assignees) a valid Certificate of Insurance for each such insurance policy upon
the execution thereof and a Certificate of Insurance for each renewal policy not
less than 30 days prior to the expiration of
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the original policy or any renewal policy. Such insurance shall (1) Include as
additional parties insured and loss payees Lessor and any Assignee(s), (2)
provide that such insurance shall not be materially changed or canceled without
at least 30 days prior notice to Lessor and such Assignees, and (3) provide that
such policy shall not be invalidated by any negligence of, or breach of warranty
by, Lessee. Upon the request of Lessor, Lessee shall provide any additional data
related to the insurance as Lessor reasonably requests.
(G) Failure to Provide Insurance. Lessee acknowledges and agrees that if Lessee
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fails to provide any required insurance or fails to continue such insurance in
force, Lessor may do so at Lessee's expense. The cost of any such insurance, at
the option of Lessor, shall be payable on demand or shall be added to the Master
Lease indebtedness. LESSEE ACKNOWLEDGES THAT IF LESSOR SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSCIAL DAMAGE
TO THE EQUIPMENT, UP TO THE BALANCE OF THE MASTER LEASE; HOWEVER LESSEE'S EQUITY
IN THE EQUIPMENT MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE
ANY PUBLIC LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE
REQUIREMENT OF ANY FINANCIAL RESPONSIBILITY LAWS.
VI. DISCLAIMER OF WARRANTIES; LIMITATION OF REMEDIES
LESSOR IS NOT A MANUFACTURER, SUPPLIER OR DEALER OF THE EQUIPMENT AND HAS NOT
INSPECTED THE EQUIPMENT PRIOR TO DELIVERY TO AND ACCEPTANCE BY LESSEE. LESSOR
HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE EQUIPMENT, INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION OR WARRANT. AS TO TITLE, CONDITION, QUALITY, DESIGN, CAPACITY,
VALUE, DURABILITY, SUITABILITY, SAFETY, OR COMPLIANCE WITH ANY LAW. RULE,
REGULAT10N OR SPECIFICATION, AS TO MERCHANTABILITY OR FITNESS FOR USE OR FITNESS
FOR A PARTICULAR PURPOSE, OR AS TO PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT,
IT BEING AGREED THAT THE EQUIPMENT IS LEASED 'AS IS' AND THAT ALL SUCH RISKS, AS
BETWEEN LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT
IT HAS SELECTED THE EQUIPMENT FROM THE SELLER THEREOF ON THE BASIS OF LESSEE'S
JUDGMENT AND EXPRESSLY DISCLAIMS ANY RELIANCE UPON ANY STATEMENT MADE BY LESSOR
OR ITS AGENTS. LESSOR SHALL NOT IN ANY EVENT BE LIABLE FOR ANY INDIRECT,
CONSEQUENTIAL OR SPECIAL DAMAGES, EVEN IF LESSOR HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
VII. RISK OF LOSS
(A) Risk of Loss. Lessee shall bear the entire risk of the Equipment if damaged,
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destroyed or rendered permanently unfit or unavailable for use after its
shipment to Lessee and until it is accepted by Lessor in accordance with Section
XII(B) hereof.
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(B) Damage/Event of Loss. (1) In the event any item of Equipment is damaged to a
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material extent by any occurrence whatsoever, Lessee shall promptly notify
Lessor and shall determine within 15 days of the date of such notice whether
such item of Equipment can be repaired If such Equipment can be repaired, Lessee
shall at its cost and expense repair such Equipment to its original condition.
(2) In the event any item of Equipment shall be lost, stolen, destroyed, damaged
beyond repair, or rendered permanently unfit or unavailable for use (through a
governmental taking or any other event), for any reason whatsoever (any such
occurrence being referred to as an "Event of Loss", Lessee shall promptly notify
Lessor and pay to Lessor, on the first day of the month immediately following
such Event of Loss, an amount equal to the Casualty Value applicable to such
item of Equipment calculated as of the immediately preceding Rent Due Date plus
any unpaid Rent and the installment of Rent for such item of Equipment due on
the Rent Due Date following the Event of Loss. After the payment of such
amounts, Lessee's obligation to pay further Basic Rent for such item of
Equipment shall cease, but Lessee's obligation to pay Interim Rent, if any, for
such item of Equipment, and to pay Rent for all other items of Equipment shall
remain unchanged. (3) Following payment of the Casualty Value and Rent for an
item of Equipment in accordance with the provisions sentence 2 of this Section
VII(B), Lessor shall transfer title to such item of Equipment to Lessee on an AS
IS, WHERE IS basis without representation or warranty.
(C) Casualty Value. The Casualty Value from time to time for any item of
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Equipment subject to a Schedule shall be an amount equal to the greater of *)
the item of Equipment's installed/in-place fair market value at the time of the
Casualty Value determination, or (2) 110% of the Item(s) of Equipment cost as of
the Acceptance Date, declining in even monthly steps to 15% at expiration and
remaining at that value thereafter.
(D) Disposition of Insurance and Other Proceeds. The proceeds of insurance or
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any condemnation of an item of Equipment for which an Event of Loss has occurred
shall be paid to Lessor (to the extent that Lessor has not previously received
all Casualty Value and other payments required to be made by Lessee pursuant to
the Master Lease), and the remainder, if any, shall be paid to Lessee. The
proceeds of insurance with respect to damage to an item of Equipment, the repair
of which, in the opinion of Lessee, is practicable shall unless an Event of
Default hereunder has occurred and is continuing be applied either to such
repair or to the reimbursement of Lessee for the cost of such repair.
VIII. LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
(A) Representations and Warranties. Lessee represents, warrants and covenants to
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Lessor, as of the date of the Master Lease and as of the date of each Schedule,
that: (1) Lessee's execution, delivery and performance of the Master Lease and
each Schedule have been duly authorized by all necessary action on the part of
Lessee, and the Master Lease and each Schedule constitute legal, valid and
binding obligations of Lessee; (2) the execution and delivery by Lessee of the
Master Lease and each Schedule and the performance of its obligations thereunder
do not conflict with or result In a material breach of Lessee's organizational
documents or applicable law, or any judgment order, writ, injunction, decree,
rule or regulation of any court, administrative agency or other governmental
authority, or any agreement or other instrument to which Lessee is a party or by
which it is bound; (3) there are no pending or, to the knowledge of
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Lessee, threatened actions or proceedings that could materially adversely affect
the ability of Lessee to perform its obligations under the Master Lease and the
Schedules; (4) there has been no material adverse change in Lessee's financial
condition since the date of the Master Lease; and (5) Lessee has obtained the
proper licenses to use, or ownership of, any software which is or may be used in
connection with the Equipment
(B) Assignment and Transfer. LESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN
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CONSENT OF LESSOR SELL, TRANSFER, ASSIGN. SUBLEASE (EXCEPT, UPON PRIOR WRITTEN
NOTICE TO LESSOR, A SUBLEASE TO A WHOLLY OWNED OR CONTROLLED SUBSIDIARY OR TO
ITS PARENT), PLEDGE OR HYPOTHECATE THE MASTER LEASE, ANY SCHEDULE, THE EQUIPMENT
OR ANY PART THEREOF OR ANY INTEREST THEREIN. Lessee shall not, without the prior
written consent of Lessor, which shall not be unreasonably withheld, merge or
consolidate with any corporation or other entity (unless Lessee is the surviving
entity or the surviving entity continues the business of Lessee and assumes the
Master Lease and ail Schedules) and shall not sell, transfer or otherwise
dispose of all or any substantial part of Lessee's assets.
(C) No Liens. Lessee shall not directly or Indirectly create, incur, assume or
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allow to exist any lien, mortgage, pledge, security interest, charge,
encumbrance, right, or claim of any kind ("Lien" on or with respect to the
Master Lease, any Schedule or any item of Equipment. Lessee will promptly notify
Lessor in writing of the existence of any Lien and will promptly, at Lessee's
expense, cause any such Lien to be duly discharged.
(D) Payment of Taxes. Lessee shall reimburse Lessor for, and indemnify and hold
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Lessor harmless from, all sales, use, personal property, stamp or other taxes,
and all levies, imposts, duties, charges, fees, assessments or withholdings of
any nature whatsoever (other than those measured by Lessor's net income),
together with any penalties, fines or interest thereon which are at any time
levied, assessed or imposed on the Equipment or any interest of Lessor or Lessee
therein or on the sale, purchase, delivery, ownership, possession, use or
operation of the Equipment or the rentals or other amounts payable under this
Agreement or any Schedule. If requested by Lessor or if filing by Lessee is
required by law, Lessee shall prepare and file, or cause to be prepared and
filed, all necessary xxxxxx for the assessment of such taxes and shall promptly
send to Lessor a copy of such filing.
(E) Financial Reports. Lessee shall upon execution hereof, and for the term of
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the Master Lease and any Schedules, amendments, extensions and addendums
thereto, furnish or caused to be furnished to Lessor the following: (1) the
audited annual financial statements of Lessee within 120 days after the close of
each fiscal year; (2) quarterly financial statements in a form reasonably
acceptable to Lessor within 60 days after the close of each fiscal quarter, and
(3) monthly financial statements in a forth reasonably acceptable to Lessor
within 30 days after the close of each fiscal month.
(F) Further Assurances: Payment of Lessor's Expenses. Lessee shall promptly
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execute and deliver, or cause to be executed and delivered to Lessor such
further documents and take such further action as Lessor may from time to time
request in order to more effectively carry out the intent and purpose of the
Master Lease and each Schedule, protect the rights and remedies of
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Lessor created or intended to be created thereunder and perfect and protect
Lessor's interest in the Equipment Lessee shall pay all reasonable costs
(including reasonable legal fees and costs) and expenses incurred by Lessor in
the consummation or interpretation of the Master Lease or any Schedule; in
collecting or attempting to collect any sums owed under the Master Lease or any
Schedule; or in enforcing any of Lessor's rights or remedies under the Master
Lease or any Schedule. Lessee shall also pay all filing fees, Lien search fees,
recordation fees and related expenses reasonably incurred by Lessor in
connection with the Master Lease or any Schedule.
(G) Notification. Lessee shall notify Lessor within 10 days of any material
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changes in the management, ownership or control of Lessee.
IX. GENERAL INDEMNITY
(A) LESSEE SHALL INDEMNIFY HOLD HARMLESS AND DEFEND LESSOR AND ITS SUCCESSORS
AND ASSIGNS AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
AGAINST ALL CLAIMS DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE
EQUIPMENT, THE MASTER LEASE OR ANY SCHEDULE, EXCEPT FOR CLAIMS RESULTING SOLELY
FROM LESSOR'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. "CLAIMS" REFERS TO ALL
LOSSES LIABILITIES, DAMAGES, PENALTIES, EXPENSES (INCLUDING REASONABLE LEGAL
FEES AND COSTS), CLAIMS, ACTIONS AND SUITS, WHETHER IN CONTRACT OR IN TORT AND
WHETHER BASED ON A THEORY OF STRICT LIABILITY OF LESSOR OR OTHERWISE, AND
INCLUDES, BUT IS NOT LIMITED T0, MATTERS RELATING TO: (1) THE SELECTION,
MANUFACTURE, PURCHASE, ACCEPTANCE, REJECTION, OWNERSHIP, DELIVERY, LEASE,
POSSESSION, STORAGE, MAINTENANCE, USE, CONDITION, RETURN OR OPERATION OF THE
EQUIPMENT; (2) ANY LATENT DEFECTS OR OTHER DEFECTS IN ANY EQUIPMENT, WHETHER OR
NOT DISCOVERABLE BY LESSOR OR LESSEE; (3) ANY PATENT, TRADEMARK OR COPYRIGHT
INFRINGEMENT; AND (4) THE CONDITION OF ANY EQUIPMENT ARISING OR EXISTING DURING
LESSEE'S USE. (B) LESSOR SHALL PROMPTLY NOTIFY LESSEE OF ANY CLAIM AFTER RECEIPT
OF A WRITTEN NOTICE OF SUCH CLAIM BY LESSOR, AND LESSEE SHALL HAVE THIRTY (30)
DAYS TO ELECT TO DEFEND, COMPROMISE OR SETTLE THE CLAIM. IF LESSEE ELECTS TO
DEFEND THE CLAIM, (1) LESSOR SHALL HAVE THE RIGHT TO APPROVE LESSEE'S SELECTION
OF COUNSEL, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, AND SHALL HAVE
THE RIGHT AT ITS ELECTION TO PARTICIPATE IN SUCH DEFENSE, AND (2) LESSEE SHALL
NOT BE RESPONSIBLE FOR ANY LEGAL FEES OR OTHER EXPENSES RELATING TO DEFENSE OF
THAT CLAIM THAT LESSOR MAY THEREAFTER ELECT TO INCUR LESSEE SHALL NOT CONSENT TO
ENTRY OF ANY JUDGMENT OR ENTER INTO ANY SETTLEMENT WITHOUT THE EXPRESS WRITTEN
CONSENT IF LESSOR. THIS INDEMNIFICATION OBLIGATION SHALL SURVIVE TERMINATION OR
EXPIRATION OF THE MASTER LEASE OR ANY SCHEDULE.
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X. LESSOR RIGHTS
(A) Assignment. Lessor (and any assignee of Lessor) shall have the right to
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sell, assign, transfer, pledge, mortgage or otherwise convey its interest in the
Master Lease, one or more Schedules, any or all of the Equipment or any of its
rights, interests or obligations with respect thereto, in whole or in part, to
one or more persons or entities (each, an "Assignee") without notice to, or
consent of, Lessee. Notwithstanding such assignment, Lessor shall not be
relieved of its obligations hereunder except to the extent of such assignment
Lessee agrees that if any Schedule is assigned, (1) Lessee shall, if instructed
by Lessor, pay all amounts due under such Schedule to the Assignee, (2) Lessee
shall execute such acknowledgments to such assignment as are reasonably required
by the Assignee to perfect and protect its right, title and interest in and to
the Equipment, the applicable Schedule and the Rent due thereunder, and (3)
Lessee shall not require the Assignee to perform any obligation of Lessor, other
than those that are expressly assumed by such Assignee, and shall not assert
against any Assignee any claim, defense, counterclaim or set-off that Lessee may
at any time have against Lessor.
LESSEE ACKNOWLEDGES THAT ANY ASSIGNMENT OR TRANSFER IN ACCORDANCE WITH THIS
SECTION BY LESSOR OR AN ASSIGNEE WILL NOT MATERIALLY CHANGE LESSEE'S DUTIES OR
OBLIGATIONS UNDER THE MASTER LEASE OR THE ASSIGNED SCHEDULE NOR MATERIALLY
INCREASE THE BURDENS OR RISKS IMPOSED ON LESSEE.
(B) Lessor's Performance of Lessee's Obligations. If Lessee fails to perform its
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obligations under the Master Lease or any Schedule, Lessor shall have the right
but not the obligation, without releasing Lessee from any obligation hereunder
or under any Schedule, to perform any act or make any payment that Lessor
reasonably deems necessary for the maintenance and protection of the Equipment
and Lessor's interests in the Equipment and in the Master Lease and the
Schedules, and in exercising any such rights, incur any liability and expend any
amounts reasonably necessary to protect such Interests. All sums so incurred and
expended by Lessor, together with expenses (including reasonable legal fees and
costs) Incurred in connection therewith, shall be immediately due and payable by
Lessee and shall bear interest at the interest rate for late payments set forth
in the applicable Schedule (or such lesser rate or amount as may then be the
maximum permitted by applicable law), from the date so incurred or expended by
Lessor to the date payment is received by Lessor.
(C) Financing Statements. Lessor may, at its option, file with such authorities
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and in such locations, as ft may deem appropriate, Uniform Commercial Code
financing statements relating to the Equipment, the Master Lease, the Schedules
and the rents payable thereunder. Lessee agrees to promptly execute and deliver
to Lessor any such financing statements requested by Lessor. provided that
Lessor may, at its option, file Uniform Commercial Code financing statements
signed by Lessor only, and if Lessee's signature is required by law, Lessee
appoints Lessor as Lessee's attorney-in-fact to execute such financing
statements or file a copy of the Master Lease or any Schedule as a financing
statement Lessee will promptly notify Lessor of any change in the location of
Its principal place of business or chief executive office.
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XI. DEFAULT AND REMEDIES.
(A) Events of Default. An "Event of Default" shall occur hereunder and under all
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Schedules if Lessee (1) fails to pay any installment of Rent or other payment
required hereunder or under any Schedule within the time period set forth in a
Schedule; (2) is in default subject to the terms of any other loan or lease
agreement with Imperial Bank or any other party: (3) fails to timely perform or
observe any covenant, condition or agreement set forth in the Master Lease or
any Schedule; (4) experiences a material adverse change in Its financial
condition as reasonably determined by Lessor; (5) becomes insolvent or makes an
assignment for the benefit of creditors, or institutes or has instituted against
it bankruptcy, reorganization or insolvency proceedings (and, in the case of any
such proceedings instituted against Lessee, such proceeding is not stayed or
dismissed within thirty (30) days), or a trustee, administrator or receiver
shall be appointed for Lessee or for a substantial part of its property; or (6)
makes any statement, representation or warranty in the Master Lease or any
Schedule that is false or misleading in any material respect when made.
(B) Remedies. (1) If an Event of Default occurs under the Master Lease, Lessor
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may give Lessee notice of the Event of Default and upon the giving of such
notice or at any time thereafter do any or all of the following (as Lessor in
its sole discretion elects): (a) proceed by appropriate court action or actions
to enforce performance by Lessee of the applicable covenants and terms of the
Master Lease or to recover damages for the breach thereof; (b) take possession
(by summary proceedings or otherwise) of any or all items of Equipment subject
to the Master Lease without prejudice to any other remedy or claim herein
referred to; (c) hold, sell, lease, or otherwise dispose of, any or all items of
Equipment subject to the Master Lease, in any manner Lessor (in its sole
discretion) elects; (d) receive from Lessee upon demand for any or all Equipment
subject to the Master Lease the following amounts which Lessee shall be
obligated to pay: (i) any unpaid Rent past due (ii) as liquidated damages for
loss of bargain and not as a penalty, the aggregate Casualty Value for such
Equipment under the Master Lease in effect as of the date on which such Event of
Default occurred, (iii) all costs and expenses incurred in searching for,
taking, removing, keeping storing repairing, and restoring such items of
Equipment, (iv) all other amounts then owing by Lessee hereunder and (v) all
costs and expenses, including (without limitation) reasonable legal fees and
expenses, incurred by Lessor as a result of an Event of Default, or the exercise
by Lessor of its remedies under this Section XI(A) or in connection with any
bankruptcy proceeding of the Lessee (including, without limitation, fees and
expenses incurred in connection with relief from stay motions relating to the
Equipment cash collateral disputes, assumption/rejection motions relating to the
Equipment and disputes relating to any proposed plan and/or disclosure
statement); (e) by notice to Lessee, declare the Master Lease (for any or all
Equipment) canceled without prejudice to Lessor's rights in respect of all
obligations set forth in this Section XI(A) and any other obligations under the
Master Lease then accrued and remaining unsatisfied; or (f) avail itself of any
other remedy or remedies provided for by any statute or otherwise available by
law, in equity or in bankruptcy or insolvency proceedings; or (g) terminate any
other Lease that Lessor may have with Lessee.
(C) The remedies set forth in this Section XI(B), (Remedies), are not intended
to be exclusive, and each shall be cumulative. The amounts to be paid to Lessor
under clause (d) of Section XI(B) shall be increased by interest, at the Late
Charge Rate, to the date of receipt by Lessor of
Page 10 of 15
the amount payable under said clause, from the respective due dates of such
amounts or (with respect to costs, expenses, and losses for which Lessor is
entitled to payment or reimbursement under said clause) from the respective
dates incurred by Lessor.
(D) Any amounts received by Lessor as the result of its sale, lease during the
original tern hereof, or other disposition of the Equipment hereunder shall be
paid or applied in the following order: (1) to any remaining obligation of
Lessee under clause (d) of Section XI (B), (2) to reimburse Lessee for the
Casualty Value previously paid as liquidated damages, and (3) to Lessor, any
remaining balance.
XII. END OF LEASE TERM
(A) End of Term Notice. Lessee shall give Lessor no less than ninety (90) days
------------------
and no more than 365 days written notice prior to the expiration of the Master
Lease Term under any Schedule, as to whether it will purchase, return or extend
the tern of the Master Leased Equipment on the applicable Schedule at expiration
of the Master Lease Term ("End of Term Notice"). If Lessee fails to give timely
notice or fails to return the Equipment b Lessor upon expiration of the Master
Lease Term as provided herein, the Schedule shall continue in full force and
effect and will extend on a month to month basis at the applicable Rent, until
Lessee provides Lessor with ninety (90) days prior written notice of Lessee's
intent to purchase, return or extend the tern of the Master Leased Equipment on
the applicable Schedule. Such notice once given shall be irrevocable.
(B) Return. (1) Upon the expiration or other permitted termination of any
------
Schedule or any extension thereof ("Expiration Date"); Lessee, at its sole cost,
risk, and expense, will return to Lessor all, (but not less than all), of the
Equipment then subject to such Schedule to a location in the Continental United
States specified by Lessor. Lessee shall be responsible at its sole cost and
expense, for (a) the deinstallation, removal and packaging of the Equipment
(including, but not limited to, any and all software, all manuals, maintenance
records, maintenance record jackets, repair orders and all other similar
documents) in a manner suitable for cartage by a common commercial carrier
acceptable to Lessor, and (b) the transportation of the Equipment; upon written
notification by Lessor, as to the date and destination of the shipping. Such
Equipment upon return, shall be free and dear of all mortgages, liens, security
interest, charges, encumbrances and claims. If Lessor shall so require, Lessee
shall provide free and safe storage, as well as maintain sufficient insurance
coverage (as specified in the Master Lease) for such Equipment for a period not
to exceed 120 days from the Expiration Date or the last day of any extension
period therefor. (2) Upon return of such Equipment Lessor or its agent shall
inspect the Equipment If any item of Equipment is not returned to Lessor, it
shall be deemed to be a casualty and an Event of Loss during the Master Lease
Term. In the event Lessor determines that repairs, additions or replacements are
necessary to place the Equipment in the same condition as when originally leased
to Lessee (reasonable wear and tear excepted), which at a minimum will require
that the Equipment be in complete and running condition with no missing or
damaged components and/or certified as being eligible for the Sellers or the
manufacturers generally available maintenance contract at then prevailing
prices. (3) If Lessor determines that the Equipment (after Inspection) is
damaged or worn beyond normal wear and tear, Lessor or Lessors agent will
prepare an invoice which fully describes the repairs and the estimated cost
Page 11 of 15
required to place the Equipment in complete and running condition, and certified
as being eligible for the Sellers or the manufacturers generally available
maintenance contract ('Equipment Repair Notice. Lessee shall pay such invoiced
costs in addition to an inspection fee equal to one-tenth (.1 %) percent of the
applicable Equipment's cost as set forth In the applicable schedule ("Equipment
Inspection Fee"), within ten (10) days of the date of such notice. (4) In the
event Lessee fails to remit payment to Lessor within ten (10) days of receiving
such Equipment Repair Notice, Lessee shall pay to Lessor, Interim Rent equal to
the Daily Lease Rate Factor, multiplied by the Equipment cost as set forth In
the applicable Schedule, for each day in excess of the Master Lease Term, until
such Equipment Repair Notice payment is made.
(C) Purchase Option. Provided that no Event of Default has occurred and the
---------------
applicable Equipment Schedule has not been previously terminated, Lessee shall
have the right at its option, upon not less than 90 days and no more than 365
days written notice to Lessor prior to the Expiration Date, to purchase all (but
not less than all) of the Equipment subject to the applicable Schedule on its
Expiration Date. In such case, Lessee's purchase price shall be payable to
Lessor on the Expiration Date and shall be an amount equal to the Equipment's
fair market value as determined by Lessor In good with. Lessor shall transfer to
Lessee, "AS IS" "WHERE IS," without recourse or warranty, expressed or implied,
of any nature (except to warrant to those claiming by, under or through Lessee,
the absence of any liens created by Lessor), all of Lessor's right, title and
interest in and to the Items) of Equipment with respect to which such payment
has been received.
(D) Renewal Option. Provided that no Event of Default has occurred and the
--------------
applicable lease Schedule has not been earlier terminated Lessee shall have the
right at its option, upon not less than ninety (90) days and no more than 365
days written notice to Lessor prior to the Expiration Date, to renew all (but
not less than all) of the Equipment subject to the applicable Equipment Schedule
for a first term renewal period not less than six months.
XII. MISCELLANEOUS
(A) Captions: Counterparts: Integration: Entire Agreement. The captions
-----------------------------------------------------
contained in the Master Lease are for convenience only and shall not affect the
interpretation of the Master Lease. The Master Lease and the Schedules may be
executed by the parties in one or more Counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
agreement. Only one counterpart of the Master Lease and each Schedule shall be
marked "Original," and all other counterparts shall be marked "Duplicate." To
the extent, if any, that the Master Lease or any Schedule constitutes chattel
paper (as such term is defined in the Uniform Commercial Code in effect in any
applicable jurisdiction), no security interest in the Master Lease or any such
Schedule may be created through the transfer or possession of any counterpart
other than the Original. THIS AGREEMENT, TOGETHER WITH ALL SCHEDULES, ANNEXES
AND EXHIBITS THERETO, CONSTITUTES THE ENTIRE AGREEMENT OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF. NO VARIATION OR MODIFICATION OF THIS
AGREEMENT OR ANY WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS SHALL BE VALID
UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH OF THE
PARTIES HERETO.
Page 12 of 15
(B) Notices. All notices under the Master Lease and the Schedules shall be in
-------
writing and shall be delivered to the parties by certified mail, return receipt
requested, by courier service or by facsimile transmission, at their respective
addresses or facsimile numbers set forth in the Schedules (or such other address
or number as either party may designate in writing from time to time). Notice
shall be deemed to have been given (1) on the third day after being deposited in
the United States mail, by certified mail, return receipt requested, properly
addressed and with postage prepaid; or (2) on the day delivered by courier
service or transmitted by facsimile.
(C) No Waiver: Lessor Approval. Any failure of Lessor to require strict
--------------------------
performance by Lessee or any written waiver by Lessor of any provision of the
Master Lease or any Schedule shall not constitute consent to or waiver of any
other breach of the same or any other provision of the Master Lease or any
Schedule. The Master Lease and each Schedule shall not be binding upon Lessor
unless and until executed by Lessor.
(D) Governing Law: Severability. THE MASTER LEASE AND EACH SCHEDULE SHALL BE
---------------------------
GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE
STATE OF CALIFORNIA. If any provision of the Master Lease or any Schedule is
illegal, invalid or unenforceable under any applicable law of any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent such
laws apply without invalidating the remaining provisions of the Master Lease or
such Schedule or causing such provision to be ineffective or unenforceable under
the laws of any other jurisdiction.
(E) Quiet Enjoyment. So long as no Event of Default has occurred and is
---------------
continuing, neither Lessor nor any Assignee will interfere with Lessee's quiet
enjoyment and use of the Equipment.
(F) Survival. All obligations of Lessee to make payments to Lessor under the
--------
Master Lease or any Schedule or to indemnify Lessor pursuant to the terms of the
Master Lease or any Schedule, and all rights of Lessor under the Master Lease
and each Schedule shall survive the expiration or termination of the Master
Lease and each Schedule.
(G) Software. Any software or other licensed products attached to or provided in
--------
connection with the Equipment shall at all times remain property of the owner
thereof, and Lessee shall not obtain title to any such software.
(H) Export Laws. Lessee shall not export or re-export , directly or indirectly,
-----------
any software or technology received by It in connection with the Master Lease or
any Schedule, or allow the direct product thereof to be exported or re-exported,
directly or indirectly, in violation of applicable law, including without
limitation the regulations of the United States Department of Commerce.
(I) Present Value. In the event it is necessary to determine the present value
-------------
of rentals under any Schedule, the parties agree that the discount rate to be
used in determining such present values shall be the then prevailing Federal
Reserve Bank Discount Rate as published in the Wall Street Journal as of the
date of discounting.
Page 13 of 15
(J) Foreign Corrupt Practices Act. The parties shall comply with all applicable
-----------------------------
laws affecting this Agreement and the performance of this Agreement. The parties
shall maintain all registrations with governmental agencies, commercial
registries xxxxxxxx of commerce, or other offices which may required under local
law in order to conduct their commercial business. The parties shall also comply
with United States laws applicable to the sale of the Equipment, including the
Foreign Corrupt Practices Act (which prohibits certain payments to governmental
officials or political parties).
(K) True Lease: Maximum Rate. The Master Lease and the Schedules are intended to
------------------------
be a "Finance Lease," as defined in Article 2A of the Uniform Commercial Code,
unless otherwise indicated in a Schedule. Lessor hereby informs Lessee that (1)
the identity of the Seller is set forth in the applicable Schedule, (2) the
Lessee is entitled under Article 2A to the promises and warranties, including
those of any third party, provided to Lessor in connection with, or as part of,
the contract by which Lessor acquired the Equipment, and (3) Lessee may
communicate with the Seller and receive an accurate and complete statement of
the promises and warranties, including any disclaimers and limitations of them
or of remedies. As a precaution in the event that, notwithstanding the express
intention of the parties hereto to enter into a true lease, the Master Lease or
any Schedule is ever deemed to be other than a true lease, or in the event that
the parties hereto intend to enter Into a lease intended as security, if so
indicated on the applicable Schedule, Lessee hereby grants Lessor a security
interest in the Equipment and all proceeds thereof, including, without
limitation, insurance proceeds. In any such event, notwithstanding any
provisions contained herein or in any Schedule, neither Lessor nor any Assignee
shall be entitled to receive, collect or apply as interest any amount in excess
of the maximum rate or amount permitted by applicable law. In the event Lessor
or any Assignee ever receives, collects or applies as interest any amount in
excess of the maximum amount permitted by applicable law, such excess amount.
shall be applied to the unpaid principal balance and any remaining excess
refunded to Lessee. In determining whether the interest paid or payable under
any specific contingency exceeds the maximum rate or amount permitted by
applicable law, Lessor and Lessee shall, to the maximum extent permitted under
applicable law, characterize any non principal payment as an expense or fee
rather than intent, exclude voluntary prepayments and the effect thereof, and
spread the total amount of interest over the entire term of the Master Lease and
the Schedules.
(L) Waiver of Jury Trial. Etc. The Lessee and the Lessor each hereby waives any
-------------------------
right to trial by jury in any litigation in any Court with respect to, in
connection with, or arising out of the Master Lease or any schedule entered into
in connection therewith, or any other claim or dispute howsoever arising,
between the Lessor and the Lessee.
Page 14 of 15
LESSEE, BY THE SIGNATURE BELOW OF ITS AUTHORIZED REPRESENTATIVE, ACKNOWLEDGES
THAT IT HAS READ THE MASTER LEASE, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS
TERMS AND CONDITIONS.
LESSOR: IMPERIAL BANK EQUIPMENT LESSEE: Chorum Technologies, Inc.
LEASING DIVISION,
A Division of Imperial Bank
Signature: _________________________ Signature: /s/ Xxx Xxxxxxxxx
-------------------------
Name: _________________________ Name: Xxx Xxxxxxxxx
Title: _________________________ Title: VP Finance
Page 15 of 15
IMPERIAL BANK EQUIPMENT LEASING DIVISION, Amendment A
A division of Imperial Bank
THIS AMENDMENT "A" dated July 7, 2000, to Master Lease Agreement dated July
7, 2000, (the "Agreement"), is entered into by and between IMPERIAL BANK
EQUIPMENT LEASING DIVISION, a division of Imperial Bank, a California
corporation and Chorum Technologies, Inc., a corporation. Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the
Agreement.
1. The Agreement is hereby amended as follows:
MASTER LEASE AGREEMENT:
IV. RENT
(A) Rent - Line 4. - Delete section between "at the address" and
----
"Lessor" and amend to read "at the Lessor's address or as
otherwise directed by Lessor."
VIII. LESSEE'S REPRESENTATIONS, WARRANTIES AND CONVENANTS
(F) Further Assurances; Payment of Lessor's Expenses.
------------------------------------------------
Line 4 - Between "reasonable" and "costs" insert "incremental
outside direct"
Line 5 - Delete "or interpretation"
Line 6 - Between "Schedule and ";" insert "during the existence
of any Event of Default"
(G) Notification.
------------
Line 1 - Between "within" and "days" replace "10" with "20"
IX. GENERAL INDEMNITY
Line 11(B) - Between "HAVE" and "DAYS" replace "THIRTY (30)" with
"SIXTY (60)"
X. LESSOR'S RIGHTS
(A) Assignment.
----------
Line 1 - After "Assignment," Insert "At any time after funding
----------
with respect to any schedule.
Line 3 - After "Assignee")" Insert "with a limit of three
Assignees other than Imperial Bank Equipment Leasing
Division."
XI. DEFAULTS AND REMEDIES
(A) Events of Default.
-----------------
(1) Line 2 - Replace "the time period set forth in a schedule"
with "ten (10) days of the date due"
(2) Line 3 - Delete "or any other party"
APPENDIX A- CONTINED
XII. END OF LEASE TERM
(B) Return.
------
(1) Line 2 - Between "Lessor" and "all" insert "any or"
Line 2 - Between "all": and "of" delete ",(but not less
than all),"
(1) (b) Line 8 - Replace "120 days" with "60 days"
(2) Line 9 - Between "returned" and "to" insert "or paid
for"
(3) Line 17 - Replace "one-tenth (.1%)" with "one-twentieth
.05%"
(C) Purchase Option.
---------------
Line 1 - Between "occurred" and "and" insert "and has
not been cured"
Line 3 - Between "purchase" and "all" insert "any or"
Line 3 - Between "all" and "of" delete "(but not less
than all),"
"occurred" and "and" insert "and has not been cured"
(D) Renewal Option.
---------------
Line 1 - Between "occured"
Line 2 - Between "renew" and "all" insert "any or"
Line 3 - Between "all" and "of" delete "(but not less
than all)"
XII MISCELLANEOUS
(1) Line 2 - Delete verbiage between "prevailing" and
"discounting" and replace with "prime rate of
Imperial Bank."
SCHEDULE "B" TO EQUIPMENT SCHEDULE 001:
Paragraph 1 - Line 2 - Delete "all, (but not less than all)," replace with "any
or all"
Line 2 - Between "subject" and Schedule" insert "to this"
Line 9 - Replace "120 days" with "60 days"
Paragraph 3 - Line 5 - Replace "one-tenth (.1%)" with "one-twentieth (.05%)"
Line 7 - Replace "ten (10)" with "thirty (30)"
2. Except as specifically set forth herein, all of the terms and provisions of
the Agreement are ratified and confirmed by the parties hereto and shall remain
in full force and effect.
3. This Amendment shall be governed by, construed and interpreted in
accordance with the internal laws (and not the law of conflicts) of the state of
California.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their authorized representatives the day and year first above
written.
IMPERIAL BANK EQUIPMENT LEASING DIVISION, Chorum Technologies, Inc. A division
of Imperial Bank
By: _______________________________________ By: /s/ Xxx Xxxxxxxx
_____________________
Its: ______________________________________ Its: VP Finance
2
SCHEDULE NO. 001
Dated as of July 7, 2000
Lessee 848
A Schedule Made Pursuant to Master Lease Agreement
Dated as of July 7, 2000,
Between Imperial Bank Equipment Leasing Division,
a division of Imperial Bank, as Lessor,
and Chorum Technologies, Inc., as Lessee
The terms and conditions of this Schedule incorporate the terms and
conditions of the Master Lease Agreement identified above. Capitalized
terms not defined in this Schedule shall have the meanings assigned to them
in the Master Lease Agreement.
I. EQUIPMENT
The Equipment covered by this Schedule is described on Schedule A,
attached.
II. ADDRESSES FOR LESSEE AND LESSOR:
(A) Lessee's Address(es):
--------------------
(1) Chief Executive Office Address: 0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
(2) Lessee's Address to Receive Invoices: Attention: Accounts Payable
0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Contact Name: Xxx Xxxxxxxxx
Contact Phone Number: 000-000-0000
Contact Facsimile Number: 000-000-0000
(3) Lessee's Address to Receive Notices: Same
Contact Name: Same
Contact Phone Number:
Contact Facsimile Number:
(B) Lessor's Addresses:
------------------
(1) Chief Executive Office: Imperial Bank Equipment
Leasing Division 0000 Xxxxx
Xx Xxxxxxx Xxxxxxxxx 00xx
Xxxxx Xxxxxxxxx, XX 00000
(2) Address for Payments: Imperial Bank Equipment Leasing Division
Payment Processing 0000 Xxxxx Xx Xxxxxxx
Xxxxxxxxx 00/xx/ Xxxxx Xxxxxxxxx, XX 00000
III. FINANCIAL TERMS
(A) Equipment Acquisition Cost: $10,000,000.00 (maximum of 25% for software
and soft costs with the hardware portion on
a per schedule basis not to exceed 20% for
information technology equipment) With 50%
equipment leased no later than December 31,
2000.
(B) Equipment Location: 0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
(C) Initial Term (number of months): 48 Months
(D) Initial Term Commencement Date: 1st day of the month following Acceptance
Date
(E) Lessee's Federal Tax ID: 00-0000000
(F) Lease Rate Factor: 2.4140%
(G) Acceptance Date: TBD
(H) Seller: Various Vendors
(I) Purchase Option: Fair Market Value not to exceed 15% of
Original Acquisition Cost.
(J) Documentation Fee: $250.00. Legal documentation to be
performed by Imperial Bank attorneys.
IV. RENT AND TERM
(A) Rent: On a per Schedule basis, monthly rent will
be based upon the Lease Rate Factor(s)
multiplied by the Equipment Acquisition
Cost plus applicable tax
(B) Due with Documentation: $250.00
2
(C) Rent Due Date: 1st of the month
(D) Rent past due after: 10 days
(E) Late Charge: 1.5% of the current amount(s) due
(Not to exceed maximum rate
permitted by applicable law)
(F) Rental Period: Monthly in advance
(G) Required Notice No less than 90 days or no more than 365
days prior to Lease Termination
LESSEE, BY THE SIGNATURE BELOW OF ITS AUTHORIZED REPRESENTATIVE, ACKNOWLEDGES
THAT IT HAS READ THIS LEASE, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS
AND CONDITIONS.
LESSOR: IMPERIAL LEASING LESSEE: CHORUM TECHNOLOGIES,
A Division of Imperial Bank INC.
Signature: ________________________ Signature: /s/ Xxx Xxxxxxxxx
----------------------------
Name: ________________________ Name: Xxx Xxxxxxxxx
Title: ________________________ Title: VP Finance
3
SCHEDULE"A"
TO EQUIPMENT SCHEDULE NO. 001
TO MASTER LEASE AGREEMENT
DATED AS OF JULY 7, 2000
BETWEEN IMPERIAL BANK EQUIPMENT LEASING DIVISION,
A DIVISION OF IMPERIAL BANK, AS LESSOR,
AND CHORUM TECHNOLOGIES, INC., AS LESSEE
EQUIPMENT LIST
Equipment Description Quantity Estimated Cost
--------------------- -------- --------------
Computer hardware to include servers, desktop PC's, $10,000,000.00
notebook, computers, computer peripherals, telecom gear,
test equipment, manufacturing machinery and equipment,
furniture and other miscellaneous equipment.
Up to 25% of the lease line may be used for software and
soft costs. The hardware portion on a per schedule basis
shall not exceed 20% for information technology equipment.
50% of the lease line to be used no later than December 31,
2000.
Additionally, up to $2,500,000.00 of the lease line will be
available for sale/leaseback of equipment not more than 90
days in use.
$10,000,000.00
Lessor Initials:____________________ Lessee Initials: /s/ BT
--------------------
SCHEDULE"B"
TO EQUIPMENT SCHEDULE NO. 001
TO MASTER LEASE AGREEM THE "MASTER LEASE")
DATED AS OF MAY 5, 2000
BETWEEN IMPERIAL BANK EQUIPMENT LEASING DIVISION, A DIVISION OF
IMPERIAL BANK, AS LESSOR,
AND CHORUM TECHNOLOGIES, INC., AS LESSEE
EQUIPMENT RETURN PROVISIONS
Upon the expiration or other permitted termination of this Schedule or any
extension thereof, Lessee, at its sole cost, risk, and expense, will return to
Lessor all, (but not less than all), of the Equipment then subject Schedule to a
location in the continental United States specified by Lessor. Lessee shall be
responsible at its sole cost and expense, for (a) the de-installation, removal
and packaging of the Equipment (including, but not limited to, any and all
applicable software, all manuals, maintenance records, maintenance record
jackets, repair orders and all other similar documents) in a manner suitable for
cartage by a common commercial carrier acceptable to Lessor, and (b) the
transportation of the Equipment, upon written notification by Lessor, as to the
date and destination of the shipping. Such Equipment, upon return, shall be free
and clear of all mortgages, liens, security interest, charges, encumbrances and
claims. If Lessor shall so require, Lessee shall provide free and safe storage,
as well as maintain sufficient insurance coverage (as specified in the Master
Lease) for such Equipment for a period not to exceed 120 days from the
expiration date or the last day of any extension period therefor.
Upon return of such Equipment, Lessor or its agent shall inspect the Equipment.
If any item of Equipment is not returned to Lessor, it shall be deemed to be a
casualty and an Event of Loss during the Lease Term. In the event Lessor
determines that repairs, additions or replacements are necessary to place the
Equipment in the same condition as when originally leased to Lessee (reasonable
wear and tear excepted), which at a minimum will require that the Equipment be
in complete and running condition with no missing or damaged components and
certified as being eligible for the Seller's or the manufacturer's generally
available maintenance contract at then prevailing prices.
If Lessor determines that the Equipment (after inspection) is damaged or worn
beyond normal wear and tear, Lessor or Lessor's agent will prepare an Equipment
Repair Notice ("ERN") which fully describes the repairs and the estimated cost
required to place the Equipment in complete and running condition, and certified
as being eligible for the Seller's or the manufactures generally available
maintenance contract Lessee shall pay such invoiced costs which shall include an
Equipment Inspection Fee equal to one-tenth (.1%) percent of the applicable
Equipment Schedule's "first cost," within ten (10) days of the date of the
Equipment Repair Notice. In the event Lessee fails to remit payment to Lessor
within ten (10) days of receiving such Equipment Repair Notice, Lessee shall pay
to Lessor, interim Rent equal to the Daily Lease Rate Factor, multiplied by the
Equipment Cost as specified in the applicable Schedule, for each day in excess
of Lease Term of the applicable Equipment Schedule, until such payment is made.
Lessor Initials:____________________ Lessee Initials: /s/ BT
---------------------
Lessor Initials:____________________ Lessee Initials: /s/ BT
---------------------
At the time of return, the Equipment shall be (I) in compliance with all
applicable federal, state and local laws; and (II) free of all advertising or
insignia thereon by Lessee.
Hold Harmless. Lessee agrees that Lessor will be held harmless for any damages
---------------
to disassembly site if Lessee or Lessee's agent causes disassembly.
Insurance on Equipment during return. Lessee will obtain and pay for a policy of
------------------------------------
transit insurance for the delivery period in an amount equal to the higher of
Replacement Value or Casualty Value of the Equipment and Lessor shall be named
as loss payee on such policies.
Any further Return Instructions more specifically related to the Equipment (if
applicable) shall be attached as Exhibit "C" Additional Return Provisions.
Lessor Initials:____________________ Lessee Initials: /s/ BT
---------------------
2
INSURANCE AUTHORIZATION
LEASE DATED: July 7, 2000
LESSOR: IMPERIAL BANK EQUIPMENT LEASING DIVISION
a division of Imperial Bank
ADDRESS: 0000 Xxxxx Xx Xxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000
LESSEE: Chorum Technologies, Inc.
ADDRESS: 0000 X. Xxxxxxx Xxxx, Xxxxxxxxxx, XX 00000-0000
EQUIPMENT INFORMATION
NO. of ITEMS DESCRIPTION OF EQUIPMENT (Model, Serial No. etc.) ESTIMATED COST
$10,000,000.00
Refer to attached Schedule "A" $
$
TAX $
EQUIPMENT LOCATION Address (Include County) I ADDITIONAL AMOUNTS (Describe)
0000 X. Xxxxxxx Xxxx, Xxxxxxxxxx, XX 00000-0000 I $
I $
TOTAL ESTIMATED COST $10,000,000.00
TO: INSURANCE AGENT OR BROKER
We are entering into an Equipment Lease or Lease and Security Agreement to
Master Lease Agreement with Imperial Bank Equipment Leasing Division, a division
of Imperial Bank ("Lessor") for the equipment described above ("Equipment").
The Lease requires us to carry physical damage and third party liability
insurance on the Equipment as described below.
Please arrange this insurance for our account with insurance companies
rated A or better by A.M. Best Company and immediately send a certificate of
insurance or binder specifically describing all required amounts and
endorsements to:
IMPERIAL BANK EQUIPMENT LEASING DIVISION, A division of Imperial Bank
0000 Xxxxx Xx Xxxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Operations
I. PHYSICAL DAMAGE INSURANCE
A. All Risks coverage (including earthquake and flood) for the Equipment
in an amount equal to its Total Estimated Cost (to be adjusted to its actual
Total Cost after the Acceptance Date).
B. Endorsements (1) naming Lessor as an additional insured and loss payee
with respect to the Equipment, (2) providing 30 days' written notice to Lessor
before coverage lapses or is cancelled or materially changed, and (3) providing
that such coverage shall not be rescinded, impaired or invalidated by any act or
neglect of Lessee.
II. THIRD PARTY LIABILITY INSURANCE
A. $1,000,000 combined single limit bodily injury and property damage
coverage.
B. Endorsements (1) naming Lessor as an additional insured with respect
to the Equipment, (2) providing that such coverage is primary as to the
Equipment without right of contribution from any other insurance, (3) providing
30 days' prior written notice to Lessor before coverage lapses or is cancelled
or materially changed, and (4) providing that such coverage shall not be
rescinded, impaired or invalidated by any act or neglect of Lessee.
Very truly yours, Agent's Name, Address, City State , Zip, Phone
Chorum Technologies, Inc. Xxxxx Xxxxxxxxx, Xx. VP, Aon Risk Services of Texas
------------------------- ---------------------------------------------------
PRINT LESSEE'S NAME ABOVE AGENT'S NAME
City Place Center East - Suite 800
---------------------------------------------
ADDRESS
By: /s/ Xxx Xxxxxxxxx 0000 X. Xxxxxxx Xxxxxx, Xxxxxx, Xxxxx 00000
------------------ ---------------------------------------------
ADDRESS
Printed Name: Xxx Xxxxxxxxx Attn: Xxxx Xxxxx
--------------------------------------
Title: VP Finance Phone: 000-000-0000
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2
CERTIFICATE
CORPORATE LEASING RESOLUTION
I, Xxxx Xxxxx, do hereby certify that I am the duly elected and qualified
Secretary of Chorum Technologies, Inc. a Delaware corporation; that the
following is a true and correct copy of resolutions duly adopted by the Board of
Directors of said corporation at a meeting of said Board of Directors convened
and held in accordance with the By-Laws of said corporation on the 10th day of
May, 2000, and that said resolutions are now in full force and effect:
"RESOLVED: That any officer of this corporation be and is hereby
authorized, directed and empowered to negotiate, execute and deliver
on behalf of this corporation a lease agreement with IMPERIAL BANK
EQUIPMENT LEASING DIVISION, division of Imperial Bank (Lessor),
whereby this corporation will lease Computer hardware to include
----------------------------
servers, desktop PC's, notebook, Computers, computer peripherals,
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telecom gear, test equipment, furniture and other miscellaneous
---------------------------------------------------------------
equipment on terms and conditions which shall be determined by said
---------
officer to be advisable and in the best interest of this corporation
and the execution of such lease agreement by said officer shall be
conclusive evidence of the approval thereof.
FURTHER RESOLVED: That the Secretary be and is hereby authorized to
furnish to IMPERIAL BANK EQUIPMENT LEASING DIVISION, division of
Imperial Bank a certified copy of these resolutions."
I FURTHER CERTIFY that said resolutions are still in full force and
effect and have not been amended or revoked.
IN WITNESS WHEREOF, I have affixed my name as Secretary of said corporation
and have caused the corporate seal of said corporation to be hereunto affixed
this ______ day of ____________________, 2000.
/s/ Xxxx Xxxxx
------------------------------
Secretary
