EXHIBIT 10.43
MASTER LEASE AGREEMENT
This Master Lease Agreement ("Master Agreement"), dated as of
September 29, 1999, and referred to as Lease Number 0099026, is entered into
by and between Silicon Valley Bank ("Lessor"), with its principal place of
business at 3003 Tasman Drive, NC 400, Santa Clara, CA 95054 and Breakaway
Solutions Inc., a Delaware corporation ("Lessee"), with its principal place
of business at 50 Rowes Wharf, 6th Floor, Boston, MA 02110. As used herein,
all terms shall have the meanings set forth below.
"Acceptance Certificate" means the form of certificate provided by
Lessor to evidence Lessee's acceptance of the Equipment.
"Acceptance Date" the date the Lessee signs and delivers to Lessor the
Acceptance Certificate.
"Applicable Term" the Initial Term and any renewal or extension
thereof.
"Assignee" means any party to whom Lessor assigns Lessor's rights to
any Lease.
"Casualty" means any event upon which any Equipment is condemned,
taken, lost destroyed, stolen or damaged beyond repair.
"Claims" means any and all claims, actions, suits, proceedings, costs,
expenses (including court costs and reasonable attorneys' fees), damages,
obligations, penalties, injuries and liabilities, including actions based on
Lessor's strict liability in tort.
"Commitment Amount" means the aggregate Schedule Commitment Amounts up
to a maximum of $4,000,000 in the aggregate.
"Contingent Obligation' means, as applied to Lessee, any direct or
indirect liability, contingent or otherwise, of Lessee with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed, co-made or discounted or sold with recourse by Lessee, or
in respect of which Lessee is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit issued for the account of
Lessee; and (iii) all obligations arising under any interest rate, currency or
commodity swap agreement, interest rate cap agreement, interest rate collar
agreement, or other agreement or arrangement designated to protect Lessee
against fluctuation in interest rates, currency exchange rates or commodity
prices; provided that the term "Contingent Obligation" shall not include
endorsements for collection or deposit in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determined amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof
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as determined by Lessee in good faith; provided that such amount shall not in
any event exceed the maximum amount of the obligations under the guarantee or
other support arrangement.
"Credit Extension" means each Lease, each loan under the Loan
Documents, and any other extension of credit by Lessor for the benefit of
Lessee.
"Current Assets" means, as of any applicable date, all amounts that
should, in accordance with GAAP, be included as current assets on the
consolidated balance sheet of Lessee and its subsidiaries as at such date.
"Current Liabilities" means, as of any applicable date, all amounts
that should, in accordance with GAAP, be included as current liabilities on the
consolidated balance sheet of Lessee and its subsidiaries, as at such date,
plus, to the extent not already included therein, all outstanding Credit
Extensions, including all Indebtedness that is payable upon demand or within one
year from the date of determination thereof unless such Indebtedness is
renewable or extendable at the option of Lessee or any subsidiary to a date more
than one year from the date of determination, but excluding Subordinated Debt.
"Cut-off Date" means December 30, 1999.
"Default" means any of the events of default described in Section 16 of
this Master Agreement.
"Equipment" means the items of equipment leased under each Schedule.
For the purpose of this Master Agreement, Equipment shall mean both hardware and
software.
"Equipment Location" means the location of the Equipment specified in
each Schedule.
"First Payment Date" has the meaning set forth in the applicable
Schedule.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.
"Imposition" means each license fee, assessment, and sales, use,
property, excise and other tax.
"Indebtedness" means (a) all indebtedness for borrowed money or the
deferred purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.
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"Interim Rent" has the meaning, if any, set forth in Section 5 of the
Schedule.
"Initial Term" means the total monthly, quarterly or other term of each
Lease, as specified in the Schedule.
"Lease" means each Schedule.
"License" means collectively, if the Equipment includes any software, a
license identical to that held by Lessee relating to the use of any software,
technical information, confidential business information and other
documentation.
"Loan Documents" means that certain Loan and Security Agreement, dated
on or about the date hereof, between Lessor, as lender, and Lessee, as borrower,
together with all related agreements, instruments and documents and all
amendments and modifications thereto.
"Material Agreement" means collectively this Master Agreement, any
Lease, any Transaction Document, and Loan Document or any other agreement
between Lessee and Lessor, or any material agreement between Lessee and any
third party, specifically including, without limitation, any agreement or
agreements between Lessee and any third party which in the aggregate give the
third party the right, whether or not exercised, to accelerate any Indebtedness
exceeding $100,000.
"Original" means the single counterpart of the Schedule, including
Rider 1 attached thereto and incorporated therein by reference, marked
"Original."
"Purchase Documents" means collectively any purchase order, contract or
other documents Lessee has approved or entered into with the applicable
Supplier.
"Quick Assets" means, as of any applicable date, the consolidated cash,
cash equivalents, accounts receivable and investments with maturities of fewer
than 90 days of Lessee determined in accordance with GAAP.
"Rent" means the amounts payable by Lessee to Lessor for the Equipment.
"Rider 1" means the rider marked "Rider 1" which is attached to and
incorporated within each Schedule.
"Schedule" means each schedule containing the specific terms of each
individual lease.
"Schedule Commitment Amount" means, with respect to a Schedule, the
amount identified as such in the Schedule.
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"Stipulated Loss Value" means the stipulated loss value of the
Equipment as specified in Rider 1 to the Schedule.
"Subordinated Debt" means any debt incurred by Lessee that is
subordinated to the debt owing by Lessee to Lessor on terms acceptable to Lessor
(and identified as being such by Lessee and Lessor).
"Supplier" means the seller of the applicable Equipment.
"Total Cost" means the Equipment acquisition cost including such
shipping, delivery, installation and other charges as Lessor shall have approved
set forth in Section 3 of the Schedule, as adjusted pursuant to Section 6 of
this Master Agreement.
"Tax Benefits" means collectively certain deductions, credits, and
other tax benefits as are provided in the Internal Revenue Code of 1986, as
amended, including without limitation, accelerated depreciation and interest
deductions to which Lessor may be entitled.
"Transaction Documents" means collectively this Master Agreement, all
Leases and all other related instruments or documents executed and/or delivered
hereunder or in connection herewith.
1. LEASE OF EQUIPMENT. This Master Agreement sets forth the
general terms and conditions which apply to the lease of
equipment from Lessor to Lessee. The specific terms of each
individual lease are set forth in a separate Schedule,
including the Equipment leased under the applicable Schedule.
Each Schedule constitutes a separate and distinct Lease,
enforceable according to its terms. In the event of any
conflict between the terms of this Master Agreement and any
related Schedule, the provisions of the applicable Schedule
shall govern. The parties agree that each Schedule
incorporates this Master Agreement by reference by listing
the lease number (as specified above) on the Schedule. A
Lease shall not become effective until accepted by Lessor.
Lessee may present proposed Equipment to Lessor for lease
pursuant hereto and under a Schedule, for a term with respect
to each Schedule of 36 months, with no more than one Schedule
per month entered into between Lessor and Lessee, for
Equipment as set forth in the Schedule in an amount equal to
the Schedule Commitment Amount, such Schedules to be entered
into between Lessor and Lessee from the date hereof up to the
Cut-Off Date and in an amount of the aggregate Schedule
Commitment Amounts not to exceed the Commitment Amount.
2. TERM. This Master Agreement shall commence upon the
execution hereof by both parties, and shall continue until
the full
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performance of all terms hereunder. Initial Term shall be as
specified in each Schedule. The Applicable Term shall be
automatically extended for successive one-month periods
unless either party gives the other party sixty days' prior
written notice that it intends to terminate the Lease at the
end of the Applicable Term.
3. ACCEPTANCE. The Equipment is unconditionally accepted
under the Lease on the Acceptance Date. Lessee shall accept
the Equipment as soon as it is delivered or, if acceptance
requirements are specified in the applicable Purchase
Documents, as soon as such requirements are met. Upon the
execution of the Acceptance Certificate, Lessee shall
promptly deliver it to Lessor.
4. RENT; NON-CANCELABLE NET LEASE. As Rent for the
Equipment, Lessee agrees to pay the amounts specified in the
Schedule, which rent amounts shall be calculated, with
respect to each Schedule, using a rent factor equal to the
rate on U.S. Treasury securities of a comparable term plus
two and one-half percentage points (250 basis points). Lessee
acknowledges and agrees that all Leases hereunder are
non-cancelable net Leases, and Lessee agrees that its
obligation to pay Rent and all other amounts when due is
unconditional. Lessee is not entitled to abate or reduce rent
or any other amounts due, or to set off any charges against
those amounts. Lessee is not entitled to claim or assert any
recoupments, cross-claims, counterclaims or any other
defenses to any rent payments or other amounts due hereunder,
whether those defenses arise out of claims by Lessee against
Lessor, Supplier, this Master Agreement, any Schedule or
otherwise. If the Equipment is not properly installed, does
not operate as represented or warranted by Supplier or is
unsatisfactory for any reason whatsoever, Lessee shall make
any claim or account thereof solely against Supplier and
shall nevertheless pay all sums payable under any Lease.
Lessee hereby waives any such claims against Lessor and any
Assignee.
5. ASSIGNMENT OF PURCHASE DOCUMENTS. Lessee assigns to
Lessor all of Lessee's right, title and interest in and to
the Equipment described in the Purchase Documents and in the
Schedule. This assignment is an assignment of rights only,
and Lessee shall remain liable for all obligations under the
Purchase Documents, except that Lessor shall pay for the
Equipment within 30 days of the Acceptance Date or as
otherwise agreed by Lessor in writing. If Lessee has not
entered into Purchase Documents for such Equipment, Lessee
authorizes Lessor to act as Lessee's agent to execute such
Purchase Documents. Lessee also represents and warrants that
it has received and approved a copy of the Purchase
Documents, or has been advised by Lessor of (a) the name of
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the Supplier of the Equipment, (b) that Lessee may have
rights under such Supplier's Purchase Documents, and (c) that
Lessee may contact the Supplier for information on such
rights. In addition, Lessee shall deliver to Lessor a
document acceptable to Lessor whereby Supplier acknowledges
and provides any consent required by Lessor or otherwise
necessary to such assignment. If the Equipment includes any
software, Supplier shall agree in such acknowledgment and
consent that upon the return of the Equipment to Lessor the
Supplier will either grant Lessor a License and permit Lessor
to assign such License to any subsequent end-user of the
Equipment, or grant any such subsequent end-user such a
License, but at no additional charge other than any regularly
scheduled fee or charge otherwise payable by Lessee; provided
that Lessee shall at all times remain liable to Supplier as
the licensee under its license, and Lessor shall not have any
obligation thereunder unless and until such license is
provided to Lessor in accordance with these provisions.
Lessor shall have no obligation or liability with respect to
Lessee's, or any subsequent third-party licensee's,
compliance under the applicable license. In addition, with
respect to any such software, Supplier shall agree that it
will not terminate Lessee's license thereof without first
providing 90 days' prior written notice to Lessor of any
intended termination and providing Lessor the right to cure
such breach by Lessee of its license as gave rise to such
notice of intended termination. Supplier shall also agree to
provide all software upgrades and modifications during the
Applicable Term to Lessee, or Lessor or other subsequent
licensee, on the same basis as offered to Supplier's other
commercial customers. Lessee agrees that neither Supplier nor
any salesperson or other employee or representative of
Supplier is an agent of Lessor, nor is any such person
authorized to waive or alter any terms of this Master
Agreement or any Lease.
6. ADJUSTMENTS. The Total Cost and Rent payment set forth
in each Schedule are estimates, and if the final invoice from
the Supplier specifies a Total Cost (including delivery,
installation, taxes and other charges) that is more or less
than such estimated Total Cost, Lessee hereby authorizes
Lessor to adjust accordingly the Total Cost and Rent payment
on the applicable Schedule. All references in this Agreement
and in any Schedule to Total Cost and Rent payment shall mean
the estimates thereof specified in the applicable Schedule,
as adjusted pursuant to this Section 6.
7. EQUIPMENT RETURN REQUIREMENTS. On or before the
termination of a Lease, Lessee shall pack the Equipment in
accordance with the manufacturer's guidelines and deliver
such Equipment (along with all operating manuals) to Lessor
at any destination within the continental
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United States designated by Lessor. All dismantling,
packaging, transportation, in-transit insurance and shipping
charges shall be borne by Lessee. All Equipment shall be
returned to Lessor in the same condition and working order as
when delivered to Lessee, reasonable wear and tear excepted,
and shall be certifiable for maintenance by the manufacturer
at its standard rates.
8. EQUIPMENT USE AND MAINTENANCE. Lessee is solely
responsible for the selection, installation, operation and
maintenance of the Equipment and all costs related thereto,
including shipping charges. Lessee shall at all times operate
and maintain the Equipment in good operating order, repair,
condition and appearance, normal wear and tear excepted, and
in accordance with its manufacturer's specifications and
recommendations. On reasonable prior notice to Lessee, Lessor
and Lessor's agents shall have the right, during Lessee's
business hours, to enter the premises where the Equipment is
located for the purpose of inspecting the Equipment and
observing its use. Lessee shall, at its expense, affix and
maintain in a prominent position on each item of Equipment
any tags or identifying labels provided by Lessor to indicate
Lessor's ownership of the Equipment. Lessee shall, at its
expense, enter into, maintain and enforce at all times a
maintenance agreement to service and maintain the Equipment,
upon terms and with a provider acceptable to Lessor.
9. EQUIPMENT OWNERSHIP; ATTACHMENTS; LOCATION. Lessor is
the sole owner of the Equipment and has sole title thereto.
Lessee covenants that it will not pledge or encumber the
Equipment or Lessor's interest in the Equipment in any manner
whatsoever nor permit any liens to be attached thereto.
Lessee shall not make any representation to any third-party
inconsistent with Lessor's sole ownership of the Equipment.
The Equipment shall remain Lessor's personal property whether
or not affixed to realty and shall not become or be made to
become a part of any real property on which it is placed
without Lessor's prior written consent. All additions,
attachments and accessories placed on the Equipment or
repairs made to the Equipment become a part thereof and
Lessor's property. Lessee shall maintain the Equipment so
that it may be removed from any building in which it is
placed without damage thereto. The Equipment will be located
at the Equipment Location, and Lessee shall not move it and
shall not permit it to be moved without the prior written
consent of Lessor, provided that in the event Lessee intends
to move the Equipment Location to another Equipment Location,
Lessee shall provide Lessor thirty (30) days prior notice of
where such Equipment is to be moved and shall execute such
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documents as Lessor requires to enable Lessor to maintain
continued perfection of its interests in the Equipment.
10. INSURANCE. Lessee agrees to keep the Equipment insured
at Lessee's expense against all risks of loss, including
theft or damage from any cause whatsoever. Lessee agrees that
such insurance shall name Lessor as a loss payee, with a full
waiver of warranties (Form BFU-438 or comparable) and provide
coverage not less than the greater of the Stipulated Loss
Value of the Equipment and the then-current fair market value
of the Equipment. Lessee also agrees that it shall carry
public liability insurance in an amount consistent with
prudent business practices and customary to Lessee's
industry. Each policy shall provide that the insurance cannot
be canceled without at least thirty (30) days prior written
notice to Lessor. Upon request by Lessor, Lessee agrees to
furnish proof of insurance coverage, including a certificate
of insurance and a copy of the policy. If Lessee fails to
provide Lessor with such evidence, then Lessor will have the
right, but not the obligation, to have such insurance
protecting Lessor placed at Lessee's expense. Lessee's
expense shall include a full premium paid for such insurance
and any customary charges, costs or fees of Lessor. Lessee
agrees to pay such amounts in equal installments allocated to
each Rent payment (plus interest on such amounts at the
lesser of 1.5% per month or the maximum rate allowable under
applicable law). Lessee hereby appoints Lessor as its
attorney-in-fact to make any claim, receive payment or
execute or endorse all documents, checks or drafts for loss
or damage or return of any premium under such insurance and
to apply any such amounts to satisfy Lessee's obligations
under this Master Agreement or any Lease.
11. RISK OF LOSS. In the event of any Casualty, on the next
Rent payment date Lessee shall pay Lessor the Stipulated Loss
Value. Upon Lessor's full receipt of such Stipulated Loss
Value, the applicable Schedule shall terminate, and except as
provided in Section 21, Lessee shall be relieved of all
obligations under the applicable Schedule, and Lessor shall
transfer all its interest in the Equipment to Lessee "AS IS,
WHERE IS," and without any warranty, express or implied from
Lessor, other than the absence of any liens or claims by,
through, or under Lessor. In the event of a partial
destruction of or repairable damage to any Equipment, the
Lease shall continue with respect to such Equipment and
Lessee shall at its expense promptly cause such Equipment to
be repaired to a condition acceptable to Lessor. There shall
be no abatement of Rent in any such event. Lessee shall
immediately notify Lessor of any Casualty or partial
destruction or damage to any Equipment.
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12. TAXES. On behalf of Lessee Lessor shall file and pay all
Impositions now or hereafter imposed or assessed by any
foreign, federal, state or local government upon the
purchase, ownership, delivery, installation, leasing, rental,
use or sale of the Equipment, or the Rent or other charges
payable hereunder, whether assessed on Lessor or Lessee. As
additional Rent, Lessee shall reimburse Lessor for all
Impositions, together with any penalties or interest in
connection therewith attributable to Lessee's acts or failure
to act, excepting only any Imposition on or measured by the
net income of Lessor.
13. INDEMNITY. Lessee shall indemnify, defend and hold
harmless Lessor, its agents and assignees, from and against
any and all Claims, arising, directly or indirectly, out of
or connected with any matter involving this Master Agreement,
the Equipment or any Lease, including but not limited to: (a)
the selection, manufacture, purchase, acceptance, rejection,
ownership, delivery, lease, possession, maintenance, use,
condition, return or operation of the Equipment; (b) any
breach by Lessee of any representation, warranty or covenant
hereunder or any other Transaction Document; (c) any latent
defects or other defects in any Equipment, whether or not
discoverable by Lessor or by Lessee; (d) any patent,
trademark or copyright infringement; and (e) the condition of
any Equipment arising or existing during Lessee's use.
Notwithstanding the foregoing, Lessee shall have no indemnity
obligation with respect to any Claims which arise solely out
of the gross negligence or willful misconduct of Lessor.
14. DISCLAIMER OF WARRANTIES AND LESSEE WAIVERS. LESSEE
LEASES THE EQUIPMENT FROM LESSOR "AS IS" AND "WHERE IS."
LESSEE HEREBY AGREES THAT: EXCEPT AS TO QUIET ENJOYMENT,
LESSOR MAKES ABSOLUTELY NO WARRANTIES, EXPRESS OR IMPLIED TO
LESSEE; LESSOR SHALL NOT BE LIABLE FOR ANY FAILURE OF ANY
EQUIPMENT OR ANY DELAY IN ITS DELIVERY OR INSTALLATION OR ANY
BREACH OF ANY WARRANTY THAT SELLER MAY HAVE MADE; LESSEE HAS
SELECTED ALL EQUIPMENT WITHOUT LESSOR'S ASSISTANCE; LESSOR IS
NOT A MANUFACTURER OF ANY OF THE EQUIPMENT; LESSOR SHALL HAVE
NO LIABILITY TO LESSEE, LESSEE'S CUSTOMERS, OR ANY THIRD
PARTIES FOR ANY DIRECT, INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES ARISING OUT OF THIS AGREEMENT OR ANY SCHEDULE OR
CONCERNING ANY EQUIPMENT, OR FOR ANY DAMAGES BASED ON STRICT
OR ABSOLUTE TORT LIABILITY OR LESSOR'S NEGLIGENCE; LESSEE'S
SOLE RECOURSE FOR
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ANY AND ALL CLAIMS AND WARRANTIES RELATING TO THE EQUIPMENT
SHALL BE AGAINST SELLER. Lessor hereby assigns to Lessee for
the Applicable Term the right to enforce, provided that no
Default then exists under this Master Agreement or any Lease
and such enforcement is pursued in Lessee's name, any
representations, warranties and agreements made by the
Supplier pursuant to the Purchase Documents, and Lessee may
retain any recovery resulting from any such enforcement
efforts. LESSEE WAIVES ANY AND ALL RIGHTS AND REMEDIES
CONFERRED UPON A LESSEE BY ARTICLE 2A (CALIFORNIA COMMERCIAL
CODE DIVISION 10) OF THE UNIFORM COMMERCIAL CODE (INCLUDING
LESSEE'S RIGHTS, CLAIMS AND DEFENSES UNDER UCC ARTICLE 2A
SECTIONS 508-522) AND ANY RIGHTS NOW OR HEREAFTER CONFERRED
BY STATUTE OR OTHERWISE THAT MAY LIMIT OR MODIFY LESSOR'S
RIGHTS AS DESCRIBED IN THIS SECTION OR OTHER SECTIONS OF THIS
MASTER AGREEMENT.
15. LESSEE WARRANTIES. Lessee represents, warrants and
covenants to Lessor that: (a) all equipment is leased for
business purposes only and not for personal, family or
household purposes; (b) Lessee is duly organized, validly
existing and in good standing under applicable law; (c)
Lessee has the power and authority to enter into the
Transaction Documents; (d) the Transaction Documents are
enforceable against Lessee in accordance with their terms and
do not violate or create a default under any instrument or
agreement binding on Lessee; (e) there are no pending or
threatened actions or proceedings before any court or
administrative agency which could have a material adverse
effect on Lessee or any Transaction Document, unless such
actions are disclosed to Lessor and consented to in writing
by Lessor; (f) Lessee shall comply in all material respects
with all laws and regulations the violation of which could
have a material adverse effect upon the Equipment or Lessee's
performance of its obligations under any Transaction
Document; (g) each Transaction Document shall be effective
against all creditors of Lessee under applicable law,
including fraudulent conveyance and bulk transfer laws, and
shall raise no presumption of fraud; (h) financial statements
and other related information furnished by Lessee shall be
prepared in accordance with generally accepted accounting
principles and shall fairly present Lessee's financial
position as of the dates given on such statements; (i) Lessee
shall furnish Lessor with its financial statements certified
by an officer of Lessee on a monthly basis (on a quarterly
basis if Lessee shall consummate an initial public offering
of its common stock) within thirty (30) days of the end of
each month (after the end of each quarter if such initial
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public offering occurs), and audited financial statements on
an annual basis within 90 days of the end of each fiscal
year, opinions of counsel, resolutions, and such other
information and documents as Lessor may reasonably request;
and (j) all Equipment is tangible personal property and shall
not become a fixture or real property under Lessee's use
thereof. Lessee shall be deemed to have reaffirmed the
foregoing warranties each time it executes any Transaction
Document.
16. DEFAULT. Any of the following shall constitute a Default
under this Master Agreement and all Leases: (a) Lessee fails
to pay any Rent payment or any other amount payable to Lessor
hereunder when due; or (b) Lessee commits a material default
under or a material breach of any of the other terms and
conditions of any Material Agreement; or (c) any material
representation or warranty made by Lessee in a Material
Agreement proves to be incorrect in any material respect when
made or reaffirmed; or (d) Lessee becomes insolvent or fails
generally to pay its debts as they become due; or (e) the
Equipment is levied against, seized or attached and the same
is not bonded against, released or stayed within ten days; or
(f) Lessee makes an assignment for the benefit of creditors,
whether voluntary or involuntary; or (g) a proceeding under
any bankruptcy, reorganization, arrangement of debt,
insolvency or receivership law is filed by or against Lessee
or Lessee takes any action to authorize any of the foregoing
matters and, if filed against Lessee, is not dismissed within
30 days; or (h) any letter of credit, guaranty, surety bond
or like instrument issued in support of a Lease is revoked,
breached, canceled or terminated; or (i) any guarantor,
surety or like third-party obligor under this Master
Agreement fails to fulfill any of the obligations of Lessor
which it agreed to perform; or (j) any breach or default
occurs under any of the Loan Documents; or (k) Lessee shall
fail to maintain, as of the last day of each calendar month,
a ratio of Quick Assets to Current Liabilities of at least
2.0 to 1.0.
17. REMEDIES. If a Default occurs, Lessor may, in its sole
discretion, exercise one or more of the following remedies:
(a) terminate this Master Agreement or any Lease; or (b) take
possession of, or render unusable, any Equipment wherever the
Equipment may be located, without demand or notice, without
any court order or other process of law and without liability
to Lessee for any damages occasioned by such action, and no
such action shall constitute a termination of any Lease; or
(c) require Lessee to deliver the Equipment to a location
specified by Lessor; or (d) declare the Stipulated Loss Value
for any or all Leases to be due and payable as liquidated
damages for loss of a bargain and not as a penalty and in
lieu of any further Rent payments under the applicable Lease
or Leases; or (e)
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proceed by court action to enforce performance by Lessee of
any Lease and/or to recover all damages and expenses incurred
by Lessor by reason of any Default; or (f) terminate any
other agreement that Lessor may have with Lessee; or (g)
exercise any other right or remedy available to Lessor at law
or in equity. Any Rent not received on or before the due date
shall bear interest at the lesser of 1.5% per month or the
highest interest rate legally permissible. Lessee shall pay
Lessor all costs and expenses that Lessor may incur to
maintain, safeguard or preserve the Equipment, and other
expenses incurred by Lessor in enforcing any of the terms,
conditions or provisions of this Agreement (including
reasonable legal fees and collection agency costs). Upon
repossession or surrender of any Equipment, Lessor shall
lease, sell or otherwise dispose of the Equipment in
compliance with applicable law and apply the net proceeds
thereof (after deducting all expenses, including reasonable
legal fees and costs, incurred in connection therewith) to
the amounts owed to Lessor hereunder; provided, however, that
Lessee shall remain liable to Lessor for any deficiency that
remains after any sale or lease of such Equipment. These
remedies are cumulative of every other right or remedy given
hereunder or now or hereafter existing at law or in equity or
by statute or otherwise, and may be enforced concurrently
therewith or from time to time.
18. PERFORMANCE OF LESSEE'S OBLIGATIONS. If Lessee fails to
perform any of its obligations hereunder, Lessor may perform
any act or make any payment that Lessor deems reasonably
necessary for the maintenance and preservation of the
Equipment and Lessor's interests therein; provided that the
performance of any act or payment by Lessor shall not be
deemed a waiver of, or release Lessee from, the obligation at
issue. All sums so paid by Lessor, together with expenses
(including reasonable legal fees and costs) incurred by
Lessor in connection therewith, shall be considered Rent
hereunder, will bear interest at the lesser of 1.5% per month
or the highest interest rate legally permissible, and shall
be, without demand, immediately due and payable to Lessor by
Lessee.
19. ASSIGNMENT. Lessor may assign, pledge, transfer,
mortgage or otherwise convey any of its interest in this
Master Agreement, any Lease, Schedule or Equipment, in whole
or in part, without notice to or the consent of Lessee. If
any Lease is assigned, Lessee shall: (a) unless otherwise
specified by Lessor and Assignee, pay all amounts due under
the applicable Lease to such Assignee, notwithstanding any
defense, setoff or counterclaim whatsoever that Lessee may
have against Lessor or Assignee, all of which are hereby
waived by Lessee as to any Assignee; (b) not require the
Assignee to perform any obligations of
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Lessor, other than those that are expressly assumed in
writing by such Assignee; and (c) execute such
acknowledgments thereto as may be requested by Lessor. It is
further agreed that: (x) each Assignee shall be entitled to
all of Lessor's rights, powers and privileges under the
applicable Lease, to the extent assigned; (y) any Assignee
may reassign its rights and interests under the applicable
Lease with the same force and effect as the assignment
described herein; and (z) any payments received by the
Assignee from Lessee with respect to the assigned Lease
shall, to the extent thereof, discharge the obligations of
Lessee to Lessor with respect to the assigned Lease. Lessee
acknowledges that any assignment or transfer by Lessor or any
Assignee will not materially change Lessee's obligations
under the assigned Lease. Without Lessor's prior written
consent, Lessee shall not assign this Master Agreement or any
Lease or assign its rights in or sublet the Equipment or any
interest therein.
20. FURTHER ASSURANCES. Lessee shall promptly execute and
deliver to Lessor such further documents and take such
further action as Lessor may require in order to more
effectively carry out the intent and purpose of this Master
Agreement and any Lease, including executing and delivering
any and all financing statements which Lessor may request.
Upon demand, Lessee will promptly reimburse Lessor for any
filing or recording fees or expenses (including reasonable
legal fees and costs) incurred by Lessor in perfecting or
protecting its interests in the Equipment.
21. SURVIVAL. All representations, warranties and covenants
made by Lessee hereunder shall survive the termination of
this Agreement and shall remain in full force and effect. All
of Lessor's rights, privileges and indemnities, to the extent
they are fairly attributable to events or conditions
occurring or existing on or prior to the termination of this
Agreement, shall survive such termination and be enforceable
by Lessor and Lessor's successors and assigns.
22. WAIVER OF JURY TRIAL. LESSEE AND LESSOR HEREBY
EXPRESSLY WAIVE ANY RIGHT TO DEMAND A JURY TRIAL WITH RESPECT
TO ANY ACTION OR PROCEEDING INSTITUTED BY LESSOR OR LESSEE IN
CONNECTION WITH THIS MASTER LEASE OR ANY LEASE OR SCHEDULE.
23. CAPTIONS; COUNTERPARTS; LESSOR'S AFFILIATES. The
captions contained in this Agreement are for convenience only
and shall not affect the interpretation of this Master
Agreement. Only the Original shall be marked "Original," and
all other counterparts of the Schedule
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shall be marked as, and shall be, duplicates. To the extent
that any Schedule constitutes chattel paper (as such term is
defined in the Uniform Commercial Code in effect in the
applicable jurisdiction), no security interest in such
Schedule may be created through the transfer or possession of
any counterpart other than the Original.
24. MISCELLANEOUS. This Master Agreement and each Lease
hereunder shall be governed by the internal laws (as opposed
to conflicts of law provisions) of the state of California.
If any provision of this Master Agreement or any Schedule
shall be prohibited by or invalid under any law, such
provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Master
Agreement or any Lease. Lessor and Lessee consent to the
jurisdiction of any local, state or federal court located
within the County of Santa Clara, State of California, and
waive any objection relating to improper venue or forum non
conveniens to the conduct of any proceeding in any such
court. This Agreement and the other Transaction Documents
constitute the entire agreement between Lessor and Lessee
relating to the leasing of the Equipment, and supersede all
prior agreements relating thereto, whether written or oral,
and may not be amended or modified except in a writing signed
by the parties hereto. Any failure of Lessor to require
strict performance by Lessee, or any written waiver by Lessor
of any provision hereof, shall not constitute consent or
waiver of any other breach of the same or any other provision
hereof.
IN WITNESS WHEREOF, LESSOR AND LESSEE HAVE EXECUTED THIS MASTER
AGREEMENT AS OF THE DATE SPECIFIED.
LESSEE LESSOR
BREAKAWAY SOLUTIONS INC. SILICON VALLEY BANK
By: /s/ Kevin Comerford By: /s/ Doug Marshall
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Title: Chief Financial Officer Title: Vice President
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SCHEDULE TO MASTER LEASE AGREEMENT
SCHEDULE NUMBER
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Silicon Valley Bank ("Lessor") and Breakaway Solutions Inc.
("Lessee") are entering into this Schedule Number ____ as of __________, 1999,
in reference and as parties to that certain Master Lease Agreement, Lease Number
__________ (the "Master Agreement"). This Schedule and the Master Agreement
together comprise a separate Lease between the parties. The terms and conditions
of the Master Agreement are hereby incorporated by reference into this Schedule.
All initially-capitalized terms not defined in this Schedule shall have the
meanings assigned to them in the Master Agreement. In the event of any conflict
between the terms of the Master Agreement and this Schedule, the provisions of
this Schedule shall govern.
1. LEASE OF EQUIPMENT. Lessor agrees to lease to Lessee and
Lessee agrees to lease from Lessor the Equipment set forth in
this Schedule. This Lease will be governed by the Master
Agreement and this Schedule.
2. EQUIPMENT DESCRIPTION. Computer equipment, printers,
servers and/or software which are acceptable to Lessor.
3. Schedule Commitment Amount. $4,000,000, $2,000,000 of
which is currently available to Lessee, the other $2,000,000
of which shall be available to Lessee only upon the
consummation by Lessee of an initial public offering of the
stock of Lessee or the receipt by Lessee of not less than
$10,000,000 of new equity funds.
4. INITIAL TERM. The Initial Term shall commence on the
first payment date ("First Payment Date") which shall be the
earlier of (i) the first day of a calendar month following
the month in which the Lessee has fully utilized the Schedule
Commitment Amount, provided that if Lessee delivers an
Acceptance certificate on the first day of a calendar month
and such Acceptance Certificate results in full utilization
of the Schedule Commitment Amount, that date shall be deemed
such first day of a calendar month or (ii) in any event no
later than the Cut-off Date. The Initial Term for software
leased under this Schedule shall be 36 months and the Initial
Term for all other Equipment leased under this Schedule shall
be 36 months.
5. INTERIM RENT. Lessee shall pay to Lessor on the first
day of each calendar month, in arrears, Interim Rent payments
for each day during the period from and including the
Acceptance Date through and including the last day of the
calendar month prior to the First Payment
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Date. For purposes of this Schedule, "Interim Rent" shall be
an amount accruing on a daily basis equal to 0.0330% of the
amount drawn under this Schedule (as set forth in the
applicable Equipment Annex __).
6. RENT PAYMENTS. Lessee shall pay Lessor, in advance, on
the first day of each month the Rent payment for the Initial
Term. The first monthly Rent payment shall be due on the
First Payment Date. For purposes of this Schedule, (i) the
applicable monthly Rent payment for software financed under
this Schedule shall be _____% of the aggregate cost of such
software leased under the Equipment Annexes and (ii) the
applicable monthly Rent payment for all other Equipment
leased under this Schedule shall be _____% of the aggregate
cost of such Equipment financed under the Equipment Annexes.
Lessor's obligation to purchase and lease the Equipment is
subject to the Acceptance Date being on or before the Cut-Off
Date set forth in this Schedule.
7. CUT-OFF DATE. December 30, 1999.
8. END OF TERM PAYMENT. See Rider 1 for provisions
regarding payment at the end of the term of this Lease.
9. PURCHASE, RENEWAL AND RETURN. See Rider 1 for provisions
regarding purchase, renewal and return of the Equipment.
10. STIPULATED LOSS VALUE. See Rider 1 for provisions
regarding the Stipulated Loss Value of the Equipment.
11. COUNTERPARTS; ONE ORIGINAL; CHATTEL PAPER SECURITY
INTEREST. Only the Original, including Rider 1 attached
hereto and incorporated herein by reference, shall be marked
"Original," and all other counterparts hereof shall be marked
as, and shall be, duplicates. To the extent that this
Schedule constitutes chattel paper (as such term is defined
in the Uniform Commercial Code in effect in the applicable
jurisdiction), no security interest in this Schedule may be
created through the transfer or possession of any counterpart
other than the Original.
IN WITNESS WHEREOF, LESSOR AND LESSEE HAVE EXECUTED THIS
SCHEDULE AS OF THE DATE SPECIFIED.
LESSEE LESSOR
BREAKAWAY SOLUTIONS INC. SILICON VALLEY BANK
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By: By:
------------------------ -------------------------
Title: Title:
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EQUIPMENT ANNEX __
This Equipment Annex ___to Schedule Number ___________ (the
"Schedule") to the Master Lease Agreement between Silicon Valley Bank ("Lessor")
and Breakaway Solutions Inc. ("Lessee") is attached to and made part of the
Schedule.
1. Total Cost. The Equipment acquisition cost including
such shipping, delivery, installation and other charges as
Lessor shall have approved: $_________________.
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