Master Equipment Lease Agreement

MASTER EQUIPMENT LEASE AGREEMENT


This MASTER EQUIPMENT LEASE AGREEMENT (this "Lease") is entered into as of October 1, 1997 by and between Synchronous Network Solutions, Inc., a Delaware corporation ("Lessor"), and Ixia Communications, a California corporation ("Lessee").


1. LEASE. Subject to the terms and conditions of this Lease, Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, the items of equipment, machinery, tools and other tangible personal property owned by Lessor and identified in any Equipment Schedule made a part of this Lease (the "Equipment"). For purposes of this Lease, an "Equipment Schedule" is a document signed by Lessor and Lessee (in substantially the form attached hereto as Exhibit 1) that identifies Equipment that is to be leased by Lessor to Lessee pursuant to the terms and conditions of this Lease and such additional terms and conditions as are contained in the applicable Equipment Schedule. Each Equipment Schedule, upon execution thereof, shall become an integral part of this Lease.


2. ACQUISITION AGREEMENTS. Lessee has selected the Equipment and may have entered into with the vendor and/or manufacturer thereof (any such person, a "Vendor" or "Manufacturer") certain purchase, licensing or maintenance agreements with respect thereto (each, an "Acquisition Agreement"). Lessee shall transfer and assign to Lessor all of its rights (other than with respect to warranties), but none of its obligations (except for Lessee's obligation to pay for the Equipment, subject to Lessee's delivery to Lessor of a Certificate of Acceptance in accordance with Paragraph 7), in and to any Acquisition Agreement to which it is a party, including the right to take title to the Equipment.


3. NO WARRANTIES BY LESSOR. LESSOR MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING THE CONDITION OF THE EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, AND, AS TO LESSOR, LESSEE LEASES THE EQUIPMENT "AS IS." LESSOR SHALL HAVE NO LIABILITY FOR ANY LOSS, DAMAGE OR EXPENSE OF ANY KIND WHATSOEVER RELATING THERETO, INCLUDING WITHOUT LIMITATION ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER.


4. CLAIMS AGAINST VENDOR AND/OR MANUFACTURER; ASSIGNMENT OF WARRANTIES. If the Equipment is not properly installed, does not operate as represented or warranted by Vendor and/or Manufacturer, or is unsatisfactory for any reason, Lessee shall make any claim on account thereof solely against Vendor and/or Manufacturer, and shall, in all events, continue to pay to Lessor all rent and other amounts, if any, payable under this Lease. Lessor hereby assigns (to the extent assignable) to Lessee for the term of the Lease or until an Event of Default occurs hereunder, all of Lessor's rights under any and all warranties obtained by Lessor from any Vendor or Manufacturer of the Equipment.


5. NON-CANCELLABLE LEASE. This Lease and any Equipment Schedule hereto cannot be canceled or terminated except as expressly provided herein. Lessee agrees that


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its obligation to pay all rent and other sums payable hereunder and the rights of Lessor in and to such rent are absolute and unconditional and are not subject to any abatement, reduction, setoff, defense, counterclaim or recoupment due or alleged to be due to, or by reason of, any past, present or future claims which Lessee may have against Lessor, any assignee, any Manufacturer or Vendor, or against any person for any reason whatsoever.


6. ORDERING EQUIPMENT. Lessee shall arrange for delivery of the Equipment so that it can be accepted in accordance with Paragraph 7 hereof within 60 days after the date of the applicable Equipment Schedule or by such other date as may be set forth therein. Unless otherwise specified on the Equipment Schedule, Lessee shall be responsible for all transportation, packing, installation, testing and other charges in connection with the delivery, installation and use of the Equipment. Lessee hereby authorizes Lessor to insert in any Equipment Schedule hereunder the serial numbers and other identification data of Equipment when determined by Lessor.


7. ACCEPTANCE. Lessee acknowledges that for purposes of receiving or accepting the Equipment from a Vendor or Manufacturer, Lessee is acting on Lessor's behalf. Upon delivery of the Equipment to Lessee and Lessee's inspection and acceptance thereof, Lessee shall furnish Lessor a written statement acknowledging receipt of the Equipment in good condition and repair and accepting it as satisfactory in all respects for the purposes of this Lease (the "Certificate of Acceptance").


8. TERM. The term of this Lease shall commence as of the date hereof and, unless earlier terminated in accordance with Section 22 hereof, shall terminate on the later to occur of (i) the fifth anniversary of the date hereof or (ii) the expiration or termination of the last Equipment Schedule hereunder. The term of each Equipment Schedule shall be set forth therein.


9. RENTAL. Unless otherwise set forth in the applicable Equipment Schedule, rent shall be payable commencing on the first day of the month following receipt and acceptance of the Equipment covered by an Equipment Schedule. The rental amount payable to Lessor by Lessee for the Equipment shall be as set forth in the Equipment Schedule(s). All rent payments shall be paid to Lessor at its address set forth on the Equipment Schedule or as otherwise directed by Lessor in writing.


10. RENEWAL. If no Event of Default by Lessee shall have occurred and be continuing, Lessee, upon 30 days' prior written notice, shall be entitled to renew an Equipment Schedule with respect to all, but not less than all, of the Equipment thereunder for a minimum of 12 months. The renewal rent payable by Lessee shall be in an amount equal to the fair market rental value of the covered Equipment, as mutually agreed by Lessor and Lessee. Unless otherwise agreed by Lessor and Lessee, any such renewal rent shall be payable on the same dates and in the same manner as the rent payable under the applicable Equipment Schedule prior to the expiration thereof.


11. LOCATION; INSPECTION; LABELS. The Equipment shall be delivered to and shall not be removed without Lessor's prior written consent from the "Equipment Location" shown on the related Equipment Schedule. Lessor shall have the right to inspect the Equipment


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at any reasonable time upon reasonable notice. Upon request by Lessor, Lessee shall conspicuously mark or affix labels to the Equipment stating that the Equipment is owned by Lessor.


12. REPAIRS; USE; ALTERATIONS. Lessee, at its own cost and expense, shall keep the Equipment in good repair and working order, in the same condition as when delivered to Lessee, ordinary wear, tear, depreciation and obsolescence excepted, and in accordance with the Manufacturer's recommended specifications; shall use the Equipment lawfully; shall not alter the Equipment without Lessor's prior written consent, shall use the Equipment in compliance with any existing Manufacturer's service and warranty requirements and any insurance policies applicable to the Equipment and shall furnish all parts and servicing required therefor. All parts, repairs, additions, alterations and attachments placed on or incorporated into the Equipment which cannot be removed without damage to the Equipment shall immediately become part of the Equipment and shall be the property of the Lessor. Lessee will obtain and maintain all permits, licenses and registrations necessary to lawfully operate the facility where the Equipment is located. Lessee shall comply with all applicable environmental and industrial safety and hygiene laws, rules and regulations (including but not limited to federal, state and local environmental protection, occupational, health and safety or similar laws, ordinances and restrictions).


13. RETURN OF EQUIPMENT. Provided that Lessee does not exercise its Purchase Option as set forth in this Lease, following the termination of this Lease for any reason, Lessee shall return the Equipment to Lessor in the same condition in which it was received by Lessee, except for ordinary wear, tear, depreciation and obsolescence. Following any such termination, Lessee shall, during regular business hours, make the Equipment available at the premises on which the Equipment is then located for pick-up and removal by Lessor, and Lessor shall pay all expenses for pick-up and removal of the Equipment.


14. LOSS OR DAMAGE. Lessee shall bear the entire risk of loss, theft, destruction of or damage to the Equipment or any item thereof (herein, "Loss or Damage") from any cause whatsoever. No Loss or Damage shall relieve Lessee of the obligation to pay rent or of any other obligation under this Lease. In the event of Loss or Damage, Lessee, at its option, shall either (i) place the same in good condition and repair or (ii) replace the same with like equipment acceptable to Lessor in good condition and repair with clear title thereto in Lessor. Notwithstanding the foregoing, Lessor and Lessee may terminate the Equipment Schedule or portion thereof applicable to the affected Equipment upon payment of such amount in respect of the remaining rent and fair market value of the Equipment as Lessor and Lessee may agree.


15. INSURANCE. Lessee shall provide, maintain and pay for (i) all risk property insurance against the loss or theft of or damage to the Equipment, for the full replacement value thereof, and (ii) commercial general liability insurance. All such policies shall name Lessor as an additional insured and shall have combined single limits in amounts acceptable to Lessor. All such insurance policies shall be endorsed to be primary and non-contributory to any policies maintained by Lessor. All insurance shall be placed with companies satisfactory to Lessor and


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shall contain the insurer's agreement to give 30 days' written notice to Lessor before cancellation or any material change of any policy of insurance.


16. TAXES. Lessee shall reimburse to Lessor (or pay directly if, but only if, instructed by Lessor) all charges and taxes (local, state and federal) which may now or hereafter be imposed or levied upon the sale, purchase, ownership, leasing, possession or use of the Equipment; excluding, however, all income taxes levied on (i) any rental payments made to Lessor hereunder, (ii) any payment made to Lessor in connection with Loss or Damage to the Equipment under Paragraph 14 hereof or (iii) any payment made to Lessor in connection with Lessee's exercise of its Purchase Option.


17. ENCUMBRANCES OR LIENS.


17.1 Lessee shall not, without the prior written consent of Lessor, pledge, encumber, create a security interest in or permit any lien to become effective on any item of the Equipment, and Lessee shall promptly notify Lessor of any liens, charges or other encumbrances affecting the Equipment of which Lessee has knowledge. Lessee shall keep the Equipment and all right, title and interest therein free and clear of all liens, charges and encumbrances other than the interest of Lessor.


17.2 Lessor shall not pledge, encumber, create a security interest in or permit any lien to become effective on any item of the Equipment, and Lessor shall promptly notify Lessee of any liens, charges or other encumbrances affecting the Equipment of which Lessor has knowledge. Lessor shall keep the Equipment and all right, title and interest therein free and clear of all liens, charges and encumbrances other than the interest of Lessee.


18. INDEMNITY. Lessee shall indemnify Lessor against and hold Lessor harmless from any and all claims, actions, damages, costs, expenses (including reasonable attorneys' fees), obligations, liabilities and liens (including any of the foregoing arising or imposed under the doctrines of "strict liability" or "product liability" and including, without limitation, the cost of any fines, remedial action, damage to the environment and cleanup and the fees and costs of consultants and experts), arising out of the manufacture, purchase, lease, ownership, possession, operation, condition, return or use of the Equipment, or by operation of law, excluding, however, any of the foregoing resulting from the sole negligence or willful misconduct of Lessor. Lessee agrees that upon written notice by Lessor of the assertion of such a claim, action, damage, obligation, liability or lien, Lessee shall assume full responsibility for the defense thereof. Lessee's choice of counsel shall be mutually acceptable to both Lessee and Lessor.


19. ASSIGNMENT.


19.1 Lessee shall not assign this Lease or any interest in this Lease or the Equipment, or sublet any of the Equipment, without the express prior written consent of Lessor, which consent shall not be unreasonably withheld; provided, however, that Lessee may assign its rights under this Lease to an affiliate of Lessee or to the surviving corporation in the event of a merger, reorganization or consolidation as a result of which Lessee is not the surviving


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corporation. In the event of any such assignment by Lessee, Lessee's assignee shall have all the rights, powers, privileges, remedies and obligations of Lessee set forth in this Lease.


19.2 Lessor shall not assign this Lease or any of its rights herein without the express prior written consent of Lessee, which consent shall not be unreasonably withheld. In the event of any such assignment by Lessor, Lessor's assignee shall have all of the rights, powers, privileges, remedies and obligations of Lessor set forth in this Lease.


19.3 This Lease shall be binding upon and inure to the benefit of Lessee and Lessor and their respective permitted successors and assigns.


20. REPRESENTATIONS AND WARRANTIES. Each party hereby represents and warrants to the other party that: (i) all action on the part of such party necessary for the execution, delivery and performance of this Lease by such party has been taken, (ii) this Lease is a legal, valid and binding obligation of such party enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies and (iii) the execution and delivery of, and the performance of the obligations under, this Lease by such party does not and will not contravene or result in any breach of any law or of any regulation, order, writ, injunction or decree of any court, tribunal, governmental body, authority, agency or instrumentality, nor do or will such execution, delivery or performance violate, conflict with or result in (or with notice or lapse of time or both result in) a breach of or a default under any term or provision of any agreement, oral or written, to which such party is a party or is bound.


21. DEFAULT.


21.1 The occurrence of any of the following events shall constitute an "Event of Default by Lessee" under this Lease:


(i) The failure by Lessee to pay any rent payment payable to
Lessor hereunder within 30 days after its due date;


(ii) The failure by Lessee to perform any of its obligations
hereunder, which failure continues uncured for a period of
30 days following Lessor's written notice to Lessee
thereof; or


(iii) The institution by or against Lessee of any proceeding
under any bankruptcy, insolvency or debtor's relief law,
which proceeding is not dismissed within 60 days, the
appointment of a receiver for Lessee or its property or
any assignment by Lessee for the benefit of its creditors.


21.2 The failure by Lessor to perform any of its obligations hereunder, which failure continues uncured for a period of 30 days following Lessee's written notice to Lessor thereof, shall constitute an "Event of Default by Lessor" under this Lease.
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