FINOVA LOGO]
FINANCIAL INNOVATORS
FINOVA Capital Corporation
10 Waterside Drive
Farmington,
Connecticut 06032-3065
(860) 676-1818
MASTER LEASE No. S7280, dated June 2, 1999
FINOVA Capital Corporation ("we", "us" or "FINOVA") agrees to lease to Avanex Corporation ("you" or "Lessee") and you agree to lease from us, the Equipment described in any schedule to this Lease (a "Schedule"). The Equipment also includes any replacement
parts, repairs, additions and accessories that you may add to the Equipment. We may treat any Schedule as a separate lease containing all of the provisions of this Lease.
1. PURCHASING AND INSTALLING THE EQUIPMENT
We will purchase the Equipment from the Supplier you chose. The Supplier
will deliver the Equipment to you at your expense. You will properly
install the Equipment at your expense at the location(s) indicated in the
2. TERM
- The Term of each Schedule begins when any of the Equipment on that
Schedule is delivered to you, or a later date that we agree to in
- The Term continues until you fully perform in all material respects
all of your obligations under this Lease and the Schedule.
- If the Equipment is not delivered, installed and accepted by you by
the date indicated in the Schedule, we may terminate this Lease and
the Schedule as to the Equipment that was not delivered, installed
and accepted by giving you 10 days written notice of termination.
- Before we make any progress payment or final payment for the
Equipment on any Schedule, we require the following:
- That no payment is past due to us under any lease, loan or other
financial arrangement that you or any guarantor have with us.
- That you are complying in all material respects with all the terms
of this Lease.
- That we have received all the documents we requested, including the
signed Schedule and Delivery and Acceptance Certificate.
- That there has been no material adverse change in your financial
condition, business, operations or prospects, or that of any
guarantor, from the condition that you disclosed to us in your
application for credit.
3. RENT
- The rent is indicated on the Schedule. The rent is payable
periodically in advance from time to time (for example, monthly).
You agree that you owe us the total of all of these rent payments
over the Term of the Schedule.
- The first rent payment is due at the beginning of the Term or at a
later date that we agree to in writing. Subsequent rent payments are
due on the same day of each successive period until you pay us in
full all of the rent and any other charges or expenses you owe us.
- If the first rent payment is due later than the beginning of the
Term, you will also pay us interim rent on the first rent payment
date. The interim rent will be for the period from the beginning of
the Term until the date that the first rent payment is due. Interim
rent will be calculated at the same rate as the regular rent
payment, but on a daily basis for the number of days for which
interim rent is due.
- YOUR OBLIGATION TO PAY US ALL RENT IS ABSOLUTE AND UNCONDITIONAL.
YOU ARE NOT EXCUSED FROM PAYING THE RENT, IN
FULL, FOR ANY REASON. YOU AGREE THAT YOU HAVE NO DEFENSE FOR FAILURE
TO PAY THE RENT AND YOU WILL NOT MAKE ANY COUNTERCLAIMS OR SETOFFS
TO AVOID PAYING THE RENT.
4. NON-CANCELABLE LEASE. YOU AGREE THAT YOU MAY NOT CANCEL OR TERMINATE
THIS LEASE OR ANY SCHEDULE.
5. PROTECTION OF OUR INTEREST IN THE EQUIPMENT; FEES.
- The Equipment is our property. It will remain our property. You will
not own the Equipment unless the Schedule gives you an option to
purchase the Equipment and you have exercised that option and paid
us in full for the Equipment and any other amounts you may owe us.
If we request, you will put labels supplied by us stating "PROPERTY
OF FINOVA" on the Equipment where they are clearly visible.
- You give us permission to add to this Lease or any Schedule the
serial numbers and other information about the Equipment.
- While this Lease is intended to be a lease (and not a loan), you
grant us a security interest in the Equipment to protect our
interest in the Equipment if this Lease is later determined to be a
security agreement. You give us permission to file this Lease or a
Uniform Commercial Code financing statement, at your expense, in
order to perfect this security interest. You also give us permission
to sign your name on the Uniform Commercial Code financing
statements where this is permitted by law.
- You will pay our cost to do searches for other filings or judgments
against you or your affiliates. You will also pay any filing,
recording or stamp fees or taxes resulting from filing this Lease or
a Uniform Commercial Code financing statement. You will also pay our
fees in effect from time to time for documentation, administration
and Termination of this Lease.
- At your expense, you will defend our ownership rights in the
Equipment against, and keep the Equipment free of, any legal
process, liens, security interests, attachments, levies and
executions. You will give us immediate written notice of any legal
process, liens, attachments, levies or executions, and you will
indemnify us against any loss that results to us from these causes.
- You will notify us at least 15 days before you change the address of
your principal executive office.
- You will promptly sign and return additional documents that we may
request in order to protect our interest in the Equipment.
- The Equipment is personal property and will remain personal
property. You will not incorporate it into real estate and will not
do anything that will cause the Equipment to become part of real
estate or a fixture.
6. CARE, USE, LOCATION AND ALTERATION OF THE EQUIPMENT
- You will make sure that the Equipment is maintained in good
operating condition, and that it is serviced, repaired and
overhauled when this is necessary to keep the Equipment in good
operating condition. All maintenance must be done according to the
Supplier's or Manufacturer's requirements or recommendations. All
maintenance must also comply with any legal or regulatory
- You will maintain service logs for the Equipment, if applicable, and
permit us to inspect the Equipment, the service logs and service
reports. You give us permission to make copies of the service logs
and service reports.
- We will give you prior notice if we, or our agent, want to inspect
the Equipment or the service logs or service reports. We may inspect
it during regular business hours. If we find during an inspection
that you are not complying with this Lease, you will pay our travel,
meals and lodging costs, our salary costs, and the costs and fees of
our agents for reinspection. You will promptly cure any problems
with the Equipment that are discovered during our inspection.
- You will use the Equipment only for business purposes. You will obey
all legal and regulatory requirements in your use of the Equipment.
- You will make all additions, modifications and improvements to the
Equipment that are required by law or government regulation.
Otherwise, you will not alter the Equipment without our written
permission. You will replace all worn, lost, stolen or destroyed
parts of the Equipment with replacement parts that are as good or
better than the original parts. The new parts will become our
property upon replacement.
- You will not remove the Equipment from the location indicated in the
Schedule without our written permission.
7. RETURN OF EQUIPMENT. Unless otherwise stated in the Schedule:
- You must give us written notice at least 60 days before the end of
the Term if you want to purchase the equipment from us (assuming the
Schedule provides you with an option to purchase the Equipment).
- You must give us written notice at least 60 days before the end of
the Term if you want to return the Equipment to us.
- If you do not give us written notice at least 60 days before the end
of the Term either that you want to purchase or that you want to
return the Equipment, you will continue to rent the Equipment and
this Lease and the Schedule will be automatically extended until 120
days after we receive your notice. The rent will be the fair market
rental value of the Equipment, as determined by us. Unless we notify
you otherwise, the fair market rental value will not exceed the rent
then being charged under this Lease and the Schedule.
- If you do give us 60 days written notice that you want to purchase
the Equipment but you do not pay us the purchase price, you will
continue to rent the Equipment. The rent will be the fair market
rental value of the Equipment, as determined by us. You will
continue to pay us this rent until you have paid the purchase price
for the Equipment. The rent payments will not be credited to the
purchase price.
- If you do give us 60 days written notice that you want to return the
Equipment to us, but you do not return the Equipment in compliance
with the return conditions contained in the next paragraph, you will
continue to rent the Equipment. The rent will be the fair market
rental value of the Equipment, as determined by us. You will
continue to pay us this rent until you have returned the Equipment
to us in compliance with these return conditions.
- Return conditions: - You will return the Equipment, freight and
insurance prepaid by you, to us at a location we request in the
United States of America. It will be returned in good operating
condition, as required by section 6 above. The Equipment will not be
subject to any liens when it is returned.
- You will pack or crate the Equipment for shipping in the
original containers, or comparable ones. You will do this
carefully and follow all recommendations of the Supplier and
the Manufacturer as to packing or crating.
- You will also return to us the plans, specifications,
operating manuals, software documentation, discs, warranties
and other documents furnished by the Manufacturer or Supplier.
You will also return to us all service logs and service
reports, as well as all written materials that you may have
concerning the maintenance and operation of the Equipment.
- At our request, you will provide us with up to 60 days free
storage of the Equipment at your location, and upon prior
notice and during normal business hours (except in a case of
an Event of Default in which case no notice is due) you will
let us (or our agent) have access to the Equipment in order to
inspect it and sell it.
- You will pay us what it costs us to repair the Equipment if
you do not return it in the required condition.
8. RISK OF LOSS
- You have the complete risk of loss or damage to the Equipment. Loss
or damage to the Equipment will not relieve you of your obligation
to pay rent.
- If any Equipment is lost or damaged, you have two choices (although
if you are in default under this Lease, we and not you will have the
two options). The choices are:
(1) Repair or replace the damaged or lost Equipment so that, once again,
we own Equipment in good operating condition and have clear title to
(2) Pay us the present value (as of the date of payment) of the
remaining rent payments and our residual interest in the Equipment.
We will calculate the present value using a discount rate of five
(5%) percent per year. Once you have paid us this amount and any
other amount that you may owe us, you (or your insurer) may keep the
Equipment for salvage purposes, on an "AS IS, WHERE IS" basis.
9. INSURANCE
- Until you have properly returned the Equipment to us, you will keep
it insured. The amount of the insurance, the coverage, and the
insurance company must be acceptable to us.
- If you do not provide us with written evidence of insurance that is
acceptable to us, we may buy the insurance ourselves, at your
expense. You will promptly pay us the cost of this insurance. We
have no obligation to purchase any insurance. Any insurance that we
purchase will be our insurance, and not yours, and may insure the
Equipment beyond the end of the Term.
- Insurance proceeds may be used to repair or replace damaged or lost
Equipment or to pay us the present value of the rent and our
residual interest in t ...