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MASTER AGREEMENT


This MASTER AGREEMENT, dated as of the 15th day of December, 1998, which together with all riders and amendments now or hereafter executed and made a part hereof (the "Master Agreement"), is made at Boston, Massachusetts by and between BANCBOSTON LEASING INC. ("Lessor"), a Massachusetts corporation with its principal place of business at 100 Federal Street, Boston, Massachusetts 02110 and DITECH CORPORATION ("Lessee"), a California corporation with its principal place of business at 825 East Middlefield Road, Mountain View, California 94043.


IN CONSIDERATION OF the mutual promises and covenants contained herein, Lessor and Lessee hereby agree as follows:


1. LEASING PROPERTY. At the request of Lessee and subject to the terms and conditions of this Master Agreement, Lessor shall lease to Lessee and Lessee shall lease from Lessor such personal property ("Equipment") as may be mutually agreed upon by Lessor and Lessee. The Equipment shall be selected by or ordered at the request of Lessee, identified in one or more lease schedules substantially in the form as supplied by Lessor (each a "Lease Schedule") and accepted by Lessee in one or more certificates of acceptance in the form as supplied by Lessor (each a "Certificate of Acceptance"). Each Lease Schedule executed by Lessor and Lessee expressly incorporates by reference the terms and conditions of this Master Agreement and any riders, schedules or amendments, now or hereafter executed, applicable to such Lease Schedule and shall constitute a separate, distinct and independent lease and contractual relationship between Lessor and Lessee.

2. CERTAIN DEFINITIONS.

2.1 The "Acquisition Cost" shall mean the total acquisition cost of the Equipment paid by Lessor as set forth in the applicable Lease Schedule.

2.2 The "Commencement Date" shall mean the date on which the Equipment identified in the applicable Lease Schedule is accepted and placed in service by Lessee as evidenced by a Certificate of Acceptance.

2.3 The "Daily Rent" shall mean the per diem amount set forth in the applicable Lease Schedule.

2.4 The "Initial Term Start Date" shall mean either (i) the first day of the month immediately following the month in which the Commencement Date occurs, or (ii) if the Commencement Date occurs on the first day of the month, the Commencement Date. For all rental periods other than monthly, the Initial Term Start Date shall be as set forth on the applicable Lease Schedule.

2.5 The "Payment Date" shall mean the date set forth in the applicable Lease Schedule.

2.6 The "Periodic Rent" shall mean the amount set forth in the applicable Lease Schedule.


2.7 The words "herein", "hereof", and "hereunder" shall refer to this Master Agreement and any Lease Schedule as a whole and not to any particular section. Other capitalized terms shall have the meanings specified elsewhere in this Master Agreement or the Lease Schedule.

3. INITIAL TERM OF LEASE; PAYMENT OF RENT.

3.1 This Master Agreement shall be effective from and after the date of execution hereof. The term of lease for the Equipment shall begin on the Commencement Date set forth in the applicable Certificate of Acceptance and shall continue during and until the expiration of the Initial Term as defined and set forth in the applicable Lease Schedule, measured from the Initial Term Start Date. The Initial Term may not be canceled or terminated except as set forth in Sections 10.2 or 17.1 below.

3.2 At the expiration of the Initial Term, Lessor and Lessee may extend the lease of the Equipment for any period as they may agree upon in writing ("Extended Term") at the then fair market rental value of the Equipment, as determined in good faith by Lessor.

3.3 Aggregate Daily Rent shall be due and payable by Lessee on the Initial Term Start Date in an amount equal to the Daily Rent multiplied by the actual number of days elapsed from, and including, the Commencement Date to, but excluding, the Initial Term Start Date. The Periodic Rent shall be due and payable, without prior notice or demand, on the Payment Date and thereafter on the first day of each month or other applicable period of the Initial Term or any Extended Term. All Daily Rents and Periodic Rents shall be paid to Lessor at its principal place of business in Boston, Massachusetts or other location to which the Lessor may direct in writing.

4. ACCEPTANCE OF EQUIPMENT; EXCLUSION OF WARRANTIES.

4.1 Lessee shall signify its acceptance of the Equipment identified in the applicable Lease Schedule by promptly executing and delivering to Lessor a Certificate of Acceptance. Lessee acknowledges that its execution and delivery of the Certificate of Acceptance shall conclusively establish, as between Lessor and Lessee, that the Equipment has been inspected by Lessee, is in good repair and working order, is of the design, manufacture and capacity selected by Lessee, and is accepted by Lessee under the applicable Lease Schedule.

4.2 In the event the Equipment is ordered by Lessor from a manufacturer or supplier at the request of Lessee, Lessor shall not be required to pay the Acquisition Cost for such Equipment unless and until the applicable executed Certificate of Acceptance has been received by Lessor. All expenses incurred in connection with Lessor's purchase of the Equipment (including shipment, delivery and installation) shall be the responsibility of Lessee and shall be either capitalized in the Acquisition Cost or paid upon demand. If Lessee shall refuse to accept delivery of any item of the Equipment, Lessee will be assigned all rights and shall assume all obligations as purchaser of such item of the Equipment. Lessee hereby agrees to indemnify, defend and hold Lessor harmless from any liability to any manufacturer or supplier of the Equipment (in each case a "Supplier") or any other manufacturer or supplier arising from the failure of Lessee to lease any Equipment which is ordered by Lessor at the request of Lessee or for which Lessor has assumed an obligation to purchase at the request of Lessee.

4.3 Lessor leases the Equipment to Lessee and Lessee leases the Equipment from Lessor "AS IS" and "WITH ALL FAULTS". Lessee hereby acknowledges that (i) Lessor is not a manufacturer, supplier or dealer of such Equipment nor an agent thereof, and (ii) LESSOR HAS NOT MADE, DOES NOT MAKE, AND HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY


-2- WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT INCLUDING, BUT NOT LIMITED TO, ITS DESIGN, CAPACITY, CONDITION, MERCHANTABILITY, OR FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE. Lessee further acknowledges that Lessor is not responsible for any repairs, maintenance, service, latent or other defects in the Equipment or in the operation thereof, or for compliance of any Equipment with requirements of any laws, ordinances, governmental rules or regulations including, but not limited to, laws with respect to environmental matters, patent, trademark, copyright or trade secret infringement, or for any direct, indirect, incidental, punitive, consequential or other damages arising out of the use of or inability to use the Equipment. In addition, Lessor makes no representation and disclaims any warranty that the Equipment is "Year 2000 Compliant," that is, that any computer applications, imbedded microchips or other systems, if any, which may be contained or included in the Equipment will be able to recognize, and perform properly, date sensitive functions involving certain dates prior to, and any date after, December 31, 1999.

4.4 Provided no Event of Default, as defined in Section 16 below, has occurred and is continuing, Lessor agrees to cooperate with Lessee, at the sole cost and expense of Lessee, in making any claim against a manufacturer or supplier of the Equipment arising from a defect in such Equipment or breach of warranty, express or implied, and/or arising out of the purchase or supply agreement between Lessor and Supplier. At the request of Lessee, Lessor shall assign to Lessee, for the Initial Term and any Extended Term, all warranties on the Equipment available from Supplier to the full extent permitted by the terms of such warranties and by applicable law.

5. OWNERSHIP; INSPECTION; MAINTENANCE AND USE.

5.1 The Equipment shall at all times be the sole and exclusive property of Lessor. Any Equipment subject to titling and registration laws shall be titled and registered by Lessee on behalf of and in the name of Lessor, or in such name as Lessor may direct, at the sole cost and expense of Lessee. Lessee shall cooperate with and provide Lessor with any information or documents necessary for titling and registration of the Equipment. Upon the request of Lessor, Lessee shall execute any documents or instruments which may be necessary or appropriate to confirm, to record or to give notice of the ownership of the Equipment by Lessor including, but not limited to, financing statements under the Uniform Commercial Code. Lessee, at the request of Lessor, shall affix to the Equipment, in a conspicuous place, any label, plaque or other insignia supplied by Lessor designating the ownership of the Equipment by Lessor.

5.2 The Equipment shall be located at the address specified in the applicable Lease Schedule, which must be within the continental United States, or such other location as Lessor may agree in writing, and may be removed therefrom to another location within the continental United States only with prior written notice to Lessor. Lessor, its agents or employees shall have the right to enter the premises of Lessee, upon reasonable notice and during normal business hours, for the purpose of inspecting the Equipment and all maintenance records kept by Lessee with respect to the Equipment.

5.3 Lessee shall pay all costs, expenses, fees and charges whatsoever incurred in connection with the use and operation of the Equipment. Lessee shall, at all times and at its own expense, keep the Equipment in good repair and working order, reasonable wear and tear excepted. Lessee shall also use the Equipment solely in the conduct of its business, and shall not permanently discontinue use of the Equipment. Any maintenance contract required by a manufacturer or supplier for the care and upkeep of the Equipment shall be entered into by Lessee at its sole cost and expense. Lessee shall permit the use and operation of the Equipment only by personnel authorized by Lessee and shall comply with all laws,


-3- ordinances or governmental rules and regulations and applicable insurance policies relating to the use and operation of the Equipment.

6. ALTERATIONS AND MODIFICATIONS. Lessee may make, or cause to be made on its behalf, any improvement, modification or addition to the Equipment with the prior written consent of Lessor, which will not be unreasonably withheld; provided, however, that such improvement, modification or addition is readily removable without causing damage to, or impairment of, the functional effectiveness, remaining economic useful life or fair market value of the Equipment. Any such improvement, modification or addition which is so readily removable shall remain the property of Lessee and shall be removed by Lessee prior to return of the Equipment. To the extent that such improvement, modification or addition is not so removable, it shall be permitted only with Lessor's prior written consent, which will be granted at Lessor's sole discretion, and only if its attachment will not cause damage to, or impairment of, the functional effectiveness, remaining economic useful life or fair market value of the Equipment; and such improvement, modification or addition shall immediately become the property of Lessor and thereupon shall be considered Equipment for all purposes hereunder. Any modification or addition to the Equipment which is required by law shall be made by Lessee, at the sole cost and expense of Lessee, and shall immediately become the property of Lessor and thereupon shall be considered Equipment for all purposes hereunder. Any improvement, modification or addition made to the Equipment shall be free of all liens, claims and encumbrances of third parties.

7. QUIET ENJOYMENT; NO DEFENSE, SETOFF OR COUNTERCLAIMS.

7.1 Provided no Event of Default, as defined in Section 16 below, has occurred and is continuing, Lessee shall have the quiet enjoyment and use of the Equipment in the ordinary course of its business during the Initial Term or any Extended Term without interruption by Lessor or any person or entity claiming through or under Lessor.

7.2 Lessee acknowledges and agrees that ANY DAMAGE TO OR LOSS, DESTRUCTION, OR UNFITNESS OF, OR DEFECT IN THE EQUIPMENT, OR THE INABILITY OF LESSEE TO USE THE EQUIPMENT FOR ANY REASON WHATSOEVER, OR ANY OTHER CIRCUMSTANCE WHATSOEVER SHALL NOT (i) GIVE RISE TO ANY DEFENSE, COUNTERCLAIM, OR RIGHT OF SETOFF AGAINST LESSOR, OR (ii) PERMIT ANY ABATEMENT OR RECOUPMENT OF, OR REDUCTION IN DAILY OR PERIODIC RENT, OR (iii) ALLOW LESSEE TO CANCEL, TERMINATE, MODIFY OR REPUDIATE THE APPLICABLE LEASE SCHEDULE, OR (iv) RELIEVE LESSEE OF, OR EXCUSE LESSEE FROM, THE PERFORMANCE OF ITS OBLIGATIONS UNDER THE APPLICABLE LEASE SCHEDULE INCLUDING, BUT NOT LIMITED TO, ITS OBLIGATION TO PAY THE FULL AMOUNT OF DAILY RENT AND PERIODIC RENT, WHICH OBLIGATIONS ARE ABSOLUTE AND UNCONDITIONAL. Any claim that Lessee may have which arises from a defect in or deficiency of the Equipment shall be brought solely against Supplier or any other manufacturer or supplier of the Equipment and Lessee shall, notwithstanding any such claim, continue to pay Lessor all amounts due and to become due under the applicable Lease Schedule.

8. ADVERSE CLAIMS AND INTERESTS.

8.1 Except for any liens, claims, mortgages, pledges, encumbrances or security interests created by or for the benefit of Lessor, Lessee shall keep the Equipment at all times, free and clear from all liens, claims, mortgages, pledges, encumbrances and security interests, other than liens for fees, taxes, levies, duties or other governmental charges of any kind, liens of mechanics, materialmen, laborers,


-4- employees or suppliers and similar liens arising by operation of law incurred by Lessee in the ordinary course of business for sums that are not yet delinquent or are being contested in good faith by appropriate proceedings which suspend the collection thereof provided, however, that such proceedings do not involve any risk of the sale, forfeiture or loss of the Equipment or any interest therein, or of the imposition of criminal liability on the part of Lessor or Lessee, which shall be determined by Lessor in its sole discretion. Lessee shall keep the Equipment at all times free and clear from all levies, seizures and attachments, and shall defend Lessor's title in and to the Equipment. Without limitation of the covenants and obligations of Lessee set forth in the preceding sentence, Lessee shall immediately notify Lessor in writing of the imposition of any prohibited lien, claim, levy or attachment on or seizure of the Equipment, at which time Lessee shall provide Lessor with all relevant information in connection therewith.

8.2 Lessee agrees that the Equipment shall be and at all times shall remain personal property. Accordingly, Lessee shall take such steps as may be necessary to prevent any person, including without limitation Lessee's landlord and such landlord's mortgagee, from acquiring, having or retaining any rights in or to the Equipment by reason of its being affixed or attached to, or otherwise located on, real property including, without limitation, obtaining and delivering to Lessor waivers of any lien, encumbrance or interest which such person might have or hereafter obtain or claim with respect to the Equipment which waivers shall be recorded at the sole cost and expense of Lessee.

9. INDEMNITIES; PAYMENT OF TAXES.

9.1 Lessee hereby agrees to indemnify, defend and hold harmless (on an after-tax basis) Lessor, its agents, employees, successors and assigns from and against any and all claims, actions, suits, proceedings, costs, expenses, damages and liabilities whatsoever arising out of or in connection with the manufacture, ordering, selection, specifications, availability, delivery, titling, registration, rejection, installation, possession, maintenance, ownership, use, leasing, operation or return of the Equipment including, but not limited to, any claim or demand based upon (i) any STRICT OR ABSOLUTE LIABILITY IN TORT, (ii) any violation of any applicable environmental or other laws or regulations, or (iii) any infringement or alleged infringement of any patent, trademark, trade secret, license, copyright or otherwise. All costs and expenses incurred by Lessor in connection with any of the foregoing including, but not limited to, reasonable legal fees shall be paid by Lessee on demand. The indemnification provisions of this Section 9.1 shall not, however, apply to any claim, cost or expense arising from, or in connection with, any gross negligence or willful misconduct on the part of Lessor, its agents, employees, its successors and assigns.

9.2 Lessee hereby agrees to indemnify, defend and hold Lessor harmless, on an after-tax basis, against all federal, state and local taxes, assessments, licenses, withholdings, levies, imposts, duties, excise taxes, registration fees and other governmental fees and charges whatsoever, which are imposed, assessed or levied on or with respect to the Equipment or its use or related in any way to a Lease Schedule ("Tax Assessments") except for taxes on or measured by the net income of Lessor determined substantially in the same manner as under the Internal Revenue Code of 1986, as amended. Lessee shall file all returns, reports or other such documents required in connection with the Tax Assessments and shall provide Lessor with copies thereof. Provided no Event of Default, as defined in Section 16 below, has occurred and is continuing, Lessee is also authorized, for and on behalf of Lessor, to file abatements or otherwise seek a refund or reduction of any Tax Assessments provided that no such filing shall create any risk of loss of or encumbrance on the Equipment. If, under local law or custom, Lessee is not authorized to make the filings required by a taxing authority, Lessee shall notify Lessor in writing, and Lessor shall thereupon file such returns, reports or documents at Lessee's sole cost and


-5- expense. Without limiting any of the foregoing, Lessee shall indemnify, defend and hold Lessor harmless from all penalties, fines, interest payments, claims and expenses, including but not limited to reasonable legal fees, arising from any failure of Lessee to comply with the requirements of this Section 9.2.

9.3 The obligations and indemnities of Lessee under this Section 9 for events occurring or arising or taxes accruing during the Initial Term or any Extended Term shall continue and survive in full force and effect, notwithstanding the expiration or other termination of this Master Agreement or any Lease Schedule.

10. RISK OF LOSS; LOSS OF EQUIPMENT.

10.1 Lessee hereby assumes and shall bear the entire risk of loss for theft, disappearance, damage, seizure, condemnation, casualty, destruction or other injury whatsoever to the Equipment from any and every cause whatsoever. Such risk of loss shall be deemed to have been assumed by Lessee from and after such risk passes from the Supplier by agreement or pursuant to applicable law. For purposes of this Section 10 only, Equipment shall include any item or unit thereof.

10.2 In the event of loss or damage to any item of Equipment which can be repaired by Lessee, Lessee shall, at its cost and expense, promptly repair and restore such item of Equipment to the condition required by this Master Agreement. In the event of any loss, seizure, condemnation, casualty or destruction of the Equipment or damage to the Equipment which cannot be repaired by Lessee, Lessee shall immediately notify Lessor in writing. Within thirty (30) days of such notice, during which time Lessee shall continue to pay Periodic Rent, Lessee shall, at the option of Lessor, either (i) replace the Equipment with equipment of the same type and manufacture, and having a value, utility and remaining economic useful life not less than the Equipment replaced, and in good repair, condition and working order, and transfer title to such equipment to Lessor free and clear of all liens, claims and encumbrances, whereupon such equipment shall be deemed Equipment for all purposes of the Lease Schedule, or (ii) pay to Lessor an amount equal to the present value of both the aggregate of the remaining unpaid Periodic Rents and the anticipated residual value of the Equipment plus any other costs actually incurred by Lessor. Lessor and Lessee agree that the residual value of the Equipment at the expiration of the Initial Term is reasonably anticipated to be not less than twenty percent (20%) of the Acquisition Cost of the Equipment. The present value shall be determined by discounting the aggregate of the remaining unpaid Periodic Rents and the anticipated residual value of the Equipment to the date of payment by Lessee at the rate of five percent (5%) per annum. When and as requested by Lessor, Lessee shall also pay to Lessor amounts due pursuant to Section 18 below, if any, arising as a result of the loss, seizure, replacement, condemnation or destruction of the Equipment. Provided no Event of Default, as defined in Section 16 below, has occurred and is continuing, any insurance or condemnation proceeds received by Lessor shall be credited to the obligations of Lessee under this Section 10.2, and the remainder of such proceeds, if any, shall be paid to Lessee by Lessor in full compensation for the loss of the leasehold interest in the Equipment by Lessee.

10.3 Upon any replacement of or payment for the Equipment as provided in Section 10.2 above, the Lease Schedule shall terminate only with respect to the Equipment so replaced or paid for, and Lessor shall transfer to Lessee title only to such Equipment "AS IS, WHERE IS", "WITH ALL FAULTS", and WITH NO WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR FOR ANY PARTICULAR PURPOSE. Lessee shall pay any sales or use taxes due on such transfer.


-6-
11. INSURANCE.

11.1 Lessee shall keep the Equipment insured against all risks of loss or damage from every cause whatsoever occurring during the Initial Term, or any Extended Term for an amount not less than the higher of the full replacement value of the Equipment or the aggregate of unpaid Daily Rent and Periodic Rent for the balance of the Initial Term or the Extended Term. Lessee shall also carry public liability insurance, both bodily injury and property damage, covering the Equipment, and Lessee shall be liable for any deductible portions of all required insurance.

11.2 All insurance required under this Section 11 shall be primary and shall name Lessor as additional insured and loss payee. Such insurance shall also be with such insurers and shall be in such form reasonably satisfactory to Lessor and in such amounts as are satisfactory to Lessor. All applicable policies shall provide that no act, omission or breach of warranty by Lessee shall give rise to any defense against payment of the insurance proceeds to Lessor. Lessee shall pay the premiums for such insurance and, at the request of Lessor, deliver to Lessor duplicates of such policies or other evidence satisfactory to Lessor of such insurance coverage. In any event, Lessee shall provide Lessor with certificates of insurance or such other evidence of coverage, to include endorsements upon the policies issued by the insurers which evidence the existence of insurance coverage required by this Section 11, and by which the insurers agree to give Lessor written notice at least thirty (30) days prior to the effective date of any expiration, modification, reduction, termination, refusal to renew or cancellation of any such policies. Lessee shall cause to be provided to Lessor, not less than fifteen (15) days prior to the scheduled expiration or lapse of such insurance coverage, evidence satisfactory to Lessor of renewal or replacement coverage.

11.3 Provided no Event of Default, as defined in Section 16 below, has occurred and is continuing, the proceeds of insurance required under this Section 11 and payable as a result of loss or damage to the Equipment shall be applied as set forth in Section 10.2 above. Upon the occurrence of an Event of Default as defined in Section 16 below, Lessee hereby irrevocably appoints Lessor as its attorney-in-fact, which power shall be deemed coupled with an interest, to make claim for, receive payment of, execute and endorse all documents, checks or drafts received in payment for loss or damage under any insurance policies required by this Section 11.

11.4 Notwithstanding anything herein, Lessor shall not be under any duty to examine any evidence of insurance furnished hereunder, or to ascertain the existence of any policy or coverage, or to advise Lessee of any failure to comply with the provisions of this Section 11.

12. SURRENDER TO LESSOR.

12.1 Lessee shall advise Lessor in writing at least ninety (90) days prior to the expiration of the Initial Term or any Extended Term of its intent to surrender the Equipment. Upon receipt of such notice, Lessor shall be authorized to demonstrate the Equipment in operation to potential buyers or lessees during the normal business hours of Lessee, provided that Lessor has given reasonable notice to Lessee prior to any such visit.

12.2 If Lessee elects to surrender the Equipment or, alternatively, upon any other termination of the Lease Schedule, Lessee shall immediately surrender the Equipment to Lessor by assembling and delivering the Equipment to a place or places, as Lessor may designate, within the continental United States. The shipment of the Equipment shall be conducted in accordance with the manufacturer's


-7- recommendations or, in the absence of such recommendations, in accordance with generally accepted industry practices for equipment similar to the Equipment. All costs of deinstalling, preparation for shipment, and shipping shall be borne by Lessee.

12.3 Upon surrender, the Equipment shall be in good repair, and working order, in compliance with the manufacturer's recommended tolerances for operation and performance in all material respects, in the same condition and appearance as when received (reasonable wear and tear excepted), and with all engineering and safety changes prescribed by the manufacturer or maintenance organization incorporated therein. The Equipment shall be complete, with all parts and pieces and all operating instructions, maintenance documentation, service manuals and other historical records; shall be capable of being immediately assembled and operated by a third party for its originally intended purpose; and shall be in compliance with all applicable laws, regulations and industry standards, without further repair, replacement of parts, alteration or improvement. Lessee shall, in a workmanlike manner and without damage to the Equipment, remove all Lessee-supplied decals, logos, insignias, numbers, and any similar identifications or markings from the Equipment. In conjunction with its surrender of the Equipment, Lessee shall provide Lessor with a complete and reasonably detailed inventory of the Equipment, including model numbers, serial numbers, and a description of all modifications (if any) made to the Equipment during the term of the Lease.

12.4 In the event that Lessee fails to comply with the provisions of this Section 12, the Initial Term or any Extended Term shall be extended on a day-to-day basis until Lessee shall have complied with such provisions. During such period, Lessee shall continue paying a per diem rental equal to the Daily Rent as set
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