Exhibit 10.39

 

 

 

Master Lease Agreement

BNY Leasing EdgeSM Lease Processing Center

 

PHONE: (800) 347-4015

1111 Old Eagle School Road, Wayne, PA 19087

 

FAX: (800) 743-0178

 

LESSEE

Full Legal Name
Dendrite International, Inc.

 

Phone Number
(908) 541-5843

Billing Address
1405-1425 Route 206 South, Bedminster, NJ 07921

 

Fax Number
(908) 541-5939

Send Invoice to Attention of:
Tina Morollo, Accounts Payable Manager

 

 

 

TERMS AND CONDITIONS

 

This MASTER LEASE AGREEMENT (“Agreement”) is dated as of September 20, 2004, and
is by and between BNY Leasing Edge Corporation, the “Lessor”, with offices and a
Lease Processing Center located at 1111 Old Eagle School Road, Wayne,
Pennsylvania 19087, its successors and assigns (“Lessor”) and the above
referenced lessee (“Lessee”). The parties hereto for good and valuable
consideration and intending to be legally bound hereby agree as follows:

1.  LEASE OF EQUIPMENT. This Agreement establishes the general terms and
conditions under which Lessor may, from time to time, lease Equipment (as
hereinafter defined) to Lessee. The terms hereof shall be deemed to form a part
of each Master Lease Schedule (“Lease”) executed by the parties which references
this Agreement. “Equipment”  shall mean all items of equipment, software and
maintenance set out in any Lease. Lessee hereby requests Lessor to purchase the
Equipment from the supplier(s) thereof (hereinafter called “Vendor and/or
Manufacturer”, as applicable) and to lease the Equipment to Lessee on the terms
and conditions contained herein. Each Lease shall constitute a separate lease
agreement incorporating all the terms hereof. In the event of a conflict between
the provisions of any Lease and the provisions hereof, the provisions of the
Lease shall prevail.

The amount of the Lease Payments on each Lease (“Lease Payments”) are based upon
the estimated total cost of the Equipment on the applicable Schedule. The Lease
Payments shall be adjusted proportionately upward or downward if the actual
total cost of the Equipment on the applicable Lease exceeds or is less than the
estimate and Lessee authorizes Lessor to adjust the Lease Payments by up to
fifteen percent (15%) in that event.

Unless Lessor has provided Lessee with a written commitment to the contrary,
Lessee authorizes Lessor to adjust the Lease Payment on each Lease to increase
or decrease the implicit rate of the Lease Payment to the Lessor in an amount
equal to any increase or decrease in the rate of Treasury Notes with a
comparable term to the term of the Lease from the date the Lessor quoted the
Lease Rate to the date Lessor accepts the Lease.

2.  TERM AND RENT. This Agreement shall become effective upon acceptance and
execution by Lessor at its corporate offices, as specified above, and shall
remain effective at least until the expiration of the term of the last Lease
hereunder. Each Lease shall become effective upon acceptance and execution by
Lessor and shall be for the term provided therein. The term of each Lease shall
commence on the Commencement Date, as defined in the Lease with an interim term
and Base Term Commencement Date as set forth therein and shall thereafter
continue until all obligations of the Lessee under the Lease shall have been
fully performed (“Lease Term”). Interim Rent and Base Term Rent shall be due and
payable as set forth in the Lease. All payments made by or on behalf of Lessee
hereunder shall be non-refundable. LESSEE’S OBLIGATION TO PAY SUCH LEASE
PAYMENTS SHALL BE ABSOLUTE AND UNCONDITIONAL AND IS NOT SUBJECT TO ANY
ABATEMENT, SET-OFF, DEFENSE OR COUNTER-CLAIM FOR ANY REASON WHATSOEVER. All
payments hereunder shall be made to Lessor at its address specified above (or
such other place as Lessor, in writing, directs) without notice or demand
therefor. If the term of a Lease is extended, “Lease Term” shall be deemed to
refer to all extensions thereof. All provisions of this Agreement shall apply
during any extended term except as may be otherwise specifically provided in
this Agreement, in a Lease, or in any subsequent written agreement of the
parties.

3.  DELIVERY AND ACCEPTANCE. Delivery and installation arrangements and costs,
unless included in the cost of the Equipment to Lessor and upon which the Lease
Payments were computed, are the sole responsibility of Lessee. Lessee agrees to
accept the Equipment when delivered, installed and operating to Manufacturer’s
specifications and to execute the Delivery and Acceptance Certificate supplied
by Lessor as evidence thereof. Lessee agrees to hold Lessor harmless from
specific performance of this Agreement and from damages, if for any reason, the
Vendor fails to deliver, or delays in delivery of, the Equipment so ordered or
if the Equipment is unsatisfactory for any reason whatsoever. Lessee agrees that
any delay in delivery of the Equipment shall not affect the validity of this
Agreement, any Lease or the obligation to make Lease Payments thereunder.
Lessee’s execution of the Delivery and Acceptance Certificate shall conclusively
establish that the Equipment covered thereby is acceptable to Lessee for all
purposes of the Lease related thereto.

The Lessee agrees to provide a suitable installation environment for the
Equipment as specified in the applicable Manufacturer’s manual, if any, and
except as otherwise specified by Manufacturer, to furnish all labor required for
unpacking and placing each item of Equipment in the desired location. Without
limiting the generality of the foregoing, the foundation or floor on which the
Equipment is to be installed, shall be in accordance with the builder’s
specifications, and the power for the Equipment shall be in accordance with the
builder’s specifications and the local electrical code.

If Lessee has entered into any purchase, licensing or maintenance agreements
with the Vendor and/or the Manufacturer (“Acquisition Agreement”) covering the
Equipment or any portion thereof, Lessee transfers and assigns to Lessor all of
Lessee’s rights, but none of its obligations (except for Lessee’s obligation to
pay for the Equipment upon Lessor’s acceptance of the Lease) in and to the
Acquisition Agreement, including without limitation the right to take title to
the Equipment.

If Lessee cancels or terminates a Lease prior to delivery of the Equipment or if
Lessee fails or refuses to sign the Delivery and Acceptance Certificate within a
reasonable time, not to exceed five (5) business days, after the Equipment has
been delivered, installed and is operating to Manufacturer’s specifications,
Lessor shall have the option of treating the Lease as cancelled by Lessee and
Lessee shall automatically assume all of Lessor’s rights and obligations as
purchaser of the Equipment, whether under an Acquisition Agreement or otherwise.

IT IS HEREBY AGREED THAT LESSOR IS NOT RESPONSIBLE FOR THE PERFORMANCE,
MAINTENANCE OR SERVICING OF THE EQUIPMENT AND LEASES SAME “AS-IS.”

4.  SELECTION OF EQUIPMENT AND DISCLAIMER OF WARRANTY.  Lessee has selected both
the Equipment and the Vendor and/or Manufacturer from whom Lessor covenants to
purchase the Equipment at Lessee’s request. LESSEE ACKNOWLEDGES THAT LESSOR HAS
NO EXPERTISE OR SPECIAL FAMILIARITY ABOUT OR WITH RESPECT TO THE EQUIPMENT.
LESSEE AGREES THAT THE EQUIPMENT LEASED HEREUNDER IS LEASED “AS-IS” AND IS OF A
SIZE, DESIGN AND CAPACITY SELECTED BY LESSEE AND THAT LESSEE IS SATISFIED THAT
THE SAME IS SUITABLE FOR LESSEE’S PURPOSES, AND THAT LESSOR HAS MADE NO
REPRESENTATION OR WARRANTY WITH RESPECT TO THE SUITABILITY OR DURABILITY OF SAID
EQUIPMENT FOR THE PURPOSES AND USES OF LESSEE, OR ANY OTHER REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT THERETO, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LESSOR
FURTHER DISCLAIMS ANY LIABILITY FOR LOSS, DAMAGE OR INJURY TO LESSEE OR THIRD
PARTIES AS A RESULT OF ANY DEFECTS, LATENT OR OTHERWISE, IN THE EQUIPMENT
WHETHER ARISING FROM THE APPLICATION OF THE LAWS OF STRICT LIABILITY OR
OTHERWISE. If the Equipment is not properly installed, does not operate as
represented or warranted by the Vendor and/or Manufacturer, or is unsatisfactory
for any reason, Lessee shall make any claim on account thereof solely against
the Vendor and/or Manufacturer and shall, nevertheless, pay Lessor all Lease
Payments under the Lease and shall not set up against Lessee’s obligations any
such claims as a defense, counterclaim, set-off or otherwise. So long as Lessee
is not in breach or default of this Agreement or any Lease hereunder, Lessor
hereby assigns to Lessee, solely for the purpose of making and prosecuting any
such claim, any rights which Lessor may have against the Vendor and/or
Manufacturer for breach of warranty or other representation respecting any item
of the Equipment. All proceeds of any warranty recovery by Lessee from the
Vendor and/or Manufacturer of any item of the Equipment shall first be used to
repair or replace the affected item.

LESSEE ACKNOWLEDGES THAT NEITHER THE VENDOR NOR ANY SALESPERSON, EMPLOYEE,
REPRESENTATIVE OR AGENT OF THE VENDOR AND/OR MANUFACTURER IS AN AGENT OR
REPRESENTATIVE OF LESSOR, AND THAT NONE OF THE ABOVE IS AUTHORIZED TO WAIVE OR
ALTER ANY TERM, PROVISION OR CONDITION OF THIS AGREEMENT OR ANY LEASE HEREUNDER,
OR MAKE ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THIS AGREEMENT, ANY LEASE
HEREUNDER OR THE EQUIPMENT LEASED HEREUNDER. Lessee further acknowledges and
agrees that Lessee, in executing this Agreement and each Lease hereunder, has
relied solely upon the terms, provisions and conditions contained herein and
therein, and any other statements, warranties, or representations, if any, by
the Vendor and/or Manufacturer, or any salesperson, employee, representative or
agent of the Vendor and/or Manufacturer, have not been relied upon, and shall
not in any way affect Lessee’s obligation to make the Lease Payments and
otherwise perform as set forth in this Agreement and each Lease.

REGARDLESS OF CAUSE, LESSEE WILL NOT ASSERT ANY CLAIM WHATSOEVER AGAINST LESSOR
FOR LOSS OF ANTICIPATORY PROFITS OR ANY OTHER INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES, NOR SHALL LESSOR BE RESPONSIBLE FOR ANY DAMAGES OR COSTS WHICH MAY BE
ASSESSED AGAINST LESSEE IN ANY ACTION FOR INFRINGEMENT OF ANY UNITED STATES
LETTERS PATENT OR COPYRIGHT. LESSOR MAKES NO WARRANTY AS TO THE TREATMENT OF
THIS AGREEMENT OR ANY LEASE HEREUNDER FOR TAX OR ACCOUNTING PURPOSES.

NOTWITHSTANDING ANY PROVISION CONTAINED HEREIN TO THE CONTRARY, LESSEE DOES NOT
WAIVE ANY RIGHTS OR REMEDIES IT MAY HAVE AGAINST THE VENDOR AND/OR MANUFACTURER
OF THE EQUIPMENT.

5.  TITLE, PERSONAL PROPERTY AND LOCATION. Except for Leases with a $1.00
purchase option or where the Lessee is required to purchase the Equipment at the
end of the Lease term, the Equipment is, and shall at all times be and remain
the sole and exclusive property of Lessor, and Lessee, notwithstanding any
trade-in or down payment made by Lessee or on its behalf with respect to the
Equipment, shall have no right, title or interest therein or thereto, except as
to the use thereof subject to the terms and conditions

 

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of this Agreement and the related Lease hereunder. To the extent that the
license for the Software (“License”) allows title to Software to pass to Lessee,
such title shall vest and remain in Lessor. To the extent such vesting requires
a specific written conveyance, Lessee hereby conveys to Lessor any title it has
or may hereafter acquire in the Software and relinquishes any subsequent claim
of title in the Software, including any rights to purchase the Software and to
retain rights to use the same beyond the Lease Term. If any provision of this
paragraph requires for its effectiveness Licensor’s prior written consent
because the License limits transfers, encumbrance or assignment of the Software,
then Lessee shall assist Lessor, if so requested, in obtaining such consent.

Lessee will not directly or indirectly create, incur, assume or suffer to exist
any lien on or with respect to the Equipment or Lessor’s title thereto, except
such liens as may arise through the independent acts or omissions of the Lessor.
Lessee, at its own expense, will promptly pay, satisfy or otherwise take such
actions as may be necessary to keep the Equipment free and clear of any and all
such liens. The Equipment is, and at all times shall remain, personal property
notwithstanding that the Equipment or any item thereof may now be, or hereafter
become, in any manner affixed or attached to, or imbedded in, or permanently
resting upon real property or any improvement thereof or attached in any manner
to what is permanent. If requested by Lessor prior to or at any time during the
Lease Term, Lessee will obtain and deliver to Lessor waivers of interest or
liens in recordable form, satisfactory to Lessor, from all persons claiming any
interest in the real property on which an item of the Equipment is installed or
located.

The Equipment shall be kept at the address designated in each Lease and shall
not be removed therefrom without the prior written consent of the Lessor, which
consent shall not be unreasonably withheld. Lessor may require plates or
markings to be affixed to or placed on the Equipment indicating the Lessor’s
ownership of the Equipment.

6.  USE AND MAINTENANCE. Lessee shall use the Equipment solely in the conduct of
its business and in a careful and proper manner consistent with the requirements
of all applicable insurance policies; shall only permit qualified personnel to
operate the Equipment and shall not discontinue the use of the Equipment during
the Lease Term. Lessee will not modify the Equipment in any way without the
prior written consent of Lessor, which consent shall not be unreasonably
withheld. Lessee shall not attach or incorporate the Equipment to or in any
other item of equipment or software in such a manner that the Equipment becomes
or may be deemed to have become an accession to or a part of such other item of
equipment or software.

At its own expense, Lessee will cause the Equipment to be kept, used and
maintained as recommended by the Manufacturer and Manufacturer’s maintenance
manuals and plans by competent and duly qualified personnel only approved by the
Manufacturer, in accordance with applicable governmental regulations, if any,
and for business purposes only and in as good operating condition as when
delivered to Lessee hereunder, ordinary wear and tear resulting from proper use
alone excepted, and will provide all maintenance and service and make all
repairs or replacements reasonably necessary for such purpose. Lessee shall
record in a log book all maintenance and repair performed on the Equipment and
deliver the same to Lessor from time to time as requested by Lessor and upon
termination of the Lease.

If any parts or accessories forming part of the Equipment become worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered unfit for
use, Lessee, at its own expense, shall within a reasonable time cause such parts
or accessories to be replaced by replacement parts or accessories which are free
and clear of all liens, encumbrances or rights of others and have a utility at
least equal to the parts or accessories replaced. All equipment, software
accessories, upgrades, parts and replacements for or which are added to or
become attached to the Equipment, which are essential to the operation of the
Equipment or which cannot be detached from the Equipment without materially
interfering with the operation of the Equipment or adversely affecting the value
and utility which the Equipment would have had without the addition thereof,
shall immediately become the property of Lessor, and shall be deemed
incorporated in the Equipment and subject to the terms of this Agreement and the
related Lease as if originally leased hereunder. Lessee shall not make any
material alterations to the Equipment without the prior written consent of
Lessor, which consent shall not be unreasonably withheld.

Upon reasonable advance notice, Lessor shall have the right to inspect the
Equipment, log book and all other maintenance records with respect thereto, if
any, at any reasonable time during normal business hours.

In the event the Lease Payments include the cost of maintenance and/or service
being provided by Vendor and/or Manufacturer, Lessee acknowledges that Lessor is
not responsible for providing any required maintenance and/or service for the
Equipment. Lessee shall make all claims for service and/or maintenance solely to
the Vendor and/or Manufacturer and Lessee’s obligation to make all required
Lease Payments shall remain unconditional.

7.  ASSIGNMENT. LESSEE MAY NOT ASSIGN THIS AGREEMENT, ANY LEASE OR THE RIGHTS
HEREUNDER, NOR SHALL THE LESSEE SUBLEASE OR LEND THE EQUIPMENT OR SUBMIT IT TO
BE USED BY ANYONE OTHER THAN LESSEE’S EMPLOYEES WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD. Lessor may
at any time assign all or part of any interest in this Agreement or any Lease
and in each item of the Equipment and monies to become due to Lessor hereunder;
and, Lessor may grant security interests in the Equipment, subject to the
Lessee’s rights therein. In such events, all the provisions of this Agreement or
any Lease hereunder for the benefit of Lessor shall inure to the benefit of and
be exercised by or on behalf of such assignee, but the assignee shall not be
liable for or be required to perform any of Lessor’s obligations to Lessee. The
Lessor may direct that all Lease Payments due and to become due under this
Agreement or any Lease hereunder and assigned by Lessor shall be paid directly
to assignee, upon notice of such assignment to Lessee. The right of the assignee
to the payment of the assigned Lease Payments, the performance of all Lessee’s
obligations and to exercise any other of Lessor’s rights hereunder shall not be
subject to any defense, counterclaim or set-off which the Lessee may have or
assert against the Lessor, and the Lessee hereby agrees that it will not assert
any such defenses, set-offs, counterclaims and claims against the assignee. No
such assignment by Lessor shall relieve Lessor of its obligations or limit or
otherwise affect Lessee’s rights and/or obligations hereunder.

8.  RETURN OF EQUIPMENT, STORAGE. The Lessee shall, at its sole expense,
surrender each item of the Equipment then subject to any Lease hereunder at the
expiration or earlier termination of the Lease Term by delivering the item to
the Lessor at a location accessible by common carrier and designated by the
Lessor within the Continental United States or, if specified by the Lessor, into
the custody of a carrier designated by the Lessor. In the case of Software,
Lessee shall destroy all intangible items constituting such Software and shall
deliver to Lessor all tangible items constituting such Software. At Lessor’s
request, Lessee shall also certify in a form acceptable to Lessor that: (i)
Lessee has complied with the above Software return provisions, (ii) Lessee will
not use the Software after the expiration or earlier termination of the Lease
Term; and (iii) Lessee shall permit Lessor and/or the Vendor of the Software to
inspect Lessee’s locations to verify compliance with the terms hereof.

If the item of the Equipment is delivered into the custody of a carrier, the
Lessee shall arrange for the shipping of the item and its insurance in transit
in accordance with the Lessor’s instructions and at the Lessee’s sole expense.
The Lessee, at its sole expense, shall completely sever and disconnect the
Equipment from the Lessee’s property, all without liability of the Lessor to the
Lessee, or to any person claiming through or under the Lessee, for damage or
loss caused by such severance and disconnection. The Lessee, at its sole
expense, shall pack or crate the Equipment or its component parts carefully and
in accordance with any recommendations of the Manufacturer with respect to
similar new software or equipment before surrendering the Equipment to the
Lessor. The Lessee shall deliver to the Lessor the plans, specifications,
operation manuals and other warranties and documents furnished by the
Manufacturer or Vendor of the Equipment and such other documents in the Lessee’s
possession relating to the maintenance and methods of operation of such
Equipment.

When an item of Software or Equipment is surrendered to the Lessor it shall be
in the condition and repair required to be maintained under this Agreement. It
will also be free of all evidence of advertising or insignia placed on it by the
Lessee and meet all legal and regulatory conditions necessary for the Lessor to
sell or lease it to a third party and be free of all liens. If Lessor reasonably
determines that an item of Software or Equipment, once it is returned, is not in
the condition required hereby, Lessor may cause the repair, service, upgrade,
modification or overhaul of the item of Software or Equipment to achieve such
condition and upon demand, Lessee shall promptly reimburse Lessor for all
amounts reasonably expended in connection with the foregoing.

Should Lessee not return the Equipment at the end of the Lease Term, Lessee
shall continue to make Lease Payments to Lessor in the sum equal to the last
Lease Payment and at the same intervals as set out in the Lease as a
month-to-month lease term (or other term as designated by Lessor) until returned
by Lessee or until returned upon demand therefor by Lessor. The acceptance of
said Lease Payments by Lessor shall not waive Lessor’s right to have the
Equipment promptly returned to Lessor pursuant to the provisions hereof, nor
shall the acceptance of said Lease Payments be deemed to be an extension of the
Lease Term.

Upon written request of the Lessor, the Lessee shall provide free storage for
any item of Equipment for a period not to exceed 60 days after expiration of its
Lease Term before returning it to the Lessor. The Lessee shall arrange for the
insurance described to continue in full force and effect with respect to such
item during its storage period and the Lessor shall reimburse the Lessee on
demand for the incremental premium cost of providing such insurance.

9.   LOSS OR DAMAGE. Lessee hereby assumes and shall bear the entire risk of
loss (including theft, requisition of use, erasure or inoperability) or
destruction of or damage to the Equipment from any and every cause whatsoever,
whether or not insured, until the Equipment is returned to Lessor. No such loss
or damage shall relieve Lessee from any obligation under this Agreement or any
Lease hereunder, which shall continue in full force and effect. In the event of
damage to or loss or destruction of the Equipment (or any item thereof), Lessee
shall promptly notify Lessor in writing of such fact and shall, at the option of
Lessor, (a) place the same in good repair, condition and working order, (b)
replace the Software and/or Equipment with like Software and/or Equipment in
good repair, condition and working order, acceptable to Lessor and transfer
clear title to or a right to use, as appropriate, such Software and/or
replacement Equipment to Lessor, whereupon such Software and/or Equipment shall
be subject to the Lease and be deemed the Equipment for purposes hereof, or (c)
on the due date for the next Lease Payment or upon the expiration of the Lease,
whichever first occurs, pay to Lessor: (i) the Stipulated Loss Value therefor as
may be specified in the Lease plus all Lease Payments then due, or if the Lease
does not provide for Stipulated Loss Values, (ii) the present value of the total
of all unpaid Lease Payments for the entire Lease Term plus the estimated fair
market value of the Equipment at the end of the originally scheduled Lease Term
or the agreed upon purchase option price, if any, all of which shall be
discounted to the date of payment at the lesser of (i) a per annum interest rate
equivalent to that of a U.S. Treasury constant maturity obligation (as reported
by the U.S. Treasury Department) that would have a repayment term equal to the
remaining Lease term, all as reasonably determined by Lessor; or (ii) 3% per
annum (each the “Present Value Rate”), whereupon the Lease shall terminate with
respect thereto. All proceeds of insurance received by Lessor as a result of
such loss or damage shall, where applicable, be applied toward the replacement
or repair of the Equipment or the payment of the obligations of Lessee
hereunder.

10.  INSURANCE. Prior to the Lease Commencement Date, Lessee shall obtain,
maintain and keep the Equipment insured against all risks of loss or damage from
every cause whatsoever including, without limitation, loss by fire, theft,
“mysterious disappearance”, collision, earthquake, flood and such other risks of
loss as are customarily insured against on the type of Equipment leased
hereunder by businesses of the type in which Lessee is engaged, in an amount not
less than the replacement cost or Stipulated Loss Value of the Equipment,
whichever is greater, without deductible and without co-insurance. Lessee shall
maintain such insurance coverage for the entire Lease Term. Lessee shall also
obtain and maintain for the entire Lease Term, comprehensive public liability
insurance covering liability for bodily injury, including death, and property
damage resulting from the purchase, ownership, leasing, maintenance, use,
operation or return of the Equipment with a combined single limit of not less
than Two Million Dollars ($2,000,000.00) per occurrence. If Lessee is a doctor,
hospital or other health care provider, Lessee shall furnish Lessor with
evidence of sufficient professional liability

 

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insurance. All said insurance shall be in a form and an amount and with
companies reasonably satisfactory to Lessor. Lessor, its successors or assigns,
shall be the sole named loss payee with respect to insurance for damage to or
loss of the Equipment and shall be named as an additional insured on the public
liability insurance. Lessee shall pay all premiums for such insurance and shall
deliver to Lessor the original policy or policies of insurance, certificates of
insurance, or other evidence satisfactory to Lessor evidencing the insurance
required thereby, along with proof, satisfactory to Lessor, of the payment of
the premiums for such insurance policies. All insurance shall provide for at
least sixty (60) days advance written notice to Lessor before any cancellation,
expiration or material modification thereof and also provide that no act or
default of any person other than Lessor, its agents or those claiming under
Lessor, will affect Lessor’s right to recover under such policy or policies in
case of loss. Lessee hereby irrevocably appoints Lessor as Lessee’s
attorney-in-fact (which power shall be deemed coupled with an interest) to make
claim for, receive payment of, and execute and endorse all documents, checks or
drafts received in payment for loss or damage under any such insurance policy.
Unless Lessee is in default, Lessee may with the prior written approval of
Lessor, settle and adjust all such claims. Lessee agrees if Lessee shall fail to
procure, maintain, and pay for such insurance, Lessor shall have the right, but
not the obligation, to obtain such insurance on behalf of Lessee. In the event
Lessor does obtain such insurance, Lessee agrees to pay an insurance fee in
addition to each Lease Payment due from the Lessee, on which the Lessor may make
a profit.

11.  WAIVER AND INDEMNITY. Lessee assumes and agrees to indemnify, defend and
keep harmless Lessor, its agents and employees, from and against any and all
losses, damages, injuries, claims, demands and expenses, including legal,
consulting and expert expenses (other than such as may directly and proximately
result from the gross negligence or willful misconduct of Lessor, its agents or
employees), arising on account of the ordering (whether by Acquisition Agreement
or otherwise), acquisition, delivery, installation or rejection of the
Equipment, the possession, maintenance, use, condition (including without
limitation, latent and other defects and whether or not discoverable by Lessor
or Lessee, ownership, any claim in tort for strict liability, and any claim for
patent, trademark or copyright infringement) or operation of any item of the
Equipment, and by whomsoever used or operated, during the Lease Term with
respect to that item of the Equipment, the loss, damage, destruction,
environmental impact, removal, return, surrender, sale or other disposition of
the Equipment, or any item thereof. Lessor shall give Lessee prompt notice of
any claim or liability hereby indemnified against. Lessee shall be entitled to
control the defense thereof, so long as Lessee is not in Default hereunder;
provided, however, that Lessor shall have the right to approve defense counsel
selected by Lessee. The obligations contained in this paragraph continue beyond
the termination of the Lease if the liability occurred during the Lease Term.

12.  TAX TREATMENT AND INDEMNIFICATION. (a) Unless otherwise provided for in a
specific Lease, it is acknowledged and agreed by the parties that they are
entering into this Agreement and each Lease on the following income tax
assumptions: (i) that Lessor and the consolidated group of which Lessor is a
member (all references to Lessor in this Section include such consolidated
group) will be treated for all federal income tax purposes (and to the extent
allowable, for state and local tax purposes) as the owner of all Equipment
leased pursuant to this Agreement and each Lease; (ii) that, for federal and
state income tax purposes, each Lease will be treated as a “true lease” of the
Equipment; (iii) that Lessor will be entitled to take (x) accelerated
Depreciation deductions under applicable state law (“Depreciation Deductions”),
(y) accelerated cost recovery deductions (“Recovery Deductions”) under Section
167(a) and Section 168 (b)(1) of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder (the “Code”), and (z) the special
depreciation allowance (“Bonus Deduction”) under Code Section 168 (k); and (iv)
that Lessor will have the maximum federal and state income tax rate applicable
to corporations in effect as of the date of Lessor’s Lease execution
(“Determination Date”) during each applicable Lease term (which maximum federal
and state income tax rate shall remain constant during such term).

(b)  The Lessee acknowledges and agrees that each Lease has been executed by
Lessor based upon the following representations and warranties of Lessee: (i)
Lessor will not, under the Code, be required to include in its gross income, for
federal income tax purposes, any amount with respect to any improvement,
modification or addition made, or permitted to be made, by Lessee to any item of
Equipment; (ii) at the time the Lessee accepts each item of Equipment under each
Lease, each such item of Equipment shall have been placed in service within the
meaning of Code Section 167 and Code Section 168, but not prior thereto, and the
“original use” (as the term is used under the Code) of such item shall commence
with Lessor; (iii) Lessor shall be entitled to (x) the maximum available
Depreciation Deductions applicable to corporations (determined as of the
Determination Date) based on the cost of each item of Equipment as specified in
the applicable Lease (“Cost”), (y) Recovery Deductions based upon each item of
Equipment Cost over the recovery period, and in those percentages of the
Equipment’s unadjusted basis (reduced under any Code requirements) for the
years, indicated in the applicable Lease, by using (A) the 200% declining
balance method permitted under Code Section 168, changing to straight line at
such time as will maximize the recovery deductions, (B) the half year convention
and (C) no salvage value, unless otherwise required by operation of Code Section
168 (d) (3) (A), and (z) the Bonus Deduction based upon the applicable Equipment
Cost for the year and percentage indicated in the applicable Lease; (iv) for
purposes of determining the amount of the Recovery Deductions, Lessor’s basis
for the Equipment will at least equal Lessor’s Equipment Cost; (v) no item of
Equipment is limited use property within the meaning of Rev. Proc. 76-30; (vi)
for federal income tax purposes, all amounts included in the gross income of
Lessor with respect to each item of Equipment will be treated as derived from or
allocable to sources within the United States; and (vii) all Equipment
information furnished by Lessee in writing to Lessor or Lessor’s agents was
accurate at the time given.

(c)  If by reason of (1) the breach or inaccuracy in law or in fact of any of
the representations or warranties set forth in Subsection (b) of this Section,
(2) the inaccuracy of any statement or information in any letter or document
furnished to Lessor by or on behalf of Lessee in connection with the
transactions contemplated under this Agreement or any Lease (“Related
Documents”), (3) the Lessee, an Affiliate (defined below), assignee or sublessee
of Lessee or any user or person or entity in possession of any Equipment (x)
committing any act, irrespective of whether such act is required or permitted by
this Agreement or any Lease (including but not limited to any improvement,
modification, addition, alteration, substitution, replacement or relocation of
any item of Equipment), or (y) failing or omitting to take any action required
under this Agreement, or any Lease or Related Document or otherwise or (4) any
change in the Code occurring after the date hereof, Lessor will (i) lose the
right to claim, will not have the right to claim or shall not claim as the
result of its good faith determination that such claim is not properly
allowable, or shall suffer a disallowance or deferral of, or shall be required
to recapture all or any portion of the Recovery Deductions, Depreciation
Deductions and/or Bonus Deduction as to any item of the Equipment, (ii) be
required to include in its gross income any amount in respect to (x) any
alteration, modification or addition, any item, other than an alteration,
modification or addition which is permitted without adverse tax consequences to
Lessor under Rev. Procs. 75-21, 76-30 or 79-48 or (y) any transaction
contemplated by this Agreement or any Lease (other than rent paid by the
Lessee), or (iii) suffer a decrease in Lessor’s net return over the then
remaining portion of the Lease Term (any such occurrence referred to hereinafter
as “Loss”), then at Lessor’s option either (x) the rent will, on and after the
next succeeding date for the payment thereof upon notice to Lessee by Lessor
that a Loss has occurred, and describing the amount as to which Lessor intends
to claim indemnification and the reason for such adjustment in reasonable
detail, be increased by such amount, which will cause Lessor’s net return over
the then remaining portion of the Lease Term (taking into account the tax effect
from deferred utilization of tax basis resulting from changes in the method of
calculating Recovery Deductions, Depreciation Deductions and Bonus Deduction) to
equal the net return that would have been available if such loss had not
occurred, or (Y) in lieu of a rent increase, Lessee shall pay to Lessor on such
next succeeding date for the payment of rent such sum as will cause Lessor’s net
return over the term of the Lease in respect of the Equipment to equal to the
net return that would have been available if such Loss had not occurred (all
such net return computations to as determined by Lessor). If such Loss occurs
after the expiration or termination of a Lease, Lessor will notify Lessee of
such Loss and Lessee will, within sixty (60) days after such notice, pay to
Lessor such sum as required by the preceding clause (y). Lessee will forthwith
pay on demand to Lessor an amount on an after-tax basis which will be equal to
the amount of any interest and/or penalties which may be assessed by the United
States or any state against Lessor as a result of the Loss.

(d)  Lessee agrees that neither it nor any person controlled by it, in control
of it, or under common control with it, directly or indirectly (an “Affiliate”),
will at any time file any Federal, state or local income tax return in the
United States that is inconsistent with the assumptions set forth in Subsection
(a) of this Section or with the representations and warranties set forth in
Subsection (b) of this Section or file any other document in a manner that
causes a Loss. Lessee and each Affiliate will file such returns, execute such
documents and take such actions as may be reasonable and necessary to facilitate
accomplishment of the intent hereof. Lessee will maintain sufficient records to
enable the Lessor to determine and verify its federal and state income tax
liability with respect to the transactions contemplated by each Lease and to
determine and verify its potential tax liability with respect to each other
taxing jurisdiction. In addition, within 30 days after notice Lessee shall
provide such information as Lessor may reasonably request to enable Lessor to
fulfill its tax return filing obligation, to respond to requests for
information, to verify information in connection with any income tax audit and
to participate effectively in any tax contest.

(e)  For purposes of this Section, a Loss will occur upon the earliest of (1)
the happening of any event which may cause such Loss, (2) the payment by Lessor
to the Internal Revenue Service of the tax increase resulting from such Loss, or
(3) the adjustment of the tax return of Lessor to reflect such Loss. Lessor will
be responsible for, and will not be entitled to a payment under this Section on
account of any Loss due solely to one or more of the following events: (i) the
failure of Lessor to have sufficient taxable income to benefit from the Recovery
Deductions, Depreciation Deductions and/or Bonus Deduction; (ii) any disposition
of the Equipment by Lessor prior to an Event of Default which has occurred and
is continuing under the Lease; or (iii) the failure of Lessor to timely or
properly claim the Recovery Deductions, Depreciation Deductions and/or Bonus
Deduction on its tax returns, unless Lessor shall have previously determined,
based upon a written opinion of tax counsel to Lessor, that substantial
authority does not exist in favor of making such claim or such failure is due to
Lessee not timely providing Lessor with information require by Subsection (d).

(f) The indemnities and assumptions of liability provided herein and all
Lessor’s rights and privileges herein will inure to the benefit of Lessor’s
successors and assigns and will continue in full force and effect
notwithstanding the expiration or termination of the Lease.

13.  EVENTS OF DEFAULT. The term “Event of Default” shall mean any one or more
of the following:

(a)   Lessee shall fail to make any Lease Payment, or any other payment, as it
becomes due and such failure is not cured within 10 days; or

(b)  Lessee shall fail to perform or observe any of the covenants set forth in
Paragraph 10; or

(c)  Lessee shall fail to perform or observe any other covenant, condition or
agreement to be performed or observed by it hereunder or in any Lease and such
failure is not cured within 30 days after the date of notice thereof by Lessor
to Lessee; or

(d)  Lessee or any Guarantor of Lessee’s obligations hereunder (“Guarantor”)
shall enter into any transaction of merger or consolidation in which it is not
the surviving entity or sell, transfer, pledge or otherwise dispose of all or
substantially all of its assets (“Assets”) unless the surviving entity or the
entity acquiring such Assts assumes all the duties and obligations of Lessee
hereunder or such Guarantor under its guaranty and which merger, consolidation,
sale, transfer or disposition must be approved in writing by Lessor; or

(e)  (i) Lessee or any Guarantor shall liquidate, dissolve or otherwise cease to
do business as a going concern or shall commence any action (A) for relief under
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, or (B) seeking
appointment of a receiver, custodian or other similar official for it or for its
Assets or making a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against Lessee any action (A) of a nature referred to
in clause (i) which results in the entry of an order for relief or any such
other relief and remains undismissed or undischarged for a period of 30 days, or
(B) seeking

 

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attachment, execution or similar process against its assets which results in the
entry of an order for any such relief which shall not be vacated or discharged
within 30 days from the entry thereof; or (iii) Lessee shall generally not, or
be unable to, pay its debts as they come due; or

(f)  Lessee or any Guarantor shall die or become incompetent; or

(g)  Any representation or warranty made by Lessee or any Guarantor, or any
financial or other statement of Lessee or any Guarantor,  furnished Lessor in
connection with this Agreement or any Lease hereunder shall prove at any time to
have been untrue or misleading in any material respect; or

(h)  Lessee or any Guarantor defaults on any indebtedness for borrowed money,
lease, or installment sale obligation, in each case when any applicable grace
period for such obligation has expired and the lender, lessor or creditor has
commenced to exercise any remedy, but only if the indebtedness or other
obligation is in an amount equal to or in excess of $50,000; or

(i)  the financial condition or operations of Lessee or any Guarantor shall
change such that in the judgment of Lessor, Lessor’s risk is materially
adversely affected; or

(j)  Lessee shall default in its obligations under a License; or

(k) The validity of this Agreement, any Lease or any, guarantee thereof shall be
contested or declared null and void or Lessee or any Guarantor shall deny it has
any liability or obligation under or with respect to this Agreement, any Lease
or any guarantee thereof; or

(l) any Guarantor shall fail to perform or observe any covenant, term or
condition of its Guaranty and such failure shall continue unremedied for a
period of 15 days after the date of notice thereof by Lessor to such Guarantor.

14.  REMEDIES. Upon the occurrence of any Event of Default, Lessor may declare
this Agreement or any Lease hereunder to be in default and exercise any one or
more of the following remedies:

(a)   Declare the entire unpaid balance of Lease Payments for the unexpired term
of the Lease hereunder immediately due and payable and similarly accelerate the
balances due under any other Leases between Lessor and Lessee without notice or
demand, (b) Sue for and recover all Lease Payments and other monies due and to
become due under any and all Leases hereunder, plus the estimated fair market
value of the Equipment at the end of the originally scheduled Lease Term or any
agreed upon Purchase Option, all of which shall be discounted to the date of
default at the Present Value Rate (defined in Section 9 hereof), but only to the
extent permitted by law, (c) Charge Lessee interest on all monies due Lessor at

the rate of eighteen percent (18%) per annum from the date of default until paid
but in no event more than the maximum rate permitted by law, (d) Charge Lessee a
returned-check or non-sufficient funds charge (“NSF Charge”) to reimburse Lessor
for the time and expense incurred with respect to each check that is returned
for any reason including non-sufficient or uncollected funds, such NSF Charge is
stipulated and liquidated at $25.00; (e) Require Lessee to assemble all
Equipment and Software at Lessee’s expense, at a place reasonably designated by
Lessor, (f) Remove any physical obstructions for removal of the Equipment from
the place where the Equipment is located and take possession of any or all items
of the Equipment, without demand or notice, wherever same may be located,
disconnecting and separating all such items of the Equipment from any other
property, with or without any court order or pre-taking hearing or other process
of law, it being understood that facility of repossession in the event of
default is a basis for the financial accommodation reflected by this Agreement
or any Lease hereunder. Lessee hereby waives any and all damages occasioned by
such retaking except such damages as may be caused by Lessor’s gross negligence
or willful misconduct. Lessor may, at its option, use, ship, store or repair any
or all items of the Equipment so removed and shall sell, lease or otherwise
dispose of any such Equipment at a private or public sale. Lessor may expose the
Equipment and resell or lease the Equipment at Lessee’s premises at reasonable
business hours without being required to remove the Equipment. In the event
Lessor disposes of the Equipment, Lessor shall give Lessee credit for any sums
received by Lessor from the sale or lease of the Equipment after deduction of
the expenses of sale or lease. The credit for any sums to be received by Lessor
from such lease during the remaining portion of the Lease Term shall be
discounted to the commencement date of such lease at an annual rate equal to the
implicit rate of interest of such lease. Lessee shall also be liable for and
shall pay to Lessor (i) all expenses incurred by Lessor in connection with the
enforcement of any of Lessor’s remedies, including all expenses of repossessing,
storing, shipping, repairing and selling the Equipment, and (ii) Lessor’s
reasonable attorney’s fees. Lessor and Lessee acknowledge the difficulty in
establishing a value for the unexpired Lease Term and owing to such difficulty
agree that the provisions of this paragraph represent an agreed measure of
damages and are not to be deemed a forfeiture or penalty.

In the case of Software, it is acknowledged and agreed that the unauthorized
use, disclosure or transfer of the Software could cause Lessor incalculable and
irreparable harm. Therefore, if Lessee is found to be using (in whatever manner)
any portion of the Software after the applicable Lease Term or after an Event of
Default and Lessor’s written demand for Lessee to return the Software or if the
licensor of the Software terminates a License or Lessee’s right to use the
Software thereunder, then liquidated damages shall immediately be payable to
Lessor in an amount equal to two (2) times the license fees paid or payable with
respect to the Software being used.

Whenever any payment is not made by Lessee when due hereunder, Lessee agrees to
pay to Lessor, not later than one month thereafter, an amount calculated at the
rate of five cents per one dollar for each such delayed payment but only to the
extent permitted by law. Such amount shall be payable in addition to all amounts
payable by Lessee as a result of the exercise of any of the remedies herein
provided.

All remedies of Lessor hereunder are cumulative, are in addition to any other
remedies provided for by law, and may, to the extent permitted by law, be
exercised concurrently or separately. The exercise of any one remedy shall not
be deemed to be an election of such remedy or to preclude the exercise of any
other remedy. No failure on the part of the Lessor to exercise and no delay in
exercising any right or remedy shall operate as a waiver thereof or modify the
terms of this Agreement or any Lease hereunder. A waiver of default shall not be
a waiver of any other or subsequent default. Lessor’s recovery hereunder shall
in no event exceed the maximum recovery permitted by law.

15.  LAWS, REGULATIONS AND TAXES. Lessee shall comply with all laws, regulations
and orders relating or pertaining to the Equipment, this Agreement or any Lease
hereunder and Lessee shall be responsible for, as and when due, and shall
indemnify and hold Lessor harmless from and against all present and future taxes
and other governmental charges, or any increases therein (including, without
limitation, sales, use, leasing and stamp taxes and license and registration
fees) and amounts in lieu of such taxes and charges and any penalties or
interest on any of the foregoing, imposed, levied upon, in connection with, or
as a result of the purchase, ownership, delivery, leasing, possession or use of
the Equipment, or based upon or measured by the Lease Payments or receipt with
respect to this Agreement or any Lease hereunder. Lessee shall not, however, be
obligated to pay any taxes on or measured by Lessor’s net income. Lessee
authorizes Lessor to add to the amount of each Lease Payment any sales, use or
leasing tax that may be imposed on or measured by such Lease Payment. Lessee
shall pay Lessor on demand, as additional rent, the amount of the personal
property tax required to be paid by Lessor as owner (if applicable) of the
Equipment, plus a fee for Lessor collecting and administering any taxes,
assessments or fees and remitting them to the appropriate authorities and
interest thereon at the highest legal rate allowed, from the date due until
fully paid. In the event Lessee does not pay all sums specified above, Lessor
has the right, but not the obligation, to pay the same. If Lessor shall so pay
any of the aforementioned, then the Lessee shall remit such amount with the next
Lease Payment plus a fee for Lessor’s collecting and administering any taxes,
assessments or fees and remitting them to the appropriate authorities.

16.  UCC FILINGS AND FINANCIAL STATEMENTS. Lessee authorizes Lessor to file a
financing statement with respect to the Equipment signed only by the Lessor
where permitted by the Uniform Commercial Code or other applicable law. Lessee
hereby appoints Lessor as Lessee’s attorney-in-fact to execute such financing
statement on Lessee’s behalf and to do all acts or things which Lessor may deem
necessary to protect Lessor’s title and interest hereunder. Lessor and Lessee
further agree that a carbon, photographic or other reproduction of this
Agreement or any Lease hereunder may be filed as a financing statement and shall
be sufficient as a financing statement under the Uniform Commercial Code or
other applicable law. It is the intent of the parties that this is a true lease,
and the filing of a financing statement under the Uniform Commercial Code or
other applicable law shall not be construed as evidence that any security
interest was intended to be created, but only to give public notice of Lessor’s
ownership of the Equipment. If any Lease hereunder has a $1.00 purchase option
or the Lessee is required to purchase the Equipment at the end of the Lease term
or this Agreement or any Lease hereunder is otherwise deemed at any time to be
one intended as security, then Lessee grants Lessor a security interest in the
Equipment and the proceeds from the sale, lease or other disposition of the
Equipment. Lessee agrees to pay Lessor a fee to reimburse Lessor’s expenses for
the preparation and filing of all such financing statements, for Lessor’s other
documentation costs and for all ongoing administration costs during each Lease
term.

Lessee agrees to submit financial statements or tax returns if its financial
statements are unaudited within 90 days from the end of its fiscal year and
Lessee warrants to Lessor that all financial statements furnished and to be
furnished have been and will be prepared in accordance with generally accepted
accounting principles, are an accurate reflection of Lessee’s financial
condition and that there has been no material adverse change in the financial
condition of Lessee or any guarantor of Lessee’s obligations since the dates of
preparation and submission of the financial statements submitted to Lessor.
Lessee agrees to deliver to Lessor at any time or times hereafter such
information or documents, including, without limitation, certified resolutions,
financial statements and legal opinions, as Lessor may request.

17.  SECURITY DEPOSIT. Lessor shall retain any security deposit set forth on
each Lease as security for the performance by Lessee of its obligations
hereunder. Any security deposit so taken shall be non-interest bearing. Lessor
may, but shall not be obligated to, apply any security deposit to cure any Event
of Default hereunder, in which event Lessee shall promptly restore any amount so
applied. If Lessee is not in default in any of Lessee’s obligations hereunder,
any security deposit will be returned to Lessee without interest at the
termination of the Lease related thereto except as otherwise required by law.
Lessee hereby grants to Lessor a security interest in the cash comprising the
security deposit from time to time together with the proceeds thereof to secure
the prompt performance as and when due of all obligations of Lessee hereunder.

18.   WARRANTY OF BUSINESS PURPOSE. Lessee hereby warrants and represents that
the Equipment will be used for business purposes, and not for personal, family
or household purposes. Lessee acknowledges that Lessor has relied upon this
representation in entering into this Agreement and each Lease hereunder.

19.   LESSEE REPRESENTATIONS AND WARRANTIES. Lessee hereby represents, warrants
and covenants to Lessor the following with respect to each Lease as of the date
Lessee executes the Delivery and Acceptance Receipt related thereto: (a) Lessee
is organized and validly existing under the laws of the state of its
organization, with adequate power and capacity to enter into the Lease, all
documents related to the purchase of the Equipment and any other documents
required to be delivered in connection with the Lease or the Equipment
(hereinafter “Documents”) and is duly qualified to do business wherever
necessary to carry on its present business, including all states where the
Equipment is to be located; (b) the Documents have been duly authorized,
executed and delivered by Lessee and constitute valid, legal and binding
agreements, enforceable in accordance with their terms, except to the extent
that the enforcement of remedies therein provided may be limited under
applicable bankruptcy and insolvency laws; (c) no approval, consent or
withholding of objections is required from any federal, state or local
governmental authority or instrumentality with respect to the entry into or
performance by Lessee of the Documents, except such as have already been
obtained; (d) the entry into and performance by Lessee of its obligations under
the Documents will not (i) violate any judgment, order, law or regulation
applicable to Lessee or (ii) result in any breach of, constitute a default under
or result in the creation of any lien, charge, security interest or other
encumbrance upon any item of the Equipment pursuant to any indenture, mortgage,
deed of trust, bank loan or credit agreement or other instrument (other than the
Lease or any purchase money security interest retained by any supplier) to which
Lessee is a party; (e) there are no suits or proceedings pending or threatened
in court or before any

 

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regulatory commission, board or other administrative governmental agency against
or affecting Lessee, which will have a material adverse effect on the ability of
Lessee to fulfill its obligations under the Lease; and (f) the balance sheet and
statement of income of Lessee, or of any consolidated group of which Lessee is a
member, heretofore delivered to Lessor have been prepared in accordance with
generally accepted accounting principles and fairly present the financial
position of Lessee or the consolidated group of companies of which Lessee is a
member on and as of the date thereof and the results of its or their operations
for the period or periods covered thereby. Since the date of such balance sheet
and statement of income there has been no material adverse change in the
financial or operating condition of Lessee or of its consolidated group.

20.  JOINT AND SEVERAL. All obligations of Lessee if more than one, shall be
joint and several.

21.  HEADINGS. All paragraph headings are inserted for reference purposes only
and shall not affect the interpretation or meaning of this Agreement or any
Lease hereunder.

22.   FURTHER ASSURANCES. Lessee agrees to execute or obtain and deliver to
Lessor at Lessor’s request such additional documents as Lessor may reasonably
deem necessary to protect Lessor’s interest in the Equipment, this Agreement and
any Lease.

23.  NOTICE. Written notices to be given hereunder shall be deemed to have been
given when delivered personally or deposited in the United States mails, postage
prepaid, addressed to such party at its address set forth above or at such other
address as such party may have subsequently provided in writing.

24.  SUPPLIER’S CONTRACT. Lessor and Lessee agree that each Lease is a Finance
Lease as that term is defined in Article 2A of the Uniform Commercial Code.
Lessee acknowledges that Lessor has apprised Lessee of the identity of the
Equipment supplier. Lessor hereby notifies Lessee that Lessee may have rights
pursuant to the contract with the supplier and the Lessee may contact the
supplier for a description of any rights or warranties that Lessee may have
under this contract.

23.  LESSEE’S WAIVERS. Lessee hereby waives any and all rights and remedies
granted Lessee by Sections 508 through 522 of Article 2A of the Uniform
Commercial Code including, by way of example only and not as a limitation, the
right to repudiate any Lease and reject the Equipment; the right to cancel any
Lease; the right to revoke acceptance of the Equipment; the right to grant a
security interest in the Equipment in Lessee’s possession and control for any
reason; the right to recover damages thereunder for any breach of warranty or
for any other reason deduct all or any part of the claimed damages resulting
from Lessor’s default, if any, under any Lease; the right to accept partial
delivery of the Equipment; the right to “cover” by making any purchase or leases
of or contract to purchase or lease Equipment in substitution for those due from
Lessor; the right to recover any general, special, incidental or consequential
damages, for any reason whatsoever; and the right to specific performance,
replevin, detinue, sequestration, claim and delivery and the like for the
Equipment. The waivers contained herein shall not constitute a waiver by Lessee
of any of its rights or remedies against the Vendor and/or Manufacturer of the
Equipment.

26.  CHOICE OF LAW/JURISDICTION AND PROCESS. This Agreement and each Lease
hereunder shall be binding and effective when accepted by Lessor at its
corporate office in Wayne, Pennsylvania, shall be deemed to have been made in
Wayne, Pennsylvania and, except for local filing requirements and laws relating
to conflict of laws, shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania. Lessee hereby consents and agrees that
non-exclusive jurisdiction, personal or otherwise, over Lessee and the Equipment
shall be with the courts of the Commonwealth of Pennsylvania or the Federal
District Court for the Eastern District of Pennsylvania, solely at Lessor’s
option, with respect to any provision of this Agreement or any Lease hereunder.
Lessee agrees that service of process in any action or proceeding may be duly
effected upon Lessee by mailing such process via certified mail, return receipt
requested. LESSEE ALSO AGREES TO WAIVE ITS RIGHT TO A TRIAL BY JURY.

27.  ENTIRE AGREEMENT, NON-WAIVER AND SEVERABILITY. This Agreement and each
Lease hereunder contain the entire agreement and understanding between Lessee
and Lessor relating to the subject matter of each Lease. No agreements or
understandings shall be binding on the parties hereto unless set forth in
writing and signed by the parties. Time is of the essence in this Agreement and
each Lease hereunder. No waiver by Lessor of any breach or default shall
constitute a waiver of any additional or subsequent breach or default by Lessor
nor shall it be a waiver of any of Lessor’s rights. Any provision of this
Agreement or any Lease hereunder which for any reason may be held unenforceable
in any one jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such unenforceability without invalidating the remaining provisions of
this Agreement or any Lease hereunder, and any such unenforceability in any one
jurisdiction shall not render such provision unenforceable in any other
jurisdiction.

28.  WAIVER OF JURY TRIAL. EACH OF LESSOR AND LESSEE WAIVES AND AGREES TO WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN LESSOR AND LESSEE
BASED UPON, ARISING OUT OF OR IN ANY WAY CONNECTED TO THIS AGREEEMENT, ANY LEASE
OR ANY TRANSACTION CONTEMPLATED HEREBY.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized representatives as of the date first above written.

 

LESSEE SIGNATURE

You agree to all of the Terms and Conditions contained in this Agreement, and in
any attachments to same (all of which are included by reference) and become part
of this Agreement. You acknowledge to have read and agreed to all the Terms and
Conditions and understand that the Leases are non-cancelable for the full term
shown therein. This Agreement shall not be binding upon Lessor or become
effective unless and until Lessor executes the Agreement. The Equipment subject
to this Agreement and the Leases is not for home or personal use.

 

Signature

 

 

KATHLEEN DONOVAN

Date

 

 

September 24, 2004

Print Name

 

 

Kathleen Donovan

Title

 

 

SR. VP & CFO

Legal Name of Corporation of Partnership
DENDRITE INTERNATIONAL, INC.

 

 

 

 

LESSOR

 

Lessor Signature

 

Date

 

 

ANDREW ROSENBERG

 

9/29/04

Print Name

 

 

Andrew Rosenberg

Title

 

 

Director, Operations

For

 

BNY LEASING EDGE CORPORATION

Lease Number

 

 

© 2004 All Rights Reserved. Printed in the U.S.A. 04BNY060 4/04

 

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MASTER LEASE AGREEMENT ADDENDUM

 

This Master Lease Agreement Addendum (“Addendum”) is made part of and amends
that certain Master Lease Agreement dated as of September 20, 2004 (“Agreement”)
by and between BNY Leasing Edge Corporation (“Lessor”) and Dendrite
International, Inc. (“Lessee”).  Unless otherwise defined herein, capitalized
terms shall have the definition set forth in the Agreement.

 

NOW, THEREFORE, for good and valuable consideration, intending to be legally
bound and pursuant to the terms and conditions of the Agreement, it is hereby
agreed as follows:

 

1.             The following shall become a part of the Agreement:

 

FINANCIAL COVENANTS.  The Lessee shall not:

 

(a)                                  permit its LEVERAGE RATIO as determined at
the end of any fiscal quarter to be more than 2.00 to 1.00.

(b)                                 permit its INTEREST COVERAGE RATIO as
determined at the end of any fiscal quarter to be less than 2.00 to 1.00.

(c)                                  permit its NET WORTH at any time to be less
than $130,000,000 plus (i) seventy-five percent (75%) of the amount of the net
proceeds to the Lessee of any offering of new equity interests issued by the
Lessee after June 30, 2003, plus (ii) on a cumulative basis commencing with the
fiscal quarter beginning April 1, 2003, fifty percent (50%) of NET INCOME (if
positive) for any fiscal quarter beginning on or after April 1, 2003.

(d)                                 permit its FIXED CHARGE COVERAGE RATIO as
determined at the end of any fiscal quarter to be less than 1.75 to 1.00.

(e)                                  have EBIT of less than zero for any period
consisting of four consecutive quarters.

 

DEFINED TERMS.  Words or phrases used in the forgoing “Financial Covenants”
Section to the Agreement shall, for the sole purposes of the Financial
Covenants,  be defined as set forth in that certain Credit Agreement dated as of
June 16, 2003 among Dendrite International, Inc. The Lenders Party thereto and
JPMorgan Chase Bank, as administrative agent, as amended on September 24, 2004.

 

2.             Section 12.  TAX TREATMENT AND INDEMNIFICATION.

 

The following sentence shall be included at the beginning of this section: “ The
tax treatment and indemnification provisions outlined herein shall not apply to
Leases with a $1.00 purchase option.”

 

Section 13.  EVENTS OF DEFAULT.

 

Subsection (a):  This subsection shall be amended and restated as follows:

“(a)  Lessee shall fail to make any Lease Payment, or any other payment, as it
becomes due and such failure is not cured within 15 days; or”

 

Subsection (h):  This subsection shall be amended and restated as follows:

“(h) Lessee or any Guarantor defaults on any indebtedness for borrowed money,
lease, or installment sale obligation, in each case when any applicable grace
period for such obligation has expired and the lender, lessor or creditor,
respectively, has commenced to exercise any remedy, but only if Lessee fails to
adhere to the Financial Covenants set forth herein, or”

 

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Subsection (i):  This subsection shall be amended and restated as follows:

“(i) the Lessee fails to adhere to the Financial Covenants set forth herein and
the financial condition or operations of Lessee shall change such that in the
reasonable judgment of Lessor, Lessor’s risk is materially adversely affected;
or”

 

Subsection (j):  This subsection shall be deleted in its entirety.

 

Section 14.  REMEDIES.

 

The eleventh (11th) sentence in the second (2nd) paragraph shall be amended and
restated as follows:

“Lessee shall also be liable for and shall pay to Lessor (i) all reasonable
expenses incurred by Lessor in connection with the enforcement of any of
Lessor’s remedies, including all reasonable expenses of repossessing, storing,
shipping, repairing and selling the Equipment, and (ii) Lessor’s reasonable
attorney’s fees.”

 

SECTION 15 LAWS, REGULATIONS AND TAXES.

 

The reference in the 2nd sentence to “net income” shall be replaced with
“income”.

 

3.             It is expressly agreed by the parties that this Addendum is
supplemental to the Agreement which is by reference made a part hereof and all
the terms and conditions and provisions thereof, unless specifically modified
herein, are to apply to this Addendum and are made a part of this Addendum as
though they were expressly rewritten.

 

4.             In the event of any conflict, inconsistency or incongruity
between the provisions of this Addendum and any of the provisions of the
Agreement, the provisions of this Addendum shall in all respects govern and
control.

 

IN WITNESS WHEREOF, the parties have caused this Addendum to be executed on the
dates set forth below.

 

Dated:

9/24/04

 

LESSEE:  DENDRITE INTERNATIONAL, INC.

 

 

 

 

 

 

By:

KATHLEEN DONOVAN

 

 

 

 

 

 

 

 

Print name:

Kathleen Donovan

 

 

 

 

 

 

 

 

Title:

Sr. VP & CFO

 

 

 

 

Dated:

9/29/04

 

LESSOR:  BNY LEASING EDGE CORPORATION.

 

 

 

 

 

 

By:

ANDREW ROSENBERG

 

 

 

 

 

 

 

 

Print name:

Andrew Rosenberg

 

 

 

 

 

 

 

 

Title:

Director, Operations

 

 

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