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Exhibit 10.38
FINOVA TECHNOLOGY FINANCE, INC.
MASTER LEASE AGREEMENT
DATED OCTOBER 6, 1997
Lessor: FINOVA Technology Finance, Inc. Lessee: Creative BioMolecules, Inc.
00 Xxxxxxxxx Xxxxx 00 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
1. LEASE. Lessor agrees to lease to Lessee and Lessee agrees to lease
from Lessor the personal property including intangibles (the "Equipment")
described in one or more Rental Schedules (herein called "Schedule(s)") to this
Master Lease Agreement. Each such Schedule incorporates by this reference, the
terms and conditions set forth in this Master Lease Agreement and constitutes a
separate lease (the "Lease"). The lease of Equipment under each Lease shall be
for such term and such rents as may be agreed to by execution of the Schedules
and this Master Lease Agreement shall control and be effective as to all such
Schedules, the same as though set forth herein unless expressly amended or
modified in writing for particular Schedules. The term "Equipment" as used in
this Master Lease Agreement shall refer to items leased under all Schedules and
the terms hereof, unless expressly amended or modified in writing, shall apply
equally to all such Equipment.
2. TERM AND RENT. The Initial Term for each item of Equipment shall
be for the period specified in the Schedules, and Lessee shall pay Lessor,
throughout the Initial Term for the use of the Equipment, the Rent specified in
the Schedules. The Initial Term and Rent with respect to each item of Equipment
shall commence as set out in the applicable Schedule.
3. LATE CHARGES. Time is of the essence in this Lease. If any Rent or
other amount due hereunder are not paid within five (5) days after the due date
thereof, Lessor shall have the right to add and collect and Lessee agrees to pay
(a) a late charge on, and in addition to, such unpaid Rent or other charges,
equal to five percent (5%) of such unpaid Rent or a lesser amount if established
by any state of federal statute applicable thereto, (b) interest on such Rent or
other charges from, the due date until paid at the highest contract rate
enforceable against Lessee under applicable law, (c) a collection fee of $500
for additional administrative costs.
4. DISCLAIMER OF WARRANTIES. Lessee acknowledges that Lessor is not
the manufacturer of the Equipment, nor manufacturer's agent, and Lessee
represents that Lessee has selected the Equipment leased hereunder based upon
Lessee's judgment prior to having requested Lessor to purchase the same for
leasing to Lessee, and Lessee agrees that as between Lessor and Lessee, the
Equipment leased hereunder is of a design, size, fitness and capacity selected
by Lessee and that Lessee is satisfied that the same is suitable and fit for its
intended purposes. LESSEE FURTHER AGREES THAT LESSOR HAS MADE AND MAKES NO
REPRESENTATIONS OR WARRANTIES OF WHATSOEVER NATURE, DIRECTLY OR INDIRECTLY,
EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY REPRESENTATIONS OR
WARRANTIES WITH RESPECT TO SUITABILITY, DURABILITY, FITNESS FOR USE AND
MERCHANTABILITY OF ANY SUCH EQUIPMENT, THE PURPOSES AND USES OF THE LESSEE THE
CHARACTERIZATION OF THE LEASE FOR TAX, ACCOUNTING OR OTHER PURPOSES, COMPLIANCE
OF THE EQUIPMENT WITH APPLICABLE GOVERNMENTAL REQUIREMENTS, OR OTHERWISE. Lessee
specifically waives all rights to make claim against Lessor herein for breach of
any warranty of any kind whatsoever. Notwithstanding the foregoing, Lessee shall
be entitled to the benefit of any applicable manufacturer's warranties received
by Lessor and to the extent assignable, such warranties are hereby assigned by
Lessor to Lessee for the term of the applicable Schedules. Lessor shall not be
liable to Lessee for any loss, damage or expense of any kind or nature caused
directly or indirectly by any Equipment leased hereunder or for the use or
maintenance thereof, or for the failure of operations thereof, or for the
repairs, service or adjustment thereto, or by any delay or failure to provide
any thereof, or by any interruption of service or loss of use thereof or for any
loss of business or any other damage
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whatsoever and howsoever caused. No defect or unfitness of the Equipment shall
relieve Lessee of the obligation to pay Rent, or to perform any other obligation
under this Lease.
5. USE, OPERATION AND MAINTENANCE. Lessee shall use the Equipment in
the manner for which it was designed and intended, solely for Lessee's business
purposes, in accordance with all manufacturer manuals and instructions and in
compliance with all applicable laws, regulations and orders. Lessee, at Lessee's
own cost and expense, shall keep the Equipment in good repair, condition and
working order, ordinary wear and tear excepted, and shall furnish all parts,
mechanisms, devices and servicing required therefor and necessary to comply with
all applicable health and safety standards. If commercially available, Lessee
shall maintain in force a maintenance agreement with respect to the Equipment
with the manufacturer thereof or such other party as may be acceptable to
Lessor, and the Equipment, upon return to Lessor, shall qualify for such program
without additional expense. All replacement parts and repairs at any time made
to or placed upon the Equipment shall become the property of Lessor. Lessee may,
with Lessor's prior written consent, make such alterations, modifications or
additions to the Equipment as Lessee may deem desirable in the conduct of its
business; provided the same shall not diminish the value or utility of the
Equipment, or cause the loss of any warranty thereon or any certification
necessary for the maintenance thereof, and shall be readily removable without
causing damage to the Equipment. Upon return to Lessor the Equipment as to which
such alterations, modifications or additions have been made, Lessee, if
requested to do so by Lessor, shall remove the same and restore the Equipment to
its original condition, reasonable wear and tear only being excepted, and, if
not so removed, title thereto shall automatically vest in Lessor.
Lessee shall keep the Equipment free and clear from all liens, charges,
encumbrances, legal process and claims. Lessee shall not assign, sublet,
hypothecate, sell, transfer or part with possession of the Equipment or any
interest in this Lease, and any attempt to do so shall be null and void and
shall constitute a default hereunder. Lessee shall not move the Equipment from
the location noted in the Schedules without the prior written consent of Lessor,
which consent shall not be unreasonably withheld. Neither this Lease nor any
interest in the Equipment is assignable or transferable by Lessee by operation
of law. Lessee agrees not to waive its right to use and possess the Equipment in
favor of any party other than Lessor and further agrees not to abandon the
Equipment to any party other than Lessor. So long as Lessee faithfully performs
and meets each and every term and condition to be performed or met by Lessee
under this Lease, Lessee's quiet and peaceful possession of the Equipment will
not be disturbed by Lessor or anyone claiming by, through or on behalf of
Lessor.
6. TITLE. The Equipment is and at all times shall remain the sole and
exclusive personal property of Lessor (subject to Section 18 hereof). No right,
title or interest in the Equipment shall pass to Lessee other than the right to
maintain possession and use of the Equipment for the full lease term,
conditioned upon Lessee's compliance with the terms and conditions of this
Lease. If requested by Lessor, Lessee shall affix to or place on the Equipment
plates or markings indicating Lessor's ownership. Lessee covenants and agrees
that the Equipment is, and will at all times, remain the personal property of
Lessor (subject to Section 18 hereof). If requested by Lessor, Lessee will
obtain a waiver, in recordable form, from all persons with a real property
interest in the premises wherein the Equipment may be located, waiving any claim
with respect thereto. Lessor shall have the right from time to time during
normal business hours to enter upon Lessee's premises or elsewhere for the
purpose of confirming the existence, condition, and proper maintenance of the
Equipment or for any other reasonable business purpose.
7. RENT ADJUSTMENT. The Effective Lease Rate will remain fixed for
the duration of the Initial Term. Prior to the funding date, the date that
Lessor pays the Purchase Price of the Equipment as set forth in the Schedule,
Lessor may adjust the Rent in order to maintain its originally anticipated rate
of return if; (i) there is a change in the yield on the U.S. Treasury
Securities, as quoted in The Wall Street Journal, from the current defined Base
Yield specified in the Schedules; (ii) the Rental Commencement Date as set forth
in the Schedules, is not on or before the Commitment Expiration Date specified
on the Schedules; (iii) Lessee fails to deliver documentation as requested by
Lessor; or (iv) the Equipment cannot be acquired by Lessor at a cost equal to
the invoice cost specified on the Schedules.
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8. TAXES. Lessee shall promptly reimburse Lessor for, or shall pay
directly if so requested by Lessor, as additional Rent, all taxes, charges and
fees which may now or hereafter be imposed or levied by any governmental body or
agency upon or in connection with the purchase, ownership, lease, possession,
use or location of the Equipment or otherwise in connection with the
transactions contemplated by the Lease, excluding, however, all taxes on or
measured by the net income of Lessor, and shall keep the Equipment free and
clear of all levies, liens or encumbrances arising therefrom. Lessor shall file,
as owner and party responsible for payment of tax, personal property tax return
relating to the Equipment unless otherwise provided in writing. Lessee shall
promptly reimburse Lessor for all property taxes levied on or assessed against
the Equipment during the Initial Term and all renewals or extensions, without
any proration whatsoever. Failure of Lessee to promptly pay amounts due
hereunder shall be the same as failure to pay any installment of Rent. If Lessee
is requested by Lessor to file any returns or remit payments directly to any
governmental body or agency as provided for hereunder, Lessee shall provide
proof of said filing or payment to Lessor upon request.
9. LOSS OR DAMAGE OF EQUIPMENT. Lessee hereby assumes and shall bear
the risk of loss for 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 impair any obligation of Lessee under
this Lease which shall continue in full force and effect. In event of damage to
or theft, loss or destruction of the Equipment (or any item thereof), Lessee
shall promptly notify Lessor in writing of such fact and of all details with
respect thereto, and shall, within thirty (30) days of such event, at Lessor's
option, (a) place the same in good repair, condition and working order or, (b)
replace the Equipment (or any item thereof) with like personal property in good
repair, condition and working order and transfer clear title to such replacement
property to Lessor whereupon such property shall be subject to this Lease and be
deemed the Equipment for purposes hereof; or, (c) pay Lessor an amount equal to
the sum of (i) all Rent accrued to the date of such payment, plus (ii) the
"Stipulated Loss Value" as set forth in the Schedules, whereupon this Lease
shall terminate, except for Lessee's duties under Section 11 hereof, solely with
respect to the Equipment (or any item thereof) for which such payment is
received by Lessor. Upon payment of the amount set forth in (c), the Rent for
such Schedules shall be reduced proportionately. Any insurance proceeds received
with respect to the Equipment (or any item thereof) shall be applied, in the
event option (c) is elected, in reduction of the then unpaid obligations,
including the Stipulated Loss Value, of Lessee to Lessor, if not already paid by
Lessee, or, if already paid by Lessee, to reimburse Lessee for such payment, or,
in the event option (a) or (b) is elected, to reimburse Lessee for the costs of
repairing, restoring or replacing the Equipment (or any item thereof) upon
receipt by Lessor of evidence, satisfactory to Lessor, that such repair,
restoration or replacement has been completed, and an invoice therefor.
10. INSURANCE. Lessee shall keep the Equipment insured against theft
and all risks of loss or damage from every cause whatsoever for not less than
the greater of the replacement cost, new, or the Stipulated Loss Value of the
Equipment and shall carry public liability insurance, both personal injury and
property damage, covering the Equipment and Lessee shall be liable for all
deductible portions of all required insurance. All said insurance shall be in
form and amount and with companies satisfactory to Lessor. All insurance for
theft, loss or damage shall provide that losses, if any, shall be payable to
Lessor, and all such liability insurance shall name Lessor (or Lessor's assignee
as appropriate) as additional insured and shall be endorsed to state that it
shall be primary insurance as to Lessor. Any other insurance obtained by or
available to Lessor shall be secondary insurance. Lessee shall pay the premiums
therefor and deliver to Lessor a certificate of insurance or other evidence
satisfactory to Lessor that such insurance coverage is in effect; provided,
however, that Lessor shall be under no duty either to ascertain the existence of
or to examine such insurance policies or to advise Lessee in the event such
insurance coverage shall not comply with the requirements hereof. Each insurer
shall agree by endorsement upon the policy or policies issued by it or by
independent instrument furnished to Lessor, that it will give Lessor thirty (30)
days written notice prior to the effective date of any alteration or
cancellation of such policy. The proceeds of such insurance payable as a result
of loss of or damage to the Equipment shall be applied as set out in Section 9
hereof. Lessee hereby irrevocably appoints Lessor as Lessee's attorney-in-fact
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 said insurance
policies.
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In case of the failure of Lessee to procure or maintain said insurance or to
comply with any other provision of this Lease, Lessor shall have the right but
shall not be obligated, to effect such insurance or compliance on behalf of
Lessee. In that event, all monies spent by and expenses of Lessor in effecting
such insurance or compliance shall be deemed to be additional Rent, and shall be
paid by Lessee to Lessor upon demand.
11. LESSEE INDEMNITY. Lessee assumes liability for and shall
indemnify, save, hold harmless (and, if requested by Lessor, defend) Lessor,
it's officers, directors, employees, agents or assignees from and against any
and all claims, actions, suites or proceedings of any kind and nature
whatsoever, including all damages, liabilities, penalties, costs, expenses and
legal fees (hereinafter "Claim(s)") based on, arising out of, connected with or
resulting from this Lease of the Equipment, including without limitation the
manufacture, selection, purchase, delivery, acceptance, rejection, possession,
use, operation, ownership, return or disposition of the Equipment, and including
without limitation Claims arising in contract or tort (including negligence,
strict liability or otherwise), arising out of latent defects (regardless of
whether the same are discoverable by Lessor or Lessee) or arising out of any
trademark, patent or copyright infringement. If any Claim is made against Lessee
or Lessor, the party receiving notice of such Claim shall promptly notify the
other, but the failure of such person receiving notice so to notify the other
shall not relieve Lessee of any obligation hereunder.
12. TAX INDEMNITY. Lessee acknowledges that (1) Lessor intends to
claim and take the accelerated cost recovery deductions available in the manner
and as provided by section 168 and related sections of the Internal Revenue Code
of 1986, as amended, and regulations adopted thereunder (the "Code") as in
effect on the date hereof (such deductions being referred to hereinafter as "Tax
Benefits") and (2) the Rent payable hereunder has been computed upon the
assumption that such Tax Benefits shall be available to Lessor. Lessee
represents and warrants to Lessor that Lessor shall be entitled to take such Tax
Benefits and that all of the Equipment is, at and after the time of delivery of
the Equipment to the location set forth in the Schedules, new, unless designated
otherwise on the Schedules. Lessee further represents and warrants that it has
not, and will not, at any time from such delivery through the term of this Lease
take any action or omit to take any action (whether or not the same is permitted
or required hereunder) which will result in the loss by Lessor of all or any
part of the Tax Benefits. If as a result of any act, omission or
misrepresentation of Lessee, the Tax Benefits are lost, disallowed, eliminated,
reduced, recaptured, compromised or are otherwise unavailable to Lessor (any of
the foregoing being a "Loss"), Lessee shall promptly pay to Lessor on demand, as
additional Rent, an amount which will, after deduction therefrom of all taxes
required to be paid in respect of the receipt thereof, enable Lessor to receive
the same rate of return that Lessor would have realized had such Loss not
occurred, together with any interest, penalties or additions to tax. Upon
payment of such amount by Lessee, such act, omission or misrepresentation of
Lessee which resulted in a Loss shall not be deemed a default hereunder. Any
event which by the term of this Lease requires payment by Lessee to Lessor of
the Stipulated Loss Value of the Equipment, shall not constitute the act,
omission or misrepresentation of Lessee for purposes of the foregoing sentence.
Lessor hereby agrees to exercise in good faith its best efforts (determined in
the sole discretion of Tax Counsel of Lessor to be reasonable, proper and
consistent with the overall tax interest of Lessor) to avoid requiring Lessee to
pay the tax indemnity referred to in this Section 12; provided, however, Lessor
shall have the sole discretion to determine whether or not to undertake judicial
or administrative proceedings beyond the level of an Internal Revenue Service
auditing agent; and provided further, that Lessor shall not be required to take
any action pursuant to this sentence unless and until Lessee shall have agreed
to indemnify Lessor for any and all expenses (including attorney's fees),
liabilities or losses which Lessor may incur as a result of taking such action.
For purposes of this Section 12, the term "Lessor" shall include the entity or
entities, if any, with which Lessor consolidates its tax return.
13. RETURN OF EQUIPMENT. Upon termination pursuant to the terms of
this Lease or Section 15 of this Lease, Lessee shall immediately return the
Equipment and all related accessories, to such place within the continental
United States as is designated by Lessor. The Equipment shall, at Lessee's sole
expense, be crated and shipped in accordance with the manufacturer's
specifications, freight prepaid and properly insured. If the Equipment, upon its
return, is not in good repair, condition and working order, ordinary wear and
tear excepted, and has not been maintained in accordance with Section
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5 hereof, Lessee shall promptly reimburse Lessor for all reasonable costs
incurred to place the Equipment in such condition.
14. Section left intentionally blank.
15. DEFAULT AND REMEDIES. (a) Lessee shall be in default hereunder if
(i) Lessee fails to pay Rent or any other payment required hereunder within five
(5) days of the due date thereof, (ii) Lessee fails to observe, keep or perform
any other term or condition of this Lease and such failure continues for twenty
(20) days following receipt of written notice thereof from Lessor, (iii) any
representation or warranty made by Lessee herein or in any document delivered to
Lessor in connection herewith shall prove to be false or misleading, (iv) Lessee
defaults under any other obligation to Lessor, or (v) at any time there shall
occur under (A) any lease between Lessee and a party other than Lessor as lessor
or (B) under any lease wholly or partially guaranteed by Lessee, the exercise by
the lessor of its possessory remedies or commencement of legal proceedings by
the lessor for default under the lease; provided that the aggregate future
payments remaining to be made or guaranteed by Lessee exceed $25,000, and that
under a lease described in (B) above within ten days of notice to Lessee of such
exercise of remedies and demand for payment by Lessee any such amount guaranteed
by Lessee remains unpaid. (b) If Lessee is in default, Lessor shall have the
right to take any one or more of the following actions: (i) proceed by
appropriate court action or actions at law or in equity to enforce performance
by Lessee of the term and conditions of this Lease and/or recover damages for
the breach thereof; and/or (ii) by written notice to Lessee, which notice shall
apply to all Schedules hereunder except as specifically excluded therefrom by
Lessor, declare due and payable, and Lessee shall without further demand,
forthwith pay to Lessor an amount equal to any unpaid Rent then due as of the
date of such notice plus, as liquidated damages or loss of the bargain and not
as a penalty, an amount equal to the Stipulated Loss Value as set forth in the
Schedules, and Lessee shall return the Equipment to Lessor as provided in
Section 13. Should Lessee fail to return the Equipment within five (5) days of
receipt of such notice, Lessor may, personally, or by its agents, and with or
without notice of legal process, enter upon the premises where the Equipment is
located, without liability for trespass or other damages, and repossess the
Equipment free from all claims by Lessee. Return or repossession of the
Equipment shall not constitute a termination of this Lease unless Lessor so
notifies Lessee in writing. With respect to Equipment returned to or repossessed
by Lessor, if Lessor has not terminated this Lease, Lessor will, in such manner
and upon such terms as Lessor may determine in its sole discretion, either sell
such Equipment at one of more public or private sales or re-lease the Equipment.
The proceeds of sale or re-lease shall be applied in the following order or
priority: (i) to pay all Lessor's fees, costs and expenses for which Lessee is
obligated pursuant to (c), below; (ii) to the extent not previously paid by
Lessee, to pay Lessor its liquidated damages hereunder and all other sums then
remaining unpaid hereunder; and (iii) to reimburse Lessee for any sums
previously paid by Lessee to Lessor as liquidated damages; and (iv) any surplus
shall be retained by Lessor. In the event the proceeds of sale or re-lease are
less than the sum of the amounts payable under (i) and (ii), Lessee shall pay
Lessor such deficiency, forthwith. The Proceeds of a credit sale or re-lease
shall be discounted to their present value at the prime rate in effect at the
inception of the Schedules plus four hundred (400) basis points (4%). (c) Lessee
shall be liable for all legal and collection fees, costs and expenses arising
from Lessee's default and the exercise of Lessor's remedies hereunder, including
costs of repossessions, storage, repairs, reconditioning and sale or re-leasing
of the Equipment. (d) In the event that any court of competent jurisdiction
determines that any provision of this Section 15 is invalid or unenforceable in
whole or in part, such determination shall not prohibit Lessor from establishing
its damages sustained as a result of any breach of this Lease in any action or
proceeding in which Lessor seeks to recover such damages. Any repossession of
sale or re-lease of the Equipment shall not bar an action for damages for breach
of this Lease, as hereinabove provided, and the bringing of an action or the
entry of judgment against Lessee shall not bar Lessor's right to repossess the
Equipment. No express or implied waiver by Lessor of any default shall in any
way be, or be construed to be, a continuing waiver or a waiver of any future or
subsequent default.
16. FURTHER ASSURANCES. Lessee agrees, at the request of Lessor, to
execute and deliver to Lessor any financing statements, fixture filings or other
instruments necessary for expedient filing, recording or perfecting the interest
and title of Lessor in this Lease and the Equipment, agrees that a copy of this
Lease and any Schedule may be so filed, and agrees that all
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costs incurred in connection therewith (including, without limitation, filing
fees and taxes) shall be paid by Lessee, and agrees to promptly, at Lessee's
expense, deliver such other documents and assurances, and take such further
action as Lessor may request, in order to effectively carry out the intent and
purpose of this Lease and Schedules. Additionally, Lessee agrees that where
permitted by law, a copy of the financing statement may be filed in lieu of the
original. Lessee shall, as soon as practicable, deliver to Lessor, Lessee's
future quarterly and annual reports of financial condition, prepared in
accordance with generally accepted accounting principles, in a manner
consistently applied; which reports Lessee represents and warrants shall fully
and fairly present the true financial condition of Lessee. Lessee's covenants,
representations, warranties and indemnities contained in Section 8, 11, 12 and
19 are made for the benefit of Lessor and shall survive, remain in full force
and effect and be enforceable after the expiration or termination of this Lease
for any reason.
17. ACCEPTANCE OF EQUIPMENT: NON CANCELLABLE. Lessee's acceptance of
the Equipment shall be conclusively and irrevocably evidenced by Lessee signing
the Certificate of Acceptance in the form of Annex A to the Schedules and upon
acceptance, the Schedules shall be noncancelable for the Initial Term thereof.
If Lessee cancels or terminates the Schedules after its execution and prior to
delivery of the Equipment or if Lessee fails or refuses to sign the Certificate
of Acceptance as to all or any part of the Equipment within a reasonable time,
not to exceed five (5) days, after the Equipment has been delivered, in which
event Lessee will be deemed to have canceled the Schedule, Lessee shall
automatically assume all of Lessor's purchase obligations for the Equipment and
Lessee agrees to indemnify and defend Lessor from any claims, including any
demand for payment of the purchase price for the Equipment, by the manufacturer
or seller of the Equipment. In addition thereto, Lessee shall pay Lessor (a) all
of Lessor's out-of-pocket expenses and (b) a sum equal to one percent (1%) of
the total rents for the lease term as liquidated damages, the exact sum of which
would be extremely difficult to determine and is reasonably estimated hereby, to
reasonably compensate Lessor for credit review, document preparation, ordering
equipment and other administrative expenses. Lessor may apply any advance Rent
payments to sums due from Lessee under (a) and (b) above.
18. ASSIGNMENT. Lessee acknowledges and agrees that Lessor may, at any
time, without notice to or consent of Lessee, assign its rights but not its
obligations under this Lease and/or mortgage, or pledge or sell the Equipment.
Such assignee or mortgagee may re-assign this Lease and/or mortgage without
notice to Lessee. Any such assignee or mortgagee shall have and be entitled to
exercise any and all rights and powers of Lessor under this Lease, but such
assignee or mortgagee shall not be obligated to perform any of the obligations
of Lessor hereunder other than Lessor's obligation not to disturb Lessee' quiet
and peaceful possession of the Equipment and unrestricted use thereof for its
intended purpose during the term thereof and for as long as Lessee is not in
default of any of the provisions hereof.
Without limiting the foregoing, Lessee further acknowledges and agrees
that in the event Lessee receives written notice of an assignment from Lessor,
Lessee will pay all Rent and any and all other amounts payable by Lessee under
any Schedule to such assignee or mortgagee or as instructed by Lessor,
notwithstanding any defense or claim of whatever nature, whether by reason of
breach of such Schedule or otherwise which it may now or hereafter have as
against Lessor (Lessee reserving its right to make claims directly against
Lessor). Lessee agrees to confirm in writing receipt of notice of assignment as
may be reasonably requested by assignee or mortgagee.
19. REPRESENTATIONS AND WARRANTIES. Lessee represents and warrants to
Lessor that: (i) the making of this Lease and any Schedule thereto executed by
Lessee are duly authorized on the part of Lessee and upon execution thereof by
Lessee and Lessor they shall constitute valid obligations binding upon, and
enforceable against, Lessee ; (ii) neither the making of this Lease or such
Schedule, nor the due performance thereof by Lessee, including the commitment
and payment of the Rent, shall result in any breach of, or constitute a default
under, or violation of, Lessee's certificate of incorporation, by-laws, or any
agreement to which Lessee is a party or by which Lessee is bound; (iii) Lessee
is in good standing in its state of incorporation and in any jurisdiction where
the Equipment is located, and is entitled to own properties and to carry on
business therein; and (iv) no approval, consent or withholding of objection is
required from any governmental authority or entity with respect to the entering
into, or performance of this Lease or such Schedules by Lessee.
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Lessee shall provide Lessor a Certified Copy of it's Corporate Resolutions and
Certificate of Incumbency substantially in the form of Annex B hereto.
20. NOTICES. Any notice required or given hereunder shall be deemed
properly given (i) three (3) business days after mailed first class, or
certified mail, return receipt requested, postage prepaid, addressed to the
designated recipient at its address set forth at the heading hereof or such
other address as such party may advise by notice given in accordance with this
provision or (ii) upon receipt by the party to whom addressed if given in
writing by personal delivery, commercial courier service, telecopy or other
means which provides a permanent record of the delivery of such notice.
21. LESSEE'S OBLIGATIONS UNCONDITIONAL: NO OFFSET. This Lease is a net
lease and except as expressly provided for herein, the Lessee shall not be
entitled to any abatement or reduction of rent and Lessee hereby agrees that
Lessee's obligation to pay all rent and other amounts hereunder shall be
absolute and unconditional under all circumstances.
22. COUNTERPARTS. Each Schedule may be executed in one or more
counterparts, each of which shall be deemed an original as between the parties
thereto, but there shall be a single executed original of each Schedule which
shall be marked "Counterpart No. 1"; all other counterparts shall be marked with
other counterpart numbers. To the extent, if any, that a Lease constitutes
chattel paper (as such term is defined in the Uniform Commercial Code)
no-security interest in the Schedule may be created through the transfer or
possession of any counterpart other than Counterpart No. 1. The Master Lease
Agreement is incorporated by reference in each of the Schedules and shall not be
chattel paper by itself.
23. SPECIAL TERMS. Lessee agrees that if Lessee hereafter desires to
lease additional equipment and receives a bona fide commitment to lease such
equipment from a third party, then Lessor shall have the right in its sole
discretion, to lease such equipment to Lessee upon the same terms and conditions
as are contained in such commitment.
24. GOVERNING LAW. This Lease and any Schedules thereto are entered
into, under and shall be construed in accordance with, and governed by, the laws
of the State of Arizona without giving effect to its conflicts of laws
principles. The State of Arizona shall have exclusive jurisdiction over any
action or proceeding brought to enforce or interpret this Lease or otherwise in
connection therewith.
25. WAIVER OF JURY. LESSOR AND LESSEE EACH HEREBY WAIVES THE RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY
WAY RELATED TO, THIS LEASE, THE SCHEDULES THERETO OR ANY CONDUCT, ACTS OR
OMISSIONS BY LESSOR OR LESSEE OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR ATTORNEYS; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING
IN CONTRACT OR TORT OR OTHERWISE.
26. PURCHASE OBLIGATION. Lessee shall be obligated to purchase all
items of the Equipment then subject to a Schedule at the expiration of the
Initial Term for such items of the Equipment for a purchase price, payable in
immediately available funds, equal to the Fair Market Value of such items which
Fair Market Value shall be equal to 10% of the original Purchase Price of the
Equipment, plus any applicable sales, excise or other taxes imposed as a result
of such sale (other than net income taxes attributable to such sale). Lessor's
sale of any items of Equipment shall be on an "as is", "where-is" basis, without
any representation or warranty by or recourse to Lessor, as provided by the
provisions of the Lease on disclaimer of warranties, and shall be subject to
such additional terms and conditions as may be specified in the Schedule.
27. MISCELLANEOUS. For purposes of this Lease, the term "Rent" as used
herein shall mean and include all amounts payable by Lessee to Lessor hereunder.
The captions of this Lease are for convenience only and shall not be read to
define or limit the intent of the provision which follows such captions. This
Lease contains the entire agreement and understanding between Lessor and Lessee
relating to the subject matter hereof. Any variation or modification hereof and
any waiver of any of the provisions or conditions hereof shall not be valid
unless in writing signed by an authorized representative of the
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parties hereto. Any provision of this Lease which is unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Lessor's failure at any time to require strict performance
by Lessee or any of the provisions hereof shall not waive or diminish Lessor's
right thereafter to demand strict compliance therewith or with any other
provision. The term "Lessee" as used herein shall mean and include any and all
Lessees who have signed this Lease, each of whom shall be jointly and severally
bound thereby.
THIS LEASE IS A NON-CANCELLABLE LEASE. THIS LEASE IS SUBJECT TO THE TERMS AND
CONDITIONS WRITTEN ABOVE WHICH LESSEE ACKNOWLEDGES HAVING READ. THIS LEASE SHALL
BE EFFECTIVE UPON EXECUTION BY LESSEE AND LESSOR.
LESSOR: LESSEE:
FINOVA Technology Finance, Inc. Creative BioMolecules, Inc.
By: /s/Xxxxx X. Xxxxxxxxx By: /s/Xxxxx X. Xxxxxx III
-------------------------------- -----------------------------------
Title: Director, Contract Admin. Title: VP & Chief Financial Officer
----------------------------- --------------------------------
Date Accepted: 10/31/97 Date Accepted: 10/22/97
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