EXHIBIT 10.18
MASTER EQUIPMENT LEASE AGREEMENT
DATED AS OF
JULY 11, 1997
BETWEEN
FINOVA TECHNOLOGY FINANCE, INC.
(LESSOR)
AND
ORTHOVITA, INC.
(LESSEE)
TABLE OF CONTENTS
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SECTION PAGE
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1. Agreement for Lease of Equipment.......................... 1
2. Delivery and Acceptance of Equipment...................... 1
3. Disclaimer of Warranties.................................. 2
4. Primary Term.............................................. 2
5. Rent...................................................... 2
6. Lessee's Representations and Warranties................... 3
7. Identification Marks...................................... 4
8. Fees and Taxes............................................ 5
9. General Indemnity......................................... 5
10. Use of Equipment; Location; Liens......................... 6
11. Maintenance and Repairs; Additions to
Equipment................................................ 6
12. Loss, Damage or Destruction of Equipment.................. 7
13. Reports; Inspections...................................... 8
14. Insurance................................................. 8
15. Return of Equipment....................................... 9
16. Lessor's Ownership; Equipment To Be and
Remain Personal Property................................. 11
17. Other Covenants........................................... 11
18. Events of Default......................................... 12
19. Assignment and Transfer by Lessor......................... 15
20. Recording and Filing; Expenses............................ 16
21. Option to Renew........................................... 16
22. Quiet Enjoyment........................................... 16
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23. Failure or Indulgence Not Waiver;
Additional Rights of Lessor.............................. 16
24. Sublease.................................................. 17
25. Purchase Option........................................... 17
26. Notices................................................... 17
27. Entire Agreement; Severability; Amendment or
Cancellation of Lease.................................... 18
28. Waiver of Jury............................................ 18
29. Restriction of Limitation Periods
and Damages.............................................. 18
30. Governing Law; Consent to Jurisdiction
and Service.............................................. 18
31. Lessor's Right to Perform for Lessee..................... 18
32. Agreement for Lease Only.................................. 18
33. Binding Effect............................................ 18
34. General................................................... 19
35. Definitions............................................... 19
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MASTER EQUIPMENT LEASE AGREEMENT
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MASTER EQUIPMENT LEASE AGREEMENT dated as of July 11, 1997, between
ORTHOVITA, INC. (hereinafter called "Lessee"), a Pennsylvania that has its
executive office and principal place of business at 00 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000 and FINOVA TECHNOLOGY FINANCE, INC. (hereinafter called
"Lessor"), a Delaware corporation with its principal place of business at 00
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000.
In consideration of the mutual covenants hereinafter contained, Lessee and
Lessor agree as follows:
1. Agreement for Lease of Equipment. Lessor shall lease to Lessee and
Lessee shall lease from Lessor, upon the terms and conditions specified in this
Master Lease and the applicable Rental Schedule, the Equipment as described in
the applicable Rental Schedule including Schedule A of such Rental Schedule and
this Master Lease. Each Rental Schedule shall incorporate the terms of this
Master Lease and shall constitute a separate lease (the term "this Lease" shall
refer collectively to the applicable Rental Schedule and this Master Lease).
Only the signed copy of each Rental Schedule and not this Master Lease shall
constitute chattel paper the possession of which can perfect a security
interest. In the event of a conflict between the provisions of this Master
Lease and the provisions of any Rental Schedule, the provisions of the Rental
Schedule shall prevail.
2. Delivery and Acceptance of Equipment. (a) Lessor and Lessee agree that
the vendor of the Equipment to Lessor or, as to any Equipment to be sold by
Lessee to Lessor and leased back, the vendor of the Equipment to Lessee (in
either case, the "Vendor") will be responsible to deliver the Equipment to
Lessee at the location specified in the applicable Rental Schedule. Such
delivery shall be delivery of the Equipment by Lessor to Lessee under this Lease
unless such Equipment is to be sold by Lessee to Lessor and leased back.
Provided that no Event of Default has occurred, no event which with the passage
of time or giving of notice would be an Event of Default has occurred, and is
continuing, and the conditions set forth in the next following paragraph have
been met and the Equipment is not to be sold by Lessee to Lessor and leased
back, Lessor hereby authorizes Lessee, acting as Lessor's agent, to accept for
Lessor, and in Lessor's name, the Equipment from the Vendor upon delivery
pursuant to the purchase contract for the Equipment. Such acceptance shall be
acceptance of the Equipment by Lessee under this Lease. Nevertheless, if within
five business days after Lessee has received delivery of an item of the
Equipment, Lessee has not given Lessor written notice of a defect therein and
Lessor has not notified Lessee not to accept the Equipment, Lessee shall be
deemed to have (a) acknowledged receipt of such item of the Equipment in good
condition and repair and (b) accepted such item of the Equipment under this
Lease. Lessee agrees to confirm any acceptance of the Equipment by Lessee by
executing a Certificate of Inspection and Acceptance and providing the same to
Lessor in accordance with the notice provision hereof on or about the Lease
Commencement Date, but no later than the date for payment to the Vendor.
(b) Conditions precedent to every progress payment and Lease Term
Commencement shall include that (i) no payment shall be past due to Lessor or
any assign of Lessor from Lessee or any Guarantor (as hereinafter defined),
whether as a lessee, a guarantor or in some other capacity; (ii) Lessee shall be
in compliance with the provisions of this Lease; (iii) all documentation then
required by Lessor's counsel shall have been received by Lessor; (iv) Lessee
shall not be in default under any material contract to which Lessee is a party
or by which Lessee or the property of Lessee is bound; and (v) there shall not
have been any material adverse change or threatened material adverse change in
the financial or other condition, business, operations, properties, assets or
prospects of Lessee, any Guarantor or any Manufacturer (as hereinafter defined)
since May 30, 1997, or from the written information that has been supplied to
Lessor prior to May 30, 1997 by Lessee, any Guarantor or any Manufacturer.
3. Disclaimer of Warranties. LESSEE ACKNOWLEDGES THAT IT HAS SELECTED
BOTH THE EQUIPMENT AND EVERY MANUFACTURER AND OTHER VENDOR OF THE EQUIPMENT,
THAT LESSEE HAS NOT RELIED UPON LESSOR FOR SUCH SELECTION AND THAT LESSEE HAS A
COPY OF THE PURCHASE CONTRACT(S) FOR LESSOR'S PURCHASE OF THE EQUIPMENT. LESSOR
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HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR
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WARRANTY, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, FITNESS FOR USE,
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FITNESS FOR A PARTICULAR PURPOSE
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OR TITLE OF THE EQUIPMENT (OR ANY PART THEREOF) OR AS TO COMPLIANCE WITH
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SPECIFICA TIONS, COMPLIANCE WITH GOVERNMENTAL REGULATIONS, QUALITY, SELECTION,
INSTALLATION, SUITABILITY, PERFORMANCE, CONDITION, DESIGN, ABSENCE OF DEFECTS,
OPERATION, OR NON-INFRINGEMENT OF PATENT, COPYRIGHT, TRADEMARK OR OTHER
INTELLECTUAL PROPERTY RIGHTS OF THE EQUIPMENT (OR ANY PART THEREOF). LESSEE
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SHALL LEASE THE EQUIPMENT "AS IS, WHERE IS". LESSOR HEREBY DISCLAIMS ANY AND ALL
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SUCH WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED. LESSEE AND LESSOR AGREE
THAT ALL RISKS INCIDENT TO THE MATTERS REFERRED TO IN THIS SECTION ARE TO BE
BORNE BY LESSEE. Lessor has and shall have no responsibility for the
installation, adjustment or servicing of the Equipment. The provisions of this
Section have been negotiated and are intended to be a complete exclusion and
negation of any representations or warranties by Lessor, express or implied,
with respect to the Equipment that may arise pursuant to any law now or
hereafter in effect, or otherwise. In no event shall defect in, or unfitness of,
any or all of the Equipment, or any breach of warranty or representation by any
or every Manufacturer or other Vendor relieve Lessee of the obligation to pay
rent or to make any other payments required hereunder or to perform any other
obligation hereunder. Without limiting the generality of the foregoing, Lessor
shall not be responsible or liable for any (i) defect, either latent or patent,
in any of the Equipment or for any direct or consequential damages therefrom,
(ii) loss of use of any of the Equipment or for any loss of profits or any
interruption in Lessee's business occasioned by Lessee's inability to use any or
all of the Equipment for any reason whatsoever, or (iii) in the event that any
Vendor delays or fails to make delivery of any or all of the Equipment or fails
to fulfill or comply with any purchase contract or order. For as long as no
Event of Default shall have occurred hereunder, Lessor hereby transfers and
assigns to Lessee during the Lease Term (as hereinafter defined) all right and
interest of Lessor in any Manufacturer's and other Vendor's warranties with
respect to any and all of the Equipment, and agrees to execute all documents
reasonably necessary to effect such transfer and assignment, except that to the
extent any rights of Lessor with respect to the Equipment may not be assigned
or otherwise be available to Lessee, Lessor shall instead use reasonable efforts
to enforce such rights against such Manufacturers or other Vendors but only upon
the request and at the expense of Lessee.
4. Primary Term. The Primary Term for each item of the Equipment shall
commence on the Lease Commencement Date provided for by the Rental Schedule for
such Equipment, and unless sooner terminated pursuant to the provisions of this
Lease, shall be for the number of calendar months set forth in such Rental
Schedule, plus the number of days remaining in any partial calendar month if the
Lease Commencement Date occurs on other than the first day of a month.
Notwithstanding the foregoing, the provisions of this Master Lease on
indemnification of Lessor by Lessee shall apply between Lessor and Lessee with
respect to any Equipment from the time that any order for the Equipment is
placed by Lessor.
5. Rent. (a) Lessee shall pay to Lessor in cash or by check as rent for
the Equipment during the Lease Term, the amounts provided for in the Rental
Schedule ("Basic Rent") for such Equipment on the dates designated therein
("Payment Dates"), at the location of Lessor set forth therein, or at such other
address or to such other person or entity as Lessor, from time to time, may
designate.
(b) Lessee shall also pay to Lessor, upon notice by Lessor to Lessee that
payment is due, any sums other than for Basic Rent that Lessee at any time shall
be required to pay Lessor pursuant to the provisions of this Lease, including
but not limited to sums payable by reason of payments by Lessor to any Vendors
in advance of the delivery of such Equipment or the commencement of the Lease
Term for such Equipment, together with every additional charge, interest and
cost which may be added for non-payment or late payment of any such sums or of
Basic Rent. All such sums shall be additional rent ("Additional Rent") and
Lessor shall provide Lessee with notification as to the amount of any Additional
Rent. If Lessee shall fail to pay any Additional Rent, Lessor shall have all
rights, powers and remedies with respect thereto as are provided herein or by
law in the case of non-payment of Basic Rent.
(c) With respect to any amount of Basic Rent or Additional Rent not
received by Lessor within three days from when due hereunder, Lessee shall pay
to Lessor interest on such amount from the due date thereof until payment is
received by Lessor at two percent per month or the highest rate of interest on
amounts past due that is not unlawful, whichever is lower (the "Default Interest
Rate"). Additionally, with respect to each such instance of
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late payment, Lessee shall pay to Lessor, within three days of notification that
such payment is due, a collection fee of $500, which fee approximates Lessor's
administrative costs, at minimum, to collect such unpaid Basic Rent or
Additional Rent.
(d) LESSEE AGREES THAT TIME IS OF THE ESSENCE TO LESSOR IN LESSEE'S MAKING
PAYMENTS OF BASIC RENT AND ADDITIONAL RENT WHEN SUCH PAYMENTS BECOME DUE.
(e) This Lease is a net-net-net lease and, notwithstanding any other
provisions of this Lease, it is intended that Basic Rent and Additional Rent
shall be paid without notice, demand, counterclaim, setoff, deduction or defense
and without abatement, suspension, deferment, diminution or reduction. Lessee
shall perform all its obligations under this Lease at its sole cost and expense.
Except to the extent otherwise expressly specified herein, the obligations and
liabilities of Lessee hereunder shall in no way be released, discharged or
otherwise affected for any reason, including, without limitation: (i) any
defect in the condition, quality or fitness for use of the Equipment or any part
thereof; (ii) any damage to, removal, abandonment, salvage, loss, scrapping or
destruction of or any requisition or taking of the Equipment or any part
thereof; (iii) any restriction, prevention or curtailment of or interference
with any use of the Equipment or any part thereof; (iv) any defect in title or
rights to the Equipment or any lien on such title or rights or on the Equipment;
(v) any change, waiver, extension, indulgence or other action or omission in
respect of any obligation or liability of Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceedings relating to Lessee or any action taken with respect to
this Lease by any trustee or receiver of Lessee or by any court, in any such
proceeding; (vii) any claim that Lessee has or might have against any Person (as
hereinafter defined), including without limitation Lessor; (viii) any failure on
the part of Lessor to perform or comply with any of the terms hereof or of any
other agreement; (ix) any invalidity, unenforceability or disaffirmance of this
Lease or any provision hereof against or by Lessee; or (x) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing, whether or not
Lessee or Lessor shall have notice or knowledge of any of the foregoing. To the
extent permitted by law, Lessee waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate, cancel, rescind or surrender this
Lease, or to any diminution or reduction of Basic Rent or Additional Rent
payable by Lessee hereunder.
6. Lessee's Representations and Warranties. Lessee represents and
warrants (and if requested by Lessor, promptly will provide supporting documents
to the effect and an opinion of counsel substantially in the form requested by
Lessor) that as of the date that Lessee signs this Master Lease, as of any date
that Lessor makes a payment to a Vendor prior to the date all Equipment has been
accepted for lease hereunder, as of each date that any Equipment is accepted for
lease hereunder and as of each Lease Commencement Date pursuant to a Rental
Schedule hereunder: (i) all items of the Equipment are new and unused as of the
Lease Commencement Date, unless otherwise specified in the applicable Rental
Schedule in which event the specified items of the Equipment shall have been
delivered new to Lessee by their suppliers not more than 90 days prior to their
Lease Term Commencement; (ii) Lessee is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, and is
qualified and in good standing to do business wherever necessary to carry on its
present business and operations, including the jurisdictions where the Equipment
is or will be located; (iii) Lessee has the power to enter into this Lease and
the other instruments and documents executed by Lessee in connection herewith
(together with this Lease, the "Transactional Documents") and to pay and perform
its obligations under this Lease and the other Transactional Documents; (iv)
this Lease and the other Transactional Documents have been duly authorized,
executed and delivered by Lessee, and constitute the valid, legal and binding
obligations of Lessee enforceable in accordance with their terms; (v) no vote or
consent of, or notice to, the holders of any class of stock of Lessee is
required, or if required, such vote or consent has been obtained or given, to
authorize the execution, delivery and performance of this Lease and the other
Transactional Documents by Lessee; (vi) neither the execution and delivery by
Lessee of this Lease or the other Transactional Documents, nor the consummation
by Lessee of the transactions contemplated hereby or thereby, nor compliance by
Lessee with the provisions hereof or thereof, conflicts with or results in a
breach of any of the provisions of any Certificate of Incorporation or By-laws
or partnership or trust agreement or certificate of Lessee, or of any applicable
law, judgment, order, writ, injunction, decree, award, rule or regulation of any
court, administrative agency or other governmental authority, or of any
indenture, mortgage, deed of trust, other agreement or instrument of any nature
to which Lessee is a party or by which it or its property is bound or affected
or pursuant to which it is constituted, or constitutes a default under any
thereof or will result in the creation of any lien, charge, security interest or
other encumbrance upon any
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of the Equipment, other than the interests therein of Lessor or any Assignee (as
hereinafter defined), or upon any other right or property of Lessee or will in
any manner adversely affect Lessor's or any Assignee's right, title and interest
in any of the Equipment; (vii) no consent, approval, withholding of objection or
other authorization of or by any court, administrative agency, other
governmental authority or any other Person is required, except such consents,
approvals or other authorizations which have been duly obtained and are in full
force and effect and copies of which have been furnished Lessor, in connection
with the execution, delivery or performance by Lessee, or the consummation by
Lessee, of the transactions contemplated by this Lease and the other
Transactional Documents; (viii) there are no actions, suits or proceedings
pending, or, to the knowledge of Lessee, threatened, in any court or before any
administrative agency or other governmental authority against or affecting
Lessee, which, if adversely decided would or could, individually or in the
aggregate, materially and adversely affect the financial or other condition,
business, operations, properties, assets or prospects of Lessee or the ability
of Lessee to perform any of its obligations under this Lease or under the other
Transactional Documents, except for any such actions, suits or proceedings that
Lessee has described in writing to Lessor; (ix) no Event of Default or event or
condition which upon the passage of time, the giving of notice, or both, would
constitute an Event of Default, exists or is continuing; (x) there has been no
material adverse change or threatened change in Lessee's, any Guarantor's or any
Manufacturer's financial or other condition, business, operations, properties,
assets or prospects since the date of Lessee's, such Guarantor's or
Manufacturer's most recent financial statements reported on by an independent
public accounting firm prior to the date of this Master Lease, since the dates
of each such Person's interim and annual financial statements, if any,
subsequent to such prior statements, or from the written information that has
been supplied to Lessor by Lessee, any Guarantor or such Manufacturer; (xi)
Lessee possesses any and all authorizations, certifications and licenses which
are or may be required to use and operate the Equipment; (xii) the actual
Acquisition Cost pursuant to the applicable Rental Schedule of each item of the
Equipment does not exceed the fair and usual price for like quantity purchases
of such item and reflects all discounts, rebates and allowances for the
Equipment given to Lessee, any Guarantor or any affiliate of Lessee or any
Guarantor by any Vendor or other Person including, without limitation, discounts
for advertising, prompt payment, testing or other services; (xiii) all
information supplied to Lessor by Lessee or any Guarantor is correct and does
not omit any statement necessary to make the information supplied not
misleading; and (xiv) the financial statements of Lessee and any Guarantor have
been prepared in accordance with generally accepted accounting principles
consistently applied and accurately and completely present the financial
condition and the results of operations of Lessee and such Guarantors at the
dates of and for the periods covered by such statements.
7. Identification Marks. To the extent requested by Lessor or if
required by applicable law, Lessee shall affix to the Equipment at Lessee's
expense signs, labels, or other forms of notice to disclose Lessor's ownership
of, and the interest of any Assignee in, the Equipment. Lessee shall keep and
maintain such signs, labels or other forms of notice affixed to the Equipment
throughout the Lease Term. Lessor may furnish such signs, labels or other forms
of notice to Lessee. Except as otherwise directed by Lessor, Lessee shall not
allow the name of any person other than Lessor to be placed on any part of the
Equipment as a designation that might reasonably be interpreted as a claim of
ownership.
8. Fees and Taxes. Lessee agrees to pay promptly when due, and to
indemnify and hold Lessor harmless from, all license, title, registration and
recording fees whatsoever, all taxes including, without limitation, sales, use,
franchise, personal property, excise, import, export and stamp taxes and customs
duties, and all charges together with any penalties, fines or interest thereon
which are assessed, levied or imposed by any governmental or taxing authority
against Lessor with respect to any or all of the Equipment or the purchase,
acquisition, ownership, construction, installation, shipment, delivery, lease,
possession, use, maintenance, condition, operation, control, return or other
disposition thereof or the rents, receipts or earnings arising therefrom which
accrue or are payable with respect to the Equipment or this Lease or which are
assessed, are based on a valuation date, or are due during or with respect to
the Lease Term or any subsequent period until the Equipment has been returned to
Lessor pursuant to the provisions of this Lease or until the Equipment has been
purchased by Lessee pursuant to any purchase option provisions of this Lease,
excluding, however, any taxes solely measured by Lessor's net income from the
general operation of Lessor's business. In the event any fees, taxes or charges
payable by Lessee pursuant to the next preceding sentence are paid by Lessor, or
if Lessor is required to collect or pay any thereof, Lessee shall reimburse
Lessor therefor (plus any penalties, fines or interest thereon) promptly upon
demand. Unless and until Lessor notifies Lessee in writing to the contrary,
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Lessee shall file and pay any personal property taxes levied or assessed on the
Equipment directly to the levying authority. Upon Lessor's written request,
Lessee shall submit to Lessor satisfactory evidence of payment by Lessee of any
or all amounts for which Lessee is required to make payment or to indemnify
Lessor hereunder that are paid by Lessee, and of the filing of any and all
reports, returns and other documentation required in connection with any such
payment. However, Lessor may, if it elects, estimate such personal property
taxes and xxxx Lessee therefor periodically in advance. In the event Lessor
elects to pay the personal property taxes directly to a levying authority,
Lessor shall submit to Lessee a copy of its personal property tax return and its
receipt for the full amount of such personal property taxes so paid by Lessor.
All of the obligations of Lessee under this Section shall continue in full force
and effect notwithstanding any expiration, termination, rescission or
cancellation of this Lease. Lessee acknowledges that Lessor may not be exempt
from the payment of any of the amounts referred to herein, even though Lessee
might have been exempt therefrom if it were the owner or purchaser of the
Equipment, and Lessee agrees that this Section shall apply, and the amounts due
from it hereunder shall be due, whether or not Lessee might itself have
otherwise been exempt from any such payments. Subject to the foregoing, Lessee
shall have the right to contest in good faith any such taxes levied or imposed
by any governmental or taxing authority, provided that Lessee shall have given
Lessor not less than ten days prior notice of its intention to contest and full
particulars of the proposed contest, in the opinion of Lessor the proposed
contest will not adversely affect the interests of Lessor or any Assignee, and
Lessee either shall have paid the taxes or provided for a bond or other security
so that none of the Equipment will be subject to seizure, confiscation or
forfeiture. For purposes of this Section, the term "Lessor" shall include each
member of Lessor's affiliated group, if any.
9. General Indemnity. (a) Lessee shall indemnify Lessor and any Assignee
(as hereinafter defined), and their respective agents and servants, against, and
agrees to defend, protect, save and keep them harmless from, any and all
liabilities, obligations, losses, damages, penalties, claims, actions, suits,
costs, expenses and disbursements, including attorneys' fees and expenses and
costs for customs, completion, performance and appeal bonds, of whatsoever kind
and nature (including, without limitation, for negligence, tort liability,
damages by reason of strict or absolute liability, punitive damages, and
indirect and consequential damages, but excluding any such amounts imposed or
incurred as a result of Lessor's gross negligence or willful misconduct),
imposed on or incurred by or assessed against Lessor and/or any Assignee, in any
way relating to or arising out of (i) the failure of Lessee to provide or obtain
any certificates, documents, consents, authorizations, clearances, licenses,
permits or instruments required hereunder or under any of the other
Transactional Documents, or (ii) the ordering, construction, installation,
delivery, testing, ownership, lease, possession, use, maintenance, operation,
control, movement, import, export, shipment, condition, or return of the
Equipment (including but not limited to latent and other defects, whether or not
discoverable by Lessor or Lessee, and any claim for patent, trademark,
copyright, software or other intellectual property infringement) until such time
as the Equipment shall have been returned to Lessor pursuant to the provisions
of this Lease or until the Equipment shall have been purchased by Lessee
pursuant to any purchase option provisions of this Lease.
(b) The obligations of Lessee under this Section shall survive the payment
of all known obligations under and any expiration, termination, rescission or
cancellation of this Lease, and are expressly made for the benefit of and shall
be enforceable by Lessor, its successors and any Assignee.
10. Use of Equipment; Location; Liens. (a) During the Lease Term, Lessee
warrants and agrees that the Equipment shall be used and operated and otherwise
be in compliance with any established operating procedures therefor of any
Manufacturer and all statutes, regulations and orders of any governmental body
having power to regulate the Equipment or its use. Lessee shall bear and pay
all costs of such compliance. Lessee shall not permit the Equipment to be used
or maintained in any manner or condition that would violate, or could result in
the termination of, the insurance policies carried by Lessee pursuant to the
provisions of this Lease on insurance, or in any manner or condition or for any
purpose for which, in the opinion of any Manufacturer, the Equipment is not
designed or suited.
(b) Lessee agrees that without Lessor's prior written consent, it will not
remove any of the Equipment from the location specified in the Rental Schedule
for such Equipment or permit any of the Equipment to be used by anyone other
than Lessee, Lessee's employees or a responsible independent contractor engaged
by Lessee.
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(c) During the Lease Term and until the Equipment has been returned to
Lessor pursuant to the provisions of this Lease or until the Equipment is
purchased by Lessee pursuant to any purchase option provisions of this Lease,
Lessee will not directly or indirectly create, incur, assume or suffer to exist
any mortgage, security interest, lien or encumbrance on the Equipment or
Lessor's or any Assignee's title thereto or interest therein, except in the name
of Lessor and its successor(s) and any Assignee. Lessee, at its own expense,
will promptly take such action as may be necessary to keep the Equipment free
and clear of, and to duly discharge, any such mortgage, security interest, lien
or encumbrance not excepted above.
(d) Lessee agrees to procure and maintain in effect all licenses,
certificates, permits and other approvals and consents required by federal,
state and local laws and regulations in connection with Lessee's possession,
use, operation and maintenance of the Equipment. During the Lease Term, Lessee
agrees that 100 percent of the use of the Equipment shall be "qualified business
use" as that term is and shall be from time to time defined by the Internal
Revenue Code of 1986, as amended.
(e) Lessee shall cooperate fully with Lessor or any Assignee to perfect
and record their respective interests in connection with the Transactional
Documents including, without limitation, the filing of financing statements and
will pay such Persons their reasonable costs related thereto. Lessee authorizes
Lessor to file financing statements that are signed only by Lessor or that are
signed for Lessee by Lessor in any jurisdiction when permitted by law or local
authority. Lessee hereby grants to Lessor power-of-attorney to act as Lessee's
attorney-in-fact to sign Lessee's name on financing statements as "Debtor".
11. Maintenance and Repairs; Additions to Equipment. (a) Lessee shall,
for the entire Lease Term, at its sole expense, maintain all of the Equipment in
good, safe and efficient operating repair, appearance and condition, will keep
all components of the Equipment properly calibrated and aligned, will make all
required adjustments, replacements and repairs and will obtain and install any
upgrades for the Equipment that are announced and available for sale by a
Manufacturer (collectively, "maintenance and repairs"). Such maintenance and
repairs shall include, but not be limited to, all recommended or advised by a
Manufacturer, all required or advised by cognizant governmental agencies or
regulatory bodies and all commonly performed by prudent business and/or
professional practice. All maintenance and repairs to any item of the Equipment
shall be made by the Manufacturer or, upon prior written approval by Lessor,
those of substantially equal skill or knowledge in maintaining and repairing the
Equipment.
(b) Lessee shall not modify the Equipment without the prior written
consent of Lessor. Any replacements, substitutions, additions, attachments,
accessions, parts, fittings, accessories, modifications, enhancements,
maintenance and repairs and other upgrades to the Equipment whenever made shall
be considered accessions to the Equipment and shall automatically become the
property of Lessor.
(c) All instruction manuals, published statements of capabilities and
technical specifications, service, maintenance and repair records, installation,
qualification, certification and calibration reports, usage logs, and printed
material relating to the Equipment shall be deemed part of the Equipment.
Computer programs, programming codes, operating systems, data processing
instructions, series of instructions or statements which are machine readable,
and any like symbols or signals usable by an electronic data processing system
(collectively "Software") that has been or shall be installed or entered in the
Equipment shall become a part of the Equipment except for any Software that is
proprietary Software of Lessee and is not a modification, change, enhancement or
improvement to any Software which is identified or listed in the description of
specific items of the Equipment in or attached to a Rental Schedule. Whenever
Lessee acquires Software licenses from other parties, with respect to the
Software such licenses shall automatically and without further action by Lessee
be assigned to Lessor and become through assignment a part of the Equipment
transferable to any future user of the Equipment for use with the Equipment.
12. Loss, Damage or Destruction of Equipment. (a) Lessee shall bear all
risks of damage to, taking of, or theft, loss or destruction of, any or all of
the Equipment commencing as of the date of this Master Lease and continuing
throughout the Lease Term and until such Equipment has been returned to Lessor
or purchased by Lessee pursuant to any purchase option provisions of this Lease.
Except as otherwise herein expressly provided,
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no damage to, taking of or theft, loss or destruction of any Equipment shall
impair any obligation of Lessee to Lessor under this Lease, including, without
limitation, the obligation to pay Basic Rent.
(b) In the event that any item of Equipment shall become damaged from any
cause whatsoever, Lessee agrees to promptly notify Lessor in writing of such
fact, fully informing Lessor of the details thereof. If any item of Equipment
is damaged (unless the same, in the opinion of Lessor is irreparably damaged, in
which case the provisions of this Lease with respect to a Casualty Occurrence
shall apply), Lessee shall, at its sole cost and expense, place the same in good
repair, condition and working order or replace the same with "like property"
having the same value and operating capabilities and useful life at least equal
to the damaged Equipment prior to the date of such damage, which property shall
thereupon become subject to this Lease with title thereto in Lessor. In the
event that an item of Equipment has been damaged, but not irreparably, if no
Event of Default has occurred and is continuing hereunder, upon receipt by
Lessor of evidence, satisfactory to Lessor, that such repair, restoration or
replacement has been completed, and an invoice therefor, Lessor shall release to
Lessee or its supplier the proceeds of any insurance received by Lessor as a
result of such damage for the purpose of reimbursing Lessee for the costs of
repairing, restoring or replacing such item.
(c) In the event that any item of Equipment shall become lost, stolen,
destroyed or irreparably damaged from any cause whatsoever, or if any item of
Equipment or Lessor's title thereto shall be requisitioned or seized by any
governmental authority (each such occurrence being herein called a "Casualty
Occurrence") during the Lease Term and until it has been returned to Lessor
pursuant to the provisions of this Lease or until the Equipment is purchased by
Lessee pursuant to any purchase option provisions of this Lease, Lessee shall
promptly notify Lessor in writing of such fact, fully informing Lessor of all
details of the Casualty Occurrence in question, and shall pay Lessor in cash the
greater of (i) the "Stipulated Loss Value" as set forth in the Table of
Stipulated Loss Values attached to the Rental Schedule pursuant to which such
item of Equipment is leased hereunder, calculated as of the date of the Casualty
Occurrence, or (ii) the Fair Market Value (as hereinafter defined) of the item
of Equipment in question as of the date of the Casualty Occurrence. This
payment shall be made within 30 days following the Casualty Occurrence, together
with the Basic Rent accrued and unpaid with respect to such Equipment as of the
date of the Casualty Occurrence, plus all Additional Rent or amounts owing with
respect to such Equipment on such date of payment.
(d) Upon the payment of the greater of the Stipulated Loss Value or Fair
Market Value of the Equipment in question in accordance with the terms of this
Section, and the payment of all Basic Rent, Additional Rent and any other sums
then due hereunder, this Lease shall terminate with respect to the Equipment or
part thereof suffering the Casualty Occurrence and all Lessor's rights and title
to such Equipment shall pass to Lessee, "as is" and "where is", without any
representation or warranty by, or recourse to, Lessor, as provided by the
provisions of this Master Lease on disclaimer of warranties and as evidenced by
a duly executed xxxx of sale naming Lessor as the seller and Lessee as the
buyer.
(e) Provided that no Event of Default has occurred and no event that with
the passage of time or giving of notice, or both, would be an Event of Default
has occurred and is continuing, any insurance proceeds received as the result of
a Casualty Occurrence with respect to any or all items of the Equipment shall be
applied first in reduction of any other then unpaid obligation of Lessee to
Lessor hereunder and second in reduction of Lessee's obligation to pay the
greater of the Fair Market Value or the Stipulated Loss Value for such item if
not already paid by Lessee to Lessor, or, if already paid by Lessee, to the
reimbursement of Lessee therefor, and the balance of the insurance proceeds, if
any, shall be paid to Lessee.
13. Reports; Inspections. Lessee will cause to be furnished to Lessor, if
requested, from time-to-time a statement showing the condition and such other
information regarding the Equipment as Lessor may reasonably request. Lessor
and any Assignee shall have the right, upon reasonable notice to Lessee, to
inspect the Equipment including Lessee's records with respect to the Equipment,
to copy such records, and to inspect and copy Lessee's records with respect to
the financial statements Lessee is required to furnish Lessor or has warranted
to Lessor pursuant to this Lease. Any inspection by Lessor or any Assignee shall
not be deemed to be approval or acknowledgment by Lessor or such Assignee of the
safety, freedom from defects, performance or compliance with specifications or
governmental requirements of the Equipment or of the conformity of the Equipment
or such
7
financial statements to the requirements or warranties of this Lease, and the
disclaimers set forth in the provisions of this Master Lease on disclaimer of
warranties shall apply to any such inspection. Lessee shall pay or reimburse
Lessor for Lessor's costs and travel expenses for one such inspection per year,
and for Lessor's costs, travel expenses and salaries and the charges and such
expenses of Lessor's advisers for the inspection following an inspection which
encountered a breach of the requirements of this Lease or the warranties of
Lessee pursuant to this Lease.
14. Insurance. During the Lease Term and until all Equipment has been
returned to Lessor pursuant to the provisions of this Lease or until the
Equipment is purchased by Lessee pursuant to any purchase option provisions of
this Lease, Lessee shall procure and maintain at its expense with reputable
insurers acceptable to Lessor (i) insurance on all of the Equipment in an amount
not less than the greater of the Equipment's Stipulated Loss Value or Fair
Market Value replacement cost insuring against all risks of loss or damage to
the Equipment and against such other risks as Lessee would, in the prudent
management of its properties, maintain with respect to similar equipment owned
by it, and (ii) comprehensive public liability and property damage insurance, in
such amounts as shall be satisfactory to Lessor but for not less than the
greater of $1,000,000 or the amounts customarily maintained by parties similar
to Lessee for similar leased equipment with similar contemplated use, insuring
Lessor and any Assignees, as their interests may appear, against liability for
death, bodily injury, professional malpractice, and property damage arising out
of or resulting from the design, construction, manufacture, ownership, use,
operation, lease or maintenance of, or otherwise in connection with, the
Equipment. On the policies referred to in clause (i), such insurance shall name
Lessor (and any Assignees) as the sole loss payee so that (and Lessor and Lessee
hereby agree that) the insurance proceeds payable under such policies will be
payable and paid solely to Lessor (and to any Assignees). On the policies
referred to in clause (ii), such insurance will name Lessor (and any Assignees)
as an additional insured as its interests may appear. All such policies shall
provide that they may not be invalidated against Lessor (or any Assignees)
because of any violation of a condition or a breach of warranty of the policies
or application therefor by Lessee, that they may not be altered or canceled
except after 30 days' prior written notice to Lessor, and that Lessor and any
Assignee have the right but not the obligation to pay the premiums with respect
to coverage required by this Lease in order to continue such insurance in effect
or to obtain like coverage. Under the policies of insurance required to be
maintained by Lessee pursuant to this Master Lease, Lessee agrees to waive any
right of subrogation and to cause the insurance carrier to waive any right of
subrogation in each instance as such right may exist against Lessor or any
Assignee and for any and all loss or damage to the Equipment. Lessee shall
maintain and deliver evidence to Lessor of such insurance written by insurers
and in amounts satisfactory to Lessor. Should Lessee fail to provide such
insurance coverage, Lessor may obtain coverage protecting interests of Lessor
and Lessee, or the interest of Lessor only, for part or all of the Lease Term or
such period beyond the Lease Term as is required by this Lease or by the
insurance company issuing such coverage. The proceeds of such insurance shall be
applied, at the option of Lessee if no Event of Default shall exist, and
otherwise at Lessor's option, toward (i) replacement, restoration or repair of
the Equipment or (ii) payment of the obligations of Lessee under this Lease.
Lessee hereby appoints Lessor as Lessee's attorney-in-fact to make claims for,
receive payment of, and execute and endorse all documents, checks or drafts for
loss or damage under any such policies.
15. Return of Equipment. (a) At the end of the Lease Term for any
Equipment, Lessee at its sole expense shall forthwith return possession of such
Equipment without omissions to Lessor by:
(i) properly preparing, crating and/or assembling such Equipment (in
accordance with the Manufacturer's instructions if such instructions exist) for
shipment by common carrier with all containers and pieces labeled with model,
part and unit numbers and descriptions; and
(ii) shipping such Equipment by common carrier, with insurance and freight
prepaid, to a place designated by Lessor within a 1,000 mile radius of the
specified location under this Lease for such Equipment. Lessor shall pay
additional shipping charges incurred because of distances in excess of such
1,000 miles.
The insurance required by clause (ii) above shall provide that in the event
of loss such insurance shall pay Lessor in cash directly the greater of (A) the
full replacement value of such Equipment and (B) the "Stipulated Loss Value" as
set forth in the Exhibit to the Rental Schedule calculated as of the Payment
Date next preceding the date
8
of loss. Lessee acknowledges that "full replacement value" may exceed Fair
Market Value.
(b) When the Equipment is returned to Lessor it shall be complete. The
condition of the Equipment including Software upon receipt by Lessor shall be
not less than (i) meeting all specifications for such fully up graded equipment
as published most currently by the respective Equipment vendor(s),
Manufacturer(s) or supplier(s) (collectively referred to, together with their
successors and assigns, if any, as "Vendors"), (ii) in fully operational
condition, (iii) capable of being installed and operated in the normal course by
another user, (iv) for each item of the Equipment for which the Vendor has a
program of maintenance and service including certification for reinstallation
and for qualification under the maintenance and service program certified in
writing by the Vendor that the items of the Equipment are in compliance with the
conditions specified in this paragraph, are accepted by the Vendor for
reinstallation and are qualified for the usual and customary service and
maintenance program of the Vendor, (v) legally qualified for future use or
operation of the Equipment by another lessee or purchaser of the Equipment, (vi)
free of defects, visible or concealed, including, but not limited to, damage or
malfunction of any kind, dents, fractures, chips, scratches, stains,
defacements, discolorations, rust, corrosion, electrical shorts, fluid
restrictions or blockages, disconnections, breakage or the like, (vii) safe for
routine and usual operation, (viii) in compliance with any and all pertinent
governmental or regulatory rules, laws or guidelines for its operation or use,
(ix) free of Lessee's markings or labelings, and (x) free of any advertising or
insignia not requested by Lessor that was placed on the Equipment by Lessee.
(c) Lessor reserves the right to inspect the Equipment within 30 days of
its return to verify compliance with the provisions of this Master Lease on
Equipment maintenance and repairs and additions and on return of Equipment.
Should there be less than full compliance, Lessor at its option may (i) perform
or cause to be performed through service organizations of its own choosing such
maintenance and repairs, including upgrades, replacements, the obtaining of
paid-up Software licenses and other services, as it deems necessary to effect
such compliance, (ii) require Lessee to perform or cause to be performed such
maintenance and repairs, including upgrades, replacements, the obtaining of
paid-up Software licenses and other services, as Lessor deems necessary to
effect such compliance and/or (iii) reasonably estimate the costs to effect such
compliance. Lessee shall pay to Lessor the costs for performance of (i) or (ii)
above, or the estimated costs under (iii) above, in any such case including the
costs of the inspection(s). If maintenance and repairs, including upgrades,
replacements, and the obtaining of paid-up Software licenses and other services,
are necessary to place any of the Equipment under any Rental Schedule in the
condition required by this Lease, Lessee shall continue to pay to Lessor monthly
Additional Rent at the last prevailing rate during the Lease Term for Basic Rent
on the Equipment under such Rental Schedule for the period of delay until all
such required maintenance and repairs can be performed, or for the period of
time reasonably necessary to accomplish such maintenance and repairs. For any
such period that applies, Lessee shall continue to provide the insurance
required during the Lease Term. However, Lessor's acceptance of such rent and
provision of insurance during such period shall not constitute a renewal of the
Lease Term, a waiver of Lessor's right to prompt return of such Equipment in the
condition required by this Section, or a waiver of Lessor's right to possession
of such Equipment.
(d) Should the inspection reveal any item(s) of the Equipment to be
missing, Lessee shall be responsible for paying to Lessor promptly the greater
of the Stipulated Loss Value or the Fair Market Value of such item(s) of the
Equipment computed as of the last Payment Date prior to the end of the Lease
Term, plus the amount of any impairment of the Fair Market Value of the
remaining item(s) of the Equipment due to the absence of such missing item(s) of
the Equipment.
(e) In the event that Lessee fails to return any of the Equipment when
required, at the election of Lessor effected by notice to Lessee, the Lease Term
for such Equipment shall be extended on a month-to-month basis on the same terms
as previously in effect, and Lessee shall pay to Lessor monthly in advance Basic
Rent for such Equipment at the last prevailing rate during the unextended Lease
Term, until such Equipment has been returned to Lessor pursuant to the
provisions of this Lease. Notwithstanding any month-to-month continuance of
this Lease, Lessor may resort to any remedies available to it under this Lease,
at law or in equity, to recover such Equipment at any time following the end of
such extended Lease Term.
(f) Lessor may give notice to Lessee not more than 120 days and not less
than 30 days prior to the end
9
of the Lease Term that Lessee shall delay returning the Equipment to Lessor and
shall keep the Equipment on the premises of Lessee in working condition after
the end of the Lease Term and until requested by Lessor to return the Equipment
or until six months after the end of the Lease Term, whichever first occurs, at
which time Lessee shall forthwith return possession of the Equipment without
omissions to Lessor as provided by the provisions of this Section other than
this paragraph. After the end of the Lease Term, Lessee shall not use the
Equipment except in the performance of demonstrations requested by Lessor.
During the period from notice to delay returning the Equipment until requested
to return the Equipment or six months after the end of the Lease Term, Lessee
shall maintain the Equipment in the same condition as required to be maintained
during the Lease Term, shall cooperate with Lessor, shall grant access to
Lessee's premises for inspection of the Equipment by potential purchasers and
future lessees of the Equipment and representatives of Lessor, and shall
facilitate demonstrations of the Equipment by Lessor. During such period and
thereafter until the Equipment is delivered to a common carrier with the
insurance upon such delivery required by this Section, Lessee shall continue to
maintain the insurance required by this Lease during the Lease Term. Lessee
shall continue to have the risk of loss of the Equipment and the obligation to
indemnify Lessor as provided by this Lease until the return of the Equipment to
Lessor following such period and delivery.
(g) Not less than 180 days prior to expiration of the Lease Term, if
Lessee has not given notice of the exercise of any purchase option and Lessor
has not given notice of the exercise of any option to require Lessee to purchase
such Equipment, Lessee shall give Lessor notice that Lessee shall be returning
the Equipment forthwith upon the expiration of the Lease Term unless otherwise
notified by Lessor and either (i) that the Equipment is in the condition
required by this Lease upon the return of the Equipment or (ii) specifying the
respects in which the condition of the Equipment is not in compliance with such
requirements and the measures that Lessee shall take to bring the Equipment into
compliance.
16. Lessor's Ownership; Equipment To Be and Remain Personal Property. (a)
Lessee acknowledges and agrees that it does not have, and by execution of this
Lease and/or payments and performance hereunder it shall not have or obtain, any
title to the Equipment, nor any property right or interest, legal or equitable,
therein, except its rights as Lessee hereunder and subject to the terms hereof.
Lessee shall not have or claim a security interest and shall not seek or obtain
replevin, detinue, specific performance, sequestration, claim and delivery, or
like remedies in or for this Lease, any rents under this Lease, any or all of
the Equipment, any items of personal property identified to become items of the
Equipment, or any proceeds of any or all of the foregoing.
(b) All of the Equipment shall be and remain personal property
notwithstanding the manner in which the Equipment may be attached or affixed to
realty. Upon the expiration, cancellation or termination of the Lease Term of
any or all of the Equipment, Lessee shall have the obligation, and Lessor shall
have the right, to remove, or cause the removal of, such Equipment from the
premises where the same is then located, for return to Lessor pursuant to the
provisions of this Master Lease on return of Equipment and, if applicable, on
Events of Default, whether or not any of the Equipment is affixed or attached to
realty or to any building. In the exercise of its rights, Lessor shall not be
liable for any damage to the realty or any such building or other real or
personal property occasioned by any removal of the Equipment by Lessee or Lessor
or the agents of Lessee or Lessor. Lessee further covenants and agrees that
Lessee will, at the request of Lessor, obtain and deliver to Lessor concurrently
with the execution and delivery of each Rental Schedule, a waiver, in recordable
form, from the owner and any landlord, tenant or holder of any lien or
encumbrance on the realty or building(s) on or in which any of the Equipment
described in such Rental Schedule shall be located, under which such owner,
landlord, tenant and holder (i) agree and consent that such Equipment is and
shall be personal property, owned by and removable by Lessor upon the
expiration, cancellation or termination of the Lease Term thereof, and (ii)
waive any rights of distraint or similar rights with respect to such Equipment.
(c) If Lessee is unable to return, or is prevented from returning, any of
the Equipment to Lessor upon the expiration, cancellation or termination of the
Lease Term as required under the provisions of this Master Lease on return of
Equipment, for any reason whatsoever, including, but not limited to, the
assertion by any third party of any claim against such Equipment, or of any
right with respect thereto, whether or not resulting from the manner in which
such Equipment is affixed or attached to, or installed in, the realty or any
building(s)
10
thereon or any other personal or real property, or from the failure of any
owner, landlord or tenant of said realty (or the building(s) thereon) or the
holder of any lien or encumbrance to execute the waiver in writing of such fact,
for all purposes of this Lease such Equipment shall be deemed to have been the
subject of a Casualty Occurrence. Thereupon, Lessee shall pay to Lessor the
amounts provided for by the provisions of this Master Lease on loss, damage or
destruction of Equipment, with respect to such Equipment, at the time, in the
manner, and with the consequences provided by such provisions.
(d) Notwithstanding the foregoing provisions of this Section, without
Lessor's prior written consent, Lessee shall not permit any of the Equipment to
be attached or affixed to, imbedded in or incorporated into any building,
structure, real estate or other personal or real property.
17. Other Covenants. (a) Lessee agrees to furnish, upon Lessor's
request, such financial, business and operational information concerning Lessee
and any or all Guarantors, including copies of its and their tax returns, as
Lessor or its assigns may reasonably request during the Lease Term.
Additionally, Lessee shall furnish to Lessor and its assigns without notice or
demand therefor two complete copies of its and of every Guarantor's (i)
quarterly interim financial statements within 45 days of the close of each of
the first three fiscal quarters of every year, certified by the chief financial
officer of, respectively, Lessee or such Guarantor and (ii) annual financial
statements within 90 days of the close of each fiscal year reported on by
independent accountants without material adverse qualification or comment. All
such financial statements shall be prepared in accordance with generally
accepted accounting principles consistently applied, and shall accurately and
completely present Lessee's and every Guarantor's financial condition and
results of operations at the dates of and for the periods covered by such
statements.
(b) Lessee shall promptly furnish to Lessor copies of (i) filings that
Lessee or any Guarantor makes with the SEC or other government agencies under
the securities laws including but not limited to definitive proxy statements,
registration statements, prospectuses and tender offer filings, and reports on
holdings or acquisitions of securities, relating to proxy solicitations, and on
Form 10-K, 10-Q, 8-K or similar forms, and any amendments to such filings, (ii)
press releases of Lessee or any Guarantor, and (iii) new product (or service)
announcements of Lessee or any Guarantor.
(c) If Lessee has been notified by Lessor, in writing, of Lessee's
default, then Lessee shall give Lessor notice of all meetings of the
stockholders or directors of such corporation and copies of all materials that
are furnished to the stockholders or directors for the meetings at the same time
that the notice or materials are sent to the stockholders or directors. If
Lessee or any Guarantor or a general partner of Lessee or any Guarantor is a
partnership, Lessee shall give Lessor notice of all meetings of such partnership
and copies of all materials that are furnished to the part ners for the meetings
at the same time that the notice or materials are sent to the partners. Lessor
shall have the right to have its representative attend any and all such meetings
at the expense, including travel costs, of Lessee.
(d) There shall be no actual or threatened conflict with, or violation of,
any statute, regulation, standard or rule relating to Lessee, its present or
future operations, or the Equipment.
(e) All information supplied to Lessor or its assigns by Lessee or any
Guarantor shall be correct and shall not omit any statement necessary to make
the information supplied not be misleading. There shall be no material breach
of the representations and warranties made by Lessee in connection with this
Lease or by any Guarantor in connection with a Guaranty (as hereinafter
defined).
(f) Lessee shall give Lessor notice of any change in the address of the
executive office or principal place of business of Lessee not less than 15 days
prior to the change.
(g) No change shall occur in the control (the result of an Initial Public
Offering does not reflect a change in ownership), and no material change shall
occur in the ownership, of Lessee or any Guarantor, and no Guarantor shall
assert in writing that the obligations of the Guarantor as a Guarantor or in its
Guaranty are not in full force and effect.
(h) Lessee shall not make any payment or distribution of money, checks,
securities or property to any
11
Person in contravention of the provisions of any Guaranty or subordination that
such Person has made in favor of Lessor or its assigns of which Lessee shall
have notice or knowledge.
18. Events of Default. If one or more of the following events
(hereinafter called "Events of Default" or an "Event of Default") shall occur:
(i) default shall be made in the payment of any Basic Rent or Additional
Rent due under this Master Lease or under any Rental Schedule hereto, and any
such default shall continue for more than 10 days after the due date thereof;
(ii) any representation or warranty by Lessee or any Guarantor made in
this Master Lease or in any Guaranty or other Transactional Document or
certificate furnished to Lessor in connection with this Lease or pursuant hereto
shall at any time prove to be incorrect in any material respect;
(iii) Lessee shall make or permit any unauthorized assignment or transfer
of this Master Lease or any Rental Schedule to this Master Lease or of any of
Lessee's rights and obligations hereunder or thereunder, or Lessee shall make or
permit any unauthorized sublease or transfer of any Equipment or the possession
of any Equipment;
(iv) Lessee shall default in the observance and/or performance of any
other covenant, condition or agreement on the part of Lessee to be observed
and/or performed under this Master Lease, under any Rental Schedule hereto, or
under any other Transactional Document, which default is not governed by
paragraphs (i), (ii) or (iii) above, and such default shall continue for 30 days
after written notice from Lessor to Lessee specifying the default and demanding
the same to be remedied;
(v) Lessee or any Guarantor shall make an assignment for the benefit of
creditors, or cease being in substantially the same line or lines of business in
which it is presently engaged, or generally fail to pay its debts as they become
due, or become insolvent or commence a voluntary case under the federal
Bankruptcy Code as now or hereafter constituted or any other applicable federal
or state bankruptcy, insolvency or similar law, or admit in writing its
inability to pay its debts as they mature, or consent to the appointment of a
trustee or receiver, or a trustee or a receiver shall be appointed for Lessee or
any Guarantor or for a substantial part of Lessee's or any Guarantor's property
without such party's consent and such appointment shall be not dismissed for a
period of 60 days; there shall have been entered a decree or order for relief by
a court having jurisdiction in respect of Lessee or any Guarantor, or approving
as properly filed a petition seeking a reorganization, arrangement, adjustment
or composition of or in respect of Lessee or any Guarantor in an involuntary
proceeding or case under any applicable federal or state bankruptcy, insolvency
or other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee or similar official of Lessee or any Guarantor or of any substantial
part of its property, or ordering the winding-up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 days, or there shall have been filed a petition by or against
Lessee or any Guarantor under any bankruptcy law or other insolvency law and, if
petition is filed against Lessee or such Guarantor, the petition is not
withdrawn or dismissed within 60 days after the date of filing; or Lessee or any
Guarantor shall cease doing business as a going concern or shall liquidate or
be dissolved;
(vi) Lessee or any Guarantor shall, without the prior written consent of
Lessor, enter into a merger, consolidation or division, effect a share exchange
of its outstanding stock for the stock of another corporation, make a tender
offer for equity securities of a publicly held entity, or sell or otherwise
dispose of all or a major part of its assets or of assets that produce all or a
major part of its revenues or profits; provided, however, that Lessee or any
Guarantor, without violating the provisions of this clause, may consolidate with
or merge with a corporation or other entity organized under the laws of one of
the states of the United States (the surviving entity, a "successor"), or sell
(except by means of a sale and leaseback arrangement) all or substantially all
of its business and assets to such a successor, on the condition that any
successor expressly assume in writing all of the obligations of Lessee pursuant
to this Lease or of such Guarantor pursuant to its Guaranty, and that the net
tangible assets and the net worth (determined in accordance with generally
accepted accounting principles) of the successor after the consolidation, merger
or sale shall be at least equal to the net tangible assets and the net worth of
Lessee or such Guarantor, as the case may be, immediately prior to the
consolidation, merger or sale;
12
(vii) there shall occur under any other lease, contract or agreement
between Lessee and Lessor, an Event of Default, as defined in such lease,
contract or agreement;
(viii) any of the Equipment shall be attached, levied upon, encumbered,
pledged, seized or taken under any judicial process (except for any attachment,
levy, encumbrance or pledge caused to be placed on the Equipment by Lessor) and
such proceedings shall not be vacated, or fully stayed, within 30 days thereof;
(ix) 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 $10,000, 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; or
(x) any obligation of Lessee or any Guarantor for the payment of
borrowed money or the acquisition of assets by purchase, conditional sale or
other arrangement is not paid or refinanced at maturity, whether by acceleration
or otherwise, or is declared due and payable prior to the stated maturity
thereof by reason of default or other violation of the terms of any promissory
note or agreement evidencing or governing such obligation, and Lessor has given
Lessee an opportunity to either cure the purported Event of Default or supply
information satisfactory to Lessor that it does not, in fact, exist;
this Lease shall be declared in default, immediately and without notice upon the
occurrence of an Event of Default specified in clause (v) above, and in the case
of any other Event of Default, upon Lessor at any time at its option subsequent
to such Event of Default giving notice to Lessee that this Lease is declared in
default. At any time after this Lease has been declared in default, Lessor may
exercise one or more of the following remedies, to the extent not then
prohibited by law, as Lessor in its sole discretion may elect:
(I) to proceed by appropriate court action or actions at law or in
equity or in bankruptcy to enforce performance by Lessee of the covenants and
terms of this Lease and/or to recover damages for the breach thereof;
(II) to terminate or cancel this Lease upon written notice to Lessee
whereupon all rights of Lessee to use the Equipment shall immediately terminate,
but Lessee shall not be relieved of any obligations under this Lease;
(III) whether or not this Lease be so terminated or canceled, and without
notice to Lessee, to repossess and/or to render inoperable the Equipment
wherever found, with or without legal process, and for this purpose Lessor
and/or its agents may enter upon any premises of or under the control or
jurisdiction of Lessee or any agent of Lessee without liability for suit, action
or other proceeding by Lessee and remove the Equipment therefrom; Lessee hereby
expressly waives any claims for damages occasioned by such repossession; LESSEE
HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS, INCLUDING RIGHTS TO NOTICE OR A
JUDICIAL HEARING, WITH RESPECT TO REPOSSESSION OF THE EQUIPMENT AFTER AN EVENT
OF DEFAULT;
(IV) to hold or to use any Equipment returned to Lessor or repossessed by
Lessor for any purpose whatsoever, to sell any Equipment at a private or public,
cash or credit sale, to re-lease any Equipment, in all the foregoing events free
and clear of any rights of Lessee and without any duty to account to Lessee with
respect to such action or inaction;
(V) whether or not Lessor shall have exercised, or shall hereafter at
any time exercise, any of its other rights with respect to an item of the
Equipment, upon written notice to Lessee, to demand that Lessee pay to Lessor,
and Lessee shall pay to Lessor on the date specified in such notice, as
liquidated damages for loss of a bargain and not as a penalty (in lieu of the
Basic Rent for such Equipment that prior to the Event of Default was to have
been paid on Payment Dates subsequent to the date specified in such notice), the
sum equal to the excess, if any, of 125% of the Stipulated Loss Value for such
---
item of Equipment computed as of the latest Payment Date when all Basic Rent and
------------
Additional Rent then due and payable has been fully paid over whichever of the
following three amounts Lessor, in its sole discretion, shall designate in such
notice:
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(A) the present value of the fair market rental value (determined as
hereafter provided in this Section) of such item of the Equipment for
the remainder of the Lease Term as of the date specified in such
notice, the present value to be computed on the basis of a seven
percent per annum rate of discount from the respective dates upon
which such rent would be paid,
(B) the fair market sales value (determined as hereafter provided in this
Section) of such item of Equipment as of the date specified in such
notice, or
(C) if Lessor shall have sold or re-leased any item of Equipment pursuant
to clause (IV) above, the net proceeds of such sale or re-lease,
plus interest at the Default Interest Rate (a) on such sum from the such Payment
--- -------
Date until paid and (b) on whichever of such three amounts is so designated by
----
Lessor from such Payment Date until whichever one of the following shall be
------------
applicable to the designated amount: the time when the fair market rental or
sales value shall have been so determined or the time when the Equipment shall
have been sold or re-leased; and
(VI) to forthwith recover from Lessee, and Lessee shall be fully liable
for, all Basic Rent that shall accrue until the date that the Equipment is
returned to or repossessed by Lessor and any Additional Rent including
collection fees, whenever accrued, and interest at the Default Interest Rate.
In addition to the foregoing, Lessor may also recover from Lessee all costs
and expenses arising out of Lessee's default, including, without limitation,
expenses of repossession of the Equipment and the storage, inspection, repair,
reconditioning, sale and re-leasing thereof, and reasonable attorneys' fees
incurred by Lessor in exercising any of its rights or remedies hereunder. For
the purposes of this Section only, "fair market rental value" and "fair market
sales value" shall be determined by an appraisal of an independent appraiser
chosen by Lessor, and the cost of any such appraisal shall be borne by Lessee.
No remedy referred to in this Section is intended to be exclusive, but each
shall be cumulative and in addition to any other remedy referred to above or
otherwise available to Lessor at law or in equity or in bankruptcy. Lessor
shall have no duty to pay Lessee any surplus from sale or lease of the
Equipment, or in the fair market rental or sales value of the Equipment, above
all amounts payable by Lessee to Lessor. The exercise by Lessor of any one or
more remedies shall not be deemed to preclude the simultaneous or later exercise
by Lessor of any or all such previously exercised remedies and any and all other
remedies.
19. Assignment and Transfer by Lessor. (a) Lessor may at any time and
from time to time assign to one or more security assignees (all herein called
the "Secured Party" and also called an "Assignee") for the purpose of securing a
loan to Lessor or for any other purpose, and at its sole discretion, may also
sell or transfer to one or more Persons (herein called the "Transferee" and also
called an "Assignee"), in any case subject to the rights of Lessee under this
Lease but without notice to or consent of Lessee, this Lease, any other
Transactional Documents, any or all of the Equipment, and all sums at any time
due and to become due or at any time owing or payable by Lessee to Lessor under
this Lease or pursuant to any or all of the Transactional Documents. The
Secured Party shall not be obligated to perform any duty, covenant or condition
required to be performed by Lessor under this Lease or any other Transactional
Documents.
(b) Lessee agrees that notwithstanding any assignment to a Secured Party,
each and every covenant, agreement, representation and warranty of Lessor under
this Lease shall be and remain the sole liability of Lessor and of every
successor in interest of Lessor (excluding any Secured Party) or, in the case of
assignment to a Transferee, shall become and remain the sole liability of the
Transferee if so agreed to by the Transferee and if not so agreed to shall be
and remain the sole liability of Lessor. Lessee further agrees and acknowledges
that any assignment, sale or transfer by Lessor could not and shall not
materially change any duty or obligation of Lessee or materially increase any
burden or risk of Lessee.
(c) Lessee further acknowledges and agrees that from and after the receipt
by Lessee of written notice of an assignment from Lessor, Lessee shall comply
with the directions or demands given in writing by the Secured Party or (to the
extent not inconsistent with the directions or demands of the Secured Party) by
the Transferee, and
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the Secured Party or Transferee shall have the right to exercise (either in its
own name or in the name of Lessor) all rights, privileges, and remedies of
Lessor provided for herein. Lessee agrees that any obligation to a Secured Party
as a result of the assignment of this Lease to a Secured Party as aforesaid
shall not be reduced or minimized by reason of any claim, defense, counterclaim,
set-off, abatement, reduction or recoupment or other right that Lessee might
otherwise have been able to assert against Lessor, any prior Assignee or any
Transferee. After any assignment to a Secured Party and unless and until Lessee
is otherwise notified by the Secured Party, this Lease may not be amended or
modified, and no consent or waiver hereunder shall be effective, without the
prior written consent of the Secured Party. Lessee agrees to execute and Lessor
or any Transferee or Secured Party may record any instruments and documents
relating to such assignment, mortgage or security interest desired by Lessor or
any Transferee or Secured Party. Lessee shall promptly provide any such
instruments and documents that are requested by Lessor or any Assignee including
certificates indicating any claim, defense, counterclaim, set-off, abatement,
reduction, recoupment or other right that Lessee may have against Lessor or any
Assignee, the date to which Basic Rent has been paid under each Rental Schedule
hereunder and that this Lease is in effect without default or amendment, or the
extent of such default or amendment, as the case may be.
20. Recording and Filing; Expenses. Lessee will, upon demand of Lessor,
at Lessee's cost and expense, do and perform any other act and will execute,
acknowledge, deliver, file, register, record and deposit (and will re-file, re-
register, re-record or re-deposit whenever required) any and all instruments
required by law or requested by Lessor (or any Assignee) including, without
limitation, financing statements under the Uniform Commercial Code (which,
notwithstanding the intent of Lessor and Lessee that this is a true lease,
Lessor shall have the right to file wherever and whenever Lessor requires), for
the purpose of providing proper protection to the satisfaction of Lessor (and/or
any Assignee) of Lessor's title to any Equipment (and/or of any Assignee's
security interest in the Equipment) or for the purpose of carrying out the
intention of this Lease. Lessee will also pay, or will upon demand reimburse
Lessor for, all reasonable costs and expenses incurred by Lessor in connection
with this Lease, any other Transactional Documents, and any related
transactions, closings, assignments, sales and transfers to any Secured Party or
Transferee, enforcement of Lessor's rights under this Lease and the other
Transactional Documents, proceedings involving Lessee or any Guarantor as a
debtor under any chapter of the Bankruptcy Code, filings, the documentation of
this and any related transactions, and fees and costs of attorneys for Lessor in
connection therewith.
21. Option to Renew. (a) Upon the expiration of the Primary Term
provided for under any Rental Schedule, and provided that the financial
condition of Lessee then meets the criteria of Lessor and that no Event of
Default or event which with the giving of notice or lapse of time, or both,
would constitute an Event of Default, has occurred and then remains unremedied
to Lessor's satisfaction, Lessee shall have the option, exercisable on at least
180 days' prior written notice to Lessor, to renew this Lease with respect to
all, but not less than all (except for items that have been destroyed and for
which Lessor has received payment of the greater of the Stipulated Loss Value or
the Fair Market Value with respect thereto) of the Equipment then subject to
such Rental Schedule, for up to two successive additional renewal terms (each a
"Renewal Term") of one year at a rate of Basic Rent for each Renewal Term that
would be obtained in an arm's-length transaction at the end of the Primary Term
between an informed and willing prospective lessee and an informed and willing
lessor, each under no compulsion to lease (said rate being herein called the
"Fair Rental Rate").
(b) If, on or before a date 100 days prior to the expiration of the
Primary Term or any Renewal Term with respect to such Rental Schedule, Lessor
and Lessee are unable to agree upon a determination of the Fair Rental Rate of
the Equipment, Lessee shall have no obligation to renew this Lease and shall
either give the notice required by the provisions of this Master Lease of
intention to return such Equipment and on the condition of such Equipment or a
written notice that Lessee wishes to proceed with its option. If Lessee gives
such notice that it will proceed with its option, such Equipment shall be leased
during the Renewal Term at the Fair Rental Rate determined in accordance with
the procedure for Appraisal (as hereinafter defined).
22. Quiet Enjoyment. So long as no Event of Default has occurred and is
continuing hereunder, Lessee shall have peaceful and quiet use and enjoyment of
the Equipment during the Lease Term as against acts of Lessor or anyone claiming
solely by, through or under Lessor including any Secured Party or Transferee.
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23. Failure or Indulgence not Waiver; Additional Rights of Lessor. (a)
No failure to exercise, and no delay in exercising, any right, power or remedy
hereunder on the part of Lessor shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
Any waiver, to be effective, must be in writing. A waiver of any covenant, term
or condition contained herein shall not be construed as a waiver of any
subsequent breach of the same covenant, term or condition. Receipt by Lessor of
any Basic Rent or Additional Rent with knowledge of the breach of any provision
hereof shall not constitute a waiver of such breach.
(b) Lessor shall be entitled to injunctive relief in case of the violation
or attempted or threatened violation of any of the provisions hereof, to a
decree compelling performance of any of the provisions hereof, and to any other
remedy allowed in law or in equity.
24. Sublease. Lessee shall not sublease the Equipment, relinquish
possession of the Equipment, or assign, pledge or hypothecate this Lease or any
of Lessee's rights or obligations hereunder, in whole or in part, without the
prior written consent of Lessor. Nevertheless, any such sublease and the rents,
profits and proceeds therefrom shall be the property of Lessor and, unless
Lessor has consented to such sublease, Lessor within 30 days after receiving
notice thereof in accordance with the provisions of this Master Lease on notices
shall have the right to declare the sublease void from its purported
commencement, to terminate the sublease or to accept the sublease. Any such
attempted relinquishment of possession, assignment, pledge or hypothecation by
Lessee without such consent shall be null and void.
25. Purchase Option. (a) If (i) no Event of Default, and no event which
with the giving of notice or lapse of time, or both, would constitute an Event
of Default, has occurred and then remains unremedied to Lessor's satisfaction,
and (ii) this Lease shall not have been earlier terminated, Lessee shall be
entitled, at its option, upon written notice to Lessor, as hereinafter provided,
to purchase all, but not less than all, items of the Equipment then subject to a
Rental Schedule, at the expiration of the Primary Term for such items of the
Equipment or, as the case may be, at the expiration of any Renewal Term for such
items of the Equipment, for an amount, with respect to each such item of the
Equipment, payable in immediately available funds, equal to the Fair Market
Value thereof as determined by an Appraisal, 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 item of the 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 this Master Lease on
disclaimer of warranties, and shall be subject to such additional terms and
conditions as may be specified in the Rental Schedule. If Lessee intends to
exercise said purchase option, Lessee shall give written notice to Lessor to
such effect at least 180 days prior to the earliest expiration of the Primary
Term of the item(s) of the Equipment subject to the particular Rental Schedule
with respect to which Lessee intends to exercise its purchase option, or, if a
Renewal Term is then in effect, at least 180 days prior to the earliest
expiration of the then current Renewal Term of the item(s) of the Equipment
subject to the particular Rental Schedule with respect to which Lessee intends
to exercise its purchase option. If Lessee fails to give such written notice to
Lessor as aforesaid, it shall be conclusively presumed that Lessee has elected
not to exercise such purchase option. If Lessee gives such written notice,
Lessee shall be obligated to buy, and Lessor shall be obligated to sell, such
Equipment on the terms herein provided.
(b) If Lessee has elected to exercise its purchase option, as provided in
this Section, as soon as practicable following Lessor's receipt of the written
notice from Lessee of Lessee's intent to exercise such option, Lessor and Lessee
shall consult for the purpose of determining the Fair Market Value of each such
item of the Equipment as of the end of the Primary Term thereof, or, if this
Lease has been renewed pursuant to any provisions of this Lease on option to
renew, as of the end of the then current Renewal Term thereof, and any values
agreed upon in writing shall constitute the Fair Market Value of each such item
of the Equipment for the purposes of this Section. In so consulting, Lessor and
Lessee may refer to books containing indexes of standard values for used
equipment of relevant type and age and to the records of Lessee and similar
users which tabulate the history of revenues and various other economic benefits
derived from the use of the Equipment. If Lessor and Lessee have failed to agree
upon such value prior to the 150th day before the expiration of the Primary
Term, or, if this Lease has been renewed, prior to the 150th day before the
expiration of the then current Renewal Term, on and after such 150th day either
party may request that such value be determined by Appraisal.
16
(c) Notwithstanding any election by Lessee to purchase, the provisions of
this Lease shall continue in full force and effect until the transfer of
ownership of such Equipment upon the date of purchase by the delivery of a Xxxx
of Sale by Lessor.
26. Notices. Any notice or other communication required or permitted to
be given by either party hereto to the other party shall be deemed to have been
given upon its receipt, in writing, by the receiving party at its address set
forth below, or at such other address as the receiving party shall have
furnished to the other party by notice pursuant to this Section.
If to Lessee: Orthovita, Inc.
00 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
17
If to Lessor: FINOVA Technology Finance, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
27. Entire Agreement; Severability; Amendment or Cancellation of Lease.
This Lease constitutes the complete and exclusive statement of the terms of the
agreement between the parties with respect to the leasing of the Equipment and
any sale of the Equipment by Lessor to Lessee. Any provision of this Lease
which is prohibited or unenforceable in any jurisdiction shall be, as to such
jurisdiction, 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. LESSEE ACKNOWLEDGES
RECEIPT OF A COPY OF THIS MASTER LEASE. Lessor and Lessee agree that neither
this Lease nor Lessee's acceptance or deemed acceptance of any or all of the
Equipment may be canceled, waived, altered, amended, repudiated, terminated,
rescinded, revoked or modified, except by a writing signed by Lessee and a duly
authorized representative of Lessor.
___________________________
Signature of Lessee
28. Waiver of Jury. Lessor and Lessee waive any right and all right to
trial by jury in any action or proceeding relating in any way to this Lease.
29. Restriction of Limitation Periods and Damages. Any action for breach
of warranty or in respect of or relating to the Equipment or this Lease that may
be brought by Lessee against Lessor or any Assignee must be commenced within one
year after the cause of action accrues. Lessee shall not make any claim in
respect of or relating to the Equipment or this Lease against Lessor or any
Assignee for special consequential or punitive damages.
30. Governing Law; Consent to Jurisdiction and Service. This Lease shall
be governed by and construed in accordance with the laws of the State of
Connecticut (other than the conflicts of laws provisions). Lessee agrees that
any legal action or proceeding against Lessee in respect of or relating to this
Lease or the Equipment may be brought in any state or federal court sitting in
the city of Hartford in the State of Connecticut. Lessee hereby irrevocably
consents and submits to the nonexclusive personal jurisdiction of said courts
and irrevocably agrees that all claims in any such action or proceeding may be
heard and determined in and enforced by any such court. Lessee irrevocably
consents to the service of summons, notice, or other process relating to any
such action or proceeding by delivery thereof to it by hand or by mail in the
manner set forth in the provisions of this Master Lease on notices.
31. Lessor's Right to Perform for Lessee. If Lessee fails to duly and
promptly perform any of its obligations under this Lease or fails to comply with
any of the covenants or agreements contained herein, Lessor may itself perform
such obligations or comply with such covenants or agreements, for the account of
Lessee, without thereby waiving any default, and any amount paid or expense
(including, without limitation, attorney's fees) reasonably incurred by Lessor
in connection with such performance or compliance shall, together with interest
thereon at the Default Interest Rate, be payable by Lessee to Lessor on demand.
32. Agreement for Lease Only. Lessor and Lessee agree that this Lease is
and is intended to be a true lease (and not a lease in the nature of a security
interest) and further agree to treat this Lease as a true lease for all
purposes, including, without limitation, tax purposes.
33. Binding Effect. This Lease shall inure to the benefit of and be
binding upon the parties hereto and their respective permitted successors and
assigns.
34. General. The captions in this Master Lease and each Rental Schedule
are for convenience of reference only. There shall be only one original
executed copy of this Master Lease and of each Rental Schedule. This
18
Master Lease is and each Rental Schedule shall be executed in the State of
Connecticut by Lessor's having countersigned the same in the State of
Connecticut, and are to be and shall be performed in the State of Connecticut by
reason of the requirements therein for payment by Lessee to Lessor to be made in
the State of Connecticut.
35. Definitions. The following terms, not elsewhere defined, shall have
the following meanings for all purposes hereof:
"Acquisition Cost" of any item of the Equipment shall mean an amount equal
to the sum of (i) the purchase price of such item of the Equipment paid by
Lessor pursuant to the purchase order for such item of the Equipment assigned to
or given by Lessor, plus (ii) any excise, sales or use tax, freight,
installation, set-up and other costs that are paid by Lessor on or with respect
to such item of the Equipment on or about the time of Lessor's purchase of the
Equipment or the Lease Commencement Date and that Lessor does not request Lessee
to directly reimburse to Lessor.
"Appraisal" shall mean the following procedure whereby recognized
independent qualified equipment appraisers shall mutually agree upon the amount
in question. The party seeking Appraisal shall deliver a written notice to that
effect to the other party appointing its appraiser, and within 15 days after
receipt of such notice, the other party shall, by written notice, appoint its
appraiser. If within 15 days after appointment of the two appraisers as
described above, the two appraisers are unable to agree upon the amount in
question, a third appraiser shall be chosen within five days thereafter by
mutual agreement of the first two appraisers, or if the first two appraisers
fail to agree upon the appointment of a third appraiser, such appointment shall
be made by an authorized representative of the American Arbitration Association.
The appraisal of the third appraiser shall be given within a period of ten days
after the selection of the third appraiser. The average of the three appraisals
arrived at by the three appraisers shall be binding and conclusive on Lessor and
Lessee. Lessor and Lessee each shall pay the fees of the appraiser appointed by
it and shall share equally the fees and expenses of the third appraiser, if any,
and those of the American Arbitration Association, if applicable.
"Certificate of Inspection and Acceptance" shall mean a certificate in the
form designated by Lessor whereby Lessee evidences its acceptance of one or more
items of the Equipment for lease hereunder.
"Fair Market Value" shall mean, with respect to the Equipment in question, the
amount which would be paid for that Equipment in an arm's-length sale
transaction between an informed and willing buyer (not a used equipment or scrap
dealer) who wants the Equipment to be as described in the next following
sentence and is under no compulsion to buy, and an informed and willing seller
under no compulsion to sell. In determining the Fair Market Value, it shall be
assumed (whether or not the same be true) that the Equipment is fully
operational, installed and in economically productive service and that all
maintenance and repairs including upgrades, replacements and other services
required by this Lease have been performed and that the Equipment is in such
condition to comply fully with the requirements of this Lease, including
provisions of this Master Lease governing the return of Equipment. The costs of
removal from the location of current use and installation at another location
for use shall not be a deduction in determining the Fair Market Value.
Upon any exercise by Lessee of the purchase option provided for by this Master
Lease at the expiration of the Primary Term for the Equipment subject to a
Rental Schedule, Lessor and Lessee agree that the Fair Market Value shall be ten
percent (10%) of the Acquisition Cost of such Equipment.
"Guarantor" shall mean a guarantor of any or all of the obligations of
Lessee pursuant to this Lease.
"Guaranty" shall mean a writing containing a guaranty of any or all of the
obligations of Lessee pursuant to this Lease.
"Lease Commencement Date" with respect to an item of Equipment shall mean
the date of commencement of the Lease Term of the item as provided by the
applicable Rental Schedule.
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"Lease Term" with respect to an item of the Equipment shall mean the
Primary Term plus any and all Renewal Terms plus any period during which Lessee
retains the Equipment on a month-to-month basis pursuant to provisions of this
Master Lease governing the return of the Equipment. The Lease Term shall
include the Lease Commencement Date and the date on which the Lease Term ends.
"Manufacturer" shall mean the Person that manufactures the item of the
Equipment in question.
"Master Lease" shall mean this Master Equipment Lease Agreement.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a limited liability company, a trust, an
estate, any incorporated organization or similar association, a government or
political subdivision, or any other entity.
"Rental Schedule" shall mean each schedule, executed by Lessor and Lessee
pursuant to this Master Lease, providing for a description of some or all of the
Equipment to be leased hereunder, the place or places where such Equipment shall
be located, its Acquisition Cost, the Basic Rent payable by Lessee with respect
thereto, the Primary Term thereof, the Lease Commencement Date with respect
thereto, and such other matters as Lessor and Lessee may agree upon.
"Stipulated Loss Value" shall mean the amounts specified in the Table of
Stipulated Loss Values applicable to the items of the Equipment subject to a
Rental Schedule, as provided by the Schedule B attached to the Rental Schedule.
Except as otherwise provided in a writing signed by Lessor and Lessee, the
Stipulated Loss Value immediately prior to the end of the Primary Term for any
items of the Equipment shall be the Stipulated Loss Value throughout any Renewal
Term(s) for such items, and thereafter until such items are returned to Lessor
pursuant to the provisions of this Lease or purchased by Lessee pursuant to any
then applicable purchase option provisions of this Lease.
IN WITNESS WHEREOF, the duly authorized representatives of Lessor and
Lessee have executed this Master Lease as of the date first above written.
LESSOR: LESSEE:
FINOVA TECHNOLOGY FINANCE, INC. ORTHOVITA, INC.
By:____________________________ By:_____________________________
Title:__________________________ Title:___________________________
ATTEST:
By:_____________________________
Title:___________________________
20
