EQUIPMENT LEASE
This
EQUIPMENT LEASE (this "Equipment Lease") is
made and entered into as of the ______ day of March, 2009, by and between
Ferring Pharmaceuticals, Inc., a Delaware corporation, with a principal place of
business at 0 Xxxxxxxx Xxxxx, 0xx Xxxxx,
Xxxxxxxxxx, XX 00000 (the "Lessor"), and
Vyteris, Inc., a Delaware corporation, with a principal place of business at
00-00 Xxxxxx Xxxxx, Xxxx Xxxx, XX ("Lessee"). Lessor
and Lessee are each referred to herein as a "Party" and together
as the "Parties".
PRELIMINARY
STATEMENT
Simultaneously
with the execution and delivery of this Equipment Lease, the Parties have
entered into a letter agreement (the "Letter Agreement")
pursuant to which, among other things, Lessor has agreed to lease to Lessee the
personal property described on Schedule A attached
hereto (the "Equipment"), and
Lessee has agreed to lease from the Lessor the Equipment, on the terms and
subject to the conditions contained in this Equipment Lease.
AGREEMENT:
1.
Equipment Lease.
Subject to the terms and conditions of this Equipment Lease, Lessor hereby
leases to Lessee, and Lessee hereby leases from Lessor, the
Equipment.
2.
Term. The term of
this Equipment Lease is for the period commencing on the date hereof and ending
on the tenth anniversary of the date hereof (the "Term"); provided that Lessor
may terminate this Equipment Lease at any time upon written notice to
Lessee.
3.
Lease
Payments. Lessee hereby agrees to pay to Lessor monthly lease
payments in the amount of One Thousand Dollars ($1,000.00) per month payable in
advance on the first day of each month during the Term (collectively, the “Lease Payments”);
provided, however, that the Lease Payment for February 2009 shall be prorated
from the date hereof and be paid on the date hereof and the Lease Payment for
February 2019 shall be prorated for the number of days from February 1, 2019
until the end of the Term. Lease Payments shall be made by wire
transfer of immediately available funds to a bank account designated by Lessor
(or such other form of payment acceptable to Lessor, in its sole
discretion). Notwithstanding the foregoing, in lieu of Lessee paying
one or more of the Lease Payments to Lessor in cash, at Lessor’s option Lessor
shall receive a dollar-for-dollar credit against (a) the option exercise price
described in the Letter Agreement with respect to the PMK300 (as defined
therein), and/or (b) amounts due by Lessor to Lessee pursuant to the License and
Development Agreement dated as of September 27, 2004, as amended from time to
time, between Lessor and Lessee (e.g., milestone payments,
royalties), the Supply Agreement dated September 27, 2004, as amended from time
to time, between Lessor and Lessee (including the Technical Agreement entered
into in connection therewith), and/or any other agreement between the
Parties.
4.
Representations
and Warranties of Each Party. Each Party hereby represents and
warrants to the other Party as follows:
(a) It
is duly and validly existing under the laws of the State of Delaware and is
authorized to transact business and is in “good standing” in the State of New
Jersey. It has the requisite power and authority to execute, deliver
and perform this Equipment Lease. It has obtained all necessary
authorizations to approve the execution, delivery and performance by it of this
Equipment Lease. This Equipment Lease has been duly executed and
delivered by it.
(b) This
Equipment Lease is its legal, valid and binding obligation, enforceable against
it in accordance with its terms. The execution, delivery and
performance by it of this Equipment Lease does not and will not, under any
circumstance whatsoever: (i) conflict with, constitute a default, or result in a
default or other breach of or under the certificate of incorporation or bylaws
of such Party or any agreement to which such Party is a party or by which it or
its assets is bound; (ii) permit any person or entity to either terminate or to
accelerate any liability or other obligation, or to impose any penalty under or
to otherwise modify, or exercise rights under, or cancel or require any notice
under, or otherwise violate any agreement to which such Party is a
party or by which it or its assets is bound; or (iii) otherwise result in any
liens, security interests, pledges, attachments, mortgages, charges, claims,
conditions or other similar encumbrances or restrictions of any kind, including,
without limitation, any conditional sale agreement or other title retention
agreement (collectively, “Liens”).
(c) No
governmental or other authorization, approval or other consent of any kind or
nature by or on behalf of such Party is required arising out of or otherwise
relating to the execution, delivery or performance of this Equipment Lease by
such Party and such Party is not prohibited by any law from consummating the
transactions contemplated by this Equipment Lease. No litigation or
other proceeding is pending or threatened against it that questions the validity
of this Equipment Lease or any transaction contemplated thereby.
5.
Certain Representations,
Warranties and Covenants of Lessee. Lessee
hereby represents, warrants and covenants to Lessor that (a) Lessee shall comply
with all laws, ordinances, regulations, requirements and rules with respect to
the use, maintenance and operation of the Equipment, (b) Lessee shall not permit
any Lien to be made on the Equipment, and (c) except as specifically
contemplated by this Equipment Lease for the benefit of Lessor, Lessee shall not
use the Equipment for the benefit of any person or entity (including Lessee)
without the prior written consent of Lessor, in its sole discretion, in each
instance. Notwithstanding clause (c), Lessee may use the Equipment
for the benefit of its other customers so long as such use does not, in the sole
discretion of Lessor, (i) interfere with Lessee’s performance of services and
supply of products for the benefit of Lessor or (ii) otherwise adversely effect
Lessor.
6.
Maintenance and Repairs;
Insurance.
(a) Lessee
shall be solely responsible for any and all costs and expenses arising in
connection with the routine maintenance and repair of the
Equipment. At Lessee’s expense, in accordance with Lessor's
specifications, Lessee shall keep the Equipment in a suitable environment
located at the facilities of Lessee located at 00-00 Xxxxxx Xxxxx, Xxxx Xxxx,
Xxx Xxxxxx. Any replacement or substitution made on the Equipment
shall automatically become the property of Lessor, without charge and free and
clear of all Liens.
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(b) Until
Lessee returns the Equipment to Lessor and for a period of two (2) years
thereafter, Lessee shall have and maintain public liability and property damage
insurance at all times with respect to all Equipment against such risks,
including fire (including so-called extended coverage), theft, sprinkler leakage
and other risks as Lessor may require, in such form, in such amount, for such
period and written by such companies as may be satisfactory to Lessor in its
sole discretion. Each such casualty insurance policy shall contain a
standard Loss Payable Clause issued in favor of Lessor under which all losses
thereunder shall be paid to Lessor as Lessor's interests may
appear. Each public liability policy shall name Lessor as an
additional insured. Such policies shall expressly provide that the
requisite insurance cannot be altered or canceled without at least thirty (30)
days prior written notice to Lessor and shall insure Lessor notwithstanding the
act or neglect of Lessee. Upon Lessor's demand, Lessee shall furnish
Lessor with duplicate original policies of insurance or such other evidence of
insurance as Lessor may require. In the event of failure to provide
insurance as herein provided, Lessor may, at its option, obtain such insurance
and Lessee shall pay to Lessor, on demand, the cost thereof. Proceeds
of insurance may be applied by Lessor to reduce any obligations of Lessee to
Lessor (pursuant to this Equipment Lease or otherwise) and/or to repair or
replace Collateral, all in Lessor's sole discretion.
(c) Lessor
makes no representation or warranty with respect to the
Equipment. Lessee hereby accepts the Equipment
“AS-IS.” LESSOR DISCLAIMS, AND LESSEE HEREBY WAIVES, ANY AND ALL
EXPRESS OR IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE OR MERCHANTABILITY AS TO THE EQUIPMENT. LESSOR,
DOES NOT WARRANT THAT THE EQUIPMENT WILL OPERATE UNINTERRUPTED OR
ERROR-FREE.
7.
Risk of Loss. Lessee assumes and
agrees to bear the entire risk of loss and damage to the
Equipment. If any item of Equipment is lost, damaged, destroyed or
stolen (a "Loss"), then Lessee
shall have the obligation to pay Lessor the remaining rent set forth in Section
2 above. Lessee shall notify Lessor immediately if the Equipment
becomes subject to a Loss event. If the Equipment becomes subject to a Loss
event, then, at the option of Lessor and without otherwise limiting Lessor's
rights hereunder, Lessee shall pay to Lessor on demand an amount equal to the
higher of (a) the fair market value of the Equipment, or (b) the fair market
value of replacement Equipment. If Lessor has not received full
payment of any amount due under this Section 7 within five (5) days after
demand, Lessee agrees to pay Lessor interest thereon at a rate equal to the
lesser of (i) the prime rate (as published in the Wall Street Journal on the
payment date) plus two percent, or (ii) the highest rate permitted by applicable
law. Anytime upon the request of Lessor, Lessee shall make the
Equipment and all related records available for inspection by Lessor during
Lessee’s normal business hours. Lessee shall affix to the Equipment
any labels supplied by Lessor indicating the ownership of the Equipment by
Lessor.
8.
Ownership of Equipment by
Lessor. The Equipment shall remain at all times the property
of Lessor. Except as provided in this Equipment Lease, Lessee shall
not acquire any right, title or interest in or to the
Equipment. Lessee shall not sell, lease, transfer or otherwise
dispose of the Equipment (or any part thereof) to any person or
entity. Any sale, lease, transfer or other disposition of the
Equipment in violation of the immediately preceding transfer restrictions shall
be void. Lessee shall take all such actions reasonably requested by
Lessor to prevent any person or entity other than Lessor from acquiring any
right, title or interest in or to the Equipment, including (a) the filing of
financing statements or similar public filings, and (b) the obtaining of
consents or waivers from landlords or lenders. Lessee promptly shall notify
Lessor of any circumstances that may permit any person or entity other than
Lessor to acquire any right, title or interest in or to the
Equipment. During the Term, Lessee shall at all times protect and
defend, at its own cost and expense, the ownership of Lessor against all claims,
liens and legal processes of creditors of Lessee, and keep the Equipment free
and clear from all such claims, liens and processes. Lessee agrees to
give Lessor prompt written notice of any such claim, lien or
process. The Equipment is and shall remain personal property and not
part of any real estate.
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9. Indemnification. Lessee
hereby agrees to indemnify and hold harmless (and at the request of Lessor
defend) Lessor and its parent and other affiliates and their respective
successors and permitted assigns, and the officers, directors, managers,
employees, members, partners, stockholders, agents and representatives of each
of the foregoing (collectively, the “Lessor Indemnitees”),
from and against, and shall pay to the Lessor Indemnitees the amount of, any and
all liabilities, losses, damages, expenses (including, without limitation,
reasonable attorneys’ fees), causes of action, suits, claims or judgments
arising from, resulting from or based upon (a) any breach of or inaccuracy in
the representations and warranties of Lessee contained in this Equipment Leas;
(b) any breach of the covenants or agreements of Lessee contained in this
Equipment Lease; and/or (c) the actual or alleged use, operation, delivery or
transportation of the Equipment during the Term or while Lessee otherwise has
possession or control thereof.
10. Event of
Default. "Event of Default"
means (a) failure by Lessee to make any payment of rent or other amount owing
hereunder when the same is due; (b) any breach of any representation
or warranty made by Lessee herein; (c) failure by Lessee to perform or observe
any other covenant or agreement hereunder and the failure to cure the same
within five calendar days after receipt of notice from Lessor; and (d) the
insolvency of Lessee or the making an assignment for the benefit of creditors by
Lessee or consent by Lessee to the appointment of a trustee or receiver, or the
reorganization, arrangement, insolvency, dissolution, or liquidation by or
against Lessee. On the occurrence and continuance of any Event of
Default, Lessor may, at its option, exercise one or more of the following
remedies: (i) xxx for and recover all unpaid Lease Payments and other amounts
due hereunder; (ii) terminate this Equipment Lease and take possession of the
Equipment, without demand or notice, wherever same may be located, without any
court order or other process of law and without liability for any damages
occasioned by such taking of possession; and/or (iii) utilize any other remedy
available to Lessor at law or in equity.
11. Limitation of Liability;
Limitation on Claims. Should Lessee be entitled to recover
damages from Lessor arising from or relating to this Equipment Lease, the
Equipment and/or any of the transactions contemplated by this Equipment Lease,
Lessor shall be liable only for (a) damages for bodily injury (including death)
and damage to real property or tangible personal property, and (b) the amount of
any other actual direct damages or loss. THE MAXIMUM AGGREGATE LIABILITY OF
LESSOR ARISING FROM OR RELATING TO THIS EQUIPMENT LEASE, THE EQUIPMENT AND/OR
ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS EQUIPMENT LEASE SHALL NOT EXCEED
$100,000. NEITHER LESSOR NOR ITS AFFILIATES NOR ANY OTHER LESSOR
INDEMNITIES SHALL BE LIABLE TO LESSEE OR ANY OF ITS AFFILIATES FOR ANY SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE OF ANY KIND OR NATURE
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOSS OF RECORDS OR
DATA), REGARDLESS OF WHETHER ARISING FROM BREACH OF CONTRACT, WARRANTY, TORT,
STRICT LIABILITY OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF THE LOSS OR
DAMAGE OR IF THE LOSS OR DAMAGE COULD HAVE BEEN REASONABLY
FORESEEN. LESSOR AND LESSEE AGREE THAT NO ACTION ARISING OUT OF THIS
EQUIPMENT LEASE, THE EQUIPMENT AND/OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS EQUIPMENT LEASE MAY BE BROUGHT MORE THAT ONE YEAR AFTER THE CAUSE OF ACTION
HAS ACCRUED.
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12. Miscellaneous.
(a) This
Equipment Lease shall be governed by and construed in accordance with the laws
of the State of New Jersey without giving effect to conflicts of law
principles.
(b) This
Equipment Lease may be executed in counterparts and delivered by facsimile, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Each of the Parties hereby submits to
the exclusive jurisdiction of the state and federal courts located in the City
of Newark, State of New Jersey for the sole purpose of this Equipment Lease and
any controversy arising thereunder. THE PARTIES EACH WAIVE THEIR RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING FROM THIS EQUIPMENT
LEASE.
(c) Lessee
shall execute and deliver to Lessor, upon Lessor’s request, such instruments and
assurances as Lessor deems necessary or advisable in order to consummate the
transactions contemplated by this Equipment Lease. At request of
Lessor, Lessee shall execute, or join Lessor in executing, financing statements
pursuant to the Uniform Commercial Code or comparable statute, rule or
regulation.
(d) All
notices under this Equipment Lease shall be delivered by facsimile (confirmed by
overnight delivery) or by overnight delivery with a reputable overnight delivery
service, to the address of the respective Parties set forth
above. Notices shall be effective on the day following the date of
transmission if sent by facsimile, and on the business day following the date of
delivery to the overnight delivery service if sent by overnight
delivery. A Party may change its address listed above by notice to
the other Party given in accordance with this section.
(e) The
Parties hereto acknowledge that this Equipment Lease and the Letter Agreement
and other documents referred to or entered into in connection herewith and
therewith set forth the entire agreement and understanding of the Parties and
supersedes all prior written or oral agreements or understandings with respect
to the subject matter thereof. No modification of any of the terms of
this Equipment Lease shall be deemed to be valid unless in writing and signed by
an authorized agent or representative of both Parties hereto. No
course of dealing or usage of trade shall be used to modify the terms and
conditions therein. A waiver of a default shall not be a waiver of
any other or a subsequent default.
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(f) This
Equipment Lease is binding upon, and inures to the benefit of, the parties
hereto and their respective administrators, successors and
assigns. Lessee may not assign or otherwise transfer (by assignment,
stock sale, merger or otherwise) this Equipment Lease without the prior written
consent of Lessor. Each provision of this Equipment Lease shall be
considered separable; and if, for any reason, any provision or provisions herein
are determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of this
Equipment Lease which are valid.
[signature
page follows]
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EXECUTED
by the undersigned parties to this Equipment Lease as of the date first above
written.
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FERRING
PHARMACEUTICALS, INC.
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By:
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/s/
Xxxxx X. Xxxxxxxx
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Name:
Xxxxx X. Xxxxxxxx
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Title:
President and CEO
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LESSEE:
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By:
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/s/
Xxxx Xxxxxxxxxx
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Name:
Xxxx Xxxxxxxxxx
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Title
Chief Executive
Officer
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Schedule
A
See
Attached
