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EXHIBIT 10.16
LEASE MANAGEMENT SERVICES, INC.
SECURITY DEPOSIT PLEDGE AGREEMENT
PLEDGEE: LEASE MANAGEMENT SERVICES, INC.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
PLEDGOR: AURORA BIOSCIENCES CORPORATION
00000 Xx. Xxxxxx Xxxxx Xxxx
Xx Xxxxx, XX 00000
In consideration of, and as an inducement for Pledgee to enter into a Master
Lease Agreement Number 10494 and an Equipment Financing Agreement Number 10794
and all Schedules thereunder (hereinafter collectively referred to as the
"Agreements") with Pledgor, and to secure the payment and performance of all
Pledgor's obligations under the Agreements, Pledgor hereby grants and assigns
to Pledgee, its successors and assigns, a security interest in, and hereby
deposits and pledges with Pledgee a Security Deposit in an amount equivalent to
12% of aggregate Equipment cost (including any soft costs) leased or financed
for each Schedule. As used herein, "Security Deposit" shall refer to the
aggregate of all component deposits made under the applicable Schedules. Such
pledge is to be upon the terms and conditions set forth below:
1. Pledgor delivers the Security Deposit to Pledgee to secure the due and
punctual payment and performance of the obligations of Pledgor under
the Agreements. Pledgee will pay 5% simple interest per annum on the
Security Deposit, which interest will be accrued for each respective
component of the Security Deposit from the commencement date of the
applicable Schedule and paid when the Security Deposit is returned to
Pledgor.
2. Upon any default by Pledgor under the Agreements, interest accrual on
the Security Deposit shall cease and Pledgee may, at its option, apply
the Security Deposit and any interest accrued to that date toward the
satisfaction of Pledgor's obligations under the Agreements, and the
payment of all costs and expenses incurred by Pledgee as a result of
such default, including reasonable attorney's fees. Pledgee is liable
to Pledgor only for any surplus remaining from said Security Deposit
after the full satisfaction of the foregoing obligations, costs and
expenses.
3. Pledgor waives any rights to require Pledgee to (i) proceed against
Pledgor or any other party; (ii) proceed against or exhaust any
security held from Pledgor; or (iii) pursue any other remedy in
Pledgee's power whatsoever before enforcing the provisions of, and
proceeding under the provisions of, this Security Deposit Pledge
Agreement. The obligations of Pledgor under this Security Deposit
Pledge Agreement shall be absolute and unconditional, and shall remain
in full force and effect without regard to, and shall not be released
or discharged or in any way affected by (a) any amendment or
modification of or supplement to the Agreements; (b) any exercise or
non-exercise of any right, remedy or privilege under or in respect to
this Security Deposit Pledge Agreement, the Agreements, or any other
instrument provided for in the Agreements, or any waiver, consent,
explanation, indulgence or actions or inaction
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SECURITY DEPOSIT PLEDGE AGREEMENT
AURORA BIOSCIENCES CORPORATION
Page 2 of 3
with respect to any such instrument; or (c) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition,
liquidation or similar proceedings of Pledgor.
4. Pledgee shall have no obligation to segregate said Security Deposit
and Pledgor hereby irrevocably authorizes Pledgee, at Pledgee's sole
election, to commingle said Security Deposit with other assets and
funds held by or belonging to Pledgee. Pledgor may not assign, pledge
or transfer to any party its interest in the Security Deposit and any
attempt to do so shall be null and void.
5. Without notice to Pledgor, Pledgee may freely assign its rights and
obligations hereunder, in whole or in part, at any time and this
Security Deposit Pledge Agreement shall inure to the successors and
assignees of Pledgee. In the event Pledgee assigns or transfers one
or more Schedules under the Agreements without assigning or
transferring the Security Deposit, Pledgor agrees that it will look
solely to Pledgee for the return of the Security Deposit and will not
assert any claim against any assignee of Pledgee for the return of
said Security Deposit and further agrees that it will not assert
against any payments due such assignee of Pledgee any offset that
Pledgor may have against Pledgee for the return of said Security
Deposit. In the event Pledgee assigns or transfers this Security
Deposit Pledge Agreement along with the Schedules under the
Agreements, Pledgor agrees that it shall look solely to the assignee
of Pledgee for the return of said Security Deposit and Pledgee shall
have no further liability to Pledgor with respect thereto.
6. Provided that the Pledgor is not then in default of its obligations to
the Pledgee under the Agreements or otherwise, Pledgee agrees to
return the Security Deposit and accrued interest on a schedule by
schedule basis to Pledgor with Pledgor's achievement of the earlier of
one of the following:
A) At such time, after 12/31/97, that Pledgee's unrestricted cash
balance, less debt, is at least $20,000,000; OR
B) In the event of an acquisition, if acquiror executes an
assignment or guarantee acceptable to Pledgor; OR
C) After receipt of 32 prompt rents per schedule and cash
sufficient in Pledgor's judgment to assure Pledgee's financial
stability through the end of term; OR
D) Pledgor produces 3 consecutive quarters of pre-tax income, net
of extraordinary items, of at least $1,000,000 per quarter.
All accounting terms used herein shall be interpreted in accordance
with generally accepted accounting principles.
7. Any reduction/return of the Security Deposit and any payment of
interest prior to the Termination of the Agreements (as defined below)
is contingent upon the following additional conditions: (a)
verification of all benchmarks is to be acceptable to Pledgee; (b)
Pledgor has made all payments on a timely basis according to the terms
of the Agreements; (c) Pledgor is not, nor ever has been, in default
of any financial obligation; (d) Pledgor, if privately held, has
provided monthly financial statements to Pledgee within 30 days of each
month-end, or if Pledgor is publicly held, has provided quarterly
statements as required to be filed by the Securities and Exchange
Commission (the "SEC"); (e) Pledgor, if privately held, has provided
an annual audited financial statements to Pledgee within 90 days of
Pledgor's fiscal year end or if Pledgor is
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SECURITY DEPOSIT PLEDGE AGREEMENT
AURORA BIOSCIENCES CORPORATION
Page 3 of 3
publicly held, has provided Pledgee with annual statements as required
to be filed by the SEC; and (f) Pledgor has not suffered any
material adverse change.
The Termination of the Agreements shall be defined as the satisfaction
of all Pledgor's obligations under the Agreements.
8. If the Security Deposit has not previously been returned, upon the
Termination of the Agreements, Pledgee shall deliver the Security
Deposit and accrued interest (less any portion of same cashed, sold,
assigned or delivered pursuant to, and under the circumstances
specified in, Paragraph 2 hereof) to Pledgor, and this Security
Deposit Pledge Agreement shall thereupon be without further effect.
PLEDGOR: PLEDGEE:
AURORA BIOSCIENCES LEASE MANAGEMENT SERVICES, INC.
CORPORATION
By: By:
--------------------------------- ---------------------------------------
Title: Title: EVP/General Manager
------------------------------ ------------------------------------
Date: Date:
------------------------------- -------------------------------------
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LEASE MANAGEMENT SERVICES, INC.
CERTIFICATE OF INCUMBENCY AND AUTHORITY
I, Xxxxxxx X. Xxxx, do hereby certify that I am the duly elected, qualified and
acting Chief Executive Officer of AURORA BIOSCIENCES CORPORATION,
(Lessee/Debtor), a Delaware corporation; that the persons whose names, titles
and signatures appear below are duly elected (or appointed) qualified and
acting officers of said corporation and hold on the date of this Certificate,
and on the date of execution of the Master Lease documents and/or Equipment
Financing documents, the offices set opposite their respective names; that the
signatures appearing opposite their respective names are the genuine signatures
of such officers; that each such officer is duly authorized for and on behalf
of said corporation to execute and deliver any Equipment Lease and/or Equipment
Financing Agreement between said corporation and said Lessor/Secured Party,
LEASE MANAGEMENT SERVICES, INC., and all agreements, documents, and instruments
in connection therewith, including without limitation, Rental Schedules and
Certificates of Equipment Acceptance, and that the execution and delivery of
any such equipment lease and/or financing agreement, and all agreements,
documents, and instruments in connection therewith for and on behalf of said
corporation is not prohibited by or in any manner restricted by the terms of
said corporation's Certificate of Incorporation, its by-laws, or of any loan
agreement, indenture or contract to which said corporation is a party or under
which it is bound. I do further certify that the foregoing authority shall
remain in full force and effect, and LEASE MANAGEMENT SERVICES, INC. shall be
entitled to rely upon the same, until written notice of the modification,
rescission or revocation of same, in whole or in part, has been delivered to
LEASE MANAGEMENT SERVICES, INC., but no such modification, rescission or
revocation shall, in any event, be effective with respect to any documents
executed or actions taken in reliance upon the foregoing authority prior to the
delivery to LEASE MANAGEMENT SERVICES, INC. of said written notice of said
modification, rescission or revocation.
NAME OF OFFICER TITLE OF OFFICER SIGNATURE OF OFFICER
Xxxxxxx X. Tower Director, Finance
-----------------------------------
& Administration
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of ________,
1996.
Lessee/Debtor:
AURORA BIOSCIENCES CORPORATION
By: _______________________________________________________
Title: Chief Executive Officer
_______________________________________________________
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LEASE MANAGEMENT SERVICES, INC.
CERTIFIED COPY OF RESOLUTIONS OF
BOARD OF DIRECTORS
I, Xxxx X. Xxxxxxxx, hereby certify that I am the Corporate Secretary and
official custodian of certain records including the Charter, By-Laws, and the
Minutes of the Meetings of the Board of Directors of AURORA BIOSCIENCES
CORPORATION, a Corporation duly organized and existing under the laws of the
State of Delaware, that the following is a true, accurate and compared
transcript of the Resolutions contained in the Minute Book of the Corporation,
duly adopted by the Board of Directors of said Corporation at a Meeting of the
Board of Directors of said Corporation duly held on the ______ day of
__________, 19____, at which time a quorum was present and acted throughout and
authorized its officers to transact the business hereinafter described, and
that the proceedings of said meeting were in accordance with the Charter and
By-Laws of said Corporation and that said Resolutions have not been rescinded
or amended and are in full force and effect:
RESOLVED, that this Corporation enter into a Lease Agreement and/or an
Equipment Financing Agreement with LEASE MANAGEMENT SERVICES, INC. for the
funding of that certain property as is set forth in the Master Equipment Lease
Agreement and/or Equipment Financing Agreement, and it is further
RESOLVED, that any officers of this Corporation be and they are hereby
authorized and empowered in the name of and on behalf of this Corporation to
execute any and all documents as may be required by LEASE MANAGEMENT SERVICES,
INC. to effectuate the provisions hereof.
I CERTIFY, that I have examined the Articles of Incorporation, the
By-Laws of the Corporation, and all amendments therewith and I am fully
familiar with all of said documents and that there are no restrictions imposed
on the power and authority of the Board of Directors of said Corporation to
adopt the foregoing resolutions whereupon the Corporation and its officers are
authorized to act in accordance therewith.
IN WITNESS WHEREOF, I have hereupon subscribed my name on the ________
day of_______________ , 1996.
By: ______________________________________
Corporate Secretary
ATTEST:
___________________________________________
Title: ____________________________________
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LEASE MANAGEMENT SERVICES, INC.
REQUEST FOR CERTIFICATE OF INSURANCE
Xxxxxxx Xxxxxx
ISU Xxxxxx Insurance Co.
000 Xxxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
We, as Lessee/Debtor, have entered into a Master Equipment Lease Agreement
and/or an Equipment Financing Agreement with LEASE MANAGEMENT SERVICES, INC.,
as Lessor/Secured Party, to finance the purchase of equipment.
Accordingly, you are hereby authorized to:
1. Insure said equipment in the name of LEASE MANAGEMENT SERVICES, INC.
2. Issue a written endorsement naming LEASE MANAGEMENT SERVICES, INC., as
Additional Insured and First Loss Payee, and provide LMSI with thirty
(30) day written notice of material change of coverage, cancellation
or non-renewal. LMSI shall have the right to name additional parties
as Additional Insured and First Loss Payee and notices will also be
provided to those parties upon LMSI's request.
3. INSURANCE MUST INCLUDE COVERAGE AS INDICATED BELOW:
(x) Bodily Injury and Property Damage Insurance with
limits of no less than $3,500,000
(x) Physical Damage (all risk) from any cause
whatsoever, except earthquake and flood.
4. Loss, if any, under this endorsement shall be payable SOLELY to LEASE
MANAGEMENT SERVICES, INC., or its assigns and shall not be invalidated
due to any violation of any conditional warranty contained in any
policy or application therefor by Lessee/Debtor, or by reason of any
act of the Lessee/Debtor.
5. THIS POLICY MUST CONTAIN THE FOLLOWING ENDORSEMENT:
The insurance under this policy shall be primary insurance, and the
company insurer shall be liable under this policy for the full amount
of the loss up to and including the total limits of liability herein
without right of contribution from any other insurance effected by
LEASE MANAGEMENT SERVICES, INC., under any policy with any insurance
company covering a loss covered under this policy.
Forward evidence of coverage to: LEASE MANAGEMENT SERVICES, INC.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Insurance Administrator
LESSEE/DEBTOR:
AURORA BIOSCIENCES CORPORATION
By: ________________________________________________________
Title: ______________________________________________________
Date: _______________________________________________________
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LEASE MANAGEMENT SERVICES, INC.
LANDLORD WAIVER
WHEREAS, Nexus Development Corporation a _______________ corporation
("Landlord"), being the owner and landlord of the premises described as 00000
Xx. Xxxxxx Xxxxx Xxxx, Xx Xxxxx, Xxx Xxxxx Xxxxxx, XX 00000; and
WHEREAS Landlord and AURORA BIOSCIENCES CORPORATION ("Tenant") have entered
into a real property lease wherein Tenant has leased approximately ___________
square feet of space in the building located at 00000 Xx. Xxxxxx Xxxxx Xxxx, Xx
Xxxxx, Xxx Xxxxx Xxxxxx, XX 00000; and ("Premises") and
WHEREAS, Landlord acknowledges that notice has been received that Tenant has
entered into an equipment lease and/or financing agreement that provides a
security interest in the personal property leased or to be leased, and/or
pledged or to be pledged, from LEASE MANAGEMENT SERVICES, INC. ("Lessor/Secured
Party"), under a Master Lease Agreement Number 00000 and all its schedules
thereunder, and/or under an Equipment Financing Agreement Number 00000 and all
its schedules thereunder, (hereinafter referred to collectively as the
"Agreements") for the better utilization of said Premises by said Tenant;
NOW, THEREFORE, the Landlord, as an inducement to said Lessor/Secured Party to
lease such personal property for said Tenant and/or to finance the acquisition
of personal property to said Tenant, and in consideration of the benefit to the
undersigned resulting from such better utilization of said Premises, and for
other valuable considerations, hereby acknowledged by the undersigned, does
hereby agree that:
1. Each and all items of personal property so leased/financed by said
Lessor/Secured Party to said Tenant, under said Agreements, or any
renewal, extension, or modification thereof, shall not, by reason of
its installation or being placed in or upon said Premises, be
construed as real property, or as forming part of any building leased
by the Landlord to said Tenant, but shall remain personal property at
all times, be severable from said Premises and not be construed as a
fixture by being placed in or upon, or in any manner annexed, attached
or connected to said Premises.
2. Title to, ownership of, and/or the right of possession as provided in
the Agreements covering said personal property, shall be and shall
remain at all times with said Lessor/Secured Party, its successors and
assigns, free of any claim or right of the Landlord.
3. Lessor/Secured Party may enter the Premises at any time or from time
to time for purposes of inspecting and/or removing any and all of the
personal property in the exercise of its rights and remedies arising
from aforesaid Agreements. If it becomes necessary to remove personal
property from the Premises, Lessor/Secured Party will take all
reasonable care to avoid damage to the Premises. If damage, resulting
solely from the Lessor/Secured Party's, and/or its agent(s) act(s) of
removing personal property, does occur, then the Lessor/Secured Party
will be responsible to pay a reasonable sum, agreed upon by both the
Landlord and Lessor/Secured Party, to repair damages resulting to the
Premises.
4. Landlord waives and releases any and all rights, however arising,
including without limitation, the right to levy, seize, xxx, execute
or sell for unpaid rent, which Landlord now has or may hereafter
acquire with respect to the personal property, whether such property
is now or hereafter located on or in the Premises or otherwise, and
all claims and demands of every kind against the personal property,
during the term of the aforesaid Agreements and any renewal, extension
or modification therefor or substitution thereof.
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LANDLORD WAIVER
Aurora Biosciences Corporation
Page 2 of 2
5. Landlord agrees to make this Waiver known to any transferee of the
Premises and any person who may have any interest or right in the
Premises or personal property.
6. Landlord agrees to make best efforts to promptly notify in writing,
said Lessor/Secured Party, of any default or termination of its lease
with Tenant for any reason or any event which, with the giving of
notice or passage of time or both, could result in the creation of the
right of Landlord to terminate any lease covering all or any part of
the Premises or to accelerate any rent due thereunder.
7. If Landlord notifies Lessor/Secured Party that Tenant has abandoned
the personal property and/or that Tenant has defaulted on the real
property lease and has been evicted and/or vacated the Premises
leaving the personal property thereon; Lessor/Secured Party upon
notification of such action from Landlord, will use its best efforts
with the Landlord to remove the personal property in a timely manner.
Should a timely removal not be possible due to the size or nature of
the personal property, or other factors, Lessor/Secured Party and
Landlord will make mutually acceptable rental and/or on-site storage
arrangements if required.
8. Any disputes arising out of the terms and conditions of this Waiver,
shall be resolved before the American Arbitration Association in the
City of San Francisco, pursuant to the rules of such Arbitration.
9. Each party represents to the others that it has full power and
authority to execute and deliver this Agreement.
This waiver shall be binding upon the heirs, administrators, executors,
successors and assigns of the Landlord, and shall inure to the benefit of the
successors and assigns of said Lessor/Secured Party.
In WITNESS WHEREOF, the undersigned has executed, sealed and delivered this
Waiver this ________ day of ________________, 1996.
LANDLORD: PERSONAL PROPERTY LESSOR/SECURED PARTY:
NEXUS DEVELOPMENT LEASE MANAGEMENT SERVICES, INC.
CORPORATION
By: By:
---------------------------------------- ----------------------------------------------------------
Name: Title: EVP/General Manager
-------------------------------------- -------------------------------------------------------
(typed or printed)
Title:
-------------------------------------
Address: 0000 Xxxxxxxxx Xx, Xxxxx 000
Xxx Xxxxx, XX 00000
Phone:
--------------------------------
