EXHIBIT 10.28
MASTER EQUIPMENT LEASE AGREEMENT
Dated as of
October 17, 1996
between
FINOVA TECHNOLOGY FINANCE, INC.
(LESSOR)
AND
VION PHARMACEUTICALS, INC.
(LESSEE)
TABLE OF CONTENTS
SECTION PAGE
------- ----
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. Automatic Lease Term Renewal.....................................16
22. Quiet Enjoyment..................................................16
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23. Failure or Indulgence Not Waiver;
Additional Rights of Lessor......................................16
24. Sublease.........................................................16
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..........................................................18
35. Definitions......................................................19
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MASTER EQUIPMENT LEASE AGREEMENT
MASTER EQUIPMENT LEASE AGREEMENT dated as of October 17, 1996, between
VION PHARMACEUTICALS, INC. (hereinafter called "Lessee"), a Delaware corporation
that has its executive office and principal place of business at Xxxx Xxxxxxx
Xxxx, Xxx Xxxxx, Xxxxxxxxxxx 00000 and FINOVA TECHNOLOGY FINANCE, INC., formerly
named Financing for Science International, 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 since December 31, 1995, or from the written information
that has been supplied to Lessor prior to October 6, 1996 by Lessee..
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
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COPY OF THE PURCHASE CONTRACT(S) FOR LESSOR'S PURCHASE OF THE EQUIPMENT. LESSOR
HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, FITNESS FOR USE,
FITNESS FOR A PARTICULAR PURPOSE OR TITLE OF THE EQUIPMENT (OR ANY PART THEREOF)
OR AS TO COMPLIANCE WITH SPECIFICATIONS, 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 SHALL LEASE THE EQUIPMENT "AS IS, WHERE IS". LESSOR
HEREBY DISCLAIMS ANY AND ALL 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.
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(c) With respect to any amount of Basic Rent or Additional Rent not
received by Lessor within three businessdays 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
late payment, Lessee shall pay to Lessor, within ten days of notification that
such payment is due, a collection fee of $300, 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; or (ix) any invalidity, unenforceability or disaffirmance of
this Lease or any provision hereof against or by Lessee or ;all 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 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
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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 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 in Lessee's, financial
or other condition, business, operations, properties, assets or prospects since
the date of Lessee'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, ; (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, or any
affiliate of Lessee 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 is correct and does not omit any
statement necessary to make the information supplied not misleading; and (xiv)
the financial statements of Lessee 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 at the dates of and for the periods covered by such statements. As of the
earliest Lease Commencement Date for the equipment subject to the provisions of
this Master Lease, Lessee shall provide to Lessor an opinion of counsel for
Lessee substantially in the form requested by Lessor.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
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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 not resulting from an error or negligent omission by
Lessor) promptly upon demand. Unless and until Lessor notifies Lessee in writing
to the contrary, 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. 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
5
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.
(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.
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 its authorized representatives 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
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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, 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
7
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, and to
copy such records. 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 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 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, 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. Lessor is hereby appointed Lessee's attorney-in-fact to
endorse any check or draft which may be payable to Lessee in order to collect
the proceeds of such insurance. Lessee shall deliver to Lessor, prior to the
beginning of the Lease Term with respect to any of the Equipment and at such
other time or times as Lessor may request, a certificate or other evidence
satisfactory to Lessor of the maintenance of such insurance. Lessor shall be
under no duty to examine such policies, certificates or other evidence of
insurance or to advise Lessee in the event that its insurance is not in
compliance with this Lease. In the event of failure on the part of Lessee to
provide such insurance, Lessor may, at its option, but without obligation,
provide such insurance and add the amount of the premiums to the rents due
hereunder, and Lessee shall, upon Lessor's demand, pay the same as Additional
Rent.
8
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 Fair Market 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 of loss.
(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 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
9
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, if any, 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) Not less than 90 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. 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,
10
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) 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 (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 Lessee or Form 10-QSB or similar form and (ii)
annual financial statements within 90 days of the close of each fiscal year
reported on by independent accountants . 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 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, and (iii) new product (or service) announcements of Lessee.
(c) Lessee shall give Lessor notice of all meetings of the stockholders of
Lessee and copies of all materials that are furnished to the stockholders for
the meetings at the same time that the notice or materials are sent to the
stockholders. Lessor shall have the right to have its representative attend any
and all such meetings.
(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 of Lessee which results in the
change in the senior management of Lessee without the consent of Lessor, which
consent shall not be unreasonably withheld.
(h) Lessee shall not make any payment or distribution of money, checks,
securities or property to any 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.
11
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 made in this Master Lease or
other Transactional Document or certificate furnished to Lessor in connection
with this Lease or pursuant hereto shall at the time provided 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 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 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 approving as properly filed a petition
seeking a reorganization, arrangement, adjustment or composition of or in
respect of Lessee 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 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 under any bankruptcy law or other insolvency law
and, if petition is filed against Lessee, the petition is not withdrawn or
dismissed within 60 days after the date of filing; or Lessee shall cease doing
business as a going concern or shall liquidate or be dissolved;
(vi) Lessee or 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 another 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, 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, 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 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 for the payment of borrowed money or under a
contract for 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 accrued or post-termination 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
13
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:
(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 Transaction 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
14
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 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. Automatic Lease Term Renewal. In the event that at the expiration of
the Primary Term Lessee does not exercise the purchase option set forth in this
Master Lease with respect to the Equipment subject to a Rental Schedule, the
Lease Term shall automatically be renewed for all of the Equipment subject to
such Rental Schedule for an additional term twelve months (the "Renewal Term")
at a monthly Basic Rent equal to one percent ( 1 %) of the Acquisition Cost of
such Equipment, plus any applicable sales and other taxes, that shall be paid
monthly in advance.
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.
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,
15
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 90 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 90 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 If Lessor and Lessee have failed to agree
upon such value prior to the 60th day before the expiration of the Primary Term,
or, if this Lease has been renewed, prior to the 60th day before the expiration
of the then current Renewal Term, on and after such 60th 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: VION Pharmaceuticals, Inc.
Xxxx Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx,
Vice President Finance
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.
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 Damages. . 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.
17
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 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,
18
Lessor and Lessee agree that the Fair Market Value shall not be less than
fifteen percent (15%) 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.
"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 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. VION PHARMACEUTICALS, INC.
FINANCE, INC.
By: /s/Xxxxx X. Xxxxxxxxx By: /s/Xxxxxx X. Xxxxx
Title: Director, Contract Administration Title: Vice President Finance
ATTEST: ATTEST:
By:____________________________ By: /s/Xxxxxx Xxxxxxx
Title:_________________________ Title: V. P. Operations
19
SALE AND LEASEBACK AGREEMENT
This Sale and Leaseback Agreement is entered into as of the 20TH day of
December, 1996, by and between VION Pharmaceuticals, Inc., a Delaware
corporation with its principal place of business a Xxxx Xxxxxxx Xxxx, Xxx Xxxxx,
Xxxxxxxxxxx 00000 (hereinafter referred to as "Seller"), and FINOVA Technology
Finance, Inc., a Delaware corporation with its principal place of business at 00
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000 (hereinafter referred to as
"Buyer").
WHEREAS, Seller desires to sell to Buyer the personal property listed in
Schedule A attached hereto (such listed personal property being hereinafter
referred to as the "Equipment"), and
WHEREAS, Seller desires to use the Equipment for the exclusive benefit of
Seller under the terms and conditions of the Master Equipment Lease Agreement
dated October 17, 1996, between Buyer (as Lessor) and Seller (as Lessee) and
Rental Schedule No. 2 thereunder (hereinafter referred to together as the
"Lease"),
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the parties agree as follows:
1. Buyer agrees to purchase the Equipment from Seller, and to lease the
Equipment to Seller pursuant to the terms and conditions contained in the Lease.
The Purchase Date for the Equipment and the date that title to the Equipment
shall pass from Seller to Buyer shall correspond with the Lease Commencement
Date as defined in the Lease.
2. Buyer and Seller agree that the Purchase Price of the Equipment is $
207,328.08, which amount shall be payable to Seller by Buyer on the Purchase
Date.
3. Seller agrees that upon payment by Buyer of the Purchase Price, Seller
will deliver to Buyer a Xxxx of Sale, in the form attached hereto as Exhibit A
(the "Xxxx of Sale"), which will convey to Buyer good and marketable title to
the Equipment, free and clear of all liens and encumbrances of any kind or
description. Seller also agrees to provide Buyer with copies of all
documentation received or executed by Seller upon the original acquisition of
the Equipment by Seller.
4. Buyer and Seller agree that the warranties, covenants and agreements
herein contained shall survive the passing of title.
5. Seller agrees to pay any and all applicable Federal, state, county or
local taxes and any and all present or future taxes or other governmental
charges levied upon or created by the sale of the Equipment hereunder, including
sales, use, or occupation taxes due upon the purchase by Buyer.
6. To induce Buyer to enter into this Sale and Leaseback Agreement ("this
Agreement") and with the knowledge that Buyer is doing so in reliance upon these
representations and warranties, Seller represents and warrants to Buyer that (i)
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, with full power to
enter into this Agreement; (ii) the person who has executed this Agreement and
who shall execute the Xxxx of Sale has the authority to bind Seller; (iii) the
execution, delivery and performance of this Agreement and the sale and leaseback
of the Equipment by Seller pursuant to the Lease will not conflict with or be a
breach of any provisions of the Certificate of Incorporation or By-Laws of
Seller or any law (including fraudulent conveyance laws), judgment, writ,
injunction, decree, award, rule or regulation of any court, administrative
agency or other governmental authority, or of any indenture or other agreement
to which Seller is a party or by which it is bound, or constitute a default
under any thereof; (iv) this Agreement and the Xxxx of Sale, when executed and
delivered to Buyer, will be a duly authorized, valid and binding agreement of
Seller enforceable against Seller in accordance with the respective terms
thereof and enforceable against purchasers from and
20
creditors of Seller; (v) no filing, giving of notice or publication is required
in connection with the sale and leaseback or if required such filing, notice or
publication has been duly made and given; (vi) no vote or consent of, or notice
to, the holders of any class of stock of Seller is required, or if required,
such vote, consent or notice has been obtained or given, to authorize the
execution , delivery and performance of this Agreement and the Xxxx of Sale by
Seller; (vii) Seller has and is transferring to Buyer title to the Equipment
free and clear of all liens and encumbrances of any kind or description; and
(viii) 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,
in connection with the execution, delivery or performance by Seller or the
consummation by Seller, of the transactions contemplated by this Agreement.
Seller hereby agrees to deliver to Buyer, upon the Lease Commencement Date of
the Lease, an opinion of Seller's counsel, substantially in the form attached
hereto as Exhibit B, to the effect that the above representations of Seller are
true and correct.
7. Seller warrants that it has taken all action necessary to obtain all
agreements, warranties and indemnifications applicable to the Equipment which
are normally provided by the manufacturer to its customers. Seller hereby
assigns to Buyer all of its right, title and interest in and to all such
agreements, warranties and indemnifications. To the extent assignable, Seller
warrants that all such agreements, warranties and indemnifications are
assignable to Buyer.
8. Buyer and Seller agree that this Agreement and all documents attached
hereto shall inure to the benefit of and shall be binding upon Seller and Buyer,
their subsidiaries, successors and assigns, except that the assignee of Buyer
shall not be required to perform any of the obligations of Buyer and any
assignment by Buyer shall not relieve Buyer of its obligations hereunder. Seller
shall not assign any interest in this Agreement or in the documents attached
hereto without Buyer's written consent.
9. Seller agrees that all obligations of Buyer are expressly contingent
and conditional upon: (a) Seller executing and delivering the Lease for the
Equipment in a form which will constitute a valid, binding and legal obligation
and agreement of Seller and which is acceptable to Buyer; (b) Seller executing a
written Certificate of Inspection and Acceptance in the form required by the
Lease; and (c) Seller delivering any and all instruments required by Buyer under
the Lease in a form acceptable to Buyer.
10. The entire agreement between the parties with respect to the subject
matter hereof is contained in this Agreement and the Lease and the Schedules and
Exhibits referenced herein and therein. There are no understandings, agreements,
representations or warranties, express or implied, respecting this Agreement or
the Lease or the Equipment purchased hereunder and leased thereunder except as
specifically set forth in this Agreement, the Lease, and the Schedules and
exhibits hereto and thereto. Buyer shall not be liable for any indirect, special
or consequential damages, in connection with or arising out of the furnishing,
performance or use of any item of the Equipment or services provided for in this
Agreement, nor shall Buyer be liable in whole or in part for any event beyond
its control.
11. 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 paragraph.
If to Seller VION Pharmaceuticals, Inc.
Xxxx Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000
If to Buyer FINOVA Technology Finance, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
21
12. Buyer and Seller agree that this Agreement and the Xxxx of Sale shall
be governed by and construed in accordance with the laws of the State of
Connecticut (other than the conflicts of laws provisions) and that any legal
action or proceeding arising out of this Agreement or the Xxxx of Sale shall be
brought in any state or federal court sitting in the city of Hartford in the
State of Connecticut. Buyer and Seller hereby irrevocably consent and submit to
the exclusive personal jurisdiction of said courts and irrevocably agree that
all claims in any such action or proceeding may be heard, determined in and
enforced by any such court. Seller 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 Agreement on notices.
13. Buyer and Seller waive any and all right to trial by jury in any
action or proceeding relating in any way to this Agreement or the Xxxx of Sale.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date set forth below by their duly authorized corporate
officers.
FINOVA TECHNOLOGY FINANCE, INC. ("Buyer") VION PHARMACEUTICALS, INC.("Seller")
By: /s/Xxxxx X. Xxxxxxxxx By: /s/Xxxxxx X. Xxxxx
Name (typed): Xxxxx X. Xxxxxxxxx Name (typed:) Xxxxxx X. Xxxxx
Title: Director, Contract Administration Title: Vice President Finance
Date: December 19, 1996 Date: December 18, 1996
22
