EXHIBIT 10.5
MASTER EQUIPMENT LEASE AGREEMENT
Agreement No. 1001 Dated: December 2, 1994
LESSOR: LIGHTHOUSE CAPITAL PARTNERS, L.P., a Delaware limited partnership
("Lessor"), 000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx
00000
LESSEE: SYMPHONIX DEVICES, INC., a California corporation ("Lessee")
ADDRESS: 0000 Xxxxxxx Xxxxxxx, Xxx Xxxx, XX 00000.
IN CONSIDERATION of the mutual covenants contained herein, the parties
agree as follows:
1. LEASE. Lessor leases to Lessee and Lessee leases from Lessor the
personal property described in each Equipment Schedule executed pursuant hereto,
subject to the terms and conditions of this Master Equipment Lease Agreement
("Master Lease") and the applicable Lease Line Schedule (defined below). The
"Equipment" (as defined in the Lease Line Schedule) is being leased for
commercial or business purposes only, and not for personal, home, or family
purposes. The parties agree that each Lease is a "finance lease" under the
Uniform Commercial Code (as in effect in the State of California during the term
of the Lease and referred to hereafter as the "UCC").
2. LEASE LINE SCHEDULE. "Lease Line Schedule" means a Lease Line Schedule
in the form of EXHIBIT A, signed by Lessor and Lessee and incorporating by
reference the terms and provisions of this Master Lease.
3. EQUIPMENT SCHEDULES. "Equipment Schedule" means an Equipment Schedule
in the form of EXHIBIT B, signed by Lessor and Lessee and incorporating, by
reference, the terms and provisions of this Master Lease and the applicable
Lease Line Schedule. Each Equipment Schedule shall constitute a separate and
independent lease (a "Lease"); the original of such Lease shall consist of the
signed Equipment Schedule and a copy of the Master Lease and applicable Lease
Line Schedule. Capitalized terms used, but not defined, in this Master Lease
have the meanings given to such terms in the applicable Lease Line Schedule or
Equipment Schedule, as the case may be.
4. TERM AND RENTALS.
(a) ACCEPTANCE. The Lease shall commence with respect to Equipment
described on the Equipment Schedule upon the Acceptance Date. The "Acceptance
Date" shall be the date upon which Lessee executes a Delivery and Acceptance
Certificate in the form of EXHIBIT C.
(b) TERM AND PAYMENT OF RENT. The lease term for the Equipment shall
be the "Lease Term" set forth in the Equipment Schedule which shall commence on
the "Commencement Date" (as defined in the Lease Line Schedule). Lessee agrees
to pay to Lessor the "Rental Payments" for the Lease Term, in the amounts and at
the times set forth in the Equipment Schedule.
(c) INTERIM PERIOD. If the Acceptance Date does not fall on the
Commencement Date, then Lessee agrees to pay to Lessor "Interim Rent" for the
period commencing on the Acceptance Date through and including the day preceding
the Commencement Date (the "Interim Period"). The Interim Rent payment for the
Interim Period shall accrue at the "Interim Rate" (as defined in the Lease Line
Schedule) and shall be due and payable in full on the Commencement Date.
(d) LEASE TERMINATION. Lessee may terminate the Lease at the
expiration of the Lease Term or any renewal term (the "Lease Termination") by
submitting to Lessor a Notice of Election in the form of EXHIBIT D. If a Notice
of Election is not submitted by Lessee to Lessor during the "Advance Notice
Period" (as defined in the Lease Line Schedule), then the Lease Term or any
renewal Term will be automatically extended for an additional period equal to
the "Automatic Extension Period" (as defined in the Lease Line Schedule). The
Lease
1.
will continue to automatically extend until Lessee submits to Lessor a Notice of
Election. The Lease may only be terminated as expressly provided in this
Section, in the applicable Lease Line Schedule or in the applicable Equipment
Schedule. Lessee agrees to continue paying rent for the Equipment in the amount
of the Rental Payment set forth in the Equipment Schedule until the later of (i)
the expiration of the Lease Term, any renewal term and any Automatic Extension
Period and (ii) either (A) the purchase option price is paid pursuant to SECTION
6(A), or (B) a mutually agreed renewal of the Lease takes effect pursuant to
SECTION 6(B), or (C) the Equipment is returned in the manner and condition
prescribed in SECTION 6(C), in each case after delivery of a Notice of Election.
(e) NET LEASE. Each Equipment Schedule shall be a net lease, and
Lessee's obligation to pay all rent and other sums thereunder shall be absolute
and unconditional, and shall not be subject to any abatement, reduction, set-
off, defense, counterclaims, interruption, deferment or recoupment, for any
reason whatsoever.
5. LATE FEE. Lessee shall pay a late charge on any rent payments or other
sums due hereunder which are past due, in the amount specified in the Lease Line
Schedule, payable on demand. In addition, interest shall accrue daily at the
"Default Rate" (as defined in the Lease Line Schedule), or if such rate exceeds
the maximum rate allowed by law, then at such maximum rate, and shall be payable
on demand.
6. LEASE TERMINATION OPTIONS. Upon Lease Termination, Lessee will have
the option to purchase the Equipment, renew the term of the Lease, or return the
Equipment to Lessor, as set forth below. Lessee shall specify its election of a
Lease Termination Option in the Notice of Election.
(a) PURCHASE OPTION. If Lessee exercises the option to purchase,
then, provided no Event of Default has occurred and is then continuing, Lessee
shall at the expiration of the Lease Term, renewal term or extension, as the
case may be, purchase the Equipment. The purchase price shall be the
Equipment's then fair market value ("FMV"). FMV, as applied to a purchase
option, shall be determined by Lessor based on the price a willing buyer would
pay and a willing seller would accept (neither buyer nor seller being under
compulsion to act) for the Equipment as installed and in use, giving due
consideration to its condition, utility, revenue-producing capability, and
replacement costs. If Lessee fails to agree with Lessor's good faith
determination of the FMV, Lessee shall nevertheless pay Lessor's invoice and
provide Lessor with a written request for a determination of the FMV with or
prior to such payment. Within ten (10) days after such request Lessor and
Lessee shall agree on an appraiser to determine the FMV or, lacking such
agreement, shall each tender the name of an appraiser. The appraiser(s) shall,
within thirty (30) days, either agree on the FMV or select a third appraiser, to
form a committee to determine the FMV. Determination by the appraiser(s) shall
be final and binding on both parties. Within fifteen (15) days after such
determination, Lessor shall refund any excess received over the FMV, and/or
Lessee shall pay any additional amount of the FMV above the amount previously
paid. Each party shall bear the fees and expenses of any appraiser which it
names and share equally the fees and expenses of any appraiser(s) jointly
selected. If the appraised FMV is within 5% of the amount invoiced by Lessor,
then Lessee shall pay all appraiser fees and expenses. The purchase option
price shall be paid not later than the last day of the Lease Term.
(b) RENEWAL. If Lessee exercises the option to renew this Lease,
such renewal shall be upon the terms and conditions of this Master Lease and the
applicable Lease Line Schedule, for a rental period and rental amount to be
agreed upon by Lessee and Lessor.
(c) RETURN. If the Notice of Election specifies return of the
Equipment, Lessee at its own risk and expense (i) will immediately return the
Equipment to Lessor in the same condition as when delivered, ordinary wear and
tear excepted, at such location as Lessor shall designate; and (ii) will, on
request from Lessor, obtain from the Equipment supplier (or other maintenance
service supplier approved by Lessor) a certificate stating that the Equipment
qualifies for continued maintenance service at the standard rates and terms then
in effect.
2.
7. USE; MAINTENANCE.
(a) Lessee, at its expense, shall make all necessary site preparations
and cause the Equipment to be operated in accordance with any applicable
operating manuals and manufacturer's instructions. Notwithstanding any transfer
or assignment by Lessor and provided Lessee is not in default hereunder, Lessee
shall have the right to quietly possess and use the Equipment as provided herein
without interference by Lessor, its assigns or any other third party claiming
through or under Lessor.
(b) Lessee shall effect and bear the expense of all necessary repair,
maintenance, operation and replacements required to be made to maintain the
Equipment in good condition, reasonable wear and tear excepted, and to comply
with all domestic and international laws to which the use and of the Equipment
may be or become subject. All replacement Equipment and parts furnished in
connection with such maintenance or repair shall immediately become the property
of Lessor and part of the Equipment for all purposes hereof. All such
maintenance, repair and replacement services shall be immediately paid for and
discharged by Lessee with the result that no lien under any applicable laws will
attach to the Equipment as a result of the performance of such services or the
provision of any such material.
8. INSURANCE. Lessee shall obtain and maintain for the Lease Term (and
any renewal term or extension), at its own expense, (a) "all risk" insurance
against loss or damage to the Equipment, (b) commercial general liability
insurance (including contractual liability, products liability and completed
operations coverages) reasonably satisfactory to Lessor, and (c) such other
insurance against such other risks of loss and with such terms, as shall in each
case be reasonably satisfactory to or reasonably required by Lessor (as to
carriers, amounts and otherwise). The amount of the "all risk" insurance shall
be greater than or equal to the Stipulated Loss Value (as defined in SECTION 9
below) of all Equipment outstanding under the Lease Line Schedule, and must
otherwise be reasonably satisfactory to Lessor as of each anniversary date of
this Lease. Any increase in the amount of such insurance coverage reasonably
requested by Lessor shall be put into effect on the next succeeding renewal date
of such insurance.
Each "all risk" policy shall: (i) name Lessor as sole loss payee with
respect to the Equipment, (ii) provide for each insurer's waiver of its right of
subrogation against Lessor and Lessee, and (iii) provide that such insurance
shall not be invalidated by any action of, or breach of warranty by, Lessee of a
provision of any of its insurance policies, and shall waive set-off,
counterclaim or offset against Lessor.
Each liability policy shall name Lessor as an additional insured and
provide that such insurance shall have cross-liability and severability of
interest endorsements (which shall not increase the aggregate policy limits of
Lessee's insurance).
All insurance policies shall provide that Lessee's insurance shall be
primary without a right of contribution of Lessor's insurance, if any, or any
obligation on the part of Lessor to pay premiums of Lessee, and shall contain a
clause requiring the insurer to give Lessor at least 30 days' prior written
notice of its cancellation (other than cancellation for non-payment for which 10
days' notice shall be sufficient). Lessee shall on or prior to the date of
Equipment Schedule No. 1 and prior to each policy renewal, furnish to Lessor
certificates of insurance or other evidence satisfactory to Lessor that such
insurance coverage is in effect. Lessee further agrees to give Lessor prompt
notice of any damage to, or loss of, the Equipment, or any part thereof.
9. LOSS OR DAMAGE. If any items of Equipment shall become lost, stolen,
destroyed, or damaged beyond repair for any reason, or in the event of
condemnation, confiscation, seizure or requisition of title to or use of such
items (collectively, an "Event of Loss"), Lessee shall promptly pay to Lessor
the applicable Stipulated Loss Value of the Equipment subject to the Event of
Loss. Upon payment by Lessee of the Stipulated Loss Value, Lessor will transfer
to Lessee, "AS IS, WHERE IS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY," all
of Lessor's right, title and interest, if any, in such items of Equipment. The
"Stipulated Loss Value" payable by Lessee under this Lease shall be an amount
equal to the product of (a) Lessor's Cost of the affected Equipment and (b) the
percentage set forth in the table attached to the applicable Lease Line Schedule
as
3.
ANNEX A opposite the Rental Payment number next following the Event of Loss.
Stipulated Loss Values and Rental Payments shall not be prorated.
10. TITLE, INSPECTION AND LOCATION.
(a) TITLE. Lessor and Lessee confirm their intent that title to the
Equipment shall remain in Lessor (or its successors and assigns) exclusively.
If requested by Lessor, Lessee will affix plates or markings on the Equipment
and on any operating manuals and manufacturer's instructions indicating the
interests of Lessor and its assigns therein, and Lessee will not allow any other
indicia of ownership or other interest in the Equipment to be placed on the
Equipment. Lessee shall not sell, assign, grant a security interest in, sublet,
pledge, hypothecate or otherwise encumber or suffer a lien upon or against this
Lease or the Equipment.
(b) INSPECTION. Lessor (through any of its officers, employees or
agents) shall have the right to inspect the Equipment during regular business
hours, with reasonable notice, and in compliance with Lessee's reasonable
security procedures; provided, that such inspections will be conducted no more
often than every six (6) months unless an Event of Default, or event which, with
notice or lapse of time or both, would become an Event of Default, has occurred
and is continuing.
(c) LOCATION. In the case of Equipment other than mobile Equipment,
Lessee may move such Equipment from the installation address shown on the
Equipment Schedule (or any other location for which Lessee has complied with
this provision) only if (i) the new location is within the continental United
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States, and (ii) Lessee gives at least 30 days' prior written notice of the
relocation and provides UCC-1 financing statements, landlord waivers or such
other documentation as Lessor reasonably requests to protect its interest in the
Equipment. In the case of mobile equipment (including, without limitation, lap-
top computers), Lessee agrees to obtain from the person using such mobile
Equipment, and deliver to Lessor, an Acknowledgment in the form of EXHIBIT F.
(d) Lessee shall keep copies of all operating manuals and
manufacturer's instructions with respect to the Equipment in good condition at
the locations specified in SECTION 10(C).
11. LESSEE'S REPRESENTATIONS, WARRANTIES AND WAIVERS. Upon execution of
the Master Lease and each Equipment Schedule, Lessee warrants and represents the
following:
(a) Lessee is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation. Lessee has full
power and authority and all necessary licenses and permits to carry on its
business as presently conducted, to own or hold under lease its properties and
to enter into this Master Lease, the Lease Line Schedule and each Equipment
Schedule and to perform its obligations thereunder; and Lessee is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of its properties or the nature of its
business or the performance of its obligations under this Master Lease, the
Lease Line Schedule and any Equipment Schedule requires such qualification,
except for such jurisdictions in which failure to qualify would not have a
material adverse effect on Lessee.
(b) The execution and delivery by Lessee of this Master Lease, the
Lease Line Schedule and each Equipment Schedule and the performance by Lessee of
its obligations thereunder have been duly authorized by all necessary corporate
action on the part of Lessee; and do not and will not contravene the provisions
of, or constitute a default (either with or without notice or lapse of time, or
both) under, or result in the creation of any lien upon, the Equipment or any
property of Lessee under any indenture, mortgage, contract or other instrument
to which Lessee is a party or by which Lessee or its properties is bound.
(c) No consent or approval of, giving of notice to, registration with,
or taking of any other action by, any state, federal, foreign or other
governmental commission, agency or regulatory authority or any other person or
entity is required for the consummation or performance by Lessee of the
transactions contemplated under this Master Lease, the Lease Line Schedule and
each Equipment Schedule.
4.
(d) This Master Lease, the Lease Line Schedule and each Equipment
Schedule, when executed by Lessee, constitute legal, valid and binding
agreements of Lessee enforceable against Lessee in accordance with their terms,
except as limited by any bankruptcy, insolvency, reorganization, or other
similar laws of general application affecting the enforcement of creditor or
Lessor rights.
(e) There are no actions, suits or proceedings pending or threatened
against or affecting Lessee or any property of Lessee in any court, before any
arbitrator of any kind or before or by any federal state, municipal or other
government department, commission, board, bureau, agency or instrumentality
(collectively "Governmental Body"), which, if adversely determined, would
materially adversely affect the business, financial condition, assets, or
operations of Lessee, or adversely affect the ability of Lessee to perform its
obligations under this Master Lease, the Lease Line Schedule and each Equipment
Schedule; and Lessee is not in default with respect to any order of any court,
arbitrator or Governmental Body or with respect to any material loan agreement,
debt instrument or contract with a supplier or customer of Lessee, except as
disclosed in writing to Lessor.
(f) To the extent permitted by applicable law, Lessee waives any and
all rights and remedies to: (i) cancel this Lease; (ii) repudiate this Lease;
(iii) reject the Equipment; (iv) revoke acceptance of the Equipment; (v) recover
damages from Lessor for any breaches of warranty or for any other reason; (vi)
claim a security interest in the Equipment in Lessee's possession or control for
any reason; (vii) deduct from Rental Payments all or any part of any claimed
damages resulting from Lessor's default, if any, under this Lease; (viii) accept
partial delivery of the Equipment; (ix) "cover" by making any purchase or lease
of or contract to purchase or lease equipment in substitution for Equipment
designated in the Lease; (x) recover any direct, general, special, incidental,
indirect, exemplary or consequential damages, for any reason whatsoever; and
(xi) obtain specific performance, replevin, detinue, sequestration, claim and
delivery or the like for any Equipment identified to this Lease. To the extent
permitted by applicable law, Lessee also waives any rights now or hereafter
conferred by statute or otherwise which may require Lessor to sell, lease or
otherwise use any Equipment in mitigation of Lessor's damages or which may
otherwise limit or modify any of Lessor's rights or remedies.
12. ASSIGNMENT BY LESSOR. LESSEE ACKNOWLEDGES THAT LESSOR MAY SELL,
ASSIGN, GRANT A SECURITY INTEREST IN, OR OTHERWISE TRANSFER ALL OR ANY PART OF
ITS RIGHTS, TITLE AND INTEREST IN THIS LEASE AND THE EQUIPMENT WITHOUT NOTICE TO
OR CONSENT OF LESSEE. Upon Lessor's written notice to Lessee that this Lease,
or the right to the Rental Payments hereunder, have been assigned, Lessee shall,
if requested, pay directly to Lessor's assignee without abatement, deduction or
set-off all amounts which become due hereunder. Lessee waives and agrees it
will not assert against Lessor's assignee any counterclaim or set-off in any
action for rent under the Lease. Upon the assignment of this Lease, Lessor's
assignee shall have and be entitled to exercise any and all rights and remedies
(but none of the obligations) or lessor hereunder, and all references herein to
Lessor shall include Lessor's assignee. Lessee acknowledges that any assignment
or transfer by Lessor does not materially change Lessee's duties or obligations
under this Lease nor materially increase the burdens or risks imposed on Lessee.
13. ASSIGNMENT BY LESSEE. LESSEE MAY NOT, WITHOUT LESSOR'S PRIOR WRITTEN
CONSENT, (i) ASSIGN THIS LEASE, WHETHER BY OPERATION OF LAW OR OTHERWISE, OR
SUBLEASE THE EQUIPMENT OR ANY PART THEREOF OR (II) ASSIGN, GRANT A SECURITY
INTEREST IN, OR OTHERWISE TRANSFER ALL OR ANY PART OF ITS RIGHTS, TITLE AND
INTEREST IN AND TO THIS LEASE OR THE EQUIPMENT. In the event Lessee makes an
assignment, sublease or other transfer (to which Lessor has consented), Lessee
shall not thereby be relieved of its duties and obligations hereunder, for which
it shall remain fully responsible and liable (independent of its assignee).
14. TAXES.
(a) Lessee shall comply with all applicable federal, state, local,
foreign and international laws, regulations and orders relating to this Lease.
Lessee assumes liability for, and shall pay when due, and on a net after-tax
basis shall indemnify and defend Lessor against, all federal, state, local,
foreign and international fees, taxes and government charges (including, without
limitation, interest and penalties) or any nature imposed upon
5.
or in any way relating to Lessor, Lessee, any item of Equipment or this Lease,
except federal, state and local taxes on or measured by Lessor's net income
(other than any such tax which is in substitution for or relieves Lessee from
the payment of taxes it would otherwise be obligated to pay to or reimburse
Lessor for as herein provided). Lessee shall at its expense file when due with
the appropriate authorities any and all tax and similar returns and reports
required to be filed with respect thereto or, if requested by Lessor, notify
Lessor of all such requirements and furnish Lessor with all information required
for Lessor to effect such filings, which filings shall also be at Lessee's
expense. Any fees, taxes or other charges paid by Lessor upon failure of Lessee
to make such payments shall at Lessor's option become immediately due from
Lessee to Lessor.
(b) This Lease has been entered into on the assumption that Lessor
shall be entitled to all deductions, credits, and other tax benefits as are
provided in the Internal Revenue Code of 1986, including amendments as may occur
(the "Code"), to an owner of property including, without limitation,
depreciation deductions and interest deductions with respect to any debts
incurred to finance the purchase of the Equipment. If, as a result of any acts,
omissions or misrepresentations by Lessee or as a result of any changes in the
Code, the regulations issued thereunder or the administrative or judicial
interpretations, Lessor's projected after-tax economic return resulting from
ownership and lease of the Equipment is reduced, then Lessee's Rental Payments
shall be increased in an amount (based on Lessor's reasonable calculations)
sufficient to provide the same net after-tax economic return as if such acts or
omissions or changes had not occurred. Appropriate increases shall also be made
in the applicable Stipulated Loss Values for this Lease. In the event the
Equipment is sold by Lessor to another party, the net after-tax economic returns
considered shall be those of such other party.
15. EQUIPMENT WARRANTIES. Lessee acknowledges that (i) Lessee has
selected the supplier of the Equipment, (ii) Lessor acquired the goods or the
right to possession and use of the goods in connection with the Lease, and (iii)
Lessee received a copy of the contract by which Lessor acquired the Equipment or
the right to possession and use of the Equipment before signing the Lease.
LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES INCLUDING THOSE OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR USE WITH RESPECT TO THE EQUIPMENT AND DISCLAIMS THE
SAME. Lessor shall have no liability for any damages, whether direct, indirect,
general, special, incidental, exemplary or consequential, incurred by Lessee as
a result of any defect or malfunction of the Equipment. Lessee shall look
solely to the Equipment supplier for any and all claims related to the
Equipment. Lessor assigns to Lessee, for and during the Lease Term, any
warranty on the Equipment provided by the supplier. Lessor and Lessee agree
that all limitations on remedies and liability contained in this Lease represent
a reasonable allocation of risks that is part of the fundamental bargain between
the parties.
16. EVENTS OF DEFAULT. An Event of Default shall occur if Lessee (i)
fails to pay any Rental Payment or other payment required under the Lease when
due and such failure continues for a period of five (5) days after written
notice from Lessor; or (ii) fails to perform or observe any other covenant,
condition or agreement to be performed or observed by it or breaches any
provision contained in the Lease or in any other document furnished to Lessor in
connection herewith, and such failure or breach continues for a period of thirty
(30) days after written notice from Lessor; or (iii) without Lessor's consent,
attempts to assign this Lease or sell, transfer, encumber, part with possession,
or subject any item of Equipment; or (iv) makes any representation or warranty
herein or in any document furnished by Lessor in connection herewith, which
shall have been materially false or inaccurate when made or at the time to which
such representation or warranty relates; or (v) shall commit an act of
bankruptcy or become insolvent or bankrupt or made an assignment for the benefit
of creditors or consent to the appointment of a Trustee or Receiver or either
shall be appointed for Lessee or for a substantial part of its property without
its consent, or bankruptcy reorganization, or insolvency proceedings shall be
instituted by or against Lessee, and if instituted against Lessee shall not be
vacated or dismissed within sixty (60) days. Any Event of Default shall be
deemed material and a substantial impairment of Lessor's interests for the
purposes of this Lease, the UCC, and any other applicable law.
17. REMEDIES. Upon the occurrences of any Events of Default and at any
time thereafter, provided such Event of Default is then continuing, Lessor may,
in its discretion, do any one or more of the following:
6.
(a) cancel any or all Leases which reference this Master Lease or the
Lease Line Schedule, upon notice to Lessee;
(b) recover any accrued and unpaid Rental Payments and other amounts
which are due and owing under the Leases so canceled on the Rental Payment Date
immediately preceding the date on which Lessor obtains possession of the
Equipment (or such earlier date as judgment is entered in favor of Lessor) (the
"Determination Date"), plus interest at the Default Rate;
(c) with or without canceling this Lease, recover (i) such Stipulated
Loss Value as of the Rental Payment Date immediately preceding the Determination
Date, and (ii) the amount of any loss or reduction of tax benefits which Lessor
anticipated it would receive if the Lease continued for its full Lease Term;
(d) recover any amounts due under any indemnity then determinable,
plus interest at the Default Rate;
(e) require that Lessee provide the return and certification of the
Equipment in accordance with SECTION 6(C) hereof;
(f) enter the premises where such Equipment is located and take
immediate possession of and remove the same, all without liability to Lessor or
its agents for such entry;
(g) sell any or all of the Equipment at public or private sale, with
or without notice to Lessee or advertisement, or otherwise dispose of, hold,
use, operate, lease to others or keep idle such Equipment, all free and clear of
any rights of Lessee and without any duty to account to Lessee for such action
or inaction or for any proceeds with respect thereto; and
(h) exercise any other right or remedy which may be available to it
under the UCC or other applicable law including the right to recover damages for
the breach hereof.
In addition, Lessee shall be liable for, and reimburse Lessor for, all
reasonable legal fees and all commercially reasonable costs and expenses
incurred by Lessor as a result of the foregoing defaults or the exercise of
Lessor's remedies, including without limitation recovering possession of the
Equipment, selling or leasing the Equipment (including broker's and sales
representative's fees and commissions), and placing any Equipment in the
condition and obtaining the certificate required by SECTION 6(C) hereof. 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. No express or implied waiver by Lessor
of any default shall constitute a waiver of any other default by Lessor, or a
waiver of any of Lessor's rights.
18. INDEMNIFICATION. Lessee assumes liability for, and shall pay when
due, and shall indemnify, reimburse and hold each Indemnified Person (defined
below) harmless from and against all Claims (defined below), directly or
indirectly relating to or arising out of the acquisition, use, manufacture,
purchase, shipment, transportation, delivery, installation, lease or sublease,
ownership, operation, possession, control, storage, return or condition of any
item of Equipment (regardless of whether such item of Equipment is at the time
in the possession of Lessee), the falsity of any non-tax representation or
warranty of Lessee or Lessee's failure to comply with the terms of the Lease
during the Lease Term. The foregoing indemnity shall cover, without limitation,
(i) any Claim in connection with a design or other defect (latent or patent) in
any item of Equipment, (ii) any Claim for infringement of any patent, copyright,
trademark or other intellectual property right, or (iii) any Claim for
negligence or strict or absolute liability in tort; provided, however, that
Lessee shall not indemnify Lessor for any liability incurred by Lessor as a
direct and sole result of Lessor's gross negligence or willful misconduct.
"Claim" means all liabilities, losses, damages, actions, suits, demands,
claims of any kind and nature (including, without limitation, claims relating to
environmental discharge, cleanup or compliance), and all costs and expenses
whatsoever to the extent they may be incurred or suffered by an Indemnified
Person in connection
7.
therewith (including, without limitation, reasonable attorneys' fees and
expenses), fines, penalties (and other charges of applicable governmental
authorities), licensing fees relating to any item of Equipment, damage to or
loss of use of property (including, without limitation, consequential or special
damages to third parties or damages to Lessee's property), or bodily injury to
or death of any person (including, without limitation, any agent or employee of
Lessee).
"Indemnified Person" means Lessor (including without limitation, each of
its partners) and each of their respective successors, assigns, agents,
officers, directors, shareholders, partners, servants, agents and employees.
Such indemnities shall continue in full force and effect, notwithstanding
the expiration or termination of this Lease. Upon Lessor's written demand,
Lessee shall assume and diligently conduct, at its sole cost and expense, the
entire defense of any Indemnified Person against any indemnified Claim described
in this SECTION 18. Lessee shall not settle or compromise any Claim against or
involving Lessor without first obtaining Lessor's written consent thereto, which
consent shall not be unreasonably withheld. Lessee shall give Lessor prompt
notice of any occurrence, event or condition in connection with which Lessor may
be entitled to indemnification hereunder. The provisions of this SECTION 18 are
in addition to, and not in limitation of, the provisions of SECTION 14(B).
19. NOTICES. Any notices or demands required or permitted hereunder shall
be given to the parties in writing and by personal delivery, regular or
certified mail, facsimile or telegram at the address set forth in the Lease Line
Schedule or to such other address as the parties may hereafter substitute by
written notice given in the manner prescribed in this Section. Such notices or
demands shall be deemed given upon receipt in the case of personal delivery and
upon mailing or transmission in the case of mail, facsimile or telegram. Lessee
agrees to provide Lessor with thirty (30) days' prior written notice of (a) any
merger or consolidation with or into any other business organization, (b) any
sale, lease or other disposition of assets not in the ordinary course of
business, and (c) any other material change in Lessee's financial structure or
ownership.
20. FURTHER ASSURANCES. Lessee will promptly execute and deliver to
Lessor such further reasonable documents and take such further reasonable action
as Lessor may request in order to more effectively carry out the intent and
purpose of this Lease or an assignment of Lessor's interest herein.
21. MISCELLANEOUS. This Lease shall be binding upon and inure to the
benefit of the parties hereto, their permitted successors and assigns. Any
provision of the Lease which is unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof; and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction; provided,
however, that to the extent that the provisions of any such applicable law can
be waived, they are waived by Lessee. Time is of the essence with respect to
the Lease. Lessee expressly assumes liability for and agrees to indemnify and
defend and hold Lessor harmless from and against any breach by Lessee of any
representation, warranty or covenant made by Lessee herein and in connection
therewith to pay and reimburse Lessor for the payment of any and all expenses,
including reasonable attorney fees incurred by Lessor in connection with or as
the result of any such breach. The captions set forth herein are for
convenience only and shall not define or limit any of the terms hereof. THIS
LEASE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REFERENCE TO CONFLICT OF LAWS
PRINCIPLES. LESSOR AND LESSEE WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY
LITIGATION ARISING FROM THIS LEASE. THIS LEASE SHALL BECOME EFFECTIVE AND
BINDING ON THE PARTIES, THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS, AND
SHALL BE DEEMED EXECUTED AND PERFORMED IN THE STATE OF CALIFORNIA, WHEN THE
RELATED EQUIPMENT SCHEDULE IS ACCEPTED BY LESSOR. LESSEE CONSENTS TO THE NON-
EXCLUSIVE JURISDICTION OF THE STATE COURTS OF CALIFORNIA FOR THE RESOLUTION OF
ANY DISPUTES HEREUNDER.
8.
22. AMENDMENTS, MODIFICATIONS, WAIVERS. NONE OF THE PROVISIONS OF THIS
LEASE MAY BE AMENDED, MODIFIED OR WAIVED EXCEPT IN A WRITING SIGNED BY LESSOR
AND LESSEE.
INITIALS (LESSEE) INITIALS (LESSOR)
---------- ----------
LESSEE: LESSOR:
SYMPHONIX DEVICES, INC. LIGHTHOUSE CAPITAL PARTNERS, L.P.
By: By: LIGHTHOUSE MANAGEMENT PARTNERS,
----------------------------- L.P., its general partner
Name: By: LIGHTHOUSE CAPITAL PARTNERS,
---------------------------- INC., its general partner
Title: By:
---------------------------- ----------------------------
Name:
--------------------------
Title:
--------------------------
9.
LIGHTHOUSE CAPITAL PARTNERS, L.P.
---------------------------------
VENTURE LEASE DOCUMENTATION PACKAGE
TABLE OF CONTENTS
Tab
---
1. Master Equipment Lease Agreement
2. Exhibit A -- Lease Line Schedule
Annex A Stipulated Loss Value Table
3. Exhibit B -- Equipment Schedule
Annex A Summary of Equipment Schedule
4. Exhibit C -- Delivery and Acceptance Certificate
Annex A Equipment Description
Annex B-1 Xxxx of Sale
Annex B-2 Purchase Order and Invoice Assignment
5. Exhibit D Notice of Election
6. Exhibit E Landlord Waiver
Annex A Legal Description of Premises
7. Exhibit F Form of Acknowledgement re mobile Equipment
8. Exhibit G Warrant
EXHIBIT A
LEASE LINE SCHEDULE NO. ________, dated _________________, 199____ ("Lease
Line Schedule"), to MASTER EQUIPMENT LEASE AGREEMENT NO. ________, dated
___________, 199____ ("Master Lease"), by and between LIGHTHOUSE CAPITAL
PARTNERS, L.P., a Delaware limited partnership ("Lessor") and SYMPHONIX DEVICES,
INC., a California corporation ("Lessee"). (All capitalized terms not otherwise
defined herein shall have the meanings given to such terms in the Master Lease.)
IN CONSIDERATION of the mutual covenants contained herein, the parties agree
as follows:
1. LEASE LINE. The total Lessor's Cost of all units of Equipment under all
Equipment Schedules pursuant to this Lease Line Schedule shall not exceed Five
Hundred Thousand Dollars ($500,000) (the "Commitment"). "LESSOR'S COST" means,
with respect to a unit of Equipment, the total cost to Lessor of purchasing such
unit, as indicated on the applicable Equipment Schedule. Lessor's obligation to
fund Equipment Schedules under the Commitment shall terminate on October 31,
1996 (the "Commitment Termination Date"). The minimum Lessor's Cost for each
Equipment Schedule shall be Ten Thousand Dollars ($10,000).
2. RENTAL FACTOR. The Rental Factor for each Equipment Schedule will be
based upon an implicit interest rate equal to the prime lending rate as quoted
in The Wall Street Journal three business days prior to the Commencement Date
for such Equipment Schedule (the "Prime Rate") plus 300 basis points. If on
----
such date the Prime Rate is other than 7.75%, then the Rental Factor for that
Equipment Schedule will be adjusted upward of downward basis point for basis
point to maintain an implicit interest rate equal to the Prime Rate plus 300
----
basis points. Once the Lease Term commences for any Equipment Schedule, there
will be no further adjustments to the Rental Factor for such Equipment Schedule.
The Rental Payment under a particular Equipment Schedule shall be an amount
equal to the product of (a) the Rental Factor and (b) the aggregate Lessor's
Cost of Equipment subject to such Equipment Schedule.
3. INTERIM RATE. The Interim Rate used to calculate the daily Interim Rent
shall be equal to the Rental Factor for each Equipment Schedule divided by
thirty (30).
4. ADVANCE RENT. Upon execution of this Lease Line Schedule, Lessee shall
pay to Lessor advance rent of Twelve Thousand Seven Hundred and Forty-Eight
Dollars ($12,748) ("Advance Rent"), to be applied on a pro rata basis (using the
ratio of the Lessor's Cost under each Equipment Schedule to the total Commitment
amount) toward the last Rental Payment due from Lessee to Lessor under each
Equipment Schedule. If Lessee shall not have leased, on or prior to the
Commitment Termination Date or the earlier termination of this Lease, Equipment
in an aggregate Lessor's Cost equal to the Commitment, then Lessor shall retain
as a non-utilization fee any portion of the Advance Rent not applied as set
forth in this SECTION 4.
5. EXPENSES. Lessee agrees to reimburse Lessor for up to One Thousand Five
Hundred Dollars ($1,500) of expenses incurred in connection with the negotiation
and documentation of this transaction, promptly upon receipt of an invoice
together with appropriate back-up.
6. ELIGIBLE EQUIPMENT. All equipment financed under an Equipment Schedule
shall be Eligible Equipment. "Eligible Equipment" means the following the types
of equipment to the extent acceptable to Lessor:
Various used and new computers, peripherals, analytical and test equipment,
office furniture and equipment, and other equipment; provided, that all
Equipment shall be delivered to Lessee by the manufacturer or vendor after,
upon or not more than ninety (90) days prior to the funding date with respect
to such Equipment.
together with all replacements, parts, cables, repairs, additions and
accessories incorporated therein or affixed thereto and all operating manuals
and manufacturer's instructions (collectively hereinafter called the
"Equipment"). Such replacements, parts, cables, repairs, additions and
accessories shall (whether or not purchased by Lessor) be considered part of the
Equipment for all purposes and, when installed in or attached to the Equipment
(unless
1.
otherwise agreed), be or become the property of the Lessor. Except as otherwise
specifically provided or the context so requires, the term "Equipment" includes
operating system or other bundled software which is delivered on or with the
Equipment or is included on the Equipment Schedules.
7. COMMENCEMENT DATE. The "Commencement Date" for each Equipment Schedule
shall be the first day of the calendar quarter following the Acceptance Date for
the items of Equipment subject to such Equipment Schedule. If the Acceptance
Date is the first day of a calendar quarter, then the Commencement Date shall be
the Acceptance Date.
8. LEASE TERMINATION OPTIONS. Upon Lease Termination (as defined in the
Master Lease), Lessee will have, with respect to all but not less than all of
the Equipment governed by this Lease Line Schedule, the option to purchase the
Equipment, renew the Lease or return the Equipment to Lessor as provided in
SECTION 6 of the Master Lease.
9. ADVANCE NOTICE PERIOD. The "Advance Notice Period" shall be at least
ninety (90) days, but not more than 180 days, prior to Lease Termination (as
defined in the Master Lease) of Equipment Schedule No. 1 to this Lease Line
Schedule.
10. AUTOMATIC EXTENSION PERIOD. The "Automatic Extension Period" shall equal
three (3) months and affects each Equipment Schedule under this Lease Line
Schedule.
11. INSURANCE. The amount of commercial general liability insurance (other
than products liability coverage and completed operations insurance) required
under the Master Lease shall be at least $2,000,000 per occurrence. The amount
of the products liability and completed operations insurance under the Master
Lease shall be at least $2,000,000 per occurrence.
12. ASSIGNMENT BY LESSEE. Notwithstanding anything to the contrary in
SECTION 13 of the Master Lease, in the event of (a) a merger, sale of
substantially all of the assets or other reorganization involving Lessee in
which the shareholders of Lessee immediately prior to such transaction own less
than 50% of the voting securities of the surviving entity or purchaser of assets
(or its parent) in such transaction or (b) a merger or other reorganization
effected solely for the purpose of changing Lessee's jurisdiction of
incorporation, Lessor shall not withhold its consent to the assignment of this
Lease to the successor entity if each of the following conditions precedent is
satisfied:
(i) in the case of paragraph (a) above, the successor entity is as of the
date of such assignment at least as creditworthy (as reasonably determined by
Lessor in accordance with Lessor's usual credit standards) as Lessee on the
date of this Lease;
(ii) Lessee gives Lessor at least thirty (30) days prior written notice of
such merger, sale of assets or other reorganization;
(iii) such merger, sale of assets or other reorganization does not
adversely affect the rights of Bank;
(iv) the corporation that results from such merger or other reorganization
or which purchases the assets in the case of a sale of assets (the "Surviving
Corporation") shall have executed and delivered to Lessor an agreement in form
and substance reasonably satisfactory to Lessor, containing an assumption by
the Surviving Corporation of the due and punctual performance and observance
of each covenant and condition of Lessee in the Master Lease, Lease Line
Schedule and Equipment Schedules (the "Lease Documents") and making
representations and warranties with respect to the Surviving Corporation
similar in scope and substance to the representations and warranties made by
Lessee in the Lease Documents;
(v) the Surviving Corporation executes any precautionary financing
statements or amendments thereto reasonably requested by Lessor; and
2.
(vi) immediately after giving effect to such merger, sale of assets or
other reorganization, no Event of Default or, event which with the lapse of
time or giving of notice or both, would result in an Event of Default shall
have occurred and be continuing.
13. FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a) as soon as
available, but in any event within twenty (20) days after the end of each month,
a company prepared balance sheet, income statement and cash flow statement
covering Lessee's operations during such period, certified by an officer of
Lessee reasonably acceptable to Lessor; (b) as soon as available, but in any
event within ninety (90) days after the end of Lessee's fiscal year, audited
financial statements of Lessee prepared in accordance with generally accepted
accounting principles, consistently applied, together with an unqualified
opinion on such financial statements of an independent certified public
accounting firm reasonably acceptable to Lessor; (c) promptly upon becoming
available, copies of all statements, reports, budgets, sales projections,
operating plans and notices sent or made available generally by Lessee to its
security holders; (d) immediately upon receipt of notice thereof, a report of
any material legal actions pending or threatened against Lessee; and (e) such
other financial information as Lessor may reasonably request from time to time.
14. MAINTENANCE SERVICE CONTRACTS. Lessee shall obtain and keep in effect at
all times during the Lease Term (and any renewal or extension thereof),
maintenance service contracts covering the Equipment with the Equipment supplier
or with suppliers of maintenance services approved by Lessor, such approval not
to be unreasonably withheld.
15. INSTALLATION, HANDLING AND DELIVERY CHARGES. Any handling and delivery
charge to cover all Equipment transportation, rigging, drayage, packing,
installation and handling to and from vendor's plant and upon return to Lessor's
designated location shall be paid by Lessee.
16. MISCELLANEOUS TAXES. Without limitation of the provisions of the Master
Lease, Lessee agrees to pay and to indemnify Lessor for any sales or use tax and
any property tax in connection with the sale, lease or use of the Equipment.
17. LATE FEE. Lessee shall pay a late charge on any rent payments or other
sums due hereunder which are past due, in an amount equal to two percent (2%) of
the past due amount, payable on demand.
18. DEFAULT RATE. The Default Rate of interest on late payments shall be
eighteen percent (18%) per annum.
19. NOTICES. All notices shall be addressed as follows:
If to Lessor: If to Lessee:
Lighthouse Capital Partners, L.P. Symphonix Devices, Inc.
000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000 0000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxx, XX 00000
Attn: Contract Administration Attn: _________________________
Phone: (000) 000-0000 Phone: ________________________
Fax: (000) 000-0000 Fax: __________________________
20. CONDITIONS TO THE FIRST EQUIPMENT SCHEDULE. On or prior to the date of
execution of the first Equipment Schedule under this Lease Line Schedule, Lessor
shall have received in form and substance satisfactory to Lessor, each of the
following:
(a) A Warrant substantially in the form of EXHIBIT G to the Master Lease.
(b) Copies, certified by the Secretary or Assistant Secretary or Chief
Financial Officer of Lessee, of: (i) the Articles of Incorporation and By-
Laws of Lessee (as amended to the date of the Lease) and (ii) the
3.
resolutions adopted by Lessee's board of directors authorizing the
execution and delivery of this Lease, the Lease Line Schedule, the
Equipment Schedules, the Warrant and the other documents referred in this
Lease Line Schedule and the performance by Lessee of its obligations in
such documents.
(c) A Good Standing Certificate (including franchise tax status) with respect
to Lessee from Lessee's state of incorporation, dated a date reasonably
close to the date of acceptance of the Lease by Lessor.
(d) Evidence of the insurance coverage required by SECTION 8 of the Master
Lease.
(e) All necessary consents of shareholders and other third parties with
respect to the subject matter of the Master Lease, the Lease Line
Schedule, the Equipment Schedules and the Warrant.
(f) Payment of the Advance Rent.
21. CONDITIONS TO ALL FUNDINGS UNDER ALL EQUIPMENT SCHEDULES. On or prior to
each funding under each Equipment Schedule under this Lease Line Schedule, each
of the following conditions shall have been satisfied:
(a) No Event of Default or event which, with notice or lapse of time or both,
would become an Event of Default, has occurred and is continuing.
(b) Lessor shall have received all necessary or desirable estoppel
certificates and UCC filings, releases or terminations.
(c) Lessor shall have received a landlord waiver and consent in substantially
the form of EXHIBIT E to the Master Lease with respect to each equipment
location.
(d) There shall not have occurred (i) any material adverse change to the
general affairs, management, results of operations, condition (financial
or otherwise) or prospects of Lessee, whether or not arising from
transactions in the ordinary course of business, or (ii) any material
adverse deviation by Lessee from the business plan of Lessee presented to
and not disapproved by Lessor, since the date of the Master Lease.
(e) Lessee shall have delivered to Lessor an Equipment Schedule covering the
appropriate funding period.
(f) Lessee shall have delivered to Lessor (i) in the case of a sale-leaseback,
copies of invoices, canceled checks or other proof of payment, a Xxxx of
Sale, a Delivery and Acceptance Certificate, and any UCC filings or other
notices deemed necessary or desirable in connection with the sale-
leaseback or (ii) at Lessor's request, in the case of a purchase of new
equipment in excess of $25,000 from an equipment vendor, a Purchase Order
and Invoice Assignment and a Delivery and Acceptance Certificate.
(g) All terms and conditions in the Equipment Schedule shall have been
satisfied by the Acceptance Date for the Equipment under such Equipment
Schedule.
(h) Lessor shall have received any security deposit provided for in the
Equipment Schedule as security for Lessee's performance of its obligations
hereunder. Lessor shall not be required to escrow the security deposit or
credit Lessee with any interest earned thereon, and Lessor may, at its
option, apply such deposit against any sum due from Lessee or paid by
Lessor on Lessee's behalf, but such application shall not relieve Lessee
of its obligation to pay or reimburse Lessor.
(i) All other documents as Lessor shall have reasonably requested.
4.
LESSEE: LESSOR:
SYMPHONIX DEVICES, INC. LIGHTHOUSE CAPITAL PARTNERS, L.P.
By: By: LIGHTHOUSE MANAGEMENT PARTNERS,
----------------------------- L.P., its general partner
Name: By: LIGHTHOUSE CAPITAL PARTNERS,
---------------------------- INC., its general partner
Title: By:
---------------------------- ----------------------------
Name:
--------------------------
Title:
--------------------------
ANNEX A - Stipulated Loss Value Table
5.
ANNEX A
STIPULATED LOSS VALUE TABLE
TO
LEASE LINE SCHEDULE NO. __________, dated __________, 199____, to MASTER
EQUIPMENT LEASE AGREEMENT NO. __________, dated ______, 199__ ("Master Lease"),
by and between LIGHTHOUSE CAPITAL PARTNERS, L.P., a Delaware limited partnership
("Lessor"), and SYMPHONIX DEVICES, INC., a California corporation ("Lessee").
(All capitalized terms not otherwise defined herein shall have the meanings
given to such terms in the Master Lease.)
In the case of an Event of Loss, the Stipulated Loss Value for each item of
leased Equipment is the Lessor's Cost for the item multiplied by Stipulated Loss
Value Percentage for the Rent Payment Number following the month of the Event of
Loss.
Stipulated Stipulated
Rent Loss Rent Loss
Payment Value Payment Value
Number Percentage Number Percentage
--------- ----------- ------- -----------
1 111.3590% 25 69.4005%
2 109.7841% 26 67.4498%
3 108.1952% 27 65.4816%
4 106.5920% 28 63.4957%
5 104.9744% 29 61.4921%
6 103.3424% 30 59.4705%
7 101.6957% 31 57.4309%
8 100.0343% 32 55.3729%
9 98.3580% 33 53.2985%
10 96.6667% 34 51.2015%
11 94.9602% 35 49.0878%
12 93.2385% 36 46.9551%
13 91.5013% 37 44.8033%
14 89.7485% 38 42.6322%
15 87.9801% 39 40.4417%
16 86.1958% 40 38.2315%
17 84.3955% 41 36.0016%
18 82.5791% 42 33.7516%
19 80.7465% 43 31.4815%
20 78.8974% 44 29.1911%
21 77.0317% 45 26.8802%
22 75.1494% 46 24.5486%
23 73.2501% 47 22.1960%
24 71.3339% 48 20.0000%
Lessor: ____________________ Lessee: ____________________
6.
EXHIBIT B
EQUIPMENT SCHEDULE NO. __________ dated _________, 199___ ("Equipment
Schedule") to LEASE LINE SCHEDULE NO. _______ dated __________, 199____ ("Lease
Line Schedule"), to MASTER EQUIPMENT LEASE AGREEMENT NO. __________ dated
__________, 199___ ("Master Lease"), by and between LIGHTHOUSE CAPITAL PARTNERS,
L.P. ("Lessor") and SYMPHONIX DEVICES, INC., a California corporation
("Lessee"). (All capitalized terms not otherwise defined herein shall have the
meanings given to such terms in the Master Lease.)
1. Total Lessor's Cost: The total Lessor's Cost under this Equipment Schedule
shall be an amount equal to the sum of the Lessor's
Cost under each Delivery and Acceptance Certificate
executed by Lessee between the date of this Equipment
Schedule and the Commencement Date, and which refers
to this Equipment Schedule.
2. Lease Term: Forty-Eight (48) Months
3. Commencement Date:
--------------------
4. Interim Rent: On or about the Commencement Date, Lessor shall send
Lessee a "Summary of Equipment Schedule" in the form
of ANNEX A hereto, specifying, among other things, the
applicable Interim Rent; provided, however, that any
failure by Lessor to send Lessee a Summary Equipment
Schedule shall not relieve Lessee of its obligation to
pay rent hereunder.
5. Rental Factor: The Rental Factor shall be set forth in the Summary of
Equipment Schedule.
6. Rental Payments: The amount of the monthly Rental Payments, calculated
in accordance with the Lease Line Schedule and payable
monthly in advance, shall be set forth in the Summary
of Equipment Schedule. Payments shall be made to
Lessor's address set forth in the Lease Line Schedule.
7. Rental Payment Dates: First day of each calendar month.
8. Equipment Description. The Equipment shall be described in each Delivery and
Acceptance Certificate executed by Lessee between the
date of this Equipment Schedule and the Commencement
Date, and which refers to this Equipment Schedule.
Delivery and Acceptance Certificates under this
Equipment Schedule must be received by Lessor no later
than the Commencement Date.
9. Equipment Location:
----------------------------------------------------
10. Terms and conditions. The terms and conditions of the above-referenced
Master Lease and Lease Line Schedule are incorporated herein. In addition, the
following attachments apply to this Equipment Schedule only: .
------------------
1.
11. No Default. No Event of Default or event which, with notice or lapse of
time or both, would become an Event of Default, has occurred and is continuing.
LESSEE: LESSOR:
SYMPHONIX DEVICES, INC. LIGHTHOUSE CAPITAL PARTNERS, L.P.
By: By: LIGHTHOUSE MANAGEMENT PARTNERS,
----------------------------- L.P., its general partner
Name: By: LIGHTHOUSE CAPITAL PARTNERS,
---------------------------- INC., its general partner
Title: By:
---------------------------- ----------------------------
Name:
--------------------------
Title:
--------------------------
2.
ANNEX A
SUMMARY OF EQUIPMENT SCHEDULE NO. __________
to
LEASE LINE SCHEDULE NO. ______ dated _______, 199__, to MASTER EQUIPMENT
LEASE AGREEMENT NO. __________ dated __________, 199___ ("Master Lease") by and
between LIGHTHOUSE CAPITAL PARTNERS, L.P. ("Lessor") and SYMPHONIX DEVICES,
INC., a California corporation ("Lessee"). (All capitalized terms not otherwise
defined herein shall have the meanings given to such terms in the Master Lease.)
1. Total Lessor's Cost:
-----------------------------
2. Total Interim Rent: $
-----------------------------
3. Rental Factor: %
-----------------------------
4. Rental Payments: Payments of $
----------------------------- ----------
each, payable monthly in advance
5. Amount of Advance Rent applied to this Equipment Schedule: $
----------------
LESSOR:
LIGHTHOUSE CAPITAL PARTNERS, L.P.
By: LIGHTHOUSE MANAGEMENT PARTNERS, L.P.,
its general partner
By: LIGHTHOUSE CAPITAL PARTNERS, INC.,
its general partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
3.
EXHIBIT C
DELIVERY AND ACCEPTANCE CERTIFICATE
UNDER
EQUIPMENT SCHEDULE NO. __________, dated ___________, 199___, to LEASE LINE
SCHEDULE NO. _____, dated ________, 199__, to MASTER EQUIPMENT LEASE AGREEMENT
NO. __________, dated __________, 199___ by and between LIGHTHOUSE CAPITAL
PARTNERS, L.P. ("Lessor") and SYMPHONIX DEVICES, INC., a California corporation
("Lessee"). (All capitalized terms not otherwise defined herein shall have the
meanings given to such terms in the Master Lease.)
1. Installation Address:
---------------------------------------
2. Lessor's Cost:
--------------------------
3. Commencement Date:
----------------
4. Equipment Description:
MODEL & ORIGINAL UNIT
QTY. DESCRIPTION PURCHASE PRICE LESSOR'S COST
---- ----------- -------------- -------------
SEE ANNEX A
5. Lessee acknowledges receipt and acceptance of the Equipment listed in
ANNEX A and agrees the Equipment has been delivered and is ready for use under
the terms of the above-referenced Master Equipment Lease Agreement, Lease Line
Schedule, and Equipment Schedule, the terms and conditions of which are
incorporated herein, including, without limitation, the obligation to pay
Interim Rent and to make Rental Payments.
Acceptance Date: _________________, 19____.
LESSEE:
SYMPHONIX DEVICES, INC.
By:
---------------------------------
Name:
---------------------------
Title:
--------------------------
ANNEX A
EQUIPMENT DESCRIPTION
Model & Original Unit
Quantity Description Purchase Price Lessor's Cost
-------- ----------- -------------- -------------
2.
ANNEX B-1
XXXX OF SALE
For and in consideration of the sum of One Dollar ($1.00) and other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, SYMPHONIX DEVICES, INC. (herein "Seller"), does hereby sell,
grant, transfer and deliver all right, title and interest in and to the
equipment further described on ANNEX A hereto (herein the "Equipment"), together
with all warranties, guarantees or other similar rights with respect to the
Equipment ("Equipment Warranties") unto LIGHTHOUSE CAPITAL PARTNERS, L.P.
(herein "Purchaser") and to its successors and assigns to have and to hold said
Equipment and the Equipment Warranties forever. Except for the Equipment
Warranties, the Equipment is sold "as is" and "where is" and the description of
the Equipment is for the sole purpose of identifying it and is not part of the
basis of the bargain.
Seller represents and warrants that it holds all right, title and interest
in and to the Equipment being transferred free and clear of all liens and
encumbrances of any kind and Seller does for itself, its successors and assigns
covenant and agree with Purchaser, its successors and assigns, to warrant and
defend the sale of the Equipment and the transfer of the Equipment Warranties
unto Purchaser, its successors and assigns against all and every person and
persons whomsoever claiming or laying claim to the same, except for any defects
in title or liens or encumbrances in or to the Equipment arising solely by
reason of Purchaser's own acts.
THE WARRANTY SET FORTH IN THE FOREGOING PARAGRAPH AND THE EQUIPMENT
WARRANTIES ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES OF SELLER, WHETHER
WRITTEN, ORAL OR IMPLIED, AND SELLER SHALL NOT, BY VIRTUE OF HAVING SOLD THE
EQUIPMENT HEREWITH, BE DEEMED TO HAVE MADE ANY REPRESENTATION OF WARRANTY AS TO
THE MERCHANTABILITY, FITNESS, DESIGN OR CONDITION OF, OR AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP IN, THE EQUIPMENT.
IN WITNESS WHEREOF, we have set our hand and seal this _________ day of
_________, 19_______.
SYMPHONIX DEVICES, INC.
By:___________________________
Name:_________________________
Title: _______________________
1.
ANNEX B-2
PURCHASE ORDER AND INVOICE ASSIGNMENT
THIS PURCHASE ORDER ASSIGNMENT, dated as of ______________________,
199____________ (this "Assignment"), between SYMPHONIX DEVICES, INC., a
California corporation ("Assignor") and LIGHTHOUSE CAPITAL PARTNERS, L.P.
("Assignee").
W I T N E S S E T H :
WHEREAS, Assignor has submitted its Purchase Orders and Invoices
listed in SCHEDULE 1 hereto (collectively, the "Purchase Orders"), to
________________________________________________________________________________
___________________________________________________________ (the "Vendor")
concerning certain units of equipment (the "Units") listed in SCHEDULE 1 hereto
to be subject to a Master Equipment Lease Agreement No. ____, dated as of
_____________________________________________, 19___________ (the "Master
Lease"), between Assignor and Assignee (all terms used but not otherwise defined
herein shall have the meaning given to them in the Master Lease):
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties
hereto agree as follows:
1. Assignor does hereby sell, assign, transfer and set over unto
Assignee, all of the Assignor's rights to and interests in the Purchase Orders
as and to the extent that the same relates to the Units. The assignment herein
shall include, without limitation, the right of Assignee to purchase the Units
pursuant to the Purchase Orders and to take title to the Units, all claims for
damages in respect of the Units arising as a result of any default by Vendor
under the Purchase Orders, together with any and all rights of Assignor to
compel performance of the terms of the Purchase Orders in respect of the Units.
2. The exercise by Assignee of any of the rights assigned hereunder
shall not release Assignor from any of its duties or obligations to Vendor under
the Purchase Orders except to the extent that such exercise by Assignee shall
constitute performance of such duties and obligations.
3. Upon satisfaction of the conditions set forth in the applicable
Lease Line Schedule to the Master Lease with respect to the Units, Assignee
shall purchase such Unit by paying or causing to be paid, by check mailed or
delivered to Vendor, on such date or thereafter as permitted by Vendor, an
amount equal to the purchase price of the Unit, as such amount may be adjusted
in accordance with the terms of the Purchase Orders and reflected on invoices
prepared by Vendor to Assignee on or before the date of delivery and acceptance
of the Unit.
4. Assignor agrees that it will, at any time and from time to time,
upon the written consent of Assignee, promptly and duly exercise and deliver any
and all such further instruments and documents and take such further action as
Assignee may reasonably request in order that Assignee may obtain the full
benefits of this Agreement and of the rights and powers herein granted.
5. Assignor represents and warrants that the Purchase Orders are in
full force and effect and that Assignor is not in default under any of them.
Assignor further represents and warrants that Assignor has not assigned or
pledged, and so long as this Assignment shall remain in effect, will not assign
or pledge, the whole or any part of the rights hereby assigned or any of its
rights with respect to the Units under the Purchase Orders to anyone other than
Assignee.
1.
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Order
Assignment to be duly executed as of the day and year first above written.
SYMPHONIX DEVICES, INC. LIGHTHOUSE CAPITAL PARTNERS, L.P.
By: By: LIGHTHOUSE MANAGEMENT PARTNERS,
----------------------------- L.P., its general partner
Name: By: LIGHTHOUSE CAPITAL PARTNERS,
---------------------------- INC., its general partner
Title: By:
---------------------------- ----------------------------
Name:
--------------------------
Title:
--------------------------
Acknowledged and Consented to this
___________________ day of______________________, 199_______________.
__________________________________________(Vendor)
By:____________________________ Title:_______________________________
2.
SCHEDULE I
TO
PURCHASE ORDER AND INVOICE ASSIGNMENT
3.
EXHIBIT D
NOTICE OF ELECTION
under
LEASE LINE SCHEDULE NO. _____, dated ________, 199__, to MASTER EQUIPMENT
LEASE AGREEMENT NO. __________, dated __________, 199___ ("Master Lease") by and
between LIGHTHOUSE CAPITAL PARTNERS, L.P. ("Lessor") and SYMPHONIX DEVICES,
INC., a California corporation ("Lessee"). (All capitalized terms not otherwise
defined herein shall have the meanings given to such terms in the Master Lease.)
1. Pursuant to SECTION 4(D) of the Master Lease, Lessee hereby elects the
Lease Termination Option indicated below for the above Lease Line Schedule.
Option Election (check one)
------ --------------------
Purchase ______________________
Renew ______________________
Return ______________________
2. If the renewal option is selected, then Lessee and Lessor must agree
upon the rental period and rental amount. If Lessee and Lessor are unable to
agree upon the terms of renewal, then this Notice of Election shall be deemed
invalid and a new Notice of Election must be submitted by Lessee.
Dated: __________________
SYMPHONIX DEVICES, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
1.
EXHIBIT E
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Lighthouse Capital Partners, L.P.
000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Contract Administration
LANDLORD'S WAIVER AND CONSENT
THIS LANDLORD'S WAIVER AND CONSENT (this "Waiver"), dated as of
_________________________________________, 199____________, is executed by and
between _____________, a _______________ ("Landlord") and LIGHTHOUSE CAPITAL
PARTNERS, L.P., a Delaware limited partnership ("Lessor").
RECITALS
A. Landlord and SYMPHONIX DEVICES, INC., a California corporation
("Tenant") are parties to a [Lease Agreement], dated as of , 19
(together with any other agreement between Landlord and Tenant relating to the
Premises, as defined below, all as amended from time to time, to be referred to
herein collectively as the "Lease"), pursuant to which Landlord has leased to
Tenant that certain real property commonly known as , and more particularly
described in ANNEX A hereto (the "Premises").
B. Tenant and Lessor intend to or have entered into a Master Equipment
Lease Agreement No. _____ dated as of ____________, 199____________ (the "Credit
Agreement") pursuant to which Lessor has agreed or will agree to lease to Tenant
from time to time certain equipment (the "Equipment") which will be located on
the Premises.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Lessor agree as follows:
1. WAIVER AND CONSENT. Landlord consents to the location of the
Equipment on the Premises and does irrevocably waive, disclaim and relinquish
and assign to Lessor any and all rights to impose, receive, assert or enforce
any lien, encumbrance, charge, security interest, ownership interest, claim or
demand of any kind against or involving the Equipment, whether arising by common
law, statute or consensually (under the Lease or otherwise) and whether now in
existence or hereafter created, including, but not limited to, those for rent or
other right of payment. This waiver, disclaimer, relinquishment and assignment
shall survive the termination of the Lease. Landlord further agrees that (a)
neither the Equipment nor any item thereof shall become part of, or otherwise be
or become a fixture attached to, the Premises, notwithstanding the manner of the
Equipment's annexation, the Equipment's adaptability to the uses and purposes
for which the Premises are used, and the intentions of the party making the
annexation; (b) the Equipment (or any item thereof) may be repossessed by
Lessor; (c) in connection with such repossession or otherwise, Lessor, and any
of its agents and employees, may enter upon the Premises for the purposes of (i)
guarding and maintaining the Equipment (or any item thereof), (ii) showing the
Equipment (or any item thereof) to prospective lenders, buyers, lessees and
sublessees, as applicable, and any of their respective agents and employees,
(iii) preparing, disassembling, dismantling, loading and/or removing the
Equipment (or any item thereof), and (iv) general inspections of the Equipment
pursuant to the Credit Agreement; and (d) the right of Lessor to enter the
Premises and the other rights granted to Lessor in
this Waiver shall not terminate until thirty (30) days after Lessor receives
written notice from Landlord of the termination of the Lease. If Lessor should
exercise its rights hereunder (and the failure to exercise such rights shall not
be construed as a waiver thereof), Landlord agrees upon receiving prior written
notice, to provide ingress and egress to effect such exercise as well as provide
reasonably adequate space contiguous to the location of the Equipment to permit
the exercise of such rights. Landlord further agrees that Lessor has no
obligation to exercise any right granted to Lessor in this Waiver and that
Lessor may elect to remove only a portion or none of the Equipment from the
Premises.
2. COSTS. Lessor agrees to indemnify and hold the Landlord harmless
from any out-of-pocket costs incurred by Landlord for any physical damage to the
Premises caused by Lessor solely from the exercise of its rights under clause
(b) or (c) of Paragraph 1 above.
3. LEASE DEFAULTS. Landlord further agrees to provide Lessor
written notice of any default or event of default under the Lease (each a
"Default Notice") simultaneously with the giving of notice of the same to Tenant
or, if no such notice is required under the Lease, at least thirty (30) days
prior to the date Landlord would be entitled to terminate the Lease. Each such
notice shall be sent to the address of Lessor set forth below the signature of
Lessor on the last page hereof or such other address as Lessor may from time to
time provide to Landlord, and shall be deemed delivered (i) in the case of
notice by letter, five (5) business days after deposited in the United States
mail registered and return receipt requested, (ii) in the case of notice by
overnight courier, two (2) business days after delivery to such courier and
(iii) in the case of notice given by telex or telecommunication, when given or
sent with electronic confirmation of receipt. During any time period when
Tenant is in default under the Lease, Lessor shall have the option, but not the
obligation, to cure any such default. Landlord shall accept such cure if it
occurs within thirty (30) days after Lessor has received the relevant Default
Notice as fully as if Tenant had fully performed its obligation under the Lease.
Upon curing any such default, Lessor shall be subrogated to the rights of
Landlord against Tenant and, as between Landlord and Tenant, such cured defaults
shall no longer exist.
4. LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord warrants and
represents to Lessor that (a) Landlord is the lessor under the Lease; (b) there
are no other agreements between the parties affecting or relating to the
Premises; (c) Landlord has all requisite power and authority to execute and
deliver this Waiver and no consents from any third party are required to do so;
(d) Landlord is the sole owner of the landlord's interest under the Lease and
has not conveyed, transferred or assigned any part of that interest to any other
person or entity; (e) no event of default (nor any event which with the passage
of time would constitute an event of default) has occurred under the Lease; (f)
there exists no litigation affecting title to the Premises or any adverse claim
with respect to the Premises of which Landlord has received notice; (g) there is
no condemnation proceeding pending with respect to any part of the Premises, nor
any threat thereof, of which the Landlord has received notice; (h) the Lease is
in full force and effect; and (i) the Premises are not subject to any mortgage
or other security interest in favor of any person which has not executed an
attornment agreement acceptable to Lessor with respect to this Waiver.
5. MISCELLANEOUS. This Waiver and all rights granted to Lessor
hereunder shall remain in effect so long as there are any obligations owing by
Tenant under the Credit Agreement or any present or future agreement between
Tenant and Lessor which involves the Equipment. All the terms and provisions of
this Waiver shall be binding on and inure to the benefit of the respective
successors and assigns of Landlord and Lessor, and Landlord covenants and agrees
that any assignment, mortgage or other transfer of all or any part of its
interest as the owner and/or landlord of the Premises shall provide and shall be
subject and subordinate to all the terms and provisions hereof. Landlord shall
provide each of Tenant and Lessor a duly executed copy of the agreement
evidencing such subordination. Such agreement shall be in form and substance
reasonably satisfactory to Lessor. The rights and benefits of this Waiver may
be assigned or transferred by Lessor or to third parties who may become the
lessor, directly or indirectly, to Tenant. Lessor shall provide subsequent
written notice to Landlord and Tenant of the assignment or transfer. Headings
in this Waiver are for convenience of reference only and are not part of the
substance hereof. This Waiver shall be governed by and construed in accordance
with the laws of the State of California.
2.
IN WITNESS WHEREOF, Landlord and Lessor have executed this Waiver as of the
date and year first written above.
-----------------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
-----------------------------------
-----------------------------------
-----------------------------------
Attention:
-------------------------
LIGHTHOUSE CAPITAL PARTNERS, L.P.
By: LIGHTHOUSE MANAGEMENT PARTNERS,
L.P., its general partner
By: LIGHTHOUSE CAPITAL PARTNERS,
INC., its general partner
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Address:
Lighthouse Capital Partners, L.P.
000 Xxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Contract Administrator
3.
ANNEX A
LEGAL DESCRIPTION OF PREMISES
[To Be Provided By Tenant]
4.
NOTARY ACKNOWLEDGEMENT
TO LANDLORD'S WAIVER AND CONSENT
State of )
------------------------ )
County of )
----------------
On , 19 before me, the undersigned, personally appeared
-- -------
, personally known to me (or proved to me on the basis of satisfactory
----------
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature ______________________________________________ (Seal)
State of )
------------------------ )
County of )
----------------
On , 19 before me, the undersigned, personally appeared
------- --------
, personally known to me (or proved to me on the basis of satisfactory
----------
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature ____________________________ (Seal)
5.
EXHIBIT F
ACKNOWLEDGEMENT FROM USER OF MOBILE EQUIPMENT
UNDER
EQUIPMENT SCHEDULE NO. __________, dated ___________, 199___ ("Equipment
Schedule"), to LEASE LINE SCHEDULE NO. _____, dated ________, 199__ ("Lease Line
Schedule"), to MASTER EQUIPMENT LEASE AGREEMENT NO. __________, dated
__________, 199___ ("Master Lease") by and between LIGHTHOUSE CAPITAL PARTNERS,
L.P. ("Lessor") and SYMPHONIX DEVICES, INC., a California corporation
("Lessee"). (All capitalized terms not otherwise defined herein shall have the
meanings given to such terms in the Master Lease.)
1. The undersigned acknowledges and agrees that:
(a) the Equipment listed in ANNEX A is owned by Lessor and is subject
to the terms and conditions of the Master Lease, Lease Line Schedule and
Equipment Schedule; and
(b) upon the occurrence and continuance of an Event of Default under
the Master Lease, Lessor may, among other things, take possession of the
Equipment and upon request the undersigned agrees to make such Equipment
available to Lessor.
2. The undersigned's address is:
_______________________
_______________________
_______________________
Phone: ________________
Fax: __________________
IN WITNESS WHEREOF, the undersigned has executed this Acknowledgement as of
the date written below.
Dated: _______________, 199____
------------------------------------
Name:
-------------------------------
EXHIBIT G
WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR
TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS AVAILABLE WITH
RESPECT THERETO.
PREFERRED STOCK PURCHASE WARRANT
Warrant No. 1001 Number of Shares 37,000
----
SYMPHONIX DEVICES, INC,
Void after October 31, 2004
1. ISSUANCE. This Warrant is issued to LIGHTHOUSE CAPITAL
PARTNERS, L.P., a Delaware limited partnership, by SYMPHONIX DEVICES, INC., a
California corporation (hereinafter with its successors called the "Company").
2. PURCHASE PRICE; NUMBER OF SHARES. The registered holder of
this Warrant (the "Holder"), commencing on the date hereof, is entitled upon
surrender of this Warrant with the subscription form annexed hereto duly
executed, at the principal office of the Company, to purchase from the Company
at a price per share (the "Purchase Price") of $1.00, Thirty-Seven Thousand
(37,000) fully paid and nonassessable shares (the "Shares") of Series A
Preferred Stock, no par value, of the Company (the "Preferred Stock"). Until
such time as this Warrant is exercised in full or expires, the Purchase Price
and the securities issuable upon exercise of this Warrant are subject to
adjustment as hereinafter provided. The person or persons in whose name or names
any certificate representing shares of Preferred Stock is issued hereunder shall
be deemed to have become the holder of record of the shares represented thereby
as at the close of business on the date this Warrant is exercised with respect
to such shares, whether or not the transfer books of the Company shall be
closed.
3. PAYMENT OF PURCHASE PRICE. The Purchase Price may be paid
(i) in cash or by check, (ii) by the surrender by the Holder to the Company of
any promissory notes or other obligations issued by the Company, with all such
notes and obligations so surrendered being credited against the Purchase Price
in an amount equal to the principal amount thereof plus accrued interest to the
date of surrender, or (iii) by any combination of the foregoing.
4. NET ISSUE ELECTION. The Holder may elect to receive,
without the payment by the Holder of any additional consideration, shares of
Preferred Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the net issue
election notice annexed hereto duly executed, at the principal office of the
Company. Thereupon, the Company shall issue to the Holder such number of fully
paid and nonassessable shares of Preferred Stock as is computed using the
following formula:
Y (A-B)
X= -------
A
where: X = the number of shares of Preferred Stock to be issued to the
Holder pursuant to this SECTION 4.
Y = the number of shares of Preferred Stock covered by this
Warrant in respect of which the net issue election is made
pursuant to this SECTION 4.
1.
A = the fair market value of one share of Preferred
Stock, as determined in good faith by the Board, as at
the time the net issue election is made pursuant to
this SECTION 4 or in the case of an Accelerating
Merger as contemplated by SECTION 10 , the value
received per share of Preferred Stock by all holders
of the Preferred Stock as determined in good faith by
the Board.
B = the Purchase Price in effect under this Warrant at the
time the net issue election is made pursuant to this
SECTION 4.
5. PARTIAL EXERCISE. This Warrant may be exercised in part,
and the Holder shall be entitled to receive a new warrant, which shall be dated
as of the date of this Warrant, covering the number of shares in respect of
which this Warrant shall not have been exercised.
6. FRACTIONAL SHARES. In no event shall any fractional share
of Preferred Stock be issued upon any exercise of this Warrant. If, upon
exercise of this Warrant as an entirety, the Holder would, except as provided in
this SECTION 6, be entitled to receive a fractional share of Preferred Stock,
then the Company shall issue the next higher number of full shares of Preferred
Stock, issuing a full share with respect to such fractional share.
7. EXPIRATION DATE; AUTOMATIC EXERCISE. This Warrant shall
expire at the close of business on October 31, 2004, and shall be void
thereafter. Notwithstanding the foregoing, this Warrant shall automatically be
deemed to be exercised in full pursuant to the provisions of SECTION 4 hereof,
without any further action on behalf of the Holder, immediately prior to the
time this Warrant would otherwise expire pursuant to the preceding sentence.
8. RESERVED SHARES; VALID ISSUANCE. The Company covenants
that it will at all times from and after the date hereof reserve and keep
available such number of its authorized shares of Preferred Stock and Common
Stock, no par value, of the Company (the "Common Stock"), free from all
preemptive or similar rights therein, as will be sufficient to permit,
respectively, the exercise of this Warrant in full and the conversion into
shares of Common Stock of all shares of Preferred Stock receivable upon such
exercise. The Company further covenants that such shares as may be issued
pursuant to such exercise and/or conversion will, upon issuance, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof.
9. STOCK SPLITS AND DIVIDENDS. If after the date hereof the
Company shall subdivide the Preferred Stock, by split-up or otherwise, or
combine the Preferred Stock, or issue additional shares of Preferred Stock in
payment of a stock dividend on the Preferred Stock, the number of shares of
Preferred Stock issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock dividend, or
proportionately decreased in the case of a combination, and the Purchase Price
shall forthwith be proportionately decreased in the case of a subdivision or
stock dividend, or proportionately increased in the case of a combination.
10. MERGERS AND RECLASSIFICATIONS. If after the date hereof
the Company shall enter into any Reorganization (as hereinafter defined), then,
as a condition of such Reorganization, lawful provisions shall be made, and duly
executed documents evidencing the same from the Company or its successor shall
be delivered to the Holder, so that the Holder shall thereafter have the right
to purchase, at a total price not to exceed that payable upon the exercise of
this Warrant in full, the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization by a holder of the
number of shares of Preferred Stock which might have been purchased by the
Holder immediately prior to such Reorganization, and in any such case
appropriate provisions shall be made with respect to the rights and interest of
the Holder to the end that the provisions hereof (including without limitation,
provisions for the adjustment of the Purchase Price and the number of shares
issuable hereunder) shall thereafter be applicable in relation to any shares of
stock or other securities and property thereafter deliverable upon exercise
hereof. For the purposes of this SECTION 10, the term "Reorganization" shall
include without limitation any reclassification, capital reorganization or
change of the Preferred Stock (other than as a result of a subdivision,
combination or stock dividend provided for in SECTION 9 hereof), or any
consolidation of the Company with, or
2.
merger of the Company into, another corporation or other business organization
(other than a merger in which the Company is the surviving corporation and which
does not result in any reclassification or change of the outstanding Preferred
Stock), or any sale or conveyance to another corporation or other business
organization of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, the unexercised portion of this Warrant
shall automatically be deemed to be exercised in full upon satisfaction of each
of the following conditions precedent:
(a) the Company shall enter into a merger or consolidation of the
Company with or into another corporation where the Company is not the
surviving corporation (an "Accelerating Merger") and such Accelerating
Merger results in a value of $3.00 or more per share of Preferred Stock
(as proportionately adjusted for any stock splits, stock dividends or
recapitalizations relating to the Preferred Stock and occurring after
the date of this Warrant);
(b) the consideration received by the holders of Preferred Stock of the
Company in the Accelerating Merger consists of either cash or Liquid
Stock (defined below) or a combination of cash and Liquid Stock and
Holder receives the same cash and/or Liquid Stock in the same proportion
as the other holders of Preferred Stock; and
(c) Holder receives at least twenty (20) business days written notice
prior to the effective date of the Accelerating Merger. Such notice
shall contain such details of the proposed Accelerating Merger as are
reasonable in the circumstances and notice that this Warrant may expire
upon closing thereof in accordance with the terms and conditions of this
SECTION 10.
Upon failure of Holder to exercise this Warrant in full prior to the
effective date of an Accelerating Merger, the unexercised portion of this
Warrant shall be deemed to have been automatically exercised in full pursuant to
SECTION 4 hereof immediately prior to such effective date. If the closing of the
Accelerating Merger does not take place, the Company shall promptly notify
Holder that such proposed transaction has been terminated. Anything to the
contrary in this Warrant notwithstanding, Holder may rescind the exercise of its
purchase rights promptly after such notice of termination of the proposed
transaction if the exercise or conversion of the Warrant occurred after the
Company notified the Holder that the Accelerating Merger was proposed, or if the
exercise or conversion were otherwise precipitated by such proposed Accelerating
Merger. In the event of such rescission, the Warrant will continue to be
exercisable on the same terms and conditions as if the Company's notice of the
Accelerating Merger had not been given.
"Liquid Stock" means stock or other securities (i) which are freely
tradeable and which have been registered pursuant to a registration statement or
similar document in compliance with the Securities Act of 1933, as amended, and
for which the registration statement or similar document has gone effective or
(ii) which are freely tradeable by virtue of their issuance pursuant to a
transaction described in Section 3(a)(10) of the Securities Act of 1933. as
amended.
11. CERTIFICATE OF ADJUSTMENT. Whenever the Purchase Price is
adjusted, as herein provided, the Company shall promptly deliver to the Holder a
certificate of the Company's chief financial officer setting forth the Purchase
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.
12. NOTICES OF RECORD DATE, ETC. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase, sell or otherwise acquire or dispose
of any shares of stock of any class or any other securities or property,
or to receive any other right;
3.
(b) any reclassification of the capital stock of the Company,
capital reorganization of the Company, consolidation or merger
involving the Company, or sale or conveyance of all or substantially
all of its assets; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then and in each such event the Company will provide or cause to be provided to
the Holder a written notice thereof. Such notice shall be provided at least
twenty (20) business days prior to the date specified in such notice on which
any such action is to be taken.
13. REPRESENTATIONS, WARRANTIES AND COVENANTS. This Warrant is
issued and delivered by the Company and accepted by each Holder on the basis of
the following representations, warranties and covenants made by the Company:
A. The Company has all necessary authority to issue, execute
and deliver this Warrant and to perform its obligations hereunder. This Warrant
has been duly authorized, issued, executed and delivered by the Company and is
the valid and binding obligation of the Company, enforceable in accordance with
its terms.
B. The shares of Preferred Stock issuable upon the exercise of
this Warrant have been duly authorized and reserved for issuance by the Company
and, when issued in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable.
C. The issuance, execution and delivery of this Warrant do not,
and the issuance of the shares of Preferred Stock upon the exercise of this
Warrant in accordance with the terms hereof will not, (i) violate or contravene
the Company's articles of incorporation or by-laws, or any law, statute,
regulation, rule, judgment or order applicable to the Company, (ii) violate,
contravene or result in a breach or default under any contract, agreement or
instrument to which the Company is a party or by which the Company or any of its
assets are bound or (iii) require the consent or approval of or the filing of
any notice or registration with any person or entity.
D. As long as this Warrant is, or any shares of Preferred Stock
issued upon exercise of this Warrant or any shares of Common Stock issued upon
conversion of such shares of Preferred Stock are, issued and outstanding, the
Company will provide to the Holder the financial and other information described
in SECTION 12 of that certain Lease Line Schedule No. I to Master Equipment
Lease Agreement No. 1001 between the Company and Lighthouse Capital Partners,
----
L.P. dated as of December 2, 1994.
---------- ----
E. The Company hereby grants to the Holder the Registration
Rights contained in Section 3 of the Company's Investor Rights Agreement dated
as of July 27, 1994, so that (i) the shares of Common Stock issuable upon
conversion of the shares of Preferred Stock issuable upon exercise of this
Warrant shall be Registrable Securities, and (ii) the Holder shall be a
"Holder", for all purposes of such Investor Rights Agreement.
14. AMENDMENT. The terms of this Warrant may be amended, modified or
waived only with the written consent of the Holder.
15. NOTICES, TRANSFERS, ETC.
A. Any notice or written communication required or permitted to
be given to the Holder may be given by certified mail or delivered to the Holder
at the address most recently provided by the Holder to the Company.
B. Subject to compliance with applicable federal and state
securities laws, this Warrant may be transferred by the Holder with respect to
any or all of the shares purchasable hereunder. Upon surrender of this Warrant
to the Company, together with the assignment notice annexed hereto duly
executed, for transfer of this Warrant as an entirety by the Holder, the Company
shall issue a new warrant of the same denomination to the
4.
assignee. Upon surrender of this Warrant to the Company, together with the
assignment hereof properly endorsed, by the Holder for transfer with respect to
a portion of the shares of Preferred Stock purchasable hereunder, the Company
shall issue a new warrant to the assignee, in such denomination as shall be
requested by the Holder hereof, and shall issue to such Holder a new warrant
covering the number of shares in respect of which this Warrant shall not have
been transferred.
C. In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and denomination
and deliver the same (i) in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost,
stolen or destroyed, upon receipt of an affidavit of the Holder or other
evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant.
16. NO IMPAIRMENT. The Company will not, by amendment of its articles
of incorporation or through any reclassification, capital reorganization,
consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance of performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder.
17. GOVERNING LAW. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the State of
California.
18. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon the
Company's successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and permitted assigns.
19. BUSINESS DAYS. If the last or appointed day for the taking of any
action required or the expiration of any right granted herein shall be a
Saturday or Sunday or a legal holiday in California, then such action may be
taken or right may be exercised on the next succeeding day which is not a
Saturday or Sunday or such a legal holiday.
20. QUALIFYING PUBLIC OFFERING. If the Company shall effect a firm
commitment underwritten public offering of shares of Common Stock which results
in the conversion of the Preferred Stock into Common Stock pursuant to the
Company's Articles of Incorporation in effect immediately prior to such
offering, then, effective upon such conversion, this Warrant shall change from
the right to purchase shares of Preferred Stock to the right to purchase shares
of Common Stock, and the Holder shall thereupon have the right to purchase, at a
total price equal to that payable upon the exercise of this Warrant in full, the
number of shares of Common Stock which would have been receivable by the Holder
upon the exercise of this Warrant for shares of Preferred Stock immediately
prior to the such conversion of such shares of Preferred Stock into shares of
Common Stock, and in such event appropriate provisions shall be made with
respect to the rights and interest of the Holder to the end that the provisions
hereof (including, without limitation, provisions for the adjustment of the
Purchase Price and of the number of shares purchasable upon exercise of this
Warrant) shall thereafter be applicable to any shares of Common Stock
deliverable upon the exercise hereof.
Dated: December 2 , 1994 SYMPHONIX DEVICES, INC,
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/s/ XXXXX X. XXXXXXX
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(Corporate Seal) By: Xxxxx X. Xxxxxxx
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Title: President
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Attest:
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5.
Subscription
To: Date:
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The undersigned hereby subscribes for shares of
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preferred Stock covered by this Warrant. The certificate(s) for such shares
shall be issued in the name of the undersigned or as otherwise indicated below:
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Signature
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Name in Registration
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Mailing Address
Net Issue Election Notice
To: Date:
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The undersigned hereby elects under SECTION 4 to surrender the right to
purchase shares of Preferred Stock pursuant to this Warrant. The
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certificate(s) for the shares issuable upon such net issue election shall be
issued in the name of the undersigned or as otherwise indicated below.
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Signature
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Name in Registration
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Mailing Address
6.
Assignment
For value received __________________ hereby sells, assigns and transfers
unto ___________________________________________________________________________
________________________________________________________________________________
[Please print or typewrite name and address of Assignee]
________________________________________________________________________________
the within Warrant, and does hereby irrevocably constitute and appoint _________
_________________ its attorney to transfer the within Warrant on the books of
the within named Company with full power of substitution on the premises.
Dated: ______________________
__________________________________________
In the Presence of:
_____________________________
7.
