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MASTER LEASE AGREEMENT
COMDISCO, INC. - LESSOR
MASTER LEASE AGREEMENT, May 3, 1995 by and between COMDISCO, INC.
("Lessor") and BIOSTAR, INC. ("Lessee").
IN CONSIDERATION of the mutual agreements described below, the parties
agree as follows (all capitalized terms are defined in Section 14.19):
1. PROPERTY LEASED.
Lessor leases to Lessee all of the Equipment described on each
Schedule. In the event of a conflict, the terms of a Schedule prevail over
this Master Lease.
2. TERM.
On the Commencement Date, Lessee will be deemed to accept the
Equipment, will be bound to its rental obligations for each item of Equipment
and the term of a Schedule will begin and continue through the Initial Term and
thereafter until terminated by either party upon prior written notice received
during the Notice Period. No termination may be effective prior to the
expiration of the Initial Term.
3. RENT AND PAYMENT.
Rent is due and payable in advance, in immediately available funds, on
the first day of each Rent Interval to the payee and at the location specified
in Lessor's invoice. Interim Rent is due and payable when invoiced. If any
payment is not made when due, Lessee will pay interest at the Overdue Rate.
Upon Lessee's execution of each Schedule, Lessee will pay Lessor the Advance
specified on the Schedule. The Advance will be credited towards the final Rent
payment if Lessee is not then in default. No interest will be paid on the
Advance.
4. SELECTION; WARRANTY AND DISCLAIMER OF WARRANTIES.
4.1 SELECTION. Lessee acknowledges that it has selected the
Equipment and disclaims any reliance upon statements made by the Lessor.
4.2 WARRANTY AND DISCLAIMER OF WARRANTIES. Lessor warrants to
Lessee that, so long as Lessee is not in default, Lessor will not disturb
Lessee's quiet and peaceful possession, and unrestricted use of the Equipment.
To the extent permitted by the manufacturer, Lessor assigns to Lessee during
the term of the Schedule any manufacturer's warranties for the Equipment.
LESSOR MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED AS TO ANY MATTER WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, THE MERCHANTABILITY OF THE EQUIPMENT OR ITS
FITNESS FOR A PARTICULAR PURPOSE. Lessor is not responsible for any liability,
claim, loss, damage or expense of any kind (including strict liability in tort)
caused by the Equipment except for any loss or damage
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caused by the negligent acts of Lessor. In no event is Lessor responsible for
special, incidental or consequential damages.
5. TITLE; RELOCATION OR SUBLEASE; AND ASSIGNMENT.
5.1 TITLE. Lessee holds the Equipment subject and subordinate to
the rights of the Owner, Lessor, any Assignee and any Secured Party. Lessee
authorizes Lessor, as Lessee's agent, to prepare, execute and file in Lessee's
name precautionary Uniform Commercial Code financing statements showing the
interest of the Owner, Lessor, and any Assignee or Secured Party in the
Equipment and to insert serial numbers in Schedules as appropriate. Lessee
will, at its expense, keep the Equipment free and clear from any liens or
encumbrances of any kind (except any caused by Lessor) and will indemnify and
hold Lessor, Owner, any Assignee and Secured Party harmless from and against
any loss caused by Lessee's failure to do so.
5.2 RELOCATION OR SUBLEASE. Upon prior written consent, Lessee
may relocate Equipment to any location within the continental United States
provided (i) the Equipment will not be used by an entity exempt from federal
income tax, (ii) all additional costs (including any administrative fees,
additional taxes and insurance coverage) are reconciled and promptly paid by
Lessee.
Lessee may sublease the Equipment upon the reasonable consent
of the Lessor and the Secured Party. Such consent to sublease will be granted
if: (i) Lessee meets the relocation requirements set out above, (ii) the
sublease is expressly subject and subordinate to the terms of the Schedule,
(iii) Lessee assigns its rights in the sublease to Lessor and the Secured Party
as additional collateral and security, (iv) Lessee's obligation to maintain and
insure the Equipment is not altered, (v) all financing statements required to
continue the Secured Party's prior perfected security interest are filed, and
(vi) the sublease is not to a leasing entity affiliated with the manufacturer
of the Equipment described on the Schedule. Lessor acknowledges Lessee's right
to sublease for a term which extends beyond the expiration of the Initial Term.
If Lessee subleases the Equipment for a term extending beyond the expiration of
such Initial Term of the applicable Schedule, Lessee will remain obligated upon
the expiration of the Initial Term to return such Equipment, or, at Lessor's
sole discretion to (i) return Like Equipment or (ii) negotiate a mutually
acceptable lease extension or purchase. If the parties cannot mutually agree
upon the terms of an extension or purchase, the term of the Schedule will
extend upon the original terms and conditions until terminated pursuant to
Section 2.
No relocation or sublease will relieve Lessee from any of its
obligations under this Master Lease and the relevant Schedule.
5.3 ASSIGNMENT BY LESSOR. The terms and conditions of each
Schedule have been fixed by Lessor in order to permit Lessor to sell and/or
assign or transfer its interest or grant a security interest in each Schedule
and/or the Equipment to a Secured Party or Assignee. In that event, the term
Lessor will mean the Assignee and any Secured Party. However, any assignment,
sale, or other transfer by Lessor will not relieve Lessor of its obligations to
Lessee and will not materially change Lessee's duties or materially increase
the burdens or risks imposed on Lessee. The Lessee consents to and will
acknowledge such assignments in a written notice given to Lessee. Lessee also
agrees that:
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(a) The Secured Party will be entitled to exercise all of
Lessor's rights, but will not be obligated to perform any of the obligations of
Lessor. The Secured Party will not disturb Lessee's quiet and peaceful
possession and unrestricted use of the Equipment so long as Lessee is not in
default and the Secured Party continues to receive all Rent payable under the
Schedule; and
(b) Lessee will pay all Rent and all other amounts
payable to the Secured Party, despite any defense or claim which it has against
Lessor. Lessee reserves its right to have recourse directly against Lessor for
any defense or claim;
(c) Subject to and without impairment of Lessee's
leasehold rights in the Equipment, Lessee holds the Equipment for the Secured
Party to the extent of the Secured Party's rights in that Equipment.
6. NET LEASE; TAXES AND FEES.
6.1 NET LEASE. Each Schedule constitutes a net lease. Lessee's
obligation to pay Rent and all other amounts is absolute and unconditional and
is not subject to any abatement, reduction, set-off, defense, counterclaim,
interruption, deferment or recoupment for any reason whatsoever.
6.2 TAXES AND FEES. Lessee will pay when due or reimburse Lessor
for all taxes, fees or any other charges (together with any related interest or
penalties not arising from the negligence of Lessor) accrued for or arising
during the term of each Schedule against Lessor, Lessee or the Equipment by any
governmental authority (except only Federal, state and local taxes on the
capital or the net income of Lessor). Lessor will file all personal property
tax returns for the Equipment and pay all property taxes due. Lessee will
reimburse Lessor for property taxes within thirty (30) days of receipt of an
invoice.
7. CARE, USE AND MAINTENANCE; ATTACHMENTS AND RECONFIGURATIONS; AND
INSPECTION BY LESSOR.
7.1 CARE, USE AND MAINTENANCE. Lessee will maintain the Equipment
in good operating order and appearance, protect the Equipment from
deterioration, other than normal wear and tear, and will not use the Equipment
for any purpose other than that for which it was designed. If commercially
available, Lessee will maintain in force a standard maintenance contract with
the manufacturer of the Equipment, or another party acceptable to Lessor, and
will provide Lessor with a complete copy of that contract. If Lessee has the
Equipment maintained by a party other than the manufacturer, Lessee agrees to
pay any costs necessary for the manufacturer to bring the Equipment to then
current release, revision and engineering change levels, and to re-certify the
Equipment as eligible for manufacturer's maintenance at the expiration of the
lease term. The lease term will continue upon the same terms and conditions
until recertification has been obtained.
7.2 ATTACHMENTS AND RECONFIGURATIONS. Upon receiving the prior
written consent of Lessor, Lessee may reconfigure and install Attachments on
the Equipment. In the event of such a Reconfiguration or Attachment, Lessee
will, upon return of the Equipment, at its expense, restore the Equipment to
the original configuration specified on the Schedule in accordance with
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the manufacturer's specifications and in the same operating order, repair and
appearance as when installed (normal wear and tear excluded). If any parts of
the Equipment are removed during a Reconfiguration or Attachment, Lessor may
require Lessee to provide additional security, satisfactory to the Lessor, in
order to ensure performance of Lessee's obligations set forth in this
subsection. Neither Attachments nor parts installed on Equipment in the course
of Reconfiguration will be accessions to the Equipment.
7.3 INSPECTION BY LESSOR. Upon request, Lessee, during reasonable
business hours and subject to Lessee's security requirements, will make the
Equipment and its related log and maintenance records available to Lessor for
inspection.
8. REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee hereby represents,
warrants and covenants that with respect to the Master Lease and each Schedule
executed hereunder:
(a) The Lessee is a corporation duly organized and
validly existing in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business in each jurisdiction (including
the jurisdiction where the Equipment is, or is to be, located) where its
ownership or lease of property or the conduct of its business requires such
qualification; and has full corporate power and authority to hold property
under the Master Lease and each Schedule and to enter into and perform its
obligations under such Lease.
(b) The execution and delivery by the Lessee of the
Master Lease and each Schedule and its performance thereunder have been duly
authorized by all necessary corporate action on the part of the Lessee, and the
Master Lease and each Schedule are not inconsistent with the Lessee's
Certificate of Incorporation or Bylaws, do not contravene any law or
governmental rule, regulation or order applicable to it, do not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument to which it is a party or by which it is
bound, and the Master Lease and each Schedule constitute legal, valid and
binding agreements of the Lessee, enforceable in accordance with their terms.
(c) There are no actions, suits, proceedings or patent
claims pending or, to the knowledge of the Lessee, threatened against or
affecting the Lessee in any court or before any governmental commission, board
or authority which, if adversely determined, will have a material adverse
effect on the ability of the Lessee to perform its obligations under the Master
Lease and each Schedule.
(d) The Equipment is personal property and when subjected
to use by the Lessee will not be or become fixtures under applicable law.
(e) The Lessee has no material liabilities or
obligations, absolute or contingent (individually or in the aggregate), except
the liabilities and obligations of the Lessee as set forth in the Financial
Statements and liabilities and obligations which have occurred in the ordinary
course of business, and which have not been, in any case or in the aggregate,
materially adverse to Lessee's ongoing business.
(f) To the best of the Lessee's knowledge, the Lessee
owns, possesses, has access to, or can become licensed on reasonable terms
under all patents, patent applications, trademarks, trade names, inventions,
franchises, licenses, permits, computer software and
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copyrights necessary for the operations of its business as now conducted, with
no known infringement of, or conflict with, the rights of others.
(g) All material contracts, agreements and instruments to
which the Lessee is a party are in full force and effect in all material
respects, and are valid, binding and enforceable by the Lessee in accordance
with their respective terms, subject to the effect of applicable bankruptcy and
other similar laws affecting the rights of creditors generally, and rules of
law concerning equitable remedies.
9. DELIVERY AND RETURN OF EQUIPMENT.
Lessee hereby assumes the full expense of transportation and
in-transit insurance to Lessee's premises and installation thereat of the
Equipment. Upon termination (by expiration or otherwise) of each Schedule,
Lessee shall, pursuant to Lessor's instructions and at Lessee's full expense
(including, without limitation, expenses of transportation and in-transit
insurance), return the Equipment to Lessor in the same operating order, repair,
condition and appearance as when received, less normal depreciation and wear
and tear. Lessee shall return the Equipment to Lessor at its address set forth
herein or at such other address within the continental United States as
directed by Lessor, provided, however, that Lessee's expense shall be limited
to the cost of returning the equipment to Lessor's address as set forth herein.
During the period subsequent receipt of a notice under Section 2, Lessor may
demonstrate the Equipment's operation in place and Lessee will supply any of
its personnel as may reasonably be required to assist in the demonstrations.
10. LABELING.
Upon request, Lessee will ▇▇▇▇ the Equipment indicating Lessor's
interest. Lessee will keep all Equipment free from any other marking or
labeling which might be interpreted as a claim of ownership.
11. INDEMNITY.
Lessee will indemnify and hold Lessor, any Assignee and any Secured
Party harmless from and against any and all claims, costs, expenses, damages
and liabilities, including reasonable Attorneys' fees, arising out of the
ownership (for strict liability in tort only), selection, possession, leasing,
operation, control, use, maintenance, delivery, return or other disposition of
the Equipment. However, Lessee is not responsible to a party indemnified
hereunder for any claims, costs, expenses, damages and liabilities occasioned
by the negligent acts of such indemnified party. Lessee agrees to carry bodily
injury and property damage liability insurance during the term of the Master
Lease in amounts and against risks customarily insured against by the Lessee on
equipment owned by it. Any amounts received by Lessor under that insurance
will be credited against Lessee's obligations under this Section.
12. RISK OF LOSS.
Effective upon delivery and until the Equipment is returned, Lessee
relieves Lessor of responsibility for all risks of physical damage to or loss
or destruction of the Equipment. Lessee will carry casualty insurance for each
item of Equipment in an amount not less than the Casualty
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Value. All policies for such insurance will name the Lessor and any Secured
Party as additional insured and as loss payee, and will provide for at least
thirty (30) days prior written notice to the Lessor of cancellation or
expiration, and will insure Lessor's interests regardless of any breach or
violation by Lessee of any representation, warranty or condition contained in
such policies and will be primary without right of contribution from any
insurance effected by Lessor. Upon the execution of any Schedule, the Lessee
will furnish appropriate evidence of such insurance acceptable to Lessor.
Lessee will promptly repair any damaged item of Equipment unless such
Equipment has suffered a Casualty Loss. Within fifteen (15) days of a Casualty
Loss, Lessee will provide written notice of that loss to Lessor and Lessee
will, at Lessor's option, either (a) replace the item of Equipment with Like
Equipment and marketable title to the Like Equipment will automatically vest in
Lessor or (b) pay the Casualty Value and after that payment and the payment of
all other amounts due and owing, Lessee's obligation to pay further Rent for
the item of Equipment will cease.
13. DEFAULT, REMEDIES AND MITIGATION.
13.1 DEFAULT. The occurrence of any one or more of the following
Events of Default constitutes a default under a Schedule:
(a) Lessee's failure to pay Rent or other amounts payable
by Lessee when due if that failure continues for five (5) days after written
notice; or
(b) Lessee's failure to perform any other term or
condition of the Schedule or the material inaccuracy of any representation or
warranty made by the Lessee in the Schedule or in any document or certificate
furnished to the Lessor hereunder if that failure or inaccuracy continues for
ten (10) days after written notice; or
(c) An assignment by Lessee for the benefit of its
creditors, the failure by Lessee to pay its debts when due, the insolvency of
Lessee, the filing by Lessee or the filing against Lessee of any petition under
any bankruptcy or insolvency law or for the appointment of a trustee or other
officer with similar powers, the adjudication of Lessee as insolvent, the
liquidation of Lessee, or the taking of any action for the purpose of the
foregoing; or
(d) The occurrence of an Event of Default under any
Schedule or other agreement between Lessee and Lessor or its Assignee or
Secured Party.
13.2 REMEDIES. Upon the occurrence of any of the above Events of
Default, Lessor, at its option, may:
(a) Enforce Lessee's performance of the provisions of the
applicable Schedule by appropriate court action in law or in equity;
(b) Recover from Lessee any damages and or expenses,
including Default Costs;
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(c) With notice and demand, recover all sums due and
accelerate and recover the present value of the remaining payment stream of all
Rent due under the defaulted Schedule (discounted at the same rate of interest
at which such defaulted Schedule was discounted with a Secured Party plus any
prepayment fees charged to Lessor by the Secured Party or, if there is no
Secured Party, then discounted at 6%) together with all Rent and other amounts
currently due as liquidated damages and not as a penalty;
(d) With notice and process of law and in compliance with
Lessee's security requirements, Lessor may enter on Lessee's premises to remove
and repossess the Equipment without being liable to Lessee for damages due to
the repossession, except those resulting from Lessor's, its assignees', agents'
or representatives' negligence; and
(e) Pursue any other remedy permitted by law or equity.
The above remedies, in Lessor's discretion and to the extent
permitted by law, are cumulative and may be exercised successively or
concurrently.
13.3 MITIGATION. Upon return of the Equipment pursuant to the
terms of Section 13.2, Lessor will use its best efforts in accordance with its
normal business procedures (and without obligation to give any priority to such
Equipment) to mitigate Lessor's damages as described below. EXCEPT AS SET
FORTH IN THIS SECTION, LESSEE HEREBY WAIVES ANY RIGHTS NOW OR HEREAFTER
CONFERRED BY STATUTE OR OTHERWISE WHICH MAY REQUIRE LESSOR TO MITIGATE ITS
DAMAGES OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES STATED HEREIN. Lessor may
sell, lease or otherwise dispose of all or any part of the Equipment at a
public or private sale for cash or credit with the privilege of purchasing the
Equipment. The proceeds from any sale, lease or other disposition of the
Equipment are defined as either:
(a) If sold or otherwise disposed of, the cash proceeds
less the Fair Market Value of the Equipment at the expiration of the Initial
Term less the Default Costs; or
(b) If leased, the present value (discounted at three
points over the prime rate as referenced in the Wall Street Journal at the time
of the mitigation) of the rentals for a term not to exceed the Initial Term,
less the Default Costs.
Any proceeds will be applied against liquidated damages and
any other sums due to Lessor from Lessee. However, Lessee is liable to Lessor
for, and Lessor may recover, the amount by which the proceeds are less than the
liquidated damages and other sums due to Lessor from Lessee.
14. ADDITIONAL PROVISIONS.
14.1 BOARD ATTENDANCE. Lessor or its duly appointed representative
will have the right to attend Lessee's corporation Board of Directors meetings
and Lessee will give Lessor reasonable notice in advance of any special Board
of Directors meeting, which notice will provide an agenda of the subject matter
to be discussed at such board meeting. Lessee will provide Lessor with a
certified copy of the minutes of each Board of Directors meeting within thirty
(30) days following the date of such meeting held during the term of this
Lease.
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14.2 FINANCIAL STATEMENTS. Lessee will provide to Lessor the
financial statements specified in this Section, prepared in accordance with
generally accepted accounting principles, consistently applied (the "Financial
Statements"); provided however, after the effective date of the initial
registration statement covering a public offering of Lessee's securities, the
term "Financial Statements" will be deemed to refer to only those statements
required by the Securities and Exchange Commission, to be provided no less
frequently than quarterly. Lessee will provide to Lessor (i) as soon as
practicable (within thirty (30) days) after the end of each month, the same
information which Lessee provides to its Board of Directors, but which will
include not less than a monthly income statement, balance sheet and statement
of cash flows, certified by Lessee's Chief Executive or Financial Officer to be
true and correct; and (ii) as soon as practicable (and in any event within
ninety (90) days) after the end of each fiscal year, audited balance sheets as
of the end of such year (consolidated if applicable), and related statements of
income or loss, retained earnings or deficit and changes in the financial
position and capital structure of Lessee for such year, setting forth in
comparative form the corresponding figures for the preceding fiscal year, and
accompanied by an audit report and opinion of the independent certified public
accountants selected by Lessee. Lessee will promptly furnish to Lessor any
additional information (including but not limited to tax returns, income
statements, balance sheets, and names of principal creditors) as Lessor
reasonably believes necessary to evaluate Lessee's continuing ability to meet
financial obligations.
14.3 OBLIGATION TO LEASE ADDITIONAL EQUIPMENT. Upon notice to
Lessee, Lessor will not be obligated to lease any Equipment which would have a
Commencement Date after said notice if: (i) Lessee is in default under this
Master Lease or any Schedule; (ii) Lessee is in default under any loan
agreement, the result of which would allow the Lender or any secured party to
demand immediate payment of the indebtedness; (iii) there is a material adverse
change in Lessee's credit standing; or (iv) Lessor determines (in reasonable
good faith) that Lessee will be unable to perform its obligations under this
Master Lease.
14.4 MERGER AND SALE PROVISIONS. Lessee will notify Lessor of any
proposed Merger at least twenty (20) days prior to the closing date. Lessor
may, in its discretion, either (i) consent to the assignment of the Master
Lease and all relevant Schedules to the successor entity, or (ii) terminate the
Master Lease and all relevant Schedules. If Lessor elects to consent to the
assignment, Lessee and its successor will sign the assignment documentation
provided by Lessor. If Lessor elects to terminate the Master Lease and all
relevant Schedules, then Lessee will pay Lessor all amounts then due and owing
and a termination fee equal to the present value (discounted at 6%) of the
remaining Rent for the balance of the Initial Term(s) of all Schedules, and
will return the Equipment in accordance with Section 9.
14.5 ENTIRE AGREEMENT. This Master Lease and associated Schedules
supersede all other oral or written agreements or understandings between the
parties concerning the Equipment including, for example, purchase orders. ANY
AMENDMENT OF THIS MATER LEASE OR A SCHEDULE, MAY ONLY BE ACCOMPLISHED BY A
WRITING SIGNED BY THE PARTY AGAINST WHOM THE AMENDMENT IS SOUGHT TO BE
ENFORCED.
14.6 NO WAIVER. No action taken by Lessor or Lessee will be deemed
to constitute a waiver of compliance with any representation, warranty or
covenant contained in this Master
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Lease or a Schedule. The waiver by Lessor or Lessee of a breach of any
provision of this Master Lease or a Schedule will not operate or be construed
as a waiver of any subsequent breach.
14.7 BINDING NATURE. Each Schedule is binding upon, and inures to
the benefit of Lessor and its assigns. LESSEE MAY NOT ASSIGN ITS RIGHTS OR
OBLIGATIONS.
14.8 SURVIVAL OF OBLIGATIONS. All agreements, obligations
including, but not limited to those arising under Section 6.2, representations
and warranties contained in this Master Lease, any Schedule or in any document
delivered in connection with those agreements are for the benefit of Lessor and
any Assignee or Secured Party and survive the execution, delivery, expiration
or termination of this Master Lease.
14.9 NOTICES. Any notice, request or other communication to either
party by the other will be given in writing and deemed received upon the
earlier of actual receipt or three days after mailing if mailed postage prepaid
by regular or airmail to Lessor (to the attention of "Lease Administrator") or
Lessee, at the address set out in the Schedule or, one day after it is sent by
courier or on the same day as sent via facsimile transmission, provided that
the original is sent by personal delivery or mail by the receiving party.
14.10 APPLICABLE LAW. THIS MASTER LEASE HAS BEEN, AND EACH SCHEDULE
WILL HAVE BEEN MADE, EXECUTED AND DELIVERED IN THE STATE OF ILLINOIS AND WILL
BE GOVERNED AND CONSTRUED FOR ALL PURPOSES IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS WITHOUT GIVING EFFECT TO CONFLICT OF LAW PROVISIONS. NO
RIGHTS OR REMEDIES REFERRED TO IN ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE
WILL BE CONFERRED ON LESSEE UNLESS EXPRESSLY GRANTED IN THIS MASTER LEASE OR A
SCHEDULE.
14.11 SEVERABILITY. If any one or more of the provisions of this
Master Lease or any Schedule is for any reason held invalid, illegal or
unenforceable, the remaining provisions of this Master Lease and any such
Schedule will be unimpaired, and the invalid, illegal or unenforceable
provision replaced by a mutually acceptable valid, legal and enforceable
provision that is closest to the original intention of the parties.
14.12 COUNTERPARTS. This Master Lease and any Schedule may be
executed in any number of counterparts, each of which will be deemed an
original, but all such counterparts together constitute one and the same
instrument. If Lessor grants a security interest in all or any part of a
Schedule, the Equipment or sums payable thereunder, only that counterpart
Schedule marked "Secured Party's Original" can transfer Lessor's rights and all
other counterparts will be marked "Duplicate".
14.13 NONSPECIFIED FEATURES AND LICENSED PRODUCTS. If the Equipment
is supplied from Lessor's inventory and contains any features not specified in
the Schedule, Lessee grants Lessor the right to remove any such feature. Any
removal will be performed by the manufacturer or another party unacceptable to
Lessee, upon the request of Lessor, at a time convenient to Lessee, provided
that Lessee will not unreasonably delay the removal of such features.
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Lessee will obtain no title to Licensed Products which will at
all times remain the property of the owner of the Licensed Products. A license
from the owner may be required and it is Lessee's responsibility to obtain any
required license before the use of the Licensed Products. Lessee agrees to
treat the Licensed Products as confidential information of the owner, to
observe all copyright restrictions, and not to reproduce or sell the Licensed
Products.
14.14 ADDITIONAL DOCUMENTS. Lessee will, upon execution of this
Master Lease and as may be requested thereafter, provide Lessor with a
secretary's certificate of incumbency and authority and any other documents
reasonably requested by Lessor. Upon the execution of each Schedule with a
purchase price in excess of $1,000,000, Lessee will provide Lessor with an
opinion from Lessee's counsel in a form acceptable to Lessor regarding the
representations and warranties in Section 8.
14.15 ELECTRONIC COMMUNICATIONS. Each of the parties may
communicate with the other by electronic means under mutually agreeable terms.
14.16 LESSOR'S RIGHT TO MATCH. Lessee's rights under Section 5.2
and 7.2 are subject to Lessor's right to match any sublease or upgrade proposed
by a third party. Lessee will provide Lessor with the terms of the third party
offer and Lessor will have three (3) business days to match the offer. Lessee
will obtain such upgrade from or sublease the Equipment to Lessor if Lessor has
timely matched the third party offer.
14.17 LANDLORD/MORTGAGEE WAIVER. Lessee agrees to provide Lessor
with a Landlord/Mortgagee Waiver with respect to the Equipment. Such waiver
shall be in a form satisfactory to Lessor.
14.18 EQUIPMENT PROCUREMENT CHARGES/PROGRESS PAYMENTS. Lessee
hereby agrees that Lessor shall not, by virtue of its entering into this Lease,
be required to remit any payments to any manufacturer or other third party
until Lessee accepts the Equipment subject to this Lease.
14.19 DEFINITIONS.
ADVANCE - means the amount due to Lessor by Lessee upon
Lessee's execution of each Schedule.
ASSIGNEE - means an entity to whom Lessor has sold or assigned
its rights as owner and Lessor of Equipment.
ATTACHMENT - means any accessory, equipment or device and the
installation thereof that does not impair the original function or use of the
Equipment and is capable of being removed without causing material damage to
the Equipment and is not an accession to the Equipment.
CASUALTY LOSS - means the irreparable loss or destruction of
Equipment.
CASUALTY VALUE - means the greater of the aggregate Rent
remaining to be paid for the balance of the lease term or the Fair Market Value
of the Equipment immediately prior to
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the Casualty Loss. However, if a Casualty Value Table is attached to the
relevant Schedule its terms will control.
COMMENCEMENT CERTIFICATE - means the Lessor provided
certificate which must be signed by Lessee within ten (10) days of the
Commencement Date as requested by Lessor.
COMMENCEMENT DATE - is defined in each Schedule.
DEFAULT COSTS - means reasonable attorney's fees and
remarketing costs resulting from a Lessee default or Lessor's enforcement of
its remedies.
EQUIPMENT - means the property described on a Schedule and any
replacement for that property required or permitted by this Master Lease or a
Schedule but not including any Attachment.
EVENT OF DEFAULT - means the events described in Subsection
13.1.
FAIR MARKET VALUE - means the aggregate amount which would be
obtainable in an arm's-length transaction between an informed and willing
buyer/user and an informed and willing seller under no compulsion to sell.
INITIAL TERM - means the period of time beginning on the first
day of the first full Rent Interval following the Commencement Date for all
items of Equipment and continuing for the number of Rent Intervals indicated on
a Schedule.
INSTALLATION DATE - means the day on which Equipment is
installed and qualified for a commercially available manufacturer's standard
maintenance contract or warranty coverage, if available.
INTERIM RENT - means the pro-rata portion of Rent due for the
period from the Commencement Date through but not including the first day of
the first full Rent Interval included in the Initial Term.
LICENSED PRODUCTS - means any software or other licensed
products attached to the Equipment.
LIKE EQUIPMENT - means replacement Equipment which is lien
free and of the same model, type, configuration and manufacture as Equipment.
LIKE PART - means a substituted part which is lien free and of
the same manufacturer and part number as the removed part, and which when
installed on the Equipment will be eligible for maintenance coverage with the
manufacturer of the Equipment.
MERGER - means any consolidation or merger of the Lessee with
or into any other corporation or entity, any sale or conveyance of all or
substantially all of the assets of the Lessee to any other person or entity or
any stock acquisition of the Lessee by any other person or entity.
11.
12
NOTICE PERIOD - means the time period described in a Schedule
during which Lessee may give Lessor notice of the termination of the term of
that Schedule.
OVERDUE RATE - means the lesser of five percent (5%) of the
payment due or the maximum rate permitted by the law of the state where the
Equipment is located.
OWNER - means the owner of Equipment.
RECONFIGURATION - means any change to Equipment that would
upgrade or downgrade the performance capabilities of the Equipment in any way.
RENT - means the rent, including Interim Rent, Lessee will pay
for each item of Equipment expressed in a Schedule either as a specific amount
or an amount equal to the amount which Lessor pays for an item of Equipment
multiplied by a lease rate factor plus all other amounts due to Lessor under
this Master Lease or a Schedule.
RENT INTERVAL - means a full calendar month or quarter as
indicated on a Schedule.
SCHEDULE - means an Equipment Schedule which incorporates all
of the terms and conditions of this Master Lease and, for purposes of Section
14.12, its associated Commencement Certificate(s).
SECURED PARTY - means an entity to whom Lessor has granted a
security interest in a Schedule and related Equipment for the purpose of
securing a loan.
IN WITNESS WHEREOF, the parties hereto have executed this Master Lease
on or as of the day and year first above written.
BIOSTAR, INC. COMDISCO, INC.
AS LESSEE AS LESSOR
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------- --------------------------------------
Title: Vice President Finance Title: President Venture Lease Division
-------------------------- -----------------------------------
12.
13
ADDENDUM TO THE MASTER LEASE AGREEMENT
DATED AS OF MAY 3, 1995
BETWEEN COMDISCO, INC., AS LESSOR,
AND BIOSTAR, INC., AS LESSEE
The undersigned hereby agree that the terms and conditions of the
above-referenced Master Lease Agreement are amended and modified as follows:
1. In the first paragraph after the words "MASTER LEASE
AGREEMENT" insert "(the "Master Lease")."
2. Section 1, "PROPERTY LEASED."
In the first sentence before the word "Schedule" insert the
words "Summary Equipment"
Second sentence, second line, replace "a Schedule" with "the
applicable Schedule"
3. Section 2, "TERM."
In the second line, delete "a" and insert "the applicable
Summary Equipment" before "Schedule".
4. Section 3, "RENT AND PAYMENT."
In the third sentence, delete the words "interest at the
Overdue Rate." and replace with "a Late Charge on the overdue
amount."
5. Section 4, "SELECTION; WARRANTY AND DISCLAIMER OF WARRANTIES."
Subsection 4.2, fourth sentence, line 3, insert "or willful
misconduct" after the words "negligent acts".
6. Section 5, "TITLE; RELOCATION OR SUBLEASE; AND ASSIGNMENT."
Subsection 5.1, line 4, before "Schedules" insert "Summary
Equipment".
In the second paragraph, fourth sentence, insert "Summary
Equipment" before "Schedule".
Subsection 5.2, first paragraph, line 3, insert "and" after
the words "federal income tax,"
Subsection 5.3, paragraph (b), first sentence, line 1, add the
phrase "After receipt of written notice of assignment from
Lessor" before the word "Lessee".
1.
14
7. Section 6, "NET LEASE; TAXES AND FEES"
Subsection 6.2, add the following paragraph at the end of this
subsection:
"Lessee shall not be liable for any taxes, fees or charges to
the extent the same result from any sale or assignment or
grant of security interest by Lessor, or to the extent any
such action increases the taxes, fees or charges that would
otherwise be payable. Lessee shall have the right to contest
by proper legal proceedings any taxes levied, as agent for or
in the name of Lessor. Lessor will cooperate in any legal
proceedings being prosecuted by Lessee with regard to any
taxes, but Lessee will pay the expenses in such litigation.
Lessee shall have the right to contest in good faith and by
appropriate proceeding the validity or the amount of taxes
unless such contest would adversely affect the title of the
Lessor to the Equipment or would subject it to forfeiture or
sale. Lessee shall have the rights to any refund received as
a result of any such contest or proceeding."
8. Section 7, "CARE, USE AND MAINTENANCE; ATTACHMENTS AND
RECONFIGURATIONS; AND INSPECTION BY LESSOR."
Subsection 7.1, second sentence, line 3, insert "at
commercially reasonable prices" after "commercially
available"; line 4, after the words "another party acceptable
to Lessor", add the words "including self-maintenance by
Lessee"; third sentence, in line 2 after the words "other than
the manufacturer", add "or self-maintains the Equipment.";
last sentence, insert the following at the end thereof: "or
Lessee has exercised its option to purchase such Equipment."
Subsection 7.2, first sentence, line 1, after the word
"Lessor", insert ", which consent shall not be unreasonably
withheld". Second sentence, line 3, after the words
"specified on the" insert "Summary Equipment". Fourth
Sentence, line 1, delete "the" and insert "such" between
accessions to" and "Equipment".
Subsection 7.3, add the following sentence at the end thereof:
"Notwithstanding the foregoing, in no event shall such
inspection occur more than twice in a calendar year, unless
otherwise agreed to between Lessee and Lessor."
9. Section 8, "REPRESENTATIONS AND WARRANTIES OF LESSEE"
Paragraph (a), line 4, insert the words "and where the failure
to be qualified would materially adversely affect the Lessee;"
after the words "requires such qualification".
Paragraph (b), add the following clause at the end thereof:
"subject to the effect of applicable bankruptcy and other
similar laws affecting the rights of creditors generally, and
rules of law concerning equitable remedies."
Paragraph (c), line 3, delete "if adversely determined, will"
and insert "are reasonably likely to".
2.
15
10. Section 9
Second sentence, line 1, insert "Summary Equipment" before
"Schedule" and insert "and provided that the Equipment is not
purchased or the term extended as permitted by the applicable
Schedule" after "Schedule". Third sentence, line 2, delete
"its address set forth herein" and insert "6111 ▇. ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇." Fourth sentence, insert "to" after
"subsequent".
11. Section 11, "INDEMNITY."
First sentence, line 4, after the word "Equipment", insert
"arising from acts or events during the term of each Summary
Equipment Schedule and prior to re-delivery of the Equipment
to Lessor in accordance with the terms of this Master Lease."
Second sentence, line 3, insert "or willful misconduct".
12. Section 13, "DEFAULT; REMEDIES AND MITIGATION."
Subsection 13.1
Introductory sentence, line 2, insert "Summary Equipment"
after the word "under'".
Paragraph (b), line 1, insert "the applicable" before the word
"Schedule".
Paragraph (c), line 4, insert the following after "powers":
"which petition or appointment is not dismissed or vacated
within sixty (60) days."
Subsection 13.2, paragraph (d), line 4, insert "or willful
misconduct" after "negligence".
Subsection 13.3, second sentence, line 1, insert "AND TO THE
FULLEST EXTENT PERMITTED BY LAW" after the words "IN THIS
SECTION".
13. Section 14, "ADDITIONAL PROVISIONS."
Subsection 14.1, is deleted in its entirety and replaced with
the following:
"Lessee agrees to provide to Lessor on a monthly basis the
executive summary and minutes of the Board of Directors
meetings which are sent to all investors, including all
attachments so distributed. In addition, the following
statements will accompany the report on a monthly basis:
Profit and Loss Statement, Balance Sheet, Cash Flow Statement
and Pro Forma Operating Plan (as developed)."
Subsection 14.2, second sentence, line 2, delete the words
"the same information..." through the words "Directors, but"
and replace with the words "reasonably detailed monthly
financial statements"; and line 5, delete "ninety (90)" and
insert "one hundred twenty (120)" before the word "(days)".
3.
16
Subsection 14.4, to the end of this subsection add the
following:
"Notwithstanding the forgoing, Lessor hereby consents to any
merger which will result in a surviving entity with a ▇▇▇▇▇'▇
Bond Rating of BAA or better, or the equivalent if the entity
is not rated by ▇▇▇▇▇'▇."
Subsection 14.7, second sentence, add the following at the end
thereof: "except as provided for in this Agreement."
Subsection 14.9, line 4, insert "applicable" before "Schedule".
Subsection 14.10, lines 2 and 3, substitute "State of
Illinois" with the "State of California".
Subsection 14.13, first sentence, insert, "Summary Equipment"
before "Schedule".
Subsection 14.14, second sentence, line 2, insert "reasonably"
before "acceptable".
Subsection 14.16 is deleted in its entirety.
Definition "CASUALTY VALUE", line 1, insert "present value of
the" after the words "greater of the" and line 2, insert
"discounted at the U.S. Treasury rate of comparable maturity
to the remaining term" after the word "term".
Definition "COMMENCEMENT CERTIFICATE" delete this definition
in its entirety.
Add the following definition "DELIVERY DATE - means the date
of delivery of inventory Equipment to Lessee's address."
Definition "EQUIPMENT" insert "Summary Equipment" before the
word "Schedule".
Definition "INSTALLATION DATE" is deleted in its entirety.
Add the following definition: "LEASE - means a Summary
Equipment Schedule which incorporates all the terms and
conditions of the related Schedule and Master Lease."
Definition "MERGER", line 2, insert "or stock" after "assets";
delete the words "or any stock acquisition of the Lessee by
any other person or entity."
Definition "OVERDUE RATE" is amended to read "Late Charge" and
the word "rate" is deleted and "amount" is inserted.
Definition "RENT", line 2, insert "Summary Equipment" before
"Schedule."
4.
17
Definition "RENT INTERVAL" insert "Summary Equipment" before
the word "Schedule".
Definition "SCHEDULE" delete this definition and replace with
the following:
"means, either an Equipment Schedule or a Licensed Product
Schedule which incorporates all of the terms and conditions of
this Master Lease."
Add the following definition: "SUMMARY EQUIPMENT SCHEDULE -
means, a Lessor provided certificate summarizing all of the
Equipment for which Lessor has received Lessee approved
invoices, purchase documentation and evidence of delivery, as
applicable, during a calendar quarter which will incorporate
all of the terms and conditions of the related Schedule and
this Master Lease and will constitute a separate Lease."
BIOSTAR, INC. COMDISCO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------- --------------------------------------
Title: Vice President Finance Title: President Venture Lease Division
------------------------- -----------------------------------
Date: 5/3/95 Date: 5/5/95
-------------------------- ------------------------------------
5.
18
(MULTIPLE QUARTER DELIVERY)
EQUIPMENT SCHEDULE NO. VL-1 DATED AS OF MAY 3, 1995
TO MASTER LEASE AGREEMENT DATED AS OF MAY 3, 1995 ("MASTER LEASE")
LESSEE: BioStar, Inc. LESSOR: Comdisco, Inc.
ADMIN. CONTACT/PHONE NO.: ADDRESS FOR ALL NOTICES:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
V.P. Finance ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ Attn: Capital Equipment Lease Administration
ADDRESS FOR NOTICES:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
CENTRAL BILLING LOCATION: PAYING AGENT:
Same as above Comdisco, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Lessee Reference No.: ___________________
(24 digits maximum)
RENT INTERVAL: 1 month
LOCATION OF EQUIPMENT: INITIAL TERM: 36 months
Same as above
LEASE FACTOR: 3.178%
Attn:
ADVANCE: $31,780
EQUIPMENT (AS DEFINED BELOW):
ITEM MACHINE TYPE/ SERIAL
NO. QTY. MANUFACTURER FEATURE DESCRIPTION NUMBER RENT
--- ---- ------------ ------------- ----------- ------ ----
Standard equipment specifically approved by Lessor, which shall be
delivered to and accepted by Lessee during the period May 3, 1995
through May 3, 1996 for which Lessor receives vendor invoices
approved for payment, up to an aggregate purchase price of
1,000,000; not including upgrades thereto and further excluding
custom use equipment, leasehold improvements, installation costs
and delivery costs, rolling stock, special tooling, custom
equipment, "stand-alone" software, application software bundled
into computer hardware, hand held items, molds and fungible items.
In no event shall any furniture exceed ten percent (10%) of
Lessor's aggregate cost hereunder.
19
1. NOTICE PERIOD: For purposes of notice by Lessee to Lessor of the
termination of the term of a Summary Equipment Schedule, the Notice Period
shall be not less than ninety (90) days nor more than twelve (12) months prior
to the expiration of the lease term of such Summary Equipment Schedule.
2. EQUIPMENT PURCHASE. Lessee acknowledges that it has either received
or approved Lessor's purchase documentation for the Equipment. The aggregate
purchase price referred to on the face of this Schedule shall include all
Equipment purchased by Lessor, consisting of amounts financed under Sections
(i), (ii), (iii) and (iv) below.
(i) NEW ON-ORDER EQUIPMENT. Lessor will purchase new
Equipment which is specifically approved by Lessor.
(ii) SALE-LEASEBACK EQUIPMENT. Any in-place Equipment
installed at Lessee's site and to which Lessee has clear title and ownership
may be considered by Lessor for inclusion under this Lease (the "Sale-Leaseback
Transaction"). Any request for a Sale-Leaseback Transaction must be submitted
to Lessor in writing (along with accompanying evidence of Lessee's Equipment
ownership satisfactory to Lessor for all Equipment submitted) no later than
June 3, 1995*. Lessor will not perform a Sale-Leaseback Transaction for any
request or accompanying Equipment ownership documents which arrive after the
date marked above by an asterisk (*). Further, any sale-leaseback Equipment
will be placed on lease subject to: (1) Lessor prior approval of the
Equipment; and (2) if approved, at Lessor's actual net appraised Equipment
value pursuant to the schedule below:
ORIGINAL EQUIPMENT PERCENT OF ORIGINAL MANUFACTURER'S NET
MANUFACTURER'S SHIP DATE EQUIPMENT COST PAID BY LESSOR
Between 03/03/95 and 06/01/95 100%
Between 01/01/95 and 03/02/95 80%
Between 10/03/94 and 01/01/95 70%
(iii) USED ON-ORDER EQUIPMENT. Lessor will purchase "used"
Equipment which is obtained from a third party by Lessee for its use subject
to: Lessor's prior approval of the Equipment and at Lessor's appraised value
for such used Equipment.
(iv) INVENTORY EQUIPMENT. Upon Lessee's request, Lessor
may supply new or used Equipment from its inventory at rates provided by
Lessor.
3. COMMENCEMENT DATE.
The Commencement Date for each item of new on-order or used on-order
Equipment will be the date Lessee approves the vendor invoice. The
Commencement Date for sale lease-back Equipment will be the date Lessor tenders
the purchase price and the Commencement Date for inventory Equipment will be
the Delivery Date. Lessor will summarize all approved invoices, purchase
documentation and evidence of delivery, as applicable, received in the same
20
calendar quarter into a Summary Equipment Schedule in the form attached to this
Schedule as Exhibit 1 and the Initial Term will begin the first day of the
calendar quarter thereafter. Each Summary Equipment Schedule will contain the
Equipment location, description, serial number(s) and cost and will incorporate
the terms and conditions of the Master Lease and this Schedule and will
constitute a separate Lease.
4. OPTION TO EXTEND.
So long as no Event of Default has occurred and is continuing
hereunder, Lessee will have the right to extend the Initial Term of a Summary
Equipment Schedule for a period of one (1) year by giving Lessor at least
ninety (90) days written notice prior to the expiration of the Initial Term of
such Summary Equipment Schedule. In such event, the rent to the paid during
said extended period shall be mutually agreed upon and if the parties cannot
mutually agree, then the Summary Equipment Schedule shall continue in full
force and effect pursuant to the existing terms and conditions until terminated
in accordance with its terms. The Summary Equipment Schedule will continue in
effect following said extended period until terminated by either party upon not
less than ninety (90) days prior written notice, which notice shall be
effective as of the date of receipt.
5. PURCHASE OPTION.
So long as no Event of Default has occurred and is continuing
hereunder, and upon written notice no earlier than twelve (12) months and no
later than ninety (90) days prior to the expiration of the Initial Term or
extended term of the applicable Summary Equipment Schedule, Lessee will have
the option at the expiration of the Initial term or extended term of such
Summary Equipment Schedule to purchase all, but not less than all, of the
Equipment listed therein for a purchase price and upon terms and conditions to
be mutually agreed upon by the parties following Lessee's written notice, plus
any taxes applicable at time of purchase. Said purchase price shall be paid to
Lessor at least thirty (30) days before the expiration date of the Initial Term
or extended term. Title to the Equipment shall automatically pass to Lessee
upon payment in full of the purchase price but, in no event, earlier than the
expiration of the fixed Initial Term or extended term, if applicable. If the
parties are unable to agree on the purchase price or the terms and conditions
with respect to said purchase, then the Summary Equipment Schedule with respect
to this Equipment shall remain in full force and effect. Notwithstanding the
exercise by Lessee of this option and payment of the purchase price, until all
obligations under the applicable Summary Equipment Schedule have been
fulfilled, it is agreed and understood that Lessor shall retain a purchase
money security interest in the Equipment listed therein and the Summary
Equipment Schedule shall constitute a Security Agreement under the Uniform
Commercial Code of the state in which the Equipment is located.
21
Master Lease: This Schedule is issued pursuant to the Master Lease identified
on page 1 of this Schedule. All of the terms and conditions of the Master
Lease are incorporated in and made a part of this Schedule as if they were
expressly set forth in this Schedule. The parties hereby reaffirm all of the
terms and conditions of the Master Lease (including, without limitation, the
representations and warranties set forth in Section 8) except as modified
herein by this Schedule. This Schedule may not be amended or rescinded except
by a writing signed by both parties.
BIOSTAR, INC. COMDISCO, INC.
AS LESSEE AS LESSOR
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------- --------------------------------------
Title: Vice President Finance Title: President Venture Lease Division
------------------------- -----------------------------------
Date: 5/3/95 Date: 5/5/95
-------------------------- ------------------------------------
22
EXHIBIT 1
SUMMARY EQUIPMENT SCHEDULE
This Summary Equipment Schedule dated _______________ is executed
pursuant to Equipment Schedule No. VL-1 dated May 2, 1995 to the Master
Agreement dated May 2, 1995 between Comdisco, Inc. ("Lessor") and BioStar, Inc.
("Lessee"). All of the terms, conditions, representations and warranties of
the Master Lease Agreement and Equipment Schedule No. VL-1 are incorporated
herein and made a part hereof and this Summary Equipment Schedule constitutes a
Lease for the Equipment described below.
1. EQUIPMENT:
EQUIPMENT
QTY. MFGR. TYPE/MODEL SERIAL # LOCATION
(See attached invoices)
2. INSTALLATION DATE: (See attached Invoices)
3. INITIAL TERM STARTS ON:
4. TOTAL EQUIPMENT COST:
5. RENT:
6. REPRESENTATIONS OF LESSEE:
Each item of Equipment has been delivered to the location indicated
above, tested, inspected, found to be in good working order and
accepted by the Lessee on its installation date as set forth above.