Exhibit 10.20
MASTER LEASE AGREEMENT
Lessor: TRANSAMERICA BUSINESS CREDIT CORPORATION
RIVERWAY II
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Lessee: CLOSURE MEDICAL CORPORATION
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The lessor pursuant to this Master Lease Agreement ("Agreement") dated as of
January 29, 1997, is Transamerica Business Credit Corporation ("Lessor"). All
equipment, together with all present and future additions, parts, accessories,
attachments, substitutions, repairs, improvements and replacements thereof or
thereto, which are the subject of a Lease (as defined in the next sentence)
shall be referred to as "Equipment." Simultaneous with the execution and
delivery of this Agreement, the parties are entering into one or more Lease
Schedules (each, a "Schedule") which refer to and incorporate by reference this
Agreement, each of which constitutes a lease (each, a "Lease") for the Equipment
specified therein. Additional details pertaining to each Lease are specified in
the applicable Schedule. Each Schedule that the parties hereafter enter into
shall constitute a Lease. Lessor has no obligation to enter into any additional
leases with, or extend any future financing to, Lessee.
1. LEASE. Subject to and upon all of the terms and conditions
of this Agreement and each Schedule, Lessor hereby agrees to lease to Lessee and
Lessee hereby agrees to lease from Lessor the Equipment for the Term (as defined
in Paragraph 2 below) thereof.
2. TERM. Each Lease shall be effective and the term of each
Lease ("Term") shall commence on the commencement date specified in the
applicable Schedule (but in no event shall any Lease have a commencement date of
later than December 31, 1997) and, unless sooner terminated (as hereinafter
provided), shall expire at the end of the term specified in such Schedule;
provided, however, that obligations due to be performed by Lessee during the
Term shall continue until they have been performed in full. Schedules will only
be executed after the delivery of the Equipment to Lessee or upon completion of
deliveries of items of such Equipment with aggregate cost of not less than
$100,000.00.
3. RENT. Lessee shall pay as rent to Lessor, for use of the
Equipment during the Term rental payments equal to the sum of all rental
payments including, without limitation, security deposits, advance rents and
interim rents payable in the amounts and on the dates specified in the
applicable Schedule ("Rent"). If any Rent or other amount payable by Lessee is
not paid within five days after the day on which it becomes payable, Lessee will
pay on demand, as a late charge, an amount equal to 5% of such unpaid Rent or
other amount but only to the extent permitted by applicable law. All payments
provided for herein shall be payable to Lessor at its address specified above,
or at any other place designated by Lessor.
4. LEASE NOT CANCELABLE; LESSEE'S OBLIGATIONS ABSOLUTE. No
Lease may be canceled or terminated except as expressly provided herein.
Lessee's obligation to pay all Rent due or to become due hereunder shall be
absolute and unconditional and shall not be subject to any delay, reduction,
set-off, defense, counterclaim or recoupment for any reason whatsoever,
including any failure of the Equipment or any representations by the
manufacturer or the vendor thereof. If the Equipment is unsatisfactory for any
reason, Lessee shall make any claim solely against the manufacturer or the
vendor thereof and shall, nevertheless, pay Lessor all Rent payable hereunder.
5. SELECTION AND USE OF EQUIPMENT. Lessee agrees that it shall
be responsible for the selection, use of, and results obtained from, the
Equipment and any other associated equipment or services.
6. WARRANTIES. LESSOR MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
THE DESIGN OR CONDITION OF THE EQUIPMENT OR ITS MERCHANTABILITY, SUITABILITY,
QUALITY OR FITNESS FOR A PARTICULAR PURPOSE, AND HEREBY DISCLAIMS ANY SUCH
WARRANTY. LESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE A CLAIM AGAINST LESSOR
FOR BREACH OF ANY WARRANTY WHATSOEVER. LESSEE LEASES THE EQUIPMENT "AS IS." IN
NO EVENT SHALL LESSOR HAVE ANY LIABILITY FOR, NOR SHALL LESSEE HAVE ANY REMEDY
AGAINST LESSOR FOR, ANY LIABILITY, CLAIM, LOSS, DAMAGE OR EXPENSE CAUSED
DIRECTLY OR INDIRECTLY BY THE EQUIPMENT OR ANY DEFICIENCY OR DEFECT THEREOF OR
THE OPERATION, MAINTENANCE OR REPAIR THEREOF OR ANY CONSEQUENTIAL DAMAGES AS
THAT TERM IS USED IN SECTION 2-719(3) OF THE MODEL UNIFORM COMMERCIAL CODE, AS
AMENDED FROM TIME TO TIME ("UCC"). Lessor grants to Lessee, for the sole purpose
of obtaining necessary repairs and replacement of parts or otherwise prosecuting
a claim, the benefits of any and all warranties made available by the
manufacturer or the vendor of the Equipment to the extent assignable.
7. DELIVERY. Lessor hereby appoints Lessee as Lessor's agent
for the sole and limited purpose of accepting delivery of the Equipment from
each vendor thereof. Lessee shall pay any and all delivery and installation
charges. Lessor shall not be liable to Lessee for any delay in, or failure of,
delivery of the Equipment.
8. PURCHASE OBLIGATION. Lessee shall be obligated to purchase
all items of the Equipment then subject to a Schedule, at the expiration of the
Term for such items of the Equipment for a purchase price, payable in
immediately available funds, equal to the Fair Market Value of such items which
shall not be less than 5% nor more than 10% of the Equipment Cost of such
Equipment specified in the applicable Schedule, plus any sales or other taxes
applicable to the transfer of the Equipment and any other amount payable and
arising hereunder in immediately available funds. Lessor's sale of any item of
the Equipment shall be on an "As Is, Where Is" basis, without any representation
or warranty by or recourse to Lessor and shall be subject to such additional
terms and conditions as may be specified in the Schedule.
9. OWNERSHIP; INSPECTION; MARKING; FINANCING STATEMENTS.
Lessee shall affix to the Equipment any labels supplied by Lessor indicating
ownership of such Equipment. The Equipment is and shall be the sole property of
Lessor. Lessee shall have no right, title or interest therein, except as lessee
under a Lease. The Equipment is and shall at all times be and remain personal
property and shall not become a fixture. Lessee shall obtain and record such
instruments and take such steps as may be necessary to prevent any person from
acquiring any rights in the Equipment by reason of the Equipment being claimed
or deemed to be real property. Lessee shall make the Equipment and its
maintenance records available for inspection by Lessor at reasonable times and
upon reasonable notice. Lessee shall execute and deliver to Lessor for filing
any UCC financing statements or similar documents Lessor may reasonably request.
10. EQUIPMENT USE. Lessee agrees that the Equipment will be
operated by competent, qualified personnel in connection with Lessee's business
for the purpose for which the Equipment was designed and in accordance with
applicable operating instructions, laws and government regulations, and that
Lessee shall use all reasonable precautions to prevent loss or damage to the
Equipment from fire and other hazards. Lessee shall procure and maintain in
effect all orders, licenses, certificates, permits, approvals and consents
required by federal, state or local laws or by any governmental body, agency or
authority in connection with the delivery, installation, use and operation of
the Equipment.
11. MAINTENANCE. Lessee, at its sole cost and expense, shall
keep the Equipment in a suitable environment as specified by the manufacturer's
guidelines or the equivalent and meet all recertification requirements, and
shall maintain the Equipment in its original condition and working order,
ordinary wear and tear excepted. At the reasonable request of Lessor, Lessee
shall furnish all proof of maintenance.
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12. ALTERATION; MODIFICATIONS; PARTS. Lessee may alter or
modify the Equipment only with the prior written consent of Lessor. Upon request
of Lessor, any alteration shall be removed and the Equipment restored to its
normal, unaltered condition at Lessee's expense (without damaging the
Equipment's originally intended function or its value) prior to its return to
Lessor. Any part installed in connection with warranty or maintenance service or
which cannot be removed in accordance with the preceding sentence shall be the
property of Lessor.
13. CASUALTY INSURANCE; LOSS OR DAMAGE. Lessee will maintain,
at its own expense, liability and property damage insurance relating to the
Equipment, insuring against such risks as are customarily insured against on the
type of equipment leased hereunder by businesses in which Lessee is engaged in
such amounts, in such form, and with insurers satisfactory to Lessor; provided,
however, that the amount of insurance against damage or loss shall not be less
than the greater of (a) the replacement value of the Equipment and (b) the
stipulated loss value of the Equipment specified in the applicable Schedule
("Stipulated Loss Value"). Each liability insurance policy shall provide
coverage (including, without limitation, personal injury coverage) of not less
than $1,000,000 for each occurrence, and shall name Lessor as an additional
insured; and each property damage policy shall name Lessor as sole loss payee
and all policies shall contain a clause requiring the insurer to give Lessor at
least thirty days prior written notice of any alteration in the terms or
cancellation of the policy. Lessee shall furnish a copy of each insurance policy
(with endorsements) or other evidence satisfactory to Lessor that the required
insurance coverage is in effect; provided, however, Lessor shall have no duty to
ascertain the existence of or to examine the insurance policies to advise Lessee
if the insurance coverage does not comply with the requirements of this
Paragraph. If Lessee fails to insure the Equipment as required, Lessor shall
have the right but not the obligation to obtain such insurance, and the cost of
the insurance shall be for the account of Lessee due as part of the next due
Rent. Lessee consents to Lessor's release, upon its failure to obtain
appropriate insurance coverage, of any and all information necessary to obtain
insurance with respect to the Equipment or Lessor's interest therein.
Lessee shall bear the entire risk of theft or
destruction of, or damage to, the Equipment including, without limitation, any
condemnation, seizure or requisition of title or use ("Casualty Loss"). No
Casualty Loss shall relieve Lessee from its obligations to pay Rent unless and
until Lessee shall have paid the Stipulated Loss Value as provided in clause (b)
below. When any Casualty Loss occurs, Lessee shall immediately notify Lessor
and, at the option of Lessor, shall promptly (a) place such Equipment in good
repair and working order; or (b) pay Lessor an amount equal to the Stipulated
Loss Value of such Equipment and all other amounts (excluding Rent) payable by
Lessee hereunder, together with a late charge on such amounts at a rate per
annum equal to the rate imputed in the Rent payments hereunder (as reasonably
determined by Lessor) from the date of the Casualty Loss through the date of
payment of such amounts, provided, however, that Lessee shall have no obligation
to pay a late charge to the extent its Rent is current through the date of
payment of the Stipulated Loss Value, whereupon Lessor shall transfer to Lessee,
without recourse or warranty (express or implied), all of Lessor's interest, if
any, in and to such Equipment on an "AS IS, WHERE IS" basis. The proceeds of any
insurance payable with respect to the Equipment shall be applied, at the option
of Lessor, either towards (i) repair of the Equipment or (ii) payment of any of
Lessee's obligations hereunder. Lessee hereby appoints Lessor as Lessee's
attorney-in-fact to make claim for, receive payment of, and execute and endorse
all documents, checks or drafts issued with respect to any Casualty Loss under
any insurance policy relating to the Equipment.
14. TAXES. Lessee shall pay when due, and indemnify and hold
Lessor harmless from, all sales, use, excise and other taxes, charges, and fees
(including, without limitation, income, franchise, business and occupation,
gross receipts, licensing, registration, titling, personal property, stamp and
interest equalization taxes, levies, imposts, duties, charges or withholdings of
any nature), and any fines, penalties or interest thereon, imposed or levied by
any governmental body, agency or tax authority upon or in connection with the
Equipment, its purchase, ownership, delivery, leasing, possession, use or
relocation of the Equipment or otherwise in connection with the transactions
contemplated by each Lease or the Rent thereunder, excluding taxes on or
measured by the income of Lessor. Upon request, Lessee will provide proof of
payment. Unless Lessor elects otherwise, Lessor will pay all property taxes on
the Equipment for which Lessee shall reimburse Lessor promptly upon request.
Lessee
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shall timely prepare and file all reports and returns which are required
to be made with respect to any obligation of Lessee under this Paragraph 14.
Lessee shall, to the extent permitted by law, cause all ▇▇▇▇▇▇▇▇ of such fees,
taxes, levies, imposts, duties, withholdings and governmental charges to be made
to Lessor in care of Lessee. Upon request, Lessee will provide Lessor with
copies of all such ▇▇▇▇▇▇▇▇.
15. LESSOR'S PAYMENT. If Lessee fails to perform its
obligations under Paragraph 13 or 14 above, or Paragraph 21 below, Lessor shall
have the right to substitute performance, in which case, Lessee shall
immediately reimburse Lessor therefor.
16. GENERAL INDEMNITY. Each Lease is a net lease. Therefore,
Lessee shall indemnify Lessor and its successors and assigns against, and hold
Lessor and its successors and assigns harmless from, any and all claims,
actions, damages, obligations, liabilities and all costs and expenses,
including, without limitation, legal fees, incurred by Lessor or its successors
and assigns arising out of each Lease including, without limitation, the
purchase, ownership, delivery, lease, possession, maintenance, condition, use or
return of the Equipment, or arising by operation of law, except that Lessee
shall not be liable for any claims, actions, damages, obligations and costs and
expenses determined by a non-appealable, final order of a court of competent
jurisdiction to have occurred as a result of the gross negligence or willful
misconduct of Lessor or its successors and assigns. Lessee agrees that upon
written notice by Lessor of the assertion of any claim, action, damage,
obligation, liability or lien, Lessee shall assume full responsibility for the
defense thereof, provided that Lessor's failure to give such notice shall not
limit or otherwise affect its rights hereunder except to the extent Lessee is
actually prejudiced by such failure. Any payment pursuant to this Paragraph
(except for any payment of Rent) shall be of such amount as shall be necessary
so that, after payment of any taxes required to be paid thereon by Lessor,
including taxes on or measured by the net income of Lessor, the balance will
equal the amount due hereunder. The provisions of this Paragraph with regard to
matters arising during a Lease shall survive the expiration or termination of
such Lease.
17. ASSIGNMENT BY LESSEE. Lessee shall not, without the prior
written consent of Lessor, (a) assign, transfer, pledge or otherwise dispose of
any Lease or Equipment, or any interest therein; (b) (i) sublease or lend any
Equipment to anyone or (ii) permit any Equipment to be used by anyone other than
Lessee, its employees, subcontractors and consultants; or (c) move any Equipment
from the location specified for it in the applicable Schedule, except that
Lessee may move Equipment to another location within the United States provided
that Lessee has delivered to Lessor (A) prior written notice thereof and (B)
duly executed financing statements and other agreements and instruments (all in
form and substance satisfactory to Lessor) necessary or, in the opinion of the
Lessor, desirable to protect Lessor's interest in such Equipment.
Notwithstanding anything to the contrary in the immediately preceding sentence,
Lessee may keep any Equipment consisting of motor vehicles or rolling stock at
any location in the United States.
18. ASSIGNMENT BY LESSOR. Lessor may assign its interest or
grant a security interest in any Lease and the Equipment individually or
together, in whole or in part. If Lessee is given written notice of any such
assignment, it shall immediately make all payments of Rent and other amounts
hereunder directly to such assignee. Each such assignee shall have all of the
rights of Lessor under each Lease assigned to it. Lessee shall not assert
against any such assignee any set-off, defense or counterclaim that Lessee may
have against Lessor or any other person.
19. DEFAULT; NO WAIVER. Lessee or any guarantor of any or all
of the obligations of Lessee hereunder (together with Lessee, the "Lease
Parties") shall be in default under each Lease upon the occurrence of any of the
following events (each, an "Event of Default"): (a) Lessee fails to pay within
five days of when due any amount required to be paid by Lessee under or in
connection with any Lease; (b) any of the Lease Parties fails to perform any
other provision under or in connection with a Lease or violates any of the
covenants or agreements of such Lease Party under or in connection with a Lease
and such failure or violation remains unremedied for fifteen days after the
earlier of the date on which Lessee knew or should have known of such failure or
violation or the date on which Lessor has given Lessee notice thereof; (c) any
material representation made or financial information delivered or furnished by
any of the Lease Parties under or in connection with a Lease shall
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prove to have been inaccurate in any material respect when made; (d) any of the
Lease Parties makes an assignment for the benefit of creditors, whether
voluntary or involuntary, or consents to the appointment of a trustee or
receiver, or if either shall be appointed for any of the Lease Parties or for a
substantial part of its property without its consent and, in the case of any
such involuntary proceeding, such proceeding remains undismissed or unstayed for
forty-five days following the commencement thereof; (e) any petition or
proceeding is filed by or against any of the Lease Parties under any Federal or
State bankruptcy or insolvency code or similar law and, in the case of any such
involuntary petition or proceeding, such petition or proceeding remains
undismissed or unstayed for forty-five days following the filing or commencement
thereof, or any of the Lease Parties takes any action authorizing any such
petition or proceeding; (f) any of the Lease Parties fails to pay when due an
amount in excess of $150,000 in the aggregate in respect of any indebtedness for
borrowed money or under conditional sales or installment sales contracts or
similar agreements, leases or obligations evidenced by bonds, debentures, notes
or other similar agreements or instruments to any creditor (including Lessor
under any other agreement) after any and all applicable cure periods therefor
shall have elapsed; (g) any judgment in excess of $50,000 individually or in the
aggregate shall be rendered against any of the Lease Parties which shall remain
unpaid or unstayed for a period of sixty days; (h) any of the Lease Parties
shall dissolve, liquidate, wind up or cease its business, sell or otherwise
dispose of all or substantially all of its assets or make any material change in
its lines of business; (i) any of the Lease Parties shall amend or modify its
name, unless such Lease Party delivers to Lessor thirty days prior to any such
proposed amendment or modification written notice of such amendment or
modification and within ten days before such amendment or modification delivers
executed financing statements (in form and substance satisfactory to the
Lessor); (j) any of the Lease Parties shall merge or consolidate with any other
entity or make any material redemption of its outstanding capital, in each case
without Lessor's prior written consent, which shall not be unreasonably
withheld; (k) any of the Lease Parties shall suffer any loss or suspension of
any material license, permit or other right or asset necessary to the profitable
conduct of its business, fail generally to pay its debts as they mature, or call
a meeting for purposes of compromising its debts; or (l) any of the Lease
Parties shall deny or disaffirm its obligations hereunder or under any of the
documents delivered in connection herewith
20. REMEDIES. Upon the occurrence and continuation of an Event
of Default, Lessor shall have the right, in its sole discretion, to exercise any
one or more of the following remedies: (a) terminate each Lease; (b) declare any
and all Rent and other amounts then due and any and all Rent and other amounts
to become due under each Lease (collectively, the "Lease Obligations")
immediately due and payable; (c) take possession of any or all items of
Equipment, wherever located, without demand, notice, court order or other
process of law, and without liability for entry to Lessee's premises, for damage
to Lessee's property or otherwise; (d) demand that Lessee return any or all
Equipment to Lessor, and, for each day that Lessee shall fail to return any item
of Equipment, Lessor may demand an amount equal to the Rent payable for such
Equipment; (e) lease, sell or otherwise dispose of the Equipment in a
commercially reasonable manner, with or without notice and on public or private
bid; (f) recover the following amounts from the Lessee (as damages, including
reimbursement of costs and expenses, liquidated for all purposes and not as a
penalty): (i) all costs and expenses of Lessor reimbursable to it hereunder,
including, without limitation, expenses of disposition of the Equipment, legal
fees and all other amounts specified in Paragraph 21 below; (ii) an amount equal
to the sum of (A) any accrued and unpaid Rent through the later of (1) the date
of the applicable default or (2) the date that Lessor has obtained possession of
the Equipment or such other date as Lessee has made an effective tender of
possession of the Equipment to Lessor (the "Default Date") and (B) if Lessor
resells or re-lets the Equipment, Rent at the periodic rate provided for in each
Lease for the additional period that it takes Lessor to resell or re-let all of
the Equipment; (iii) the present value of all future Rent reserved in the Leases
and contracted to be paid over the unexpired Term of the Leases discounted at
five percent simple interest per annum; (iv) the reversionary value of the
Equipment as of the expiration of the Term of the applicable Lease as set forth
on the applicable Schedule; and (v) any indebtedness for Lessee's indemnity
under Paragraph 16 above, plus a late charge at the rate specified in Paragraph
3 above, less the amount received by Lessor, if any, upon sale or re-let of the
Equipment; and (g) exercise any other right or remedy to recover damages or
enforce the terms of the Leases. Upon the occurrence and continuance of an Event
of Default or an event which with the giving of notice or the passage of time,
or both, would result in an Event of Default, Lessor shall have the right,
whether or not Lessor has made any demand or the obligations of Lessee hereunder
have matured, to appropriate and apply to the payment of the obligations of
Lessee hereunder all security deposits and other deposits
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(general or special, time or demand, provisional or final) now or hereafter held
by and other indebtedness or property now or hereafter owing by Lessor to
Lessee. Lessor may pursue any other rights or remedies available at law or in
equity, including, without limitation, rights or remedies seeking damages,
specific performance and injunctive relief. Any failure of Lessor to require
strict performance by Lessee, or any waiver by Lessor of any provision hereunder
or under any Schedule, shall not be construed as a consent or waiver of any
other breach of the same or of any other provision. Any amendment or waiver of
any provision hereof or under any Schedule or consent to any departure by Lessee
herefrom or therefrom shall be in writing and signed by Lessor.
No right or remedy is exclusive of any other provided herein
or permitted by law or equity. All such rights and remedies shall be cumulative
and may be enforced concurrently or individually from time to time.
21. LESSOR'S EXPENSE. Lessee shall pay Lessor on demand all
costs and expenses in protecting and enforcing Lessor's rights and interests in
each Lease and the Equipment, including, without limitation, legal, collection
and remarketing fees and expenses incurred by Lessor in enforcing the terms,
conditions or provisions of each Lease or, upon the occurrence and continuation
of an Event of Default.
22. LESSEE'S WAIVERS. To the extent permitted by applicable
law, Lessee hereby waives any and all rights and remedies conferred upon a
lessee by Sections 2A-508 through 2A-522 of the UCC. To the extent permitted by
applicable law, Lessee also hereby 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 as set forth in Paragraph 20
above or which may otherwise limit or modify any of Lessor's rights or remedies
under Paragraph 20. Any action by Lessee against Lessor for any default by
Lessor under any Lease shall be commenced within one year after any such cause
of action accrues.
23. NOTICES; ADMINISTRATION. Except as otherwise provided
herein, all notices, approvals, consents, correspondence or other communications
required or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery or certified or registered mail,
postage prepaid, if to Lessor, then to Technology Finance Division, ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Assistant Vice President,
Lease Administration, with a copy to Lessor at Riverway II, West Office Tower,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department,
if to Lessee, then to Closure Medical Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, Chief Financial
Officer or such other address as shall be designated by Lessee or Lessor to the
other party. All such notices and correspondence shall be effective when
received.
24. REPRESENTATIONS. Lessee represents and warrants to Lessor
that (a) Lessee is duly organized, validly existing and in good standing under
the laws of the State of its incorporation; (b) the execution, delivery and
performance by Lessee of this Agreement are within Lessee's powers, have been
duly authorized by all necessary action, and do not contravene (i) Lessee's
organizational documents or (ii) any law or contractual restriction binding on
or affecting Lessee; (c) no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by Lessee of this
Agreement; and (d) each Lease constitutes the legal, valid and binding
obligations of Lessee enforceable against Lessee in accordance with its terms.
25. FURTHER ASSURANCES. Lessee, upon the request of Lessor,
will execute, acknowledge, record or file, as the case may be, such further
documents and do such further acts as may be reasonably necessary, desirable or
proper to carry out more effectively the purposes of this Agreement. Lessee
hereby appoints Lessor as its attorney-in-fact to execute on behalf of Lessee
and authorizes Lessor to file without Lessee's signature any UCC financing
statements and amendments Lessor deems advisable.
26. FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a)
as soon as available, but not later than 120 days after the end of each fiscal
year of Lessee and its consolidated subsidiaries, the consolidated balance
sheet, income statement and statements of cash flows and shareholders equity for
Lessee and
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its consolidated subsidiaries (the "Financial Statements") for such year,
reported on by independent certified public accountants without an adverse
qualification; and (b) as soon as available, but not later than 60 days after
the end of each of the first three fiscal quarters in any fiscal year of Lessee
and its consolidated subsidiaries, the Financial Statements for such fiscal
quarter, together with a certification duly executed by a responsible officer of
Lessee that such Financial Statements have been prepared in accordance with
generally accepted accounting principles and are fairly stated in all material
respects (subject to normal year-end audit adjustments).
27. CONSENT TO JURISDICTION. Lessee irrevocably submits to the
jurisdiction of any Illinois state or federal court sitting in Illinois for any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, and Lessee irrevocably agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
Illinois state or federal court.
28. WAIVER OF JURY TRIAL. LESSEE AND LESSOR IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
29. FINANCE LEASE. Lessee and Lessor agree that each Lease is
a "Finance Lease" as defined by Section 2A-103(g) of the UCC. Lessee
acknowledges that Lessee has reviewed and approved each written Supply Contract
(as defined by UCC 2A-103(y)) covering Equipment purchased from each "Supplier"
(as defined by UCC 2A-103(x)) thereof.
30. NO AGENCY. Lessee acknowledges and agrees that neither the
manufacturer or supplier, nor any salesman, representative or other agent of the
manufacturer or supplier, is an agent of Lessor. No salesman, representative or
agent of the manufacturer or supplier is authorized to waive or alter any term
or condition of this Agreement or any Schedule and no representation as to the
Equipment or any other matter by the manufacturer or supplier shall in any way
affect Lessee's duty to pay Rent and perform its other obligations as set forth
in this Agreement or any Schedule.
31. SPECIAL TAX INDEMNIFICATION. Lessee acknowledges that
Lessor, in determining the Rent due hereunder, has assumed that certain tax
benefits as are provided to an owner of property under the Internal Revenue Code
of 1986, as amended (the "Code"), and under applicable state tax law, including,
without limitation, depreciation deductions under Section 168(b) of the Code,
and deductions under Section 163 of the Code in an amount at least equal to the
amount of interest paid or accrued by Lessor with respect to any indebtedness
incurred by Lessor in financing its purchase of the Equipment, are available to
Lessor as a result of the lease of the Equipment. In the event Lessor is unable
to obtain such tax benefits as a result of an act or omission of Lessee, is
required to include in income any amount other than the Rent or is required to
recognize income in respect of the Rent earlier than anticipated pursuant to
this Agreement, Lessee shall pay Lessor additional rent ("Additional Rent") in a
lump sum in an amount needed to provide Lessor with the same after-tax yield and
after-tax cash flow as would have been realized by Lessor had Lessor (i) been
able to obtain such tax benefits, (ii) not been required to include any amount
in income other than the Rent and (iii) not been required to recognize income in
respect of the Rent earlier than anticipated pursuant to this Agreement. The
Additional Rent shall be computed by Lessor, which computation shall be binding
on Lessee absent manifest error. The Additional Rent shall be due immediately
upon written notice by Lessor to Lessee of Lessor's inability to obtain tax
benefits, the inclusion of any amount in income other than the Rent or the
recognition of income in respect of the Rent earlier than anticipated pursuant
to this Agreement. The provisions of this Paragraph 31 shall survive the
termination of this Agreement.
32. GOVERNING LAW; SEVERABILITY. EACH LEASE SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF ILLINOIS. IF ANY PROVISION SHALL BE HELD TO BE
INVALID OR UNENFORCEABLE, THE VALIDITY AND ENFORCEABILITY OF THE REMAINING
PROVISIONS SHALL NOT IN ANY WAY BE AFFECTED OR IMPAIRED.
LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND
THE
7
SCHEDULE HERETO, UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND
CONDITIONS. FURTHER, LESSEE AND LESSOR AGREE THAT THIS AGREEMENT AND THE
SCHEDULES DELIVERED IN CONNECTION HEREWITH FROM TIME TO TIME ARE THE COMPLETE
AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL
PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF.
IN WITNESS WHEREOF, the parties hereto have executed or caused
this Master Lease Agreement to be duly executed by their duly authorized
officers as of this 3rd day of March, 1997.
CLOSURE MEDICAL CORPORATION
By: /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
Federal Identification Number ###-##-####
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
Name:
Title:
8
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DRAFT
SCHEDULE TO MASTER LEASE AGREEMENT
Dated: February , 1997
Schedule No. 1
LESSOR NAME & MAILING ADDRESS LESSEE NAME & MAILING ADDRESS
Transamerica Business Credit Corporation Closure Medical Corporation
Riverway II ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Equipment Location (if different than Lessee's address above):
This Schedule covers the following described equipment ("Equipment").
See Exhibit II attached hereto and made a part hereof.
The Equipment is hereby leased pursuant to the provisions of the Master Lease
Agreement between the undersigned Lessee and Lessor dated January 29, 1997 (the
"Master Lease"), the terms of which are incorporated herein by reference
thereto, plus the following additional terms, provisions and modifications.
Lessor reserves the right to adjust the monthly payments in accordance with the
Commitment Letter dated January 17, 1997, between the Lessor and Lessee, if the
Lessor has not received this Schedule executed by the Lessee within five
business days from the date set forth above.
1. Term (Number of Months) 60 months
2. Equipment Cost $100,000.00
3. Commencement Date __________________
4. Rate Factor 2.1931% of Equipment Cost
5. Total Rents
6. Advance Rents (first and last)
7. Monthly rental payments
(including monthly sales/use tax of
$_________ and the second such rental
payment will be due on ____________, _____
and subsequent rental payments will
be due on the same day of each month thereafter
8. Security Deposit NONE
9. In addition to the monthly rental
payments provided for herein, Lessee shall
pay to Lessor, as interim rent, payable on
the commencement date specified above, an
amount equal to 1/30th of the monthly rental
payment (including monthly sales/use tax)
multiplied by the number of days from and
including the commencement date through the
end of the same calendar month. $_____________
Lessee hereby irrevocably authorizes Lessor to insert in this Schedule the
Commencement Date and the due date of the first rental payment.
Except as expressly provided or modified hereby, all the terms and provisions of
the Master Lease Agreement shall remain in full force and effect.
The Purchase Date shall be ____________, ____ The Purchase Price shall be the
Fair Market Value of the Equipment. Lessor and Lessee agree that the Fair Market
Value of the Equipment on the Purchase Date shall be not less than 5% nor more
than 10% of the Equipment Cost.
The Stipulated Loss Value of any items of Equipment shall be an amount equal to
the present value of all future Rent discounted at a rate of 6% per annum plus
the Reversionary Value.
The Reversionary Value of any item of Equipment shall be 10% of Equipment Cost.
In witness whereof, this Schedule is hereby executed and agreed to this ____ day
of _______, __, 1997.
TRANSAMERICA BUSINESS CREDIT CLOSURE MEDICAL CORPORATION
CORPORATION (Lessee)
(Lessor)
By:__________________________ By:_______________________
Title:_____________________ Title:______________________