Exhibit 10.16
Duplicate Original
MASTER LEASE AGREEMENT
MASTER LEASE AGREEMENT (the "Master Lease") dated May 7, 1990 by and between
COMDISCO, INC. ("Lessor") and Elitra Pharmaceuticals Inc. ("Lessee").
IN CONSIDERATION of the mutual agreements described below, the parties agree
as follows (all capitalized terms are defined in Section 14.18):
1. PROPERTY LEASED.
Lessor leases to Lessee all of the Equipment described on each Summary
Equipment Schedule. In the event of a conflict, the terms of the applicable
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 Summary Equipment 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 on the first day of each Rent Interval at
the address specified in Lessor's invoice. Interim Rent is due and payable
when invoiced. If any payment is not made when due, Lessee will pay a Late
Charge on the overdue amount. 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, other than as set
forth in the Schedule.
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 Summary Equipment 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 caused by the willful misconduct or 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, and at Lessor's expense, 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 Summary
Equipment 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 the Owner, Lessor, any
Assignee and Secured Party harmless from and against any loss caused by
Lessee's failure to do so, except where such is caused by Lessor.
5.2 RELOCATION OR SUBLEASE. Upon prior written notice, 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,
and (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) Lessee executes sublease documents acceptable to Lessor.
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:
(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 Summary Equipment Schedule constitutes a net lease.
Lessee's obligation to pay Rent and all other amounts due hereunder 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 Summary Equipment Schedule against Lessor, Lessee or
the Equipment by any governmental authority (except only Federal, state,
local and franchise taxes on the capital or the net income of Lessor). Lessor
will file all personal property tax returns for the Equipment and pay all
such property taxes due. Lessee will reimburse Lessor for property taxes
within thirty (30) days of receipt of an invoice.
7. CARE, USE AND MAINTENANCE; 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 and considered common business practice for each item of Equipment,
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 or self
maintains, 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, provided re-certification is
available and is required by Lessor. The lease term will continue upon the
same terms and conditions until recertification has been obtained.
7.2 INSPECTION BY LESSOR. Upon reasonable advance notice, 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 validity 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, except for where such lack of qualification would not have a
material adverse effect on the Company's business; 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 the Master Lease and each
Schedule.
(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 Articles of
Incorporation or Bylaws, do not
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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, subject to the effect of applicable bankruptcy
and other similar laws affecting the rights of creditors generally and rules
of law concerning equitable remedies.
(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 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 Summary Equipment
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 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 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 to 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
with labels provided by Lessor. Lessee will keep all Equipment free from any
other marking or labeling which might be interpreted as a claim of ownership.
11. INDEMNITY.
With regard to bodily injury and property damage liability only, 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 during the term of this Master Lease or until Lessee's obligations
under the Master Lease terminate. 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 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
affected by Lessor. Upon the execution of any Schedule, the Lessee will
furnish appropiate 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 Lessee'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 with respect to that item of
Equipment, 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 Summary Equipment Schedule:
(a) Lessee's Failure to pay Rent or other amounts payable by Lessee
when due if that failure continues for five (5) business 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)
business days after written notice; or
(c) An assignment by Lessee for the benefit of its creditors, the
failure by Lessee to pay it 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, Summary
Equipment 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 equity;
(b) recover from Lessee any damages and or expences, including Default
Costs;
(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 Second 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
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(b) if leased, the present value (discounted at 3 percent (3%) over the
U.S. Treasury Notes of comparable maturity to the term of the re-lease) 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. One representative of Lessor will have the right to
attend Lessee's corporate 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 Master Lease.
14.2 FINANCIAL STATEMENTS. As soon as practicable at the end of each month
(and in any event within thirty (30) days), Lessee will provide to Lessor 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 prepared in accordance with generally accepted
accounting principles, consistently applied (the "Financial Statements"). As
soon as practicable at the end of each fiscal year, Lessee will provide to
Lessor audited Financial Statements setting forth in comparative form the
corresponding figures for the fiscal year (and in any event within ninety
(90) days), 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. 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.
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 any material 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 or any Schedule.
14.4 MERGER AND SALE PROVISIONS. Lessee will notify Lessor of any proposed
Merger at least sixty (60) 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 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. Lessor hereby consents to any Merger
in which the acquiring entity has a ▇▇▇▇▇'▇ Bond Rating of BA3 or better or a
commercially acceptable equivalent measure of creditworthiness as reasonably
determined by Lessor.
14.5 ENTIRE AGREEMENT. This Master Lease and associated Schedules and Summary
Equipment 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 MASTER 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 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, Summary Equipment 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 (1)
actual receipt or (2) three days after mailing if mailed postage prepaid by
regular or airmail to Lessor (to the attention of "the Comdisco Venture Group")
or Lessee, at the address set out in the Schedule, (3) one day after it is sent
by courier or (4) on the same day as sent via facsimile transmission, provided
that the original is sent by personal delivery or mail by the sending 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 LICENSED PRODUCTS. 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 SECRETARY'S CERTIFICATE. Lessor will, upon execution of this Master Lease,
provide Lessor with a secretary's certificate of incumbency and authority. 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 B.
14.15 ELECTRONIC COMMUNICATIONS. Each of the parties may communicate with the
other by electronic means under mutually agreeable terms.
14.16 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.
14.17 EQUIPMENT PROCUREMENT CHARGES/PROGRESS PAYMENTS. Lessee hereby agrees that
Lessor shall not, by virtue of its entering into this Master Lease, be required
to remit any payments to any manufacturer or other third party until Lessee
accepts the Equipment subject to this Master Lease.
14.18 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.
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 the Casualty Loss. However, if a Casualty Value Table is
attached to the relevant Schedule its terms will control.
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.
DELIVERY DATE - means date of delivery of Inventory Equipment to Lessee's
address.
EQUIPMENT - means the property described on a Summary Equipment Schedule and any
replacement for that property required or permitted by this Master Lease or a
Schedule.
EVENT OF DEFAULT - means the events described in Subsection 13.1.
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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.
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.
LATE CHARGE - means the lesser of five percent (5%) of the payment due or the
maximum amount permitted by the law of the state where the Equipment is
located.
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.
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 or stock of the Lessee by or to any other person or entity
in which Lessee is not the surviving entity.
NOTICE PERIOD - means not less than ninety (90) days nor more than twelve
(12) months prior to the expiration of the lease term.
OWNER - means the owner of Equipment.
RENT - means the rent Lessee will pay for each Item of Equipment expressed in
a Summary Equipment 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 either an Equipment Schedule or a Licensed Products Schedule
which incorporates all of the terms and conditions of this Master Lease.
SECURED PARTY - means an entity to whom Lessor has granted a security
interest for the purpose of securing a loan.
SUMMARY EQUIPMENT SCHEDULE - means a certificate provided by Lessor
summarizing all of the Equipment for which Lessor has received Lessee
approved vendor invoices, purchase documents and/or evidence of delivery
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 for the equipment leased thereunder.
IN WITNESS WHEREOF, the parties herein have executed this Master Lease on or
as of the day and year first above written.
ELITRA PHARMACEUTICALS, INC. COMDISCO, INC.,
AS LESSEE AS LESSOR
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------- ---------------------------------
▇▇▇▇▇ ▇▇▇▇, President
Title: CFO Title: Comdisco Ventures Division
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ADDENDUM TO THE
MASTER LEASE AGREEMENT DATED AS OF MAY 7, 1999
BETWEEN ELITRA PHARMACEUTICALS INC., AS LESSEE
AND COMDISCO, INC., AS LESSOR
The undersigned hereby agree that the terms and conditions of the above-
referenced Master Lease are hereby modified and amended as follows:
1) Section 3., "RENT AND PAYMENT"
In line 3 after the words "is not made" insert "within five days of the
date" and delete "when".
2) Section 5., "TITLE, RELOCATION OR SUBLEASE; AND ASSIGNMENT"
Subsection 5.2, second paragraph, in line 8, after the word "documents",
insert "reasonably".
Subsection 5.3(d), at the beginning of the first sentence insert, "After
receipt of written notice of assignment from Lessor,"
3) 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,
upon prior written notice to Lessor and 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 proceedings 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 to the extent Lessee has
previously reimbursed Lessor for such taxes."
4) Section 7., "CARE, USE AND MAINTENANCE, INSPECTION BY LESSOR"
Subsection 7.1, line 7, after the words "another party acceptable to
Lessor", add the words "including self-maintenance by Lessee upon
Lessor's prior written consent, which consent shall not be unreasonably
withheld".
Subsection 7.1, last sentence, delete "." and insert the following at
the end thereof "or Lessee has exercised its option to purchase such
Equipment."
5) Section 8., "REPRESENTATIONS AND WARRANTIES OF LESSEE"
Subsection (c), in line 3 and 4, delete the words "if adversely
determined, will", and insert "are reasonably likely to"
6) Section 9., "DELIVERY AND RETURN OF EQUIPMENT"
Second sentence, after the word "Schedule", insert "and provided that
the equipment is not purchased or the term extended as permitted by the
applicable Schedule,"
7) Section 11, "INDEMNITY"
First sentence, line 6, after the word "Equipment", delete the words
"during the term of this Master Lease or until Lessee's obligations
under the Master Lease terminate" and insert "arising from acts or
events during the period from the Commencement Date of each Summary
Equipment Schedule until re-delivery of the Equipment to Lessor in
accordance with the terms of this Master Lease."
Second sentence, line 3, insert "or willful misconduct" at the end of
the sentence.
8) Section 13, "DEFAULT, REMEDIES AND MITIGATION"
Subsection 13.1, paragraph (b), line 1, insert "applicable" before the
word "Schedule".
Subsection 13.1, 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, introduction, insert "and during the continuance" after
the word "occurence".
Subsection 13.2, paragraph (d), line 5, insert "or willful misconduct"
after "negligence".
Subsection 13.3, second sentence, line 1, insert "AND TO THE EXTENT
PERMITTED BY LAW" after the words "IN THIS SECTION".
9) Section 14, "ADDITIONAL PROVISIONS"
Subsection 14.1., delete this section in its entirety.
Subsection 14.2., line 8, delete "ninety (90)" and insert "one hundred
twenty (120)".
Subsection 14.4, in line 10, after the words "Section 9", insert "or
purchase the Equipment for a mutually agreeable price" and at the end of
the paragraph, insert "and Lessor shall not unreasonably withhold its
consent to a Merger in other cases."
Subsection 14.7., at the end of the second sentence, insert ", except as
provided for in this Agreement."
Subsection 14.9, line 5, insert "applicable" before "Schedule".
Subsection 14.10, change "Illinois" to "California" in lines 2 and 4.
Subsection 14.8, in line 1, after the words "greater or the", insert
"present value of the" and in line 2, after the word "term", insert
"discounted at the U.S. Treasury rate of comparable maturity to the
remaining term, plus the residual value of the Equipment as of the
expiration of the Initial Term"
Except as amended hereby, all other terms and conditions of the Master Lease
Agreement remain in full force and effect.
ELITRA PHARMACEUTICALS INC. COMDISCO, INC.
AS LESSEE AS LESSOR
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇, President
Title: CFO Title: Comdisco Ventures Division
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Date: 5/11/99 Date: May 14, 1999
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