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EXHIBIT 10.59
MASTER EQUIPMENT LEASE AGREEMENT
Dated as of
October 25, 1996
between
FINOVA TECHNOLOGY FINANCE, INC.
(LESSOR)
AND
HYBRIDON, INC.
(LESSEE)
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TABLE OF CONTENTS
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SECTION PAGE
------- ----
1. Agreement for Lease of Equipment.........................................1
2. Delivery and Acceptance of Equipment.....................................1
3. Disclaimer of Warranties.................................................2
4. Primary Term.............................................................3
5. Rent.....................................................................3
6. Lessee's Representations and Warranties..................................4
7. Identification Marks.....................................................6
8. Fees and Taxes...........................................................6
9. General Indemnity........................................................7
10. Use of Equipment; Location; Liens........................................8
11. Maintenance and Repairs; Additions to Equipment..........................9
12. Loss, Damage or Destruction of Equipment................................10
13. Reports; Inspections....................................................11
14. Insurance...............................................................11
15. Return of Equipment.....................................................12
16. Lessor's Ownership; Equipment To Be and Remain Personal Property........14
17. Other Covenants.........................................................15
18. Events of Default.......................................................17
19. Assignment and Transfer by Lessor.......................................20
20. Recording and Filing; Expenses..........................................21
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21. Automatic Lease Term Renewal............................................22
22. Option to Renew.........................................................22
23. Quiet Enjoyment.........................................................22
24. Failure or Indulgence not Waiver; Additional Rights of Lessor...........23
25. Sublease................................................................23
26. Purchase Option.........................................................23
27. Notices.................................................................24
28. Entire Agreement; Severability; Amendment or Cancellation of Lease......25
29. Waiver of Jury..........................................................25
30. Restriction of Limitation Periods and Damages...........................25
31. Governing Law; Consent to Jurisdiction and Service......................25
32. Lessor's Right to Perform for Lessee....................................26
33. Agreement for Lease Only................................................26
34. Binding Effect..........................................................26
35. General.................................................................26
36. Definitions.............................................................26
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MASTER EQUIPMENT LEASE AGREEMENT
--------------------------------
MASTER EQUIPMENT LEASE AGREEMENT dated as of October 25, 1996 between
HYBRIDON, INC. (hereinafter called "Lessee"), a Delaware corporation that has
its executive office and principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and FINOVA TECHNOLOGY FINANCE, INC. (hereinafter
called "Lessor"), a Delaware corporation with its principal place of business at
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
In consideration of the mutual covenants hereinafter contained, Lessee
and Lessor agree as follows:
1. Agreement for Lease of Equipment. Lessor shall lease to Lessee and
Lessee shall lease from Lessor, upon the terms and conditions specified in this
Master Lease and the applicable Rental Schedule, the Equipment as described in
the applicable Rental Schedule including Schedule A of such Rental Schedule and
this Master Lease. Each Rental Schedule shall incorporate the terms of this
Master Lease and shall constitute a separate lease (the term "this Lease" shall
refer collectively to the applicable Rental Schedule and this Master Lease).
Only the signed copy of each Rental Schedule and not this Master Lease shall
constitute chattel paper the possession of which can perfect a security
interest. In the event of a conflict between the provisions of this Master Lease
and the provisions of any Rental Schedule, the provisions of the Rental Schedule
shall prevail.
2. Delivery and Acceptance of Equipment. (a) Lessor and Lessee agree
that the vendor of the Equipment to Lessor or, as to any Equipment to be sold by
Lessee to Lessor and leased back, the vendor of the Equipment to Lessee (in
either case, the "Vendor") will be responsible to deliver the Equipment to
Lessee at the location specified in the applicable Rental Schedule. Such
delivery shall be delivery of the Equipment by Lessor to Lessee under this Lease
unless such Equipment is to be sold by Lessee to Lessor and leased back.
Provided that no Event of Default has occurred, no event which with the passage
of time or giving of notice would be an Event of Default has occurred, and is
continuing, and the conditions set forth in the next following paragraph have
been met and the Equipment is not to be sold by Lessee to Lessor and leased
back, Lessor hereby authorizes Lessee, acting as Lessor's agent, to accept for
Lessor, and in Lessor's name, the Equipment from the Vendor upon delivery
pursuant to the purchase contract for the Equipment. Such acceptance shall be
acceptance of the Equipment by Lessee under this Lease. Nevertheless, if within
five business days after Lessee has received delivery of an item of the
Equipment, Lessee has not given Lessor written notice of a defect therein and
Lessor has not notified Lessee not to accept the Equipment, Lessee shall be
deemed to have (a) acknowledged receipt of such item of the Equipment in good
condition and repair and (b) accepted such item of the Equipment under this
Lease. Lessee agrees to confirm any acceptance of the Equipment by Lessee by
executing a Certificate of Inspection and Acceptance and providing the same to
Lessor in accordance with the notice provision hereof on or about the Lease
Commencement Date, but no later than the date for payment to the Vendor.
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(b) Conditions precedent to every progress payment and Lease Term
Commencement shall include that (i) no payment shall be past due to Lessor or
any assign of Lessor from Lessee or any Guarantor (as hereinafter defined),
whether as a lessee, a guarantor or in some other capacity; (ii) Lessee shall be
in compliance with the provisions of this Lease; (iii) all documentation then
required by Lessor's counsel shall have been received by Lessor; (iv) Lessee
shall not be in default under any material contract to which Lessee is a party
or by which Lessee or the property of Lessee is bound; and (v) there shall not
have been any material adverse change or threatened material adverse change in
the financial or other condition, business, operations, properties, assets or
prospects of Lessee, any Guarantor or any Manufacturer (as hereinafter defined)
since June 30, 1996, or from the written information that has been supplied to
Lessor prior to October 21, 1996 by Lessee, any Guarantor or any Manufacturer,
other than the continued occurrence of losses in the ordinary course of
business.
3. Disclaimer of Warranties. LESSEE ACKNOWLEDGES THAT IT HAS SELECTED
BOTH THE EQUIPMENT AND EVERY MANUFACTURER AND OTHER VENDOR OF THE EQUIPMENT THAT
LESSEE HAS NOT RELIED UPON LESSOR FOR SUCH SELECTION AND THAT LESSEE HAS A COPY
OF THE PURCHASE CONTRACT(S) FOR LESSOR'S PURCHASE OF THE EQUIPMENT. LESSOR HAS
NOT MADE AND SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, FITNESS FOR USE, FITNESS FOR A
PARTICULAR PURPOSE OR TITLE OF THE EQUIPMENT (OR ANY PART THEREOF) OR AS TO
COMPLIANCE WITH SPECIFICATIONS, COMPLIANCE WITH GOVERNMENTAL REGULATIONS,
QUALITY. SELECTION, INSTALLATION, SUITABILITY, PERFORMANCE, CONDITION, DESIGN,
ABSENCE OF DEFECTS, OPERATION, OR NON-INFRINGEMENT OF PATENT, COPYRIGHT,
TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THE EQUIPMENT (OR ANY PART
THEREOF). LESSEE SHALL LEASE THE EQUIPMENT "AS IS," WHERE IS". LESSOR HEREBY
DISCLAIMS ANY AND ALL SUCH WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED.
LESSEE AND LESSOR AGREE THAT ALL RISKS INCIDENT TO THE MATTERS REFERRED TO IN
THIS SECTION ARE TO BE BORNE BY LESSEE. Lessor has and shall have no
responsibility for the installation, adjustment or servicing of the Equipment.
The provisions of this Section have been negotiated and are intended to be a
complete exclusion and negation of any representations or warranties by Lessor,
express or implied, with respect to the Equipment that may arise pursuant to any
law now or hereafter in effect, or otherwise. In no event shall defect in, or
unfitness of, any or all of the Equipment, or any breach of warranty or
representation by any or every Manufacturer or other Vendor relieve Lessee of
the obligation to pay rent or to make any other payments required hereunder or
to perform any other obligation hereunder. Without limiting the generality of
the foregoing, Lessor shall not be responsible or liable for any (i) defect,
either latent or patent, in any of the Equipment or for any direct or
consequential damages therefrom, (ii) loss of use of any of the Equipment or for
any loss of profits or any interruption in Lessee's business occasioned by
Lessee's inability to use any or all of the Equipment for any reason whatsoever,
or (iii) in the event that any Vendor delays or fails to make delivery of any or
all of the Equipment or fails to fulfill or comply with any purchase contract
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or order. For as long as no Event of Default shall have occurred hereunder,
Lessor hereby transfers and assigns to Lessee during the Lease Term (as
hereinafter defined) all right and interest of Lessor in any Manufacturer's and
other Vendor's warranties with respect to any and all of the Equipment, and
agrees to execute all documents reasonably necessary to effect such transfer and
assignment, except that to the extent any rights of Lessor with respect to the
Equipment may not be assigned or otherwise be available to Lessee, Lessor shall
instead use reasonable efforts to enforce such rights against such Manufacturers
or other Vendors but only upon the request and at the expense of Lessee.
4. Primary Term. The Primary Term for each item of the Equipment shall
commence on the Lease Commencement Date provided for by the Rental Schedule for
such Equipment, and unless sooner terminated pursuant to the provisions of this
Lease, shall be for the number of calendar months set forth in such Rental
Schedule, plus the number of days remaining in any partial calendar month if the
Lease Commencement Date occurs on other than the first day of a month.
Notwithstanding the foregoing, the provisions of this Master Lease on
indemnification of Lessor by Lessee shall apply between Lessor and Lessee with
respect to any Equipment from the time that any order for the Equipment is
placed by Lessor.
5. Rent. (a) Lessee shall pay to Lessor in cash or by check as rent
for the Equipment during the Lease Term, the amounts provided for in the Rental
Schedule ("Basic Rent") for such Equipment on the dates designated therein
("Payment Dates"), at the location of Lessor set forth therein, or at such other
address or to such other person or entity as Lessor, from time to time, may
designate.
(b) Lessee shall also pay to Lessor, upon notice by Lessor to Lessee
that payment is due, any sums other than for Basic Rent that Lessee at any time
shall be required to pay Lessor pursuant to the provisions of this Lease, within
(5) five business days of notice thereof including but not limited to sums
payable by reason of payments by Lessor to any Vendors in advance of the
delivery of such Equipment or the commencement of the Lease Term for such
Equipment, together with every additional charge, interest and cost which may be
added for non-payment or late payment of any such sums or of Basic Rent. All
such sums shall be additional rent ("Additional Rent") and Lessor shall provide
Lessee with notification as to the amount of any Additional Rent. If Lessee
shall fail to pay any Additional Rent within (5) five business days after notice
thereof, Lessor shall have all rights, powers and remedies with respect thereto
as are provided herein or by law in the case of non-payment of Basic Rent.
(c) With respect to any amount of Basic Rent or Additional Rent not
received by Lessor within three days from when due hereunder, Lessee shall pay
to Lessor interest on such amount from the due date thereof until payment is
received by Lessor at two percent per month or the highest rate of interest on
amounts past due that is not unlawful, whichever is lower (the "Default Interest
Rate"). Additionally, with respect to each such instance of late payment, Lessee
shall pay to Lessor, within three days of notification that
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such payment is due, a collection fee of $500, which fee approximates Lessor's
administrative costs, at minimum, to collect such unpaid Basic Rent or
Additional Rent. However, no Default Interest or collection fee shall be payable
for (x) any Basic Rent for a partial month commencing on a Lease Commencement
Date or (y) any Basic Rent for a full calendar month in an amount that differs
from the amount of Basic Rent payable for the immediately prior calendar month,
provided that in either circumstance the Basic Rent is paid within ten (10) days
of an invoice to Lessee from Lessor giving notice of the amount of Basic Rent to
be paid.
(d) LESSEE AGREES THAT TIME IS OF THE ESSENCE TO LESSOR IN LESSEE'S
MAKING PAYMENTS OF BASIC RENT AND ADDITIONAL RENT WHEN SUCH PAYMENTS BECOME DUE.
(e) This Lease is a net-net-net lease and, notwithstanding any other
provisions of this Lease, it is intended that Basic Rent and Additional Rent
shall be paid without notice, demand, counterclaim, setoff, deduction or defense
and without abatement, suspension, deferment, diminution or reduction. Lessee
shall perform all its obligations under this Lease at its sole cost and expense.
Except to the extent otherwise expressly specified herein, the obligations and
liabilities of Lessee hereunder shall in no way be released, discharged or
otherwise affected for any reason, including, without limitation: (i) any defect
in the condition, quality or fitness for use of the Equipment or any part
thereof; (ii) any damage to, removal, abandonment, salvage, loss, scrapping or
destruction of or any requisition or taking of the Equipment or any part
thereof; (iii) any restriction, prevention or curtailment of or interference
with any use of the Equipment or any part thereof; (iv) any defect in title or
rights to the Equipment or any lien on such title or rights or on the Equipment;
(v) any change, waiver, extension, indulgence or other action or omission in
respect of any obligation or liability of Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceedings relating to Lessee or any action taken with respect to
this Lease by any trustee or receiver of Lessee or by any court, in any such
proceeding; (vii) any claim that Lessee has or might have against any Person (as
hereinafter defined), including without limitation Lessor; (viii) any failure on
the part of Lessor to perform or comply with any of the terms hereof or of any
other agreement; (ix) any invalidity, unenforceability or disaffirmance of this
Lease or any provision hereof against or by Lessee; or (x) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing, whether or not
Lessee or Lessor shall have notice or knowledge of any of the foregoing. To the
extent permitted by law, Lessee waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate, cancel, rescind or surrender this
Lease, or to any diminution or reduction of Basic Rent or Additional Rent
payable by Lessee hereunder.
6. Lessee's Representations and Warranties. Lessee represents and
warrants (and if reasonably requested by Lessor, promptly will provide
supporting documents to the effect and an opinion of counsel substantially in
the form requested by Lessor) that as of the date that Lessee signs this Master
Lease, as of any date that Lessor makes a payment to a Vendor
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prior to the date all Equipment has been accepted for lease hereunder, as of
each date that any Equipment is accepted for lease hereunder and as of each
Lease Commencement Date pursuant to a Rental Schedule hereunder: (i) all items
of the Equipment are new and unused as of the Lease Commencement Date, unless
otherwise specified in the applicable Rental Schedule in which event the
specified items of the Equipment shall have been delivered new to Lessee by
their suppliers not more than 90 days prior to their Lease Term Commencement;
(ii) Lessee is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, and is qualified and in good
standing to do business wherever necessary to carry on its present business and
operations, including the jurisdictions where the Equipment is or will be
located; (iii) Lessee has the power to enter into this Lease and the other
instruments and documents executed by Lessee in connection herewith (together
with this Lease, the "Transactional Documents") and to pay and perform its
obligations under this Lease and the other Transactional Documents; (iv) this
Lease and the other Transactional Documents have been duly authorized, executed
and delivered by Lessee, and constitute the valid, legal and binding obligations
of Lessee enforceable in accordance with their terms; (v) no vote or consent of,
or notice to, the holders of any class of stock of Lessee is required, or if
required, such vote or consent has been obtained or given, to authorize the
execution, delivery and performance of this Lease and the other Transactional
Documents by Lessee; (vi) neither the execution and delivery by Lessee of this
Lease or the other Transactional Documents, nor the consummation by Lessee of
the transactions contemplated hereby or thereby, nor compliance by Lessee with
the provisions hereof or thereof, conflicts with or results in a breach of any
of the provisions of any Certificate of Incorporation or By-laws or partnership
or trust agreement or certificate of Lessee, or of any applicable law, judgment,
order, writ, injunction, decree, award, rule or regulation of any court,
administrative agency or other governmental authority, or of any indenture,
mortgage, deed of trust, other agreement or instrument of any nature to which
Lessee is a party or by which it or its property is bound or affected or
pursuant to which it is constituted, or constitutes a default under any thereof
or will result in the creation of any lien, charge, security interest or other
encumbrance upon any of the Equipment, other than the interests therein of
Lessor or any Assignee (as hereinafter defined), or upon any other right or
property of Lessee or will in any manner adversely affect Lessor's or any
Assignee's right, title and interest in any of the Equipment; (vii) no consent,
approval, withholding of objection or other authorization of or by any court,
administrative agency, other governmental authority or any other Person is
required, except such consents, approvals or other authorizations which have
been duly obtained and are in full force and effect and copies of which have
been furnished Lessor, in connection with the execution, delivery or performance
by Lessee, or the consummation by Lessee, of the transactions contemplated by
this Lease and the other Transactional Documents; (viii) there are no actions,
suits or proceedings pending, or, to the knowledge of Lessee, threatened, in any
court or before any administrative agency or other governmental authority
against or affecting Lessee, which, if adversely decided would or could,
individually or in the aggregate, materially and adversely affect the financial
or other condition, business, operations, properties, assets or prospects of
Lessee or the ability of Lessee to perform any of its obligations under this
Lease or under the other Transactional Documents, except for
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any such actions, suits or proceedings that Lessee has described in writing to
Lessor; (ix) no Event of Default or event or condition which upon the passage of
time, the giving of notice, or both, would constitute an Event of Default,
exists or is continuing; (x) there has been no material adverse change or
threatened change in Lessee's, any Guarantor's or any Manufacturer's financial
or other condition, business, operations, properties, assets or prospects since
the date of Lessee's, such Guarantor's or Manufacturer's most recent financial
statements prior to the date of this Master Lease, or from the written
information that has been supplied to Lessor by Lessee, any Guarantor or such
Manufacturer, (xi) Lessee possesses any and all authorizations, certifications
and licenses which are or may be required to use and operate the Equipment;
(xii) the actual Acquisition Cost to the Company's knowledge pursuant to the
applicable Rental Schedule of each item of the Equipment does not exceed the
fair and usual price for like quantity purchases of such item and reflects all
discounts, rebates and allowances for the Equipment given to Lessee, any
Guarantor or any affiliate of Lessee or any Guarantor by any Vendor or other
Person including, without limitation, discounts for advertising, prompt payment,
testing or other services; (xiii) all information supplied to Lessor by Lessee
or any Guarantor is correct and does not omit any statement necessary to make
the information supplied not misleading; and (xiv) the financial statements of
Lessee and any Guarantor have been prepared in accordance with generally
accepted accounting principles consistently applied and accurately and
completely present in all material respects the financial condition and the
results of operations of Lessee and such Guarantors at the dates of and for the
periods covered by such statements except that the quarterly interim financial
statements of Lessee do not contain full footnote disclosure.
7. Identification Marks. To the extent requested by Lessor or if
required by applicable law, Lessee shall affix to the Equipment at Lessee's
expense signs, labels, or other forms of notice to disclose Lessor's ownership
of, and the interest of any Assignee in, the Equipment. Lessee shall keep and
maintain such signs, labels or other forms of notice affixed to the Equipment
throughout the Lease Term. Lessor may furnish such signs, labels or other forms
of notice to Lessee. Except as otherwise directed by Lessor, Lessee shall not
allow the name of any person other than Lessor to be placed on any part of the
Equipment as a designation that might reasonably be interpreted as a claim of
ownership.
8. Fees and Taxes. Lessee agrees to pay promptly when due, and to
indemnify and hold Lessor harmless from, all license, title, registration and
recording fees whatsoever, all taxes including, without limitation, sales, use,
franchise, personal property, excise, import, export and stamp taxes and customs
duties, and all charges together with any penalties, fines or interest thereon
which are assessed, levied or imposed by any governmental or taxing authority
against Lessor with respect to any or all of the Equipment or the purchase,
acquisition, ownership, construction, installation, shipment, delivery, lease,
possession, use, maintenance, condition, operation, control, return or other
disposition thereof or the rents, receipts or earnings arising therefrom which
accrue or are payable with respect to the Equipment or this Lease or which are
assessed, are based on a valuation date, or are due during or with respect to
the Lease Term or any subsequent period until the
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Equipment has been returned to Lessor pursuant to the provisions of this Lease
or until the Equipment has been purchased by Lessee pursuant to any purchase
option provisions of this Lease, excluding, however, any taxes to the extent
measured by Lessor's net income from the general operation of Lessor's business.
In the event any fees, taxes or charges payable by Lessee pursuant to the next
preceding sentence are paid by Lessor, or if Lessor is required to collect or
pay any thereof, Lessee shall reimburse Lessor therefor (plus any penalties,
fines or interest thereon) promptly upon demand. Unless and until Lessor
notifies Lessee in writing to the contrary, Lessee shall file and pay any
personal property taxes levied or assessed on the Equipment directly to the
levying authority. Upon Lessor's written request, Lessee shall submit to Lessor
satisfactory evidence of payment by Lessee of any or all amounts for which
Lessee is required to make payment or to indemnify Lessor hereunder that are
paid by Lessee, and of the filing of any and all reports, returns and other
documentation required in connection with any such payment. In the event Lessor
elects to pay the personal property taxes directly to a levying authority,
Lessor shall submit to Lessee a copy of its personal property tax return and its
receipt for the full amount of such personal property taxes so paid by Lessor.
All of the obligations of Lessee under this Section shall continue in full force
and effect notwithstanding any expiration, termination, rescission or
cancellation of this Lease. Lessee acknowledges that Lessor may not be exempt
from the payment of any of the amounts referred to herein, even though Lessee
might have been exempt therefrom if it were the owner or purchaser of the
Equipment, and Lessee agrees that this Section shall apply, and the amounts due
from it hereunder shall be due, whether or not Lessee might itself have
otherwise been exempt from any such payments. Subject to the foregoing, Lessee
shall have the right to contest in good faith any such taxes levied or imposed
by any governmental or taxing authority, provided that Lessee shall have given
Lessor not less than ten days' prior notice of its intention to contest and full
particulars of the proposed contest, in the opinion of Lessor the proposed
contest will not adversely affect the interests of Lessor or any Assignee, and
Lessee either shall have paid the taxes or provided for a bond or other security
so that none of the Equipment will be subject to seizure, confiscation or
forfeiture. For purposes of this Section, the term "Lessor" shall include each
member of Lessor's affiliated group, if any.
9. General Indemnity. (a) Lessee shall indemnify Lessor and any
Assignee (as hereinafter defined), and their respective agents and servants,
against, and agrees to defend, protect, save and keep them harmless from, any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs, expenses and disbursements, including attorneys' fees and expenses
and costs for customs, completion, performance and appeal bonds, of whatsoever
kind and nature (including, without limitation, for negligence, tort liability,
damages by reason of strict or absolute liability, punitive damages, and
indirect and consequential damages, but excluding any such amounts imposed or
incurred as a result of Lessor's gross negligence or wilful misconduct), imposed
on or incurred by or assessed against Lessor and/or any Assignee, in any way
relating to or arising out of (i) the failure of Lessee to provide or obtain any
certificates, documents, consents, authorizations, clearances, licenses, permits
or instruments required hereunder or under any of the other Transactional
Documents, or (ii) the ordering, construction, installation, delivery, testing,
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ownership, lease, possession, use, maintenance, operation, control, movement,
import, export, shipment, condition, or return of the Equipment (including but
not limited to latent and other defects, whether or not discoverable by Lessor
or Lessee, and any claim for patent, trademark, copyright, software or other
intellectual property infringement) until such time as the Equipment shall have
been returned to Lessor pursuant to the provisions of this Lease or until the
Equipment shall have been purchased by Lessee pursuant to any purchase option
provisions of this Lease.
(b) The obligations of Lessee under this Section shall survive the
payment of all known obligations under and any expiration, termination,
rescission or cancellation of this Lease, and are expressly made for the benefit
of and shall be enforceable by Lessor, its successors and any Assignee.
10. Use of Equipment; Location; Liens. (a) During the Lease Term,
Lessee warrants and agrees that the Equipment shall be used and operated and
otherwise be in compliance in all material respects with any established
operating procedures therefor of any Manufacturer and all statutes, regulations
and orders of any governmental body having power to regulate the Equipment or
its use. Lessee shall bear and pay all costs of such compliance. Lessee shall
not permit the Equipment to be used or maintained in any manner or condition
that would violate, or could result in the termination of, the insurance
policies carried by Lessee pursuant to the provisions of this Lease on
insurance, or in any manner or condition or for any purpose for which, in the
opinion of any Manufacturer, the Equipment is not designed or suited.
(b) Lessee agrees that without Lessor's prior written consent, it will
not remove any of the Equipment from the location specified in the Rental
Schedule for such Equipment or permit any of the Equipment to be used by anyone
other than Lessee, Lessee's employees or a responsible independent contractor
engaged by Lessee.
(c) During the Lease Term and until the Equipment has been returned to
Lessor pursuant to the provisions of this Lease or until the Equipment is
purchased by Lessee pursuant to any purchase option provisions of this Lease,
Lessee will not directly or indirectly create, incur, assume or suffer to exist
any mortgage, security interest, lien or encumbrance on the Equipment or
Lessor's or any Assignee's title thereto or interest therein, except in the name
of Lessor and its successor(s) and any Assignee. Lessee, at its own expense,
will promptly take such action as may be necessary to keep the Equipment free
and clear of, and to duly discharge, any such mortgage, security interest, lien
or encumbrance not excepted above.
(d) Lessee agrees to procure and maintain in effect all licenses,
certificates, permits and other approvals and consents required by federal,
state and local laws and regulations in connection with Lessee's possession,
use, operation and maintenance of the Equipment. During the Lease Term, Lessee
agrees that 100 percent of the use of the Equipment shall be
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"qualified business use" as that term is and shall be from time to time defined
by the Internal Revenue Code of 1986, as amended.
(e) Lessee shall cooperate fully with Lessor or any Assignee to perfect
and record their respective interests in connection with the Transactional
Documents including, without limitation, the filing of financing statements and
will pay such Persons their reasonable costs related thereto. Lessee authorizes
Lessor to file financing statements that are signed only by Lessor or that are
signed for Lessee by Lessor in any jurisdiction when permitted by law or local
authority. Lessee hereby grants to Lessor power-of-attorney to act as Lessee's
attorney-in-fact to sign Lessee's name on financing statements as "Debtor."
11. Maintenance and Repairs; Additions to Equipment. (a) Lessee shall,
for the entire Lease Term, at its sole expense, maintain all of the Equipment in
good, safe and efficient operating repair, appearance and condition, will keep
all components of the Equipment properly calibrated and aligned, will make all
required adjustments, replacements and repairs and will obtain and install any
upgrades for the Equipment that are announced and available for sale by a
Manufacturer (collectively, "maintenance and repairs"). Such maintenance and
repairs shall include, but not be limited to, all recommended or advised by a
Manufacturer, all required or advised by cognizant governmental agencies or
regulatory bodies and all commonly performed by prudent business and/or
professional practice. All maintenance and repairs to any item of the Equipment
shall be made by the Manufacturer or, upon prior written approval by Lessor,
those of substantially equal skill or knowledge in maintaining and repairing the
Equipment.
(b) Lessee shall not modify the Equipment without the prior written
consent of Lessor. Any replacements, substitutions, additions, attachments,
accessions, parts, fittings, accessories, modifications, enhancements,
maintenance and repairs and other upgrades to the Equipment whenever made shall
be considered accessions to the Equipment and shall automatically become the
property of Lessor.
(c) All instruction manuals, published statements of capabilities and
technical specifications, service, maintenance and repair records, installation,
qualification, certification and calibration reports, usage logs, and printed
material relating to the Equipment shall be deemed part of the Equipment.
Computer programs, programming codes, operating systems, data processing
instructions, series of instructions or statements which are machine readable,
and any like symbols or signals usable by an electronic data processing system
(collectively "Software") that has been or shall be installed or entered in the
Equipment shall become a part of the Equipment except for any Software that is
proprietary Software of Lessee and is not a modification, change, enhancement or
improvement to any Software which is identified or listed in the description of
specific items of the Equipment in or attached to a Rental Schedule. Whenever
Lessee acquires Software licenses from other parties, with respect to the
Software such licenses shall automatically and without further action by Lessee
be assigned to Lessor and become through assignment a part of the Equipment
transferable to any future user of the Equipment for use with the Equipment.
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12. Loss, Damage or Destruction of Equipment. (a) Lessee shall bear all
risks of damage to, taking of, or theft, loss or destruction of, any or all of
the Equipment commencing as of the date of this Master Lease and continuing
throughout the Lease Term and until such Equipment has been returned to Lessor
or purchased by Lessee pursuant to any purchase option provisions of this Lease.
Except as otherwise herein expressly provided, no damage to, taking of or theft,
loss or destruction of any Equipment shall impair any obligation of Lessee to
Lessor under this Lease, including, without limitation, the obligation to pay
Basic Rent.
(b) In the event that any item of Equipment shall become damaged from
any cause whatsoever, Lessee agrees to promptly notify Lessor in writing of such
fact, fully informing Lessor of the details thereof. If any item of Equipment is
damaged (unless the same, in the opinion of Lessor is irreparably damaged, in
which case the provisions of this Lease with respect to a Casualty Occurrence
shall apply), Lessee shall, at its sole cost and expense, place the same in good
repair, condition and working order or replace the same with "like property"
having the same value and operating capabilities and useful life at least equal
to the damaged Equipment prior to the date of such damage, which property shall
thereupon become subject to this Lease with title thereto in Lessor. In the
event that an item of Equipment has been damaged, but not irreparably, if no
Event of Default has occurred and is continuing hereunder, upon receipt by
Lessor of evidence, satisfactory to Lessor, that such repair, restoration or
replacement has been undertaken, and an invoice therefor, Lessor shall release
to Lessee or its supplier the proceeds of any insurance received by Lessor as a
result of such damage for the purpose of reimbursing Lessee for the costs of
repairing, restoring or replacing such item to the extent such repair,
restoration or replacement has been made.
(c) In the event that any item of Equipment shall become lost, stolen,
destroyed or irreparably damaged from any cause whatsoever, or if any item of
Equipment or Lessor's title thereto shall be requisitioned or seized by any
governmental authority (each such occurrence being herein called a "Casualty
Occurrence") during the Lease Term and until it has been returned to Lessor
pursuant to the provisions of this Lease or until the Equipment is purchased by
Lessee pursuant to any purchase option provisions of this Lease, Lessee shall
promptly notify Lessor in writing of such fact, fully informing Lessor of all
details of the Casualty Occurrence in question, and shall pay Lessor in cash the
"Stipulated Loss Value" as set forth in the Table of Stipulated Loss Values
attached to the Rental Schedule pursuant to which such item of Equipment is
leased hereunder, calculated as of the date of the Casualty Occurrence. This
payment shall be made within 30 days following the Casualty Occurrence, together
with the Basic Rent accrued and unpaid with respect to such Equipment as of the
date of the Casualty Occurrence, plus all Additional Rent or amounts owing with
respect to such Equipment on such date of payment.
(d) Upon the payment of the Stipulated Loss Value of the Equipment in
question in accordance with the terms of this Section, and the payment of all
Basic Rent, Additional Rent and any other sums then due hereunder, this Lease
shall terminate with respect to the
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Equipment or part thereof suffering the Casualty Occurrence and all Lessor's
rights and title to such Equipment shall pass to Lessee, "as is" and "where is,"
without any representation or warranty by, or recourse to, Lessor, as provided
by the provisions of this Master Lease on disclaimer of warranties and as
evidenced by a duly executed ▇▇▇▇ of sale naming Lessor as the seller and Lessee
as the buyer.
(e) Provided that no Event of Default has occurred and no event that
with the passage of time or giving of notice, or both, would be an Event of
Default has occurred and is continuing, any insurance proceeds received as the
result of a Casualty Occurrence with respect to any or all items of the
Equipment shall be applied first in reduction of any other then unpaid
obligation of Lessee to Lessor hereunder and second in reduction of Lessee's
obligation to pay the Stipulated Loss Value for such item if not already paid by
Lessee to Lessor, or, if already paid by Lessee, to the reimbursement of Lessee
therefor, and the balance of the insurance proceeds, if any, shall be paid to
Lessee.
13. Reports; Inspections. Lessee will cause to be furnished to Lessor,
if requested, from time to time but more often than once annually unless an
Event of Default has occurred and is continuing a statement showing the
condition and such other information regarding the Equipment as Lessor may
reasonably request. Lessor and any Assignee shall have the right, upon
reasonable notice to Lessee, to inspect the Equipment including Lessee's records
with respect to the Equipment, to copy such records, and to inspect and copy
Lessee's records with respect to the financial statements Lessee is required to
furnish Lessor or has warranted to Lessor pursuant to this Lease. Any inspection
by Lessor or any Assignee shall not be deemed to be approval or acknowledgment
by Lessor or such Assignee of the safety, freedom from defects, performance or
compliance with specifications or governmental requirements of the Equipment or
of the conformity of the Equipment or such financial statements to the
requirements or warranties of this Lease, and the disclaimers set forth in the
provisions of this Master Lease on disclaimer of warranties shall apply to any
such inspection. Lessee shall pay or reimburse Lessor for Lessor's costs and
travel expenses for one such inspection per year, and for Lessor's costs, travel
expenses and salaries and the charges and such expenses of Lessor's advisers for
the inspection following an inspection which encountered a breach of the
requirements of this Lease or the warranties of Lessee pursuant to this Lease.
14. Insurance. During the Lease Term and until all Equipment has been
returned to Lessor pursuant to the provisions of this Lease or until the
Equipment is purchased by Lessee pursuant to any purchase option provisions of
this Lease, Lessee shall procure and maintain at its expense with reputable
insurers reasonably acceptable to Lessor (i) insurance on all of the Equipment
in an amount not less than the Equipment's Stipulated Loss Value insuring
against all risks of loss or damage to the Equipment and against such other
risks as Lessee would, in the prudent management of its properties, maintain
with respect to similar equipment owned by it, and (ii) comprehensive public
liability and property damage insurance, in such amounts as shall be
satisfactory to Lessor but for not less than the greater of $1,000,000 or the
amounts customarily maintained by parties similar to Lessee for similar
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leased equipment with similar contemplated use, insuring Lessor and any
Assignees, as their interests may appear, against liability for death, bodily
injury, professional malpractice, and property damage arising out of or
resulting from the design, construction, manufacture, ownership, use, operation,
lease or maintenance of, or otherwise in connection with, the Equipment. On the
policies referred to in clause (i), such insurance shall name Lessor (and any
Assignees) as the sole loss payee so that (and Lessor and Lessee hereby agree
that) the insurance proceeds payable under such policies will be payable and
paid solely to Lessor (and to any Assignees). On the policies referred to in
clause (ii), such insurance will name Lessor (and any Assignees) as an
additional insured as its interests may appear. All such policies shall provide
that they may not be invalidated against Lessor (or any Assignees) because of
any violation of a condition or a breach of warranty of the policies or
application therefor by Lessee, that they may not be altered or canceled except
after 30 days' prior written notice to Lessor, and that Lessor and any Assignee
have the right but not the obligation to pay the premiums with respect to
coverage required by this Lease in order to continue such insurance in effect or
to obtain like coverage. Under the policies of insurance required to be
maintained by Lessee pursuant to this Master Lease, Lessee agrees to waive any
right of subrogation and to cause the insurance carrier to waive any right of
subrogation in each instance as such right may exist against Lessor or any
Assignee and for any and all loss or damage to the Equipment. Lessor is hereby
appointed Lessee's attorney-in-fact to endorse any check or draft which may be
payable to Lessee in order to collect the proceeds of such insurance. Lessee
shall deliver to Lessor, prior to the beginning of the Lease Term with respect
to any of the Equipment and at such other time or times as Lessor may request, a
certificate or other evidence satisfactory to Lessor of the maintenance of such
insurance. Lessor shall be under no duty to examine such policies, certificates
or other evidence of insurance or to advise Lessee in the event that its
insurance is not in compliance with this Lease. In the event of failure on the
part of Lessee to provide such insurance, Lessor may, at its option, but without
obligation, provide such insurance and add the amount of the premiums to the
rents due hereunder, and Lessee shall, upon Lessor's demand, pay the same as
Additional Rent.
15. Return of Equipment. (a) At the end of the Lease Term for any
Equipment that is not then purchased by Lessee pursuant to the Purchase Option
provisions of this Lease, Lessee at its sole expense shall forthwith return
possession of such Equipment without omissions to Lessor by:
(i) properly preparing, crating and/or assembling such Equipment (in
accordance with the Manufacturer's instructions if such instructions exist) for
shipment by common carrier with all containers and pieces labeled with model,
part and unit numbers and descriptions; and
(ii) shipping such Equipment by common carrier, with insurance and
freight prepaid, to a place in the United States designated by Lessor within a
1,000 mile radius of the specified location under this Lease for such Equipment
Lessor shall pay additional shipping charges incurred because of distances in
excess of such 1,000 miles.
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The insurance required by clause (ii) above shall provide that in the
event of loss such insurance shall pay Lessor in cash directly the greater of
(A) the full replacement value of such Equipment and (B) the "Stipulated Loss
Value" as set forth in the Exhibit to the Rental Schedule calculated as of the
Payment Date next preceding the date of loss. Lessee acknowledges that "full
replacement value" may exceed Fair Market Value.
(b) When the Equipment is returned to Lessor it shall be complete. The
condition of the Equipment including Software upon receipt by Lessor shall be
not less than (i) meeting all specifications for such equipment as published by
the respective Equipment vendor(s), Manufacturer(s) or supplier(s) (collectively
referred to, together with their successors and assigns, if any, as "Vendors"),
(ii) in fully operational condition, (iii) with no modifications that would
render the Equipment incapable of being installed and operated in the normal
course by another user, (iv) legally qualified for future use or operation of
the Equipment by another lessee or purchaser of the Equipment, (v) free of
damage or malfunction of any kind, dents, fractures, chips, scratches, stains,
defacements, discolorations, rust, corrosion, electrical shorts, fluid
restrictions or blockages, disconnections, breakage or the like other than
ordinary wear customary for such equipment, (vi) safe for routine and usual
operation, (vii) in compliance with any and all pertinent governmental or
regulatory rules, laws or guidelines for its operation or use, (viii) free of
Lessee's markings or labelings, and (ix) free of any advertising or insignia not
requested by Lessor that was placed on the Equipment by Lessee.
(c) Lessor reserves the right to inspect the Equipment within 30 days
of its return to verify compliance with the provisions of this Master Lease on
Equipment maintenance and repairs and additions and on return of Equipment.
Should there be less than full compliance, Lessor at its option may (i) perform
or cause to be performed through service organizations of its own choosing such
maintenance and repairs, including upgrades, replacements, the obtaining of
paid-up Software licenses and other services, as it deems necessary to effect
such compliance, (ii) require Lessee to perform or cause to be performed such
maintenance and repairs, including upgrades, replacements, the obtaining of
paid-up Software licenses and other services, as Lessor deems necessary to
effect such compliance and/or (iii) reasonably estimate the costs to effect such
compliance. Lessee shall pay to Lessor the costs for performance of (i) or (ii)
above, or the estimated costs under (iii) above. If maintenance and repairs,
including upgrades, replacements, and the obtaining of paid-up Software licenses
and other services, are necessary to place any of the Equipment under any Rental
Schedule in the condition required by this Lease, Lessee shall continue to pay
to Lessor monthly Additional Rent at the last prevailing rate during the Lease
Term for Basic Rent on the Equipment under such Rental Schedule for the period
of delay until all such required maintenance and repairs can be performed, or
for the period of time reasonably necessary to accomplish such maintenance and
repairs. For any such period that applies, Lessee shall continue to provide the
insurance required during the Lease Term. However, Lessor's acceptance of such
rent and provision of insurance during such period shall not constitute a
renewal of the Lease Term, a waiver of Lessor's right to prompt return of such
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Equipment in the condition required by this Section, or a waiver of Lessor's
right to possession of such Equipment.
(d) Should the inspection reveal any item(s) of the Equipment to be
missing, Lessee shall be responsible for paying to Lessor promptly the greater
of the Stipulated Loss Value or the Fair Market Value of such item(s) of the
Equipment computed as of the last Payment Date prior to the end of the Lease
Term, plus the amount of any impairment of the Fair Market Value of the
remaining item(s) of the Equipment due to the absence of such missing item(s) of
the Equipment.
(e) In the event that Lessee fails to return any of the Equipment when
required, at the election of Lessor effected by notice to Lessee, the Lease Term
for such Equipment shall be extended on a month-to-month basis on the same terms
as previously in effect, and Lessee shall pay to Lessor monthly in advance Basic
Rent for such Equipment at the last prevailing rate during the unextended Lease
Term, until such Equipment has been returned to Lessor pursuant to the
provisions of this Lease. Notwithstanding any month-to-month continuance of this
Lease, Lessor may resort to any remedies available to it under this Lease, at
law or in equity, to recover such Equipment at any time following the end of
such extended Lease Term.
(f) Not less than 180 days prior to expiration of the Renewal Term, if
Lessee has not given notice of the exercise of any purchase option, Lessee shall
give Lessor notice that Lessee shall be returning the Equipment forthwith upon
the expiration of the Renewal Term unless otherwise notified by Lessor and
either (i) that the Equipment is in the condition required by this Lease upon
the return of the Equipment or (ii) specifying the respects in which the
condition of the Equipment is not in compliance with such requirements and the
measures that Lessee shall take to bring the Equipment into compliance.
16. Lessor's Ownership; Equipment To Be and Remain Personal Property.
(a) Lessee acknowledges and agrees that it does not have, and by execution of
this Lease and/or payments and performance hereunder it shall not have or
obtain, any title to the Equipment, nor any property right or interest, legal or
equitable, therein, except its rights as Lessee hereunder and subject to the
terms hereof. Lessee shall not have or claim a security interest and shall not
seek or obtain replevin, detinue, specific performance, sequestration, claim and
delivery, or like remedies in or for this Lease, any rents under this Lease, any
or all of the Equipment, any items of personal property identified to become
items of the Equipment, or any proceeds of any or all of the foregoing.
(b) All of the Equipment shall be and remain personal property
notwithstanding the manner in which the Equipment may be attached or affixed to
realty. Upon the expiration, cancellation or termination of the Lease Term of
any or all of the Equipment, Lessee shall have the obligation, and Lessor shall
have the right, to remove, or cause the removal of, such Equipment from the
premises where the same is then located, for return to Lessor pursuant to the
provisions of this Master Lease on return of Equipment and, if
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applicable, on Events of Default, whether or not any of the Equipment is affixed
or attached to realty or to any building. In the exercise of its rights, Lessor
shall not be liable for any damage to the realty or any such building or other
real or personal property occasioned by any removal of the Equipment by Lessee
or Lessor or the agents of Lessee or Lessor. Lessee further covenants and agrees
that Lessee will, at the request of Lessor, obtain and deliver to Lessor
concurrently with the execution and delivery of each Rental Schedule, a waiver,
in recordable form, from the owner and any landlord, tenant or holder of any
lien or encumbrance on the realty or building(s) on or in which any of the
Equipment described in such Rental Schedule shall be located, under which such
owner, landlord, tenant and holder (i) agree and consent that such Equipment is
and shall be personal property, owned by and removable by Lessor upon the
expiration, cancellation or termination of the Lease Term thereof, and (ii)
waive any rights of distraint or similar rights with respect to such Equipment.
(c) If Lessee is unable to return, or is prevented from returning, any
of the Equipment to Lessor upon the expiration, cancellation or termination of
the Lease Term as required under the provisions of this Master Lease on return
of Equipment, for any reason whatsoever, including, but not limited to, the
assertion by any third party of any claim against such Equipment, or of any
right with respect thereto, whether or not resulting from the manner in which
such Equipment is affixed or attached to, or installed in, the realty or any
building(s) thereon or any other personal or real property, or from the failure
of any owner, landlord or tenant of said realty (or the building(s) thereon) or
the holder of any lien or encumbrance to execute the waiver in writing of such
fact, for all purposes of this Lease such Equipment shall be deemed to have been
the subject of a Casualty Occurrence. Thereupon, Lessee shall pay to Lessor the
amounts provided for by the provisions of this Master Lease on loss, damage or
destruction of Equipment, with respect to such Equipment, at the time, in the
manner, and with the consequences provided by such provisions.
(d) Notwithstanding the foregoing provisions of this Section, without
Lessor's prior written consent, Lessee shall not permit any of the Equipment to
be attacked or affixed to, imbedded in or incorporated into any building
structure, real estate or other personal or real property.
17. Other Covenants. (a) Lessee agrees to furnish, upon Lessor's
request, such financial, business and operational information concerning Lessee
and any or all Guarantors, including copies of its and their tax returns, as
Lessor or its assigns may reasonably request during the Lease Term.
Additionally, Lessee shall furnish to Lessor and its assigns without notice or
demand therefor two complete copies of its and of every Guarantor's (i)
quarterly interim financial statements within 45 days of the close of each of
the first three fiscal quarters of every year, certified by the chief financial
officer of, respectively, Lessee or such Guarantor and (ii) annual financial
statements within 90 days of the close of each fiscal year reported on (audited)
by independent accountants without material adverse qualification or comment.
All such financial statements shall be prepared in accordance with generally
accepted accounting principles consistently applied except that the quarterly
interim financial statements need not contain full footnote disclosure, and
shall accurately and
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completely in all material respects present Lessee's and every Guarantor's
financial condition and results of operations at the dates of and for the
periods covered by such statements.
(b) Lessee shall promptly furnish to Lessor copies of (i) filings that
Lessee or any guarantor makes with the SEC or other government agencies under
the securities laws including but not limited to definitive proxy statements,
registration statements, prospectuses and tender offer filings, and reports on
holdings or acquisitions of securities, relating to proxy solicitations, and on
Form 10-K, 10-Q, 8-K or similar forms, and any amendments to such filings, (ii)
press releases of Lessee or any guarantor, and (iii) new product (or service)
announcements of Lessee or any Guarantor.
(c) If Lessee or any Guarantor or a general partner of Lessee or any
Guarantor is a corporation, Lessee shall give Lessor notice of all meetings of
the stockholders of such corporation and copies of all materials that are
furnished to the stockholders for the meetings at the same time that the notice
or materials are sent to the stockholders. If Lessee or any Guarantor or a
general partner of Lessee or any Guarantor is a partnership, Lessee shall give
Lessor notice of all meetings of such partnership and copies of all materials
that are furnished to the partners for the meetings at the same time that the
notice or materials are sent to the partners. Lessor shall have the right to
have its representative attend any and all such meetings at the expense,
including travel costs, of Lessee.
(d) There shall be no actual or threatened conflict with, or violation
of, any statute, regulation, standard or rule relating to Lessee, its present or
future operations, or the Equipment.
(e) All information supplied to Lessor or its assigns by Lessee or any
Guarantor shall be correct and shall not omit any statement necessary to make
the information supplied not be misleading. There shall be no material breach of
the representations and warranties made by Lessee in connection with this Lease
or by any Guarantor in connection with a Guaranty (as hereinafter defined).
(f) Lessee shall give Lessor notice of any change in the address of the
executive office or principal place of business of Lessee not less than 15 days
prior to the change.
(g) No change shall occur in the control, and no material change shall
occur in the ownership, of Lessee or any Guarantor, and no Guarantor shall
assert in writing that the obligations of the Guarantor as a Guarantor or in its
Guaranty are not in full force and effect.
(h) Lessee shall not make any payment or distribution of money, checks,
securities or property to any Person in contravention of the provisions of any
Guaranty or subordination that such Person has made in favor of Lessor or its
assigns of which Lessee shall have notice or knowledge.
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18. Events of Default. If one or more of the following events
(hereinafter called "Events of Default" or an "Event of Default") shall occur:
(i) default shall be made in the payment of any Basic Rent or
Additional Rent due under this Master Lease or under any Rental Schedule hereto,
and any such default shall continue for more than 10 days after the due date
thereof;
(ii) any representation or warranty by Lessee or any Guarantor made in
this Master Lease or in any Guaranty or other Transactional Document or
certificate furnished to Lessor in connection with this Lease or pursuant hereto
shall at any time prove to be incorrect in any material respect;
(iii) Lessee shall make or permit any unauthorized assignment or
transfer of this Master Lease or any Rental Schedule to this Master Lease or of
any of Lessee's rights and obligations hereunder or thereunder, or Lessee shall
make or permit any unauthorized sublease or transfer of any Equipment or the
possession of any Equipment;
(iv) Lessee shall default in the observance and/or performance of any
other covenant, condition or agreement on the part of Lessee to be observed
and/or performed under this Master Lease, under any Rental Schedule hereto, or
under any other Transactional Document, which default is not governed by
paragraphs (i), (ii) or (iii) above, and such default shall continue for 30 days
after written notice from Lessor to Lessee specifying the default and demanding
the same to be remedied;
(v) Lessee or any Guarantor shall make an assignment for the benefit
of creditors, or cease being in substantially the same line or lines of business
in which it is presently engaged, or generally fail to pay its debts as they
become due, or become insolvent or commence a voluntary case under the federal
Bankruptcy Code as now or hereafter constituted or any other applicable federal
or state bankruptcy, insolvency or similar law, or admit in writing its
inability to pay its debts as they mature, or consent to the appointment of a
trustee or receiver, or a trustee or a receiver shall be appointed for Lessee or
any Guarantor or for a substantial part of Lessee's or any Guarantor's property
without such party's consent and such appointment shall be not dismissed for a
period of 90 days; there shall have been entered a decree or order for relief by
a court having jurisdiction in respect of Lessee or any Guarantor, or approving
as properly filed a petition seeking a reorganization, arrangement, adjustment
or composition of or in respect of Lessee or any Guarantor in an involuntary
proceeding or case under any applicable federal or state bankruptcy, insolvency
or other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee or similar official of Lessee or any Guarantor or of any substantial
part of its property, or ordering the winding-up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 90 days, or there shall have been filed a petition by or against
Lessee or any Guarantor under any bankruptcy law or other insolvency law and, if
petition is filed against Lessee or such Guarantor, the petition is not
withdrawn or dismissed within 90 days after the date of filing; or Lessee or
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any Guarantor shall cease doing business as a going concern or shall liquidate
or be dissolved;
(vi) Lessee or any Guarantor shall, without the prior written consent
of Lessor, enter into a merger, consolidation or division, effect a share
exchange of its outstanding stock for the stock of another corporation, make a
tender offer for equity securities of a publicly held entity, or sell or
otherwise dispose of all or a major part of its assets or of assets that produce
all or a major part of its revenues or profits; provided, however, that Lessee
or any Guarantor, without violating the provisions of this clause, may
consolidate with or merge with a corporation or other entity organized under the
laws of one of the states of the United States (the surviving entity, a
"successor"), or sell (except by means of a sale and leaseback arrangement) all
or substantially all of its business and assets to such a successor, on the
condition that any successor expressly assume in writing all of the obligations
of Lessee pursuant to this Lease or of such Guarantor pursuant to its Guaranty,
and that the net tangible assets and the net worth (determined in accordance
with generally accepted accounting principles) of the successor after the
consolidation, merger or sale shall be at least equal to the net tangible assets
and the net worth of Lessee or such Guarantor, as the case may be, immediately
prior to the consolidation, merger or sale;
(vii) there shall occur under any other lease, contract or agreement
between Lessee and Lessor, an Event of Default, as defined in such lease,
contract or agreement;
(viii) any of the Equipment shall be attached, levied upon, encumbered,
pledged, seized or taken under any judicial process (except for any attachment,
levy, encumbrance or pledge caused to be placed on the Equipment by Lessor) and
such proceedings shall not be vacated, or fully stayed, within 30 days of
Lessee's becoming aware thereof;
(ix) at any time there shall occur under (A) any lease between Lessee
and a party other than Lessor as lessor or (B) under any lease wholly or
partially guaranteed by Lessee, the exercise by the Lessor of its possessory
remedies or commencement of legal proceedings by the Lessor for default under
the Lease; provided that the aggregate future payments remaining to be made or
guaranteed by Lessee exceed $250,000, and that under a lease described in (B)
above within ten days of notice to Lessee of such exercise of remedies and
demand for payment by Lessee any such amount guaranteed by Lessee remains
unpaid; or
(x) any obligation of Lessee or any Guarantor in excess of $250,000
for the payment of borrowed money or the acquisition of assets by purchase,
conditional sale or other arrangement is not paid or refinanced at maturity,
whether by acceleration or otherwise, or is declared due and payable prior to
the stated maturity thereof by reason of default or other violation of the terms
of any promissory note or agreement evidencing or governing such obligation, and
Lessor has given Lessee an opportunity to either cure the purported Event of
Default or supply information satisfactory to Lessor that it does not, in fact,
exist;
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this Lease shall be declared in default, immediately and without notice upon the
occurrence of an Event of Default specified in clause (v) above, and in the case
of any other Event of Default, upon Lessor at any time at its option subsequent
to such Event of Default giving notice to Lessee that this Lease is declared in
default. At any time after this Lease has been declared in default, Lessor may
exercise one or more of the following remedies, to the extent not then
prohibited by law, as Lessor in its sole discretion may elect:
(I) to proceed by appropriate court action or actions at law or in
equity or in bankruptcy to enforce performance by Lessee of the covenants and
terms of this Lease and/or to recover damages for the breach thereof;
(II) to terminate or cancel this Lease upon written notice to
Lessee whereupon all rights of Lessee to use the Equipment shall immediately
terminate, but Lessee shall not be relieved of any obligations under this Lease;
(III) whether or not this Lease be so terminated or canceled, and
without notice to Lessee, to repossess and/or to render inoperable the Equipment
wherever found, with or without legal process, and for this purpose Lessor
and/or its agents may enter upon any premises of or under the control or
jurisdiction of Lessee or any agent of Lessee without liability for suit, action
or other proceeding by Lessee and remove the Equipment therefrom; Lessee hereby
expressly waives any claims for damages occasioned by such repossession; LESSEE
HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS, INCLUDING RIGHTS TO NOTICE OR A
JUDICIAL HEARING, WITH RESPECT TO REPOSSESSION OF THE EQUIPMENT AFTER AN EVENT
OF DEFAULT;
(IV) to hold or to use any Equipment returned to Lessor or
repossessed by Lessor for any purpose whatsoever, to sell any Equipment at a
private or public, cash or credit sale, to re-lease any Equipment, in all the
foregoing events free and clear of any rights of Lessee and without any duty to
account to Lessee with respect to such action or inaction;
(V) whether or not Lessor shall have exercised, or shall hereafter
at any time exercise, any of its other rights with respect to an item of the
Equipment, upon written notice to Lessee, to demand that Lessee pay to Lessor,
and Lessee shall pay to Lessor on the date specified in such notice, as
liquidated damages for loss of a bargain and not as a penalty (in lieu of the
Basic Rent for such Equipment that prior to the Event of Default was to have
been paid on Payment Dates subsequent to the date specified in such notice), the
SUM equal to the excess, if any, of 125% of the Stipulated Loss Value for such
item of Equipment computed as of the latest PAYMENT DATE when all Basic Rent and
Additional Rent then due and payable has been fully paid over whichever of the
following three amounts Lessor, in its sole discretion, shall designate in such
notice:
(A) the present value of the fair market rental value (determined
as hereafter provided in this Section) of such item of the
Equipment for the remainder of the Lease Term as of the date
specified in such notice, the present value to be
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computed on the basis of a seven percent per annum rate of
discount from the respective dates upon which such rent would
be paid,
(B) the fair market sales value (determined as hereafter provided
in this Section) of such item of Equipment as of the date
specified in such notice, or
(C) if Lessor shall have sold or re-leased any item of Equipment
pursuant to clause (IV) above, the net proceeds of such sale
or re-lease,
plus interest at the Default Interest Rate (a) on such SUM from the such PAYMENT
DATE until paid and (b) on whichever of such three amounts is so designated by
Lessor from such PAYMENT DATE until whichever one of the following shall be
applicable to the designated amount: the time when the fair market rental or
sales value shall have been so determined or the time when the Equipment shall
have been sold or re-leased; and
(VI) to forthwith recover from Lessee, and Lessee shall be fully
liable for, all Basic Rent that shall accrue until the date that the Equipment
is returned to or repossessed by Lessor and any Additional Rent including
collection fees, whenever accrued, and interest at the Default Interest Rate.
In addition to the foregoing, Lessor may also recover from Lessee all
costs and expenses arising out of Lessee's default, including, without
limitation, expenses of repossession of the Equipment and the storage,
inspection, repair, reconditioning, sale and re-leasing thereof, and reasonable
attorneys' fees incurred by Lessor in exercising any of its rights or remedies
hereunder. For the purposes of this Section only, "fair market rental value" and
"fair market sales value" shall be determined by an appraisal of an independent
appraiser chosen by Lessor, and the cost of any such appraisal shall be borne by
Lessee. No remedy referred to in this Section is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy referred to above
or otherwise available to Lessor at law or in equity or in bankruptcy. Lessor
shall have no duty to pay Lessee any surplus from sale or lease of the
Equipment, or in the fair market rental or sales value of the Equipment, above
all amounts payable by Lessee to Lessor. The exercise by Lessor of any one or
more remedies shall not be deemed to preclude the simultaneous or later exercise
by Lessor of any or all such previously exercised remedies and any and all other
remedies.
19. Assignment and Transfer by Lessor. (a) Lessor may at any time
and from time to time assign to one or more security assignees (all herein
called the "Secured Party" and also called an "Assignee") for the purpose of
securing a loan to Lessor or for any other purpose, and at its sole discretion,
may also sell or transfer to one or more Persons (herein called the "Transferee"
and also called an "Assignee"), in any case subject to the rights of Lessee
under this Lease but without notice to or consent of Lessee, this Lease, any
other Transactional Documents, any or all of the Equipment, and all sums at any
time due and to become due or at any time owing or payable by Lessee to Lessor
under this Lease or
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pursuant to any or all of the Transaction Documents. The Secured Party shall not
be obligated to perform any duty, covenant or condition required to be performed
by Lessor under this Lease or any other Transactional Documents.
(b) Lessee agrees that notwithstanding any assignment to a Secured
Party, each and every covenant, agreement, representation and warranty of Lessor
under this Lease shall be and remain the sole liability of Lessor and of every
successor in interest of Lessor (excluding any Secured Party) or, in the case of
assignment to a Transferee, shall become and remain the sole liability of the
Transferee if so agreed to by the Transferee and if not so agreed to shall be
and remain the sole liability of Lessor. Lessee further agrees and acknowledges
that any assignment, sale or transfer by Lessor could not and shall not
materially change any duty or obligation of Lessee or materially increase any
burden or risk of Lessee.
(c) Lessee further acknowledges and agrees that from and after the
receipt by Lessee of written notice of an assignment from Lessor, Lessee shall
comply with the directions or demands given in writing by the Secured Party or
(to the extent not inconsistent with the directions or demands of the Secured
Party) by the Transferee, and the Secured Party or Transferee shall have the
right to exercise (either in its own name or in the name of Lessor) all rights,
privileges, and remedies of Lessor provided for herein. Lessee agrees that any
obligation to a Secured Party as a result of the assignment of this Lease to a
Secured Party as aforesaid shall not be reduced or minimized by reason of any
claim, defense, counterclaim, set-off, abatement, reduction or recoupment or
other right that Lessee might otherwise have been able to assert against Lessor,
any prior Assignee or any Transferee. After any assignment to a Secured Party
and unless and until Lessee is otherwise notified by the Secured Party, this
Lease may not be amended or modified, and no consent or waiver hereunder shall
be effective, without the prior written consent of the Secured Party. Lessee
agrees to execute and Lessor or any Transferee or Secured Party may record any
instruments and documents relating to such assignment, mortgage or security
interest desired by Lessor or any Transferee or Secured Party. Lessee shall
promptly provide any such instruments and documents that are requested by Lessor
or any Assignee including certificates indicating any claim, defense,
counterclaim, setoff, abatement, reduction, recoupment or other right that
Lessee may have against Lessor or any Assignee, the date to which Basic Rent has
been paid under each Rental Schedule hereunder and that this Lease is in effect
without default or amendment, or the extent of such default or amendment, as the
case may be.
20. Recording and Filing; Expenses. Lessee will, upon demand of Lessor,
at Lessee's cost and expense, do and perform any other act and will execute,
acknowledge, deliver, file, register, record and deposit (and will re-file,
re-register, re-record or re-deposit whenever required) any and all instruments
required by law or requested by Lessor (or any Assignee) including, without
limitation, financing statements under the Uniform Commercial Code (which,
notwithstanding the intent of Lessor and Lessee that this is a true lease,
Lessor shall have the right to file wherever and whenever Lessor requires), for
the purpose of providing
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proper protection to the satisfaction of Lessor (and/or any Assignee) of
Lessor's title to any Equipment (and/or of any Assignee's security interest in
the Equipment) or for the purpose of carrying out the intention of this Lease.
Lessee will also pay, or will upon demand reimburse Lessor for, all reasonable
costs and expenses incurred by Lessor in connection with this Lease, any other
Transactional Documents, and any related transactions, closings, assignments,
sales and transfers to any Secured Party or Transferee, enforcement of Lessor's
rights under this Lease and the other Transactional Documents, proceedings
involving Lessee or any Guarantor as a debtor under any chapter of the
Bankruptcy Code, filings, the documentation of this and any related
transactions, and fees and costs of attorneys for Lessor in connection
therewith.
21. Automatic Lease Term Renewal. In the event that at the expiration
of the Primary Term Lessee does not exercise the purchase option set forth in
this Master Lease with respect to the Equipment subject to a Rental Schedule,
the Lease Term shall automatically be renewed for all of the Equipment subject
to such Rental Schedule for an additional term of twelve months (the "Automatic
Renewal Term") at a monthly Basic Rent equal to 1.7% of the Acquisition Cost of
such Equipment, plus any applicable sales and other taxes, that shall be paid
monthly in advance.
22. Option to Renew. (a) Upon the expiration of an Automatic Renewal
Term for the Equipment under any Rental Schedule, and provided that the
financial condition of Lessee then meets the criteria of Lessor and that no
Event of Default or event which with the giving of notice or lapse of time, or
both, would constitute an Event of Default, has occurred and then remains
uncured, Lessee shall have the option, exercisable on at least 180 days' prior
written notice to Lessor, to renew this Lease with respect to all, but not less
than all the Equipment then subject to Rental Schedules, for one additional
renewal term of one year (the "Second Renewal Term") at the rate of Basic Rent
that would be obtained in an arm's length transaction at the end of the
Automatic Renewal Term between an informed and willing prospective lessee and an
informed and willing lessor, each under no compulsion to lease (said rate being
herein called the "Fair Rental Rate").
(b) If, on or before a date 100 days prior to the expiration of the
Automatic Renewal Term, Lessor and Lessee are unable to agree upon a
determination of the Fair Rental Rate of the Equipment, Lessee shall have no
obligation to renew this Lease for a Second Renewal Term and shall either give
the notice required by the provisions of this Master Lease of intention to
return such Equipment and on the condition of such Equipment or a written notice
that Lessee wishes to proceed with its option. If Lessee gives such notice that
it will proceed with its option, such Equipment shall be leased during the
Second Renewal Term at the Fair Rental Rate determined in accordance with the
procedure for Appraisal (as hereinafter defined).
23. Quiet Enjoyment. So long as no Event of Default has occurred and is
continuing hereunder, Lessee shall have peaceful and quiet use and enjoyment of
the
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Equipment during the Lease Term as against acts of Lessor or anyone claiming
solely by, through or under Lessor including any Secured Party or Transferee.
24. Failure or Indulgence not Waiver; Additional Rights of Lessor. (a)
No failure to exercise, and no delay in exercising, any right, power or remedy
hereunder on the part of Lessor shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
Any waiver, to be effective, must be in writing. A waiver of any covenant, term
or condition contained herein shall not be construed as a waiver of any
subsequent breach of the same covenant, term or condition. Receipt by Lessor of
any Basic Rent or Additional Rent with knowledge of the breach of any provision
hereof shall not constitute a waiver of such breach.
(b) Lessor shall be entitled to injunctive relief in case of the
violation or attempted or threatened violation of any of the provisions hereof,
to a decree compelling performance of any of the provisions hereof, and to any
other remedy allowed in law or in equity.
25. Sublease. Lessee shall not sublease the Equipment, relinquish
possession of the Equipment, or assign, pledge or hypothecate this Lease or any
of Lessee's rights or obligations hereunder, in whole or in part, without the
prior written consent of Lessor. Nevertheless, any such sublease and the rents,
profits and proceeds therefrom shall be the property of Lessor and, unless
Lessor has consented to such sublease, Lessor within 30 days after receiving
notice thereof in accordance with the provisions of this Master Lease on notices
shall have the right to declare the sublease void from its purported
commencement, to terminate the sublease or to accept the sublease. Any such
attempted relinquishment of possession, assignment, pledge or hypothecation by
Lessee without such consent shall be null and void.
26. Purchase Option. (a) If (i) no Event of Default, and no event which
with the giving of notice or lapse of time, or both, would constitute an Event
of Default, has occurred and then remains unremedied to Lessor's satisfaction,
and (ii) this Lease shall not have been earlier terminated, Lessee shall be
entitled, at its option, upon written notice to Lessor, as hereinafter provided,
to purchase all, but not less than all, items of the Equipment then subject to a
Rental Schedule, at the expiration of the Primary Term for such items of the
Equipment or, as the case may be, at the expiration of the Primary Term for such
items of the Equipment, for an amount (the "Purchase Amount"), with respect to
each such item of the Equipment, payable in immediately available funds, equal
to the Fair Market Value thereof determined as provided by the definition of
Fair Market Value at the expiration of the Primary Term and the definition of
Fair Market Value at any expiration of the Lease Term other than the expiration
of the Primary Term. In addition, the Purchase Amount shall include any
applicable sales, excise or other taxes imposed as a result of such sale (other
than net income taxes attributable to such sale). Lessor's sale of any item of
the Equipment shall be on an "as-is," "where-is" basis, without any
representation or warranty by or recourse to Lessor, as provided by the
provisions of this Master Lease on disclaimer of
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warranties, and shall be subject to such additional terms and conditions as may
be specified in the Rental Schedule. If Lessee intends to exercise said purchase
option, Lessee shall give written notice to Lessor to such effect at least 180
days prior to the earliest expiration of the Primary Term of the item(s) of the
Equipment subject to the particular Rental Schedule with respect to which Lessee
intends to exercise its purchase option, or, if a Renewal Term is then in
effect, at least 180 days prior to the earliest expiration of the then current
Renewal Term of the item(s) of the Equipment subject to the particular Rental
Schedule with respect to which Lessee intends to exercise its purchase option.
If Lessee fails to give such written notice to Lessor as aforesaid, it shall be
conclusively presumed that Lessee has elected not to exercise such purchase
option. If Lessee gives such written notice, Lessee shall be obligated to buy,
and Lessor shall be obligated to sell, such Equipment on the terms herein
provided.
(b) If Lessee has elected to exercise its purchase option, as provided
in this Section, as soon as practicable following Lessor's receipt of the
written notice from Lessee of Lessee's intent to exercise such option, Lessor
and Lessee shall consult for the purpose of determining the Fair Market Value of
each such item of the Equipment as of the end of the Primary Term thereof, or,
if this Lease has been renewed pursuant to any provisions of this Lease on
option to renew, as of the end of the then current Renewal Term thereof, and any
values agreed upon in writing shall constitute the Fair Market Value of each
such item of the Equipment for the purposes of this Section. In so consulting,
Lessor and Lessee may refer to books containing indexes of standard values for
used equipment of relevant type and age and to the records of Lessee and similar
users which tabulate the history of revenues and various other economic benefits
derived from the use of the Equipment. If Lessor and Lessee have failed to agree
upon such value prior to the 150th day before the expiration of the Primary
Term, or, if this Lease has been renewed, prior to the 150th day before the
expiration of the then current Renewal Term, on and after such 150th day either
party may request that such value be determined by Appraisal.
(c) Notwithstanding any election by Lessee to purchase, the provisions
of this Lease shall continue in full force and effect until the transfer of
ownership of such Equipment upon the date of purchase by the delivery of a ▇▇▇▇
of Sale by Lessor.
27. Notices. Any notice or other communication required or permitted to
be given by either party hereto to the other party shall be deemed to have been
given upon its receipt, in writing, by the receiving party at its address set
forth below, or at such other address as the receiving party shall have
furnished to the other party by notice pursuant to this Section.
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If to Lessee: Hybridon, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
If to Lessor: FINOVA Technology Finance, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
28. Entire Agreement; Severability; Amendment or Cancellation of Lease.
This Lease constitutes the complete and exclusive statement of the terms of the
agreement between the parties with respect to the leasing of the Equipment and
any sale of the Equipment by Lessor to Lessee. Any provision of this Lease which
is prohibited or unenforceable in any jurisdiction shall be, as to such
jurisdiction, ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. LESSEE ACKNOWLEDGES
RECEIPT OF A COPY OF THIS MASTER LEASE. Lessor and Lessee agree that neither
this Lease nor Lessee's acceptance or deemed acceptance of any or all of the
Equipment may be canceled, waived, altered, amended, repudiated, terminated,
rescinded, revoked or modified, except by a writing signed by Lessee and a duly
authorized representative of Lessor.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Signature of Lessee
29. Waiver of Jury. Lessor and Lessee waive any right and all right to
trial by jury in any action or proceeding relating in any way to this Lease.
30. Restriction of Limitation Periods and Damages. Any action for
breach of warranty or in respect of or relating to the Equipment or this Lease
that may be brought by Lessee against Lessor or any Assignee must be commenced
within one year after the cause of action accrues. Lessee shall not make any
claim in respect of or relating to the Equipment or this Lease against Lessor or
any Assignee for special consequential or punitive damages.
31. Governing Law; Consent to Jurisdiction and Service. This Lease
shall be governed by and construed in accordance with the laws of the State of
Connecticut (other than the conflicts of laws provisions). Lessee agrees that
any legal action or proceeding against Lessee in respect of or relating to this
Lease or the Equipment may be brought in any state or federal court sitting in
the city of Hartford in the State of Connecticut. Lessee hereby irrevocably
consents and submits to the nonexclusive personal jurisdiction of said courts
and irrevocably agrees that all claims in any
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such action or proceeding may be heard and determined in and enforced by any
such court. Lessee irrevocably consents to the service of summons, notice, or
other process relating to any such action or proceeding by delivery thereof to
it by hand or by mail in the manner set forth in the provisions of this Master
Lease on notices.
32. Lessor's Right to Perform for Lessee. If Lessee fails to duly and
promptly perform any of its obligations under this Lease or fails to comply with
any of the covenants or agreements contained herein, Lessor may itself perform
such obligations or comply with such covenants or agreements, for the account of
Lessee, without thereby waiving any default and any amount paid or expense
(including, without limitation, attorney's fees) reasonably incurred by Lessor
in connection with such performance or compliance shall, together with interest
thereon at the Default Interest Rate, be payable by Lessee to Lessor on demand.
33. Agreement for Lease Only. Lessor and Lessee agree that this Lease
is and is intended to be a true lease (and not a lease in the nature of a
security interest) and further agree to treat this Lease as a true lease for all
purposes, including, without limitation, tax purposes.
34. Binding Effect. This Lease shall inure to the benefit of and be
binding upon the parties hereto and their respective permitted successors and
assigns.
35. General. The captions in this Master Lease and each Rental Schedule
are for convenience of reference only. There shall be only one original executed
copy of this Master Lease and of each Rental Schedule. This Master Lease is and
each Rental Schedule shall be executed in the State of Connecticut by Lessor's
having countersigned the same in the State of Connecticut, and are to be and
shall be performed in the State of Connecticut by reason of the requirements
therein for payment by Lessee to Lessor to be made in the State of Connecticut.
36. Definitions. The following term, not elsewhere defined, shall have
the following meanings for all purposes hereof:
"Acquisition Cost" of any item of the Equipment shall mean an amount
equal to the sum of (i) the purchase price of such item of the Equipment paid by
Lessor pursuant to the purchase order for such item of the Equipment assigned to
or given by Lessor, plus (ii) any excise, sales or use tax, freight,
installation, set-up and other costs that are paid by Lessor on or with respect
to such item of the Equipment on or about the time of Lessor's purchase of the
Equipment or the Lease Commencement Date and that Lessor does not request Lessee
to directly reimburse to Lessor.
"Appraisal" shall mean the following procedure whereby recognized
independent qualified equipment appraisers shall mutually agree upon the amount
in question. The party seeking Appraisal shall deliver a written notice to that
effect to the other party
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appointing its appraiser, and within 15 days after receipt of such notice, the
other party shall, by written notice, appoint its appraiser. If within 15 days
after appointment of the two appraisers as described above, the two appraisers
are unable to agree upon the amount in question, a third appraiser shall be
chosen within five days thereafter by mutual agreement of the first two
appraisers, or if the first two appraisers fail to agree upon the appointment of
a third appraiser, such appointment shall be made by an authorized
representative of the American Arbitration Association. The appraisal of the
third appraiser shall be given within a period of ten days after the selection
of the third appraiser. The average of the three appraisals arrived at by the
three appraisers shall be binding and conclusive on Lessor and Lessee. Lessor
and Lessee each shall pay the fees of the appraiser appointed by it and shall
share equally the fees and expenses of the third appraiser, if any, and those of
the American Arbitration Association, if applicable.
"Certificate of Inspection and Acceptance" shall mean a certificate in
the form designated by Lessor whereby Lessee evidences its acceptance of one or
more items of the Equipment for lease hereunder.
"Fair Market Value" shall mean, with respect to the Equipment in
question, the amount which would be paid for that Equipment in an arm's-length
sale transaction between an informed and willing buyer (not a used equipment or
scrap dealer) who wants the Equipment to be as described in the next following
sentence and is under no compulsion to buy, and an informed and willing seller
under no compulsion to sell. In determining the Fair Market Value, it shall be
assumed (whether or not the same be true) that the Equipment is fully
operational, installed and in economically productive service and that all
maintenance and repairs including upgrades, replacements and other services
required by this Lease have been performed and that the Equipment is in such
condition to comply fully with the requirements of this Lease, including
provisions of this Master Lease governing the return of Equipment. The costs of
removal from the location of current use and installation at another location
for use shall not be a deduction in determining the Fair Market Value. Upon any
exercise by Lessee of the purchase option provided for by this Master Lease at
the expiration of the Primary Term for the Equipment subject to a Rental
Schedule, Lessor and Lessee agree that the Fair Market Value shall be eighteen
percent (18%) of the Acquisition Cost of such Equipment. Upon any exercise by
Lessee of the purchase option provided for by this Master Lease at the
expiration of the Automatic Renewal Term for the Equipment subject to a Rental
Schedule, Lessor and Lessee agree that the Fair Market Value shall be sixteen
percent (16%) of the Acquisition Cost of such Equipment.
"Guarantor" shall mean a guarantor of any or all of the obligations of
Lessee pursuant to this Lease.
"Guaranty" shall mean a writing containing a guaranty of any or all of
the obligations of Lessee pursuant to this Lease.
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"Lease Commencement Date" with respect to an item of Equipment shall
mean the date of commencement of the Lease Term of the item as provided by the
applicable Rental Schedule.
"Lease Term" with respect to an item of the Equipment shall mean the
Primary Term plus any and all Renewal Terms plus any period during which Lessee
retains the Equipment on a month-to-month basis pursuant to provisions of this
Master Lease governing the return of the Equipment. The Lease Term shall include
the Lease Commencement Date and the date on which the Lease Term ends.
"Manufacturer" shall mean the Person that manufactures the item of the
Equipment in question.
"Master Lease" shall mean this Master Equipment Lease Agreement.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a limited liability company, a trust, an
estate, any incorporated organization or similar association, a government or
political subdivision, or any other entity.
"Primary Term" shall mean the 48 calendar months plus any partial month
commencing for the Equipment under a Rental Schedule on its Lease Commencement
Date.
"Renewal Term" shall mean the periods of 12 months for the Equipment
under a Rental Schedule commencing, for the Automatic Renewal Term, upon the
expiration of the Primary Term therefor and, for the Second Renewal Term, upon
the expiration of the Automatic Renewal Term therefor, but in either case only
if the Lessee shall not have exercised the purchase option provided in section
25 of this Master Lease.
"Rental Schedule" shall mean each schedule, executed by Lessor and
Lessee pursuant to this Master Lease, providing for a description of some or all
of the Equipment to be leased hereunder, the place or places where such
Equipment shall be located, its Acquisition Cost, the Basic Rent payable by
Lessee with respect thereto, the Primary Term thereof, the Lease Commencement
Date with respect thereto, and such other matters as Lessor and Lessee may agree
upon.
"Stipulated Loss Value" shall mean the amounts specified in the Table
of Stipulated Loss Values applicable to the items of the Equipment subject to a
Rental Schedule, as provided by the Schedule B attached to the Rental Schedule.
Except as otherwise provided in a writing signed by Lessor and Lessee, the
Stipulated Loss Value immediately prior to the end of the Primary Term for any
items of the Equipment shall be the Stipulated Loss Value throughout any Renewal
Term(s) for such items, and thereafter until such items are returned to Lessor
pursuant to the provisions of this Lease or purchased by Lessee pursuant to any
then applicable purchase option provisions of this Lease.
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IN WITNESS WHEREOF, the duly authorized representatives of Lessor and
Lessee have executed this Master Lease as of the date first above written.
LESSOR: LESSEE:
FINOVA TECHNOLOGY FINANCE, INC. HYBRIDON, INC.
By: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------- -------------------------------
Title: Title: CFO
------------------------------- -----------------------------
ATTEST: ATTEST:
By: By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------- --------------------------------
Title: Title:
------------------------------- -----------------------------
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