EXHIBIT 10.37
MEMORANDUM OF UNDERSTANDING
The undersigned, SWMF HOLDINGS CORPORATION (d/b/a SOUTHWEST
MICHIGAN INNOVATION CENTER, INC.), a Michigan nonprofit corporation ("Lessor")
and ESPERION THERAPEUTICS, INC., a Delaware corporation ("Lessee") had
preliminary discussions and wish to memorialize those discussions, related to a
master lease agreement between Lessor and Lessee, under which Lessor shall lease
to Lessee certain equipment to be identified by Lessee and used exclusively at
either McCracken Hall or the Southwest Michigan Innovation Center (the "Master
Lease Agreement").
1. Intent. The parties wish to enter into a Master Lease under
which Lessor shall lease certain equipment to Lessee according to the terms set
forth herein, and those terms more fully set forth in the Master Lease. Lessee
intends to issue a purchase order for a NMR Spectrometer upon execution of this
Memorandum. Such purchase order shall be assigned to Lessor upon consummation of
the Master Lease. Notwithstanding any provision in this Memorandum, the parties
agree that if Lessor deposits funds or pays any portion of the purchase price of
any equipment intended to be leased under the Master Lease and the Master Lease
is not consummated within ninety (90) days after the date of this Memorandum,
unless extended by mutual agreement of the parties, then any sums deposited or
paid by Lessor shall be immediately due and payable, without interest. The
parties agree that Lessee's due execution of (i) the sublease agreement with
Lessor for lab space located in McCracken Hall and (ii) the letter of intent
with Lessor in connection with lease space at the Southwest Michigan Innovation
Center is a condition precedent to Lessor's obligations under this Memorandum.
2. Master Lease. The parties agree that any equipment leased
pursuant to the Master Lease (the "Equipment") will remain the personal property
of Lessor and Lessee shall have no right, title or interest in such Equipment
until payment, in full of Aggregate Lease Amount, as defined below, pursuant to
the terms of the Master Lease. The parties agree and intend to deal with each
other fairly and in good faith during the negotiations of the Master Lease, and
agree to modify any provisions of this Memorandum to ensure that such provisions
are consistent with and meet the requirements of a "Finance Lease" under Article
2A, so long as the intent of the parties defined in this Memorandum is
preserved.
3. Term and Rental. Lessor agrees to allow Lessee to identify
Equipment that has an aggregate retail value of less than or equal to $500,000.
Sums expended by Lessor to acquire Equipment on Lessee's behalf shall be
recorded on a schedule attached to the Master Lease and shall be continuously
updated by Lessor ("Aggregate Lease Amount"). The Aggregate Lease Amount shall
be paid to Lessor according to the terms set forth in
Section 4 below. Lessee shall have eighteen (18) months after the commencement
of the Master Lease to identify the Equipment ("Identification Period"). Upon
expiration of the Identification Period or selection of Equipment which equals
$500,000.00, Lessor shall have no further obligation to acquire additional
Equipment. The Master Lease shall commence thirty (30) days after Lessor makes
its initial deposit with the supplier of the NMR Spectrometer ("Commencement
Date"). The term of the Master Lease shall be for seventy-two (72) months
beginning on the Commencement Date. Lessee shall pay as rent for use of the
Equipment, aggregate rentals equal to the following:
Rental Payments Master Lease Term
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a. No payments 1 - 12 months
(interest will accrue on the Aggregate
Lease Amount at 4% per annum during this
time period)
b. Monthly Interest Only Payments 13 - 36 months
equal to 4% per annum of the Lease
Aggregate Amount, plus 1/24th of the
interest accrued during the first
twelve months.
c. Monthly principal and interest 36 - 72 months
calculated using a 10-year amortization
with interest accruing at 4% of the
Aggregate Lease Amount. The
unamortized balance of the Aggregate
Lease Amount shall be paid in full
at expiration of the term of the
Master Lease.
The Master Lease shall be non-cancelable for its
entire term and Lessee shall have a right of prepayment, without penalty for the
unpaid principal balance of the Aggregate Lease Amount.
Lessor may terminate this Agreement upon default by
Lessee as defined in the Master Lease and shall have all remedies set forth in
the Master Lease. Lessee may terminate the Master Lease if Lessor or its
assignee is unable to provide certain space as defined in a letter of intent to
be finalized between the parties, within thirty-six (36) months from the
Commencement Date of the Master Lease.
4. Warranties. Lessor disclaims all warranties with regard to
the Equipment and shall not be liable to Lessee or any third party for
consequential, incidental, special or exemplary damages arising out of or
related to the Master Lease, or the
transactions to be contemplated under the Master Lease, except for Lessor's
gross negligence or willful misconduct.
5. Risk of Loss. Lessee shall bear all risk of loss from the
date of shipment of the Equipment from supplier to Lessee, or the date Lessor
confirms Lessee's purchase order or contract to supplier. Lessee shall assume
and bear the entire risk of loss for theft, damage, destruction or other injury
to the Equipment from any and every cause, whatsoever. No such loss or damage
shall impair any obligation of Lessee under the Master Lease which shall
continue in full force and effect. Lessee shall have the right to review and
approve any agreements and contracts between the Lessor and supplier.
6. Insurance. Lessee shall obtain and maintain for the entire
term of the Master Lease, at its own expense, property damage and general
liability insurance, including without limitation, loss by fire (including
so-called extended coverage), theft, collision and such other risks of loss as
are customarily insured against the type of Equipment leased under the Master
Lease and by the businesses in which Lessee is engaged, in such amounts and in
such form which are reasonable with respect to the risks covered.
7. Maintenance. Lessee shall maintain Equipment in good
repair, condition and working order, at the sole costs and expense of Lessee.
Lessee shall pay when due or reimburse and, on a net after-tax basis, shall
indemnify and defend Lessor against all fees, assessments and sales, use,
property, excise or other taxes and governmental charges upon any Equipment.
Lessee shall pay all shipping and delivery charges and other expenses incurred
in the connection with the Equipment at the expiration of the Master Lease,
unless Lessee purchases the Equipment or is allowed to renew the Master Lease.
Lessee, at Lessee's risk and expense, shall assemble, prepare for shipment and
immediately return each item of Equipment to Lessor to any location designated
by Lessor.
8. Access. Lessee shall at any and all times during business
hours, and with prior reasonable notice, which will not exceed thirty-six (36)
hours, provided, a Lessee representative accompanies Lessor, grant Lessor
reasonable access to enter upon the premises wherein the Equipment shall be
located and permit Lessor to inspect the equipment.
9. No Liens. Lessee shall not create or incur any mortgage,
lien, pledge or other encumbrance or attachment of any kind upon the Equipment.
Lessee shall not make any changes to the Equipment, except as permitted by
Lessor, except as required by any maintenance obligations of the Master Lease.
Lessee shall not remove the Equipment from the Southwest Michigan Innovation
Center. Lessee shall not assign or in any way dispose of all or any part of its
rights or obligations under the Master Lease, except to a successor to its
business or substantially all of its assets, provided, Lessor has consented to
such assignment, which shall not be unreasonably withheld.
10. Indemnity. Lessee shall indemnify and hold Lessor harmless
from
and against claims, losses, or liabilities arising out of Lessee's use of the
Equipment, except for Lessor's negligence, willful misconduct or breach of the
Master Lease.
11. Governing Law. The Master Lease and this Memorandum shall
in all respects be governed by the laws of the State of Michigan.
12. Counterparts. This Memorandum may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which taken together shall be one and the same instrument. This Memorandum may
be executed by facsimile transmission, with each facsimile signature to be
deemed an original signature.
Dated: July 11, 2001 SWMF HOLDINGS CORPORATION, d/b/a
------------- SOUTHWEST MICHIGAN
INNOVATION CENTER, INC.
By: /s/ Barry G. Broome
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Its: CEO/Executive Director
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Dated: July 2, 2001 ESPERION THERAPEUTICS, INC.
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By: /s/ Timothy Mayleben
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Its: VP, Finance & CFO
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