EXHIBIT 10.15
[LOGO OF LEASE MANAGEMENT SERVICES, INC.]
MASTER LEASE AGREEMENT NUMBER 10467
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LESSEE: MEGABIOS Corp. LESSOR: LEASE MANAGEMENT SERVICES, INC.
-------------------------------- 2500 Sand Hill Road, Suite 101
871 Industrial Road, Suite J & K Menlo Park, CA 94025
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San Carlos, CA 94070
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LEASE TERMS
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1. LEASE. Lessor hereby agrees to lease to Lessee and Lessee hereby agrees
to lease from Lessor, subject to the terms of this Master Lease Agreement and
any addenda thereto (the "Master Lease") and the Schedule defined below, the
personal property (together with all attachments, replacements, parts,
substitutions, additions, repairs, accessions, and accessories, incorporated
therein and/or affixed, thereto) (the "Equipment") described in any Lease
Schedule and any addenda thereto (a "Schedule") executed by the parties hereto
and incorporating the terms of this Master Lease by reference therein (the
"Lease"). The parties agree that this Lease is a "Finance Lease" as defined by
Section 10103 (1) (g) of the California Commercial Code (Cal.Com.C.). Lessee
acknowledges either (a) that Lessee has reviewed and approved any written Supply
Contract (as defined by Cal.Com.C 10103(1)(y)) covering the Equipment purchased
from the "Supplier" (as defined by Cal.Com.C. 10103 (1)(x)) thereof for lease to
Lessee or (b) that Lessor has informed or advised Lessee, in writing, either
previously or by this Lease of the following: (i) the identity of the Supplier;
(ii) that the Lessee may have rights under the Supply Contract; and (iii) that
the Lessee may contact the Supplier for a description of any such rights Lessee
may have under the Supply Contract.
2. TERM AND RENT. The term of this Lease shall be as specified in the
Schedule(s). The rental payments ("Rent") for the Equipment shall be as set
forth in the Schedule(s) and any addenda and shall be payable at the time set
forth therein.
3. LATE CHARGES. Time is of the essence in this Lease and if any Rent is
not paid within ten (10) days after the due date thereof, Lessor shall have the
right to add and collect, and Lessee agrees to pay: (a) a late charge on and in
addition to such Rent equal to five percent (5%) of such Rent or a lesser amount
if established by any state or federal statute applicable thereto, and (b)
interest on such Rent from thirty (30) days after the due date until paid at the
highest contract rate enforceable against Lessee under applicable law but never
to exceed eighteen percent (18%) per annum.
4. DISCLAIMER OF WARRANTIES. LESSOR IS NOT THE MANUFACTURER, SUPPLIER OR
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SELLER OF THE EQUIPMENT. LESSOR IS NOT THE AGENT OF THE MANUFACTURER, SUPPLIER
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OR SELLER OF THE EQUIPMENT. LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES AS TO
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ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE FITNESS,
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MERCHANTABILITY, CONDITION, QUALITY, DURABILITY OR SUITABILITY OF THE EQUIPMENT
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IN ANY RESPECT, OR IN CONNECTION WITH, OR FOR THE PURPOSES AND USES OF LESSEE,
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OR ANY OTHER REPRESENTATION OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR
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IMPLIED, WITH RESPECT THERETO. As between Lessor and Lessee, the Equipment shall
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be accepted and leased by Lessee "as is" and "with all faults." Lessee
specifically waives all rights to make claim against Lessor herein for breach of
any warranty of any kind whatsoever, asserting and resolving any such claims
directly with the Supplier of the Equipment, and Lessor hereby assigns to Lessee
all warranties, if any, received by Lessor resulting from its ownership of the
Equipment. Lessor shall not be responsible for any repairs, service or defects
in the quality or in its operation or for any delay of Supplier and Lessee
waives any claim it might have with respect to Lessor for any loss, damage, or
expense caused by the Equipment, its use or maintenance. In no event shall
Lessor be liable for any consequential damages. Supplier is not an agent of
Lessor and no employee, salesperson, or agent of Supplier is authorized to
waive, supplement, or otherwise alter any provision of this Lease, and no
representation as to the Equipment or any other matter by the Supplier shall in
any way affect the Lessee's duty to pay Rent and perform all its obligations as
set forth in this Lease. Lessor makes no warranty that the Equipment is in
compliance with applicable governmental requirements, rules or regulations.
Lessor has not made any representation or warranty to Lessee as to the tax
benefits, if any. Lessee will obtain from this Lease, or as to the manner in
which Lessee should treat this Lease in Lessee's records for tax, financial
reporting or accounting purposes.
5. ACCEPTANCE. Lessee's acceptance of the Equipment shall be conclusively
and irrevocably evidenced by Lessee signing the Lessor's standard form
Certificate of Acceptance. If Lessee fails or refuses to sign the Certificate of
Acceptance as to all or any part of the Equipment within a reasonable time,
Lessee shall automatically assume all of Lessor's purchase obligations for the
Equipment and Lessee agrees to indemnify and defend Lessor from any claims
including any demand for payment of the purchase price for the Equipment by the
manufacturer, Supplier or seller of the Equipment.
6. USE, OPERATION AND LOCATION. Lessee shall not use or operate the
Equipment so as to violate the terms of any insurance coverage for the Equipment
as required herein. Lessee agrees not to allow the Equipment to be used by
persons other than employees of Lessee, not to rent or sublet the Equipment or
any part thereof to others, to use the Equipment solely for commercial,
agricultural or business purposes, and to use and operate the Equipment in
accordance with the manufacturer's operating procedures and all applicable
governmental laws, ordinances, rules and regulations. If at any time during the
term hereof, Lessor supplies Lessee with labels or other markings, stating that
the Equipment is owned by Lessor, Lessee (or Lessor, at Lessor's option) shall
affix and keep the labels upon a prominent place on the Equipment.
The Equipment shall be located as shown on the Schedule(s). Lessee, without the
prior written consent of Lessor, shall not remove the Equipment from such
location nor give up possession or control thereof. Lessor, upon prior
reasonable notice to Lessee, shall have the right to inspect the Equipment
during Lessee's normal business hours.
7. ALTERATIONS, MAINTENANCE AND REPAIRS. Lessee, at its sole expense, shall
keep Equipment in good condition and working order and furnish all labor, parts
and supplies required therefor. Lessee agrees to maintain accurate and complete
records of all repairs and maintenance to the Equipment. Any modifications or
additions to the Equipment required by any governmental edict shall be promptly
made by Lessee at its own expense.
Without the prior written consent of Lessor, Lessee shall not make any
alterations, additions or improvements to the Equipment which are permanent or
which detract from its economic value or functional utility, except as may be
required pursuant to the preceding sentence of this Paragraph 7. All additions
and improvements to the Equipment shall belong to and immediately become the
property of Lessor and shall be returned to Lessor with the Equipment upon the
expiration or earlier termination of this Lease unless Lessor notifies Lessee to
restore such Equipment to its original state.
8. LOSS, DAMAGE. Lessee assumes the risk of loss and damage to the
Equipment, or any portion thereof, from every cause whatsoever, including but
not limited to damage, destruction, loss or theft. No loss, theft, damage,
destruction of the Equipment shall relieve Lessee of the obligation to pay Rent
or to comply with any other obligation under this Lease. In the event of damage
to any item of Equipment, Lessee shall immediately place the Equipment in good
condition and working order at Lessee's expense. If Lessor determines that any
item of Equipment is lost, stolen, destroyed or damaged beyond repair, Lessee
shall, at Lessor's option, either:
(a) Replace the same with like equipment in good condition and working
order, free and clear of all liens, claims and encumbrances, which equipment
shall thereupon become subject to this Lease; or
(b) Pay Lessor, not as a penalty, but herein liquidated for all purposes an
amount equal to the sum of (i) any accrued and unpaid Rent as of the date the
loss, theft, damage or destruction occurred ("Date of Loss") plus the total of
any amounts due to Lessor pursuant to Paragraph 3; (ii) the present value of all
future rentals reserved in this Lease and contracted to be paid over the
unexpired term of this Lease discounted at a rate equal to the discount rate of
the Federal Reserve Bank of San Francisco as of the Date of Loss; (iii) the
discounted value of the agreed upon or estimated residual value of the Equipment
as of the expiration of this Lease or any renewal thereof discounted at a rate
equal to the discount rate of the Federal Reserve Bank of San Francisco as of
the Date of Loss; and (iv) any other amount otherwise then due and owing under
this Lease or which otherwise will become due and owing irrespective of the fact
that the Equipment has been damaged, destroyed, lost or stolen including any
additional taxes or other charges that may otherwise arise by reason of the
damage, destruction, loss or theft of the Equipment. Lessee further agrees to
pay late charges calculated in accordance with Paragraph 3 from the Date of Loss
to the date the casualty payment is paid to Lessor.
9. INSURANCE. Commencing on the date risk of loss passes to Lessor from the
Supplier and continuing until all of Lessee's obligations under this Lease have
been satisfied, Lessee shall, at Lessee's own expense, keep the Equipment and
any replacements thereto insured against such risks, and in such amounts, in
such form and with such companies as are satisfactory to Lessor. All such
insurance policies shall protect Lessor and Lessee, as their respective
interests may appear, and shall provide that all losses shall be payable to and
adjusted solely with Lessor. Lessee shall, at Lessee's own expense, also
maintain public liability insurance, in such amounts, in such form and with such
companies as are satisfactory to Lessor, insuring Lessor with respect to injury
to person or property resulting from the condition, locations, maintenance, and
actual or alleged use of the Equipment. Lessee shall, prior to the acceptance of
a Schedule by Lessor, deliver to Lessor each of the foregoing policies or
satisfactory evidence of such insurance. Each such policy shall contain an
endorsement providing that the insurer will give Lessor not less than 30 days'
prior written notice of the effective date of any alteration or cancellation of
such policy. Lessee shall furnish annually to Lessor satisfactory evidence of
the maintenance of such insurance. Lessee hereby irrevocably appoints Lessor as
Lessee's attorney-in-fact to make claim for, receive payment of, and execute any
and endorse all documents for loss or damages under any insurance policy as
herein specified. In case of the failure of Lessee to maintain any of such
insurance, Lessor shall have the right, but shall not be obligated, to obtain
such insurance,and therefor, Lessee hereby grants Lessor the irrevocable right
to select an insurance broker for the procurement and maintenance of such
insurance coverage herein specified.
10. TAXES. Lessee shall pay directly, or to Lessor, all license fees,
registration fees, assessments and taxes which may now or hereafter be imposed
upon the ownership, sale (if authorized), possession or use of the Equipment,
excepting only those based on Lessor's income or any single business tax of
Lessor. All required personal property tax returns relating to the Equipment
shall be filed by Lessor unless otherwise provided in writing. If Lessee fails
to pay any said fees,
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THIS LEASE MAY NOT BE AMENDED EXCEPT BY A WRITING SIGNED BY LESSOR AND LESSEE.
LESSEE'S INITIALS KZL
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Dated: 13th of May, 1994
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LESSEE: LESSOR:
MEGABIOS Corp. LEASE MANAGEMENT SERVICES, INC.
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By Kathleen Z Layendecker By Barbara B. Kaiser
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Title Director of Corporate Development Title Sr. Vice President/General Manager
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WHITE - LESSOR'S COPY YELLOW - FILE COPY PINK - LESSEE'S COPY
assessments,or taxes, Lessor shall have the right but not the obligation to pay
the same, and such amount, including penalties and costs, shall be repayable to
Lessor at the next Rent due date, and if not so paid, shall be the same as
failure to pay any Rent due hereunder. Lessor shall not be responsible for
contesting any valuation of or tax imposed on the Equipment but may do so
strictly as an accommodation to Lessee and shall not be liable or accountable to
Lessee therefor. If Lessee pays any taxes, fees or assessments directly to the
appropriate taxing authority, Lessee agrees to immediately notify Lessor and to
provide Lessor documentary evidence of said payment.
11. LESSEE'S FAILURE TO PAY: LESSOR'S PAYMENT. In the event Lessee fails to
pay any amounts due hereunder, including Lessee's obligation to pay taxes
and insurance, or to perform any of its other obligations under this Lease,
Lessor may, at its option, pay such amounts or perform such obligations, and
lessee shall reimburse Lessor the amount of such payment or cost of such
performance, including any charges or penalties which have been levied by the
taxing authority or insurance carrier for such late payment. Within ten (10)
days from demand, such reimbursement shall be paid as additional Rent plus late
charges as calculated in accordance with Paragraph 3 from the date of Lessor's
payment to the date of reimbursement.
12. TITLE. The Equipment is, and shall at all times be the sole and
exclusive property of Lessor, and Lessee shall have no right, title or interest
therein or thereto except as expressly set forth in this Lease. Further, the
Equipment shall at all times remain personal property, notwithstanding that the
Equipment or any part thereof may be affixed or attached to real property or any
building thereon.
Lessee shall keep the Equipment free and clear from all liens, charges,
encumbrances, legal process, and claims. Lessee shall not assign, sublet,
hypothecate, sell, transfer or give up possession of the Equipment or any
interest in this Lease, and any such attempt shall be null and void.
13. INDEMNITY. Lessee shall indemnify and hold Lessor harmless from and
against all claims, losses, liabilities (including negligence, tort and strict
liability), damages, judgments, suits, and all legal proceedings, and any and
all costs and expenses in connection therewith (including attorneys' fees)
arising out of or in any manner connected (a) with the manufacture, purchase,
financing, ownership, delivery, rejection, nondelivery, possession, use,
transportation, storage, operation, maintenance, repair, return or other
disposition of the Equipment; or (b) with this Lease, including, without
limitation, claims for injury or death of persons and for damage to property,
and claims for patent, trademark or copyright infringement, and give Lessor
prompt notice of any claim or liability.
14. NON-TERMINABLE LEASE: OBLIGATIONS UNCONDITIONAL. This Lease cannot be
terminated except as expressly provided herein. Lessee hereby agrees that
Lessee's obligation to pay all Rent and any other amounts owing hereunder shall
be absolute and unconditional.
15. HOLDING OVER. Any use of the Equipment by Lessee beyond the initial
Lease term or any renewal thereof shall be an extension of this Lease term at
the then current Rent on a month-to-month basis terminable by Lessor on ten (10)
days' notice to Lessee and all obligations of Lessee herein contained, including
payment of Rent, shall continue during such holding over. Any holdover period is
limited to twelve (12) months without written consent of Lessor.
16. RETURN OF EQUIPMENT. Upon the expiration or earlier termination of this
Lease, with respect to the Equipment or any part thereof, Lessee shall return
the same to Lessor in good condition and working order, ordinary wear and tear
excepted, in the following manner as selected by Lessor:
(a) By properly packing and delivering the Equipment at Lessee's cost and
expense,to such place as Lessor shall specify within the County in which the
same was delivered to Lessee; or
(b) By properly packing and loading the Equipment, at Lessee's cost and
expense, on board such carrier as Lessor shall specify, and shipping the same,
freight prepaid, to the destination indicated by Lessor.
Lessee agrees to pay for all repair to the Equipment other than
attributable to ordinary wear and tear. Notice of Lessee's intent to return
Equipment must be received by Lessor at least sixty (60) days prior to return.
17. LESSEE'S WAIVERS. To the extent permitted by applicable law, Lessee
hereby waives any and all rights and remedies conferred upon a Lessee by
Sections 10508 through 10522 of the Cal.Com.C., including but not limited to
Lessee's rights to: (i) cancel this Lease; (ii) repudicate this Lease; (iii)
reject the Equipment; (iv) revoke acceptance of the Equipment; (v) recover
damages from Lessor for any breaches of warranty or for any other reason; (vi)
a security interest in the Equipment in Lessee's possession or control for any
reason; (vii) deduct all or any part of any claimed damages resulting from
Lessor's default, if any, under this Lease; (viii) accept partial delivery of
the Equipment; (ix) "cover" by making any purchase or lease of or contract to
purchase or lease Equipment in substitution for Equipment due from Lessor; (x)
recover any general, special, incidental or consequential damages, for any
reason whatsoever; and (xi) specific performance, replevin, detinue,
sequestration, claim and delivery or the like for any Equipment identified to
this Lease. To the extent permitted by applicable law, Lessee also hereby waives
any rights now or hereafter conferred by statute or otherwise which may require
Lessor to sell, lease or otherwise use any Equipment in mitigation of Lessor's
damages as set forth in Paragraph 19 or which may otherwise limit or modify any
of Lessor's rights or remedies under Paragraph 19. Any action by Lessee against
Lessor for any default by Lessor under this Lease, including breach of warranty
or indemnity, shall be commenced within one (1) year after any such cause of
action accrues.
18. DEFAULT. Any of the following events or conditions shall constitute an
event of default ("Event of Default") hereunder:
(a) Lessee's failure to pay when due any Rent or other amount due
hereunder;
(b) Lessee's failure to perform any other term, covenant or condition
hereof or a default under any other agreement between Lessor and Lessee;
(c) The breach of any representation or warranty made by Lessee or any
guarantor of this Lease;
(d) Seizure of the Equipment under legal process;
(e) A filing by or against Lessee of a Petition for Reorganization or
Liquidation under the Bankruptcy Code or any amendments thereto or any other
insolvency law providing for the relief of debtors;
(f) The voluntary or involuntary making of an assignment of a substantial
portion of its assets by Lessee for the benefit of creditors, employment of a
receiver or trustee for Lessee or for any of Lessee's assets, the institution of
formal or informal proceedings by or against Lessee for dissolution,
liquidation, settlement of claims against or winding up of the affairs of
Lessee, or the making by Lessee of a transfer of all or a material portion of
Lessee's assets or inventory not in the ordinary course of business;
(g) The value or condition of any collateral furnished by the Lessee, or
any guarantor of this Lease, becomes impaired or diminished as to, in Lessor's
reasonable opinion, increase Lessor's credit risk;
(h) If, in Lessor's reasonable opinion, there should be a material adverse
change in the financial condition of Lessee.
19. REMEDIES. Upon the occurrence of any Event of Default and at any time
thereafter, Lessor may, with or without cancelling this Lease, in its sole
discretion, do any one or more of the following:
(a) upon notice to Lessee cancel this Lease and any or all Schedules;
(b) continue to be the owner of the Equipment and may, but is not
obligated to, take possession of the Equipment, dispose of the Equipment by sale
or otherwise, all of which determinations may be made by Lessor in its absolute
discretion and for its own account;
(c) declare immediately due and payable all Rents due and to becomes due
hereunder for the full term of this Lease (including any renewal or purchase
obligations);
(d) recover from Lessee damages not as a penalty but herein liquidated for
all purposes and in an amount equal to the sum of (i) any accrued and unpaid
rent as of the date of entry of judgment in favor of Lessor plus the total of
any amounts due to Lessor pursuant to Paragraph 3; (ii) the present value of all
future rentals reserved in this Lease and contracted to be paid over the
unexpired term of this Lease discounted at a rate equal to the discount rate of
the Federal Reserve Bank of San Francisco as of the date of entry of judgment in
favor of Lessor; (iii) all commercially reasonable costs and expenses incurred
by Lessor in any repossession, recovery, storage, repair, sale, re-lease or
other disposition of the Equipment including reasonable attorneys' fees and
costs incurred in connection therewith or otherwise resulting from Lessee's
default; (iv) the present value of the agreed upon or estimated residual value
of the Equipment as of the expiration of this Lease or any renewal thereof
discounted at a rate equal to the discount rate of the Federal Reserve Bank of
San Francisco as of the date of entry of judgment in favor of Lessor; and (v)
any indemnity, if then determinable, plus interest at eighteen percent (18%) per
annum;
(e) in its sole discretion, re-lease or sell any or all of the Equipment at
a public or private sale on such terms and notice as Lessor shall deem
reasonable and recover from Lessee damages, not as a penalty, but herein
liquidated for all purposes and in an amount equal to the sum of (i) any accrued
and unpaid rent as of the later of (A) the date of default or (B) the date that
Lessor has obtained possession of the Equipment or such other date as Lessee has
made an effective tender of possession of the Equipment back to Lessor ("Default
Date"); plus rent (at the rate provided for in this Lease) for the additional
period (but in no event longer than two (2) months) that it takes Lessor to
resell or re-let all of the Equipment, plus the total of any amounts due to
Lessor pursuant to Paragraph 3; (ii) the present value of all future rentals
reserved in this Lease and contracted to be paid over the unexpired term of this
Lease discounted at a rate equal to the discount rate of the Federal Reserve
Bank of San Francisco as of the Default Date; (iii) all commercially reasonable
costs and expenses incurred by Lessor in any repossession, recovery, storage,
repair, sale, re-lease or other disposition of the Equipment including
reasonable attorneys' fees and costs incurred in connection with or otherwise
resulting from the Lessee's default; (iv) estimated residual value of the
Equipment as of the expiration of this Lease or any renewal thereof; and (v) any
indemnity, if then determinable, plus interest at eighteen percent (18%) per
annum; LESS the amount received by Lessor upon such public or private sale or
re-lease of such items of Equipment, if any;
(f) exercise any other right or remedy which may be available to it under
the Uniform Commercial Code or any applicable law.
A cancellation hereunder shall occur only upon notice by Lessor and only as
to such items of Equipment as Lessor specifically elects to cancel and this
Lease shall continue in full force and effect as to the remaining items, if any.
If this Lease is deemed at any time to be one intended as security, Lessee
agrees that the Equipment shall secure; in addition to the indebtedness set
forth herein, all other indebtedness at any time owing by Lessee to Lessor.
No remedy referred to in this Paragraph is intended to be exclusive, but
shall be cumulative and in addition to any other remedy referred to above or
otherwise available to Lessor at law or in equity. No express or implied waiver
by Lessor of any default shall constitute a waiver of any other default by
Lessee or a waiver of any of Lessor's rights.
20. ASSIGNMENT BY LESSOR. LESSOR MAY ASSIGN OR TRANSFER THIS LEASE OR ANY
SCHEDULES OR LESSOR'S INTEREST IN THE EQUIPMENT WITHOUT NOTICE TO LESSEE. Any
assignee or transferee of Lessor shall have the rights, but none of the
obligations, of Lessor under this Lease. Lessee agrees that it will not assert
against any assignee or transferee of Lessor any defense, counterclaim or offset
that Lessee may have against Lessor and that upon notice, it will pay Rent to
such assignee or transferee. Lessee acknowledges that any assignment or transfer
by Lessor shall not materially change Lessee's duties or obligations under this
Lease nor materially increase the burdens or risks imposed on Lessee.
21. NO ASSIGNMENT BY LESSEE. LESSEE SHALL NOT ASSIGN OR IN ANY WAY DISPOSE
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OF ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER THIS LEASE OR ENTER INTO
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ANY SUBLEASE OF ALL OR ANY PART OF THE EQUIPMENT WITHOUT THE PRIOR WRITTEN
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CONSENT OF LESSOR.
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22. FURTHER ASSURANCES. Lessee will promptly and duly execute and deliver
to Lessor such further documents and take such further actions as Lessor may
from time to time deem necessary in order to carry out the intent and purpose of
this Lease and to protect the interests of Lessor under this Lease. Lessee, at
the request of Lessor, agrees to execute and deliver to Lessor, any financing
statements, fixture filings, or other instruments necessary for perfecting the
interest and title of Lessor in this Lease and the Equipment, agrees that a copy
of this Lease may be so filed, and agrees that all costs incurred in connection
therewith (including, without limitation, filing fees and taxes) shall be paid
by Lessee. Lessee hereby appoints Lessor as Lessee's attorney-in-fact to affix
Lessee's signature to any and all such documents. Lessee will deliver to Lessor
monthly financial statements (unaudited but prepared in accordance with
generally accepted accounting principles) within 30 days of each month-end and
audited annual financial statements within three months of fiscal year-end,
which financial statements, Lessee warrants, shall fully and fairly represent
the true financial condition of Lessee.
23. MISCELLANEOUS. This Lease shall constitute an agreement of lease
and nothing herein shall be construed as giving to Lessee any right, title or
interest in any of the Equipment except as a Lessee only. If Lessee is a
partnership, then this Lease is executed by a general partner thereof, and if
Lessee is a corporation, then this Lease is executed by a duly authorized
officer of said corporation pursuant to authority granted by the board of
directors of said corporation. This Lease may be executed in several
counterparts, each of which shall constitute an original and in each case, such
counterparts together shall constitute but one and the same instrument.
(a) Law: Jurisdiction, Venue. This Lease shall be deemed to have been made
and accepted in San Mateo County, California, where Lessor's principal place of
business is located, and shall be governed by the laws of the State of
California, except for local recording statutes. Lessee hereby agrees that all
actions and proceedings arising from this Lease may be litigated, at the
election of Lessor, only in courts having sites within the State of California
and Lessee hereby consents to the jurisdiction of any state or federal court
located within the State of California. Lessee agrees that if any action is
brought to enforce the provisions of this Lease by either party, the County of
San Mateo shall be a proper place for the trial of such action. Lessee agrees to
waive trial by jury.
(b) Binding on Successors. The terms and conditions of this Lease
shall, subject only to the provisions as to assignment, be binding upon and
inure to the benefit of Lessor and Lessee and their respective heirs, executors,
administrators and assigns.
(c) Survival. Lessee's indemnities such as given in Paragraphs 13 and in
any addenda to this Lease shall survive the expiration or other termination of
this Lease.
(d) Entire Agreement; Non-Waiver; Notices; Severability. This Lease
constitutes the entire understanding between Lessor and Lessee relating to the
subject matter hereof. Any representation, promises or conditions not contained
herein shall not be binding unless in writing and signed by duly authorized
representatives of each party. No covenant or condition of this lease can be
waived except by the written consent of Lessor. Any notices required to be given
hereunder shall be given in writing at the address of each party herein set
forth, or at such other address as either party may substitute by written notice
to the other. If any condition of this Lease is held invalid, such an invalidity
shall not affect any other provisions hereof.
(e) Gender; Number; Joint and Several Liability; Authorization; Paragraph
Headings. Whenever the content of this Lease requires, the masculine gender
includes the feminine or neuter, and the single number includes the plural.
Whenever the word "Lessor" is used herein, it shall include all assignees of
Lessor. Whenever the word "herein" is used referring to this Lease, it shall
include the applicable Schedules hereto. If there is more than one lessee named
in this Lease, the liability of each shall be joint and several. Lessee hereby
authorizes Lessor to (i) insert serial numbers and other identification in the
Equipment Description when known and (ii) correct any patent errors or omissions
in this Lease. The titles to the Paragraphs of this Lease are solely for the
convenience of the parties and shall in no way be held to explain, modify,
amplify or aid in the interpretation of the terms and provisions hereof.
ADDENDUM TO MASTER LEASE NUMBER 10467
BETWEEN MEGABIOS Corp. ("LESSEE")
AND LEASE MANAGEMENT SERVICES, INC. ("LESSOR")
The printed form of Master Lease Agreement #10467 between the parties dated May
13, 1994 is amended as follows:
FIRST: In Section 5, Delete section in its entirety and replace with "5.
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ACCEPTANCE. Lessee's acceptance of the Equipment shall be conclusively and
irrevocably evidenced by Lessee signing the Lessor's standard form of
Certificate of Acceptance. If Lessee fails or refuses to sign the Certificate of
Acceptance as to all or any part of the Equipment within a reasonable time after
Lessor pays, or assumes an obligation to pay, for all or any part of the
Equipment, Lessee shall automatically assume all of Lessor's purchase
obligations, if any, for the Equipment and Lessee agrees to indemnify and defend
Lessor from any claims with respect to such Equipment, including any demand for
payment of the purchase price for such Equipment by the manufacturer, supplier
or seller of such Equipment. If Lessor paid for the Equipment or any part
thereof and Lessee has not signed a Certificate of Acceptance with respect to
such Equipment, Lessee shall, immediately upon demand, repay the Lessor the
amount so paid or execute a Certificate of Acceptance.".
SECOND: In Section 6, line 4, after the word "employees" insert the words
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"contractors, consultants, temporary workers or vendor representatives
("Authorized Users")" and in the same line after the word "Lessee" insert "or
Authorized Users of certain Universities specified by Lessee".
THIRD: In Section 7, paragraph 2, line 2, delete the second reference to the
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word "or" and insert "and".
FOURTH: In Section 8, line 5, after the word "Equipment" insert "prior to
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redelivery to LESSOR" and then in line 8, after the word "repair" insert
"Lessor shall first consult with Lessee and then".
FIFTH: In Section 8 (b), line 15, after the word "charges" insert ", if
- -----
applicable,".
SIXTH: In Section 9, delete section in its entirety and replace with "9.
- -----
INSURANCE. Commencing on the date risk of loss passes to Lessor from the
Supplier and continuing until all of Lessee's obligations under this Lease have
been satisfied, Lessee shall, at Lessee's own expense, keep the Equipment and
any replacements thereto insured against such risks, in an amount equal to or
exceeding the full replacement value of the Equipment, in such form and with
such companies as are reasonably satisfactory to Lessor. Such insurance policy
or policies shall protect Lessor and Lessee, as their respective interests may
appear, and shall provide that all losses shall be payable to and adjusted with
Lessor, as its interest may appear. Lessee shall, at Lessee's own expense, also
maintain public liability insurance, in such form and with such companies as are
reasonably satisfactory to Lessor, insuring Lessor with respect to injury to
person or property resulting from the condition, locations, maintenance, and
actual or alleged use of the Equipment. Lessee shall, prior to
MEGABIOS Corp.
Addendum to Master Lease
Page 2 of 3
the acceptance of a Schedule by Lessor, deliver to Lessor each of the foregoing
policies or satisfactory evidence of such insurance. Each such policy shall
contain an endorsement or certificate providing that the insurer will give
Lessor not less than 30 days' prior written notice of the effective date of any
alteration or cancellation of such policy. Lessee shall furnish annually to
Lessor satisfactory evidence of the maintenance of such insurance. Lessee hereby
irrevocably appoints Lessor as Lessee's attorney-in-fact, if an Event of Default
has occurred and is continuing, to make claim for, receive payment of, and
execute any and endorse all documents for loss or damages under any insurance
policy as herein specified. In case of the failure of Lessee to maintain any of
such insurance, Lessor shall have the right, but shall not be obligated, to
obtain such insurance, and therefor, Lessee hereby grants Lessor irrevocable
right to select an insurance broker for the procurement and maintenance of such
insurance coverage herein specified.".
SEVENTH: After the sentence in bold print above the signature lines insert
- -------
"The terms and conditions in the attached commitment letter dated March 25,
1994, are specifically included as part of this Master Lease, including, without
limitation, a commitment for a $2,300,000 master lease/line of credit; provided
however, that the Warrant shall be a Warrant to purchase Series B Preferred
Stock. In the event of a conflict between the terms of this Master Lease and the
commitment letter, the terms of this Master Lease and related lease documents
shall govern.".
EIGHTH: Section 12, at the end of the first paragraph insert "Provided that
- ------
Lessee is not in Default hereunder, Lessee shall have the right of quiet
enjoyment of the Equipment" and then in the second paragraph, line 2, after the
word "not" insert", without Lessor's prior written consent,".
NINTH: SECTION 13, delete section in its entirety and replace with "13.
- -----
INDEMNITY. Lessee shall indemnify and hold Lessor harmless from and against all
claims, losses, liabilities (including negligence, tort and strict liability,
but excluding gross negligence or willful misconduct of Lessor), damages,
judgments, suits, and all legal proceedings, and any and all reasonable costs
and expenses in connection therewith (including reasonable attorneys' fees)
arising out of or in any way connected with (a) the purchase, financing,
ownership, delivery, rejection, nondelivery, possession, use, transportation,
storage, operation, maintenance, repair, return or other disposition of the
Equipment by Lessee; or (b) this Lease, including, without limitation, claims
for injury or death of persons and for damage to property, in each case
resulting from the lease of the Equipment by Lessee from Lessor, and claims for
patent, trademark or copyright infringement, and give Lessor prompt notice of
any claim or liability.".
TENTH: Section 15, delete section in its entirety.
- -----
ELEVENTH: Section 16, line 2, after the word "Lease" insert "and provided that
- --------
(i) the Lease is not renewed or (ii) Lessee does not exercise its option to
purchase the Equipment," and then in Section 16 (b), line 3, after the word
"Lessor" insert "in California.".
TWELFTH: Section 17, line 14, delete sentence that reads "To the extent
- -------
permitted.......remedies under Paragraph 19.".
MEGABIOS Corp.
Addendum to Master Lease
Page 3 of 3
THIRTEENTH: Section 18 (a), after the word "hereunder" insert ", which failure
- ----------
shall not have been cured within ten (10) days:".
FOURTEENTH: Section 18 (b), line 2, after the word "Lessee" insert ", which
- ----------
failure or default shall not have been cured within 20 days after notice to the
Lessee, except that, Lessee shall not be entitled to any notice of default and
opportunity to cure if the default constitutes a default in (i) maintaining
insurance on or in connection with the Equipment and its use as provided in
Section 9, (ii) the removal of the Equipment in violation of Section 6, (iii)
the abandonment of the Equipment by Lessee or (iv) the breach of the Negative
Covenant Pledge Agreement being executed simultaneously herewith.".
FIFTEENTH: Section 18 (c), line 1 , before the word "representation" insert
- ---------
"material".
SIXTEENTH: Section 18 (e), after the word "debtors" insert ", provided,
- ---------
however, with respect to an involuntary petition in bankruptcy, such petition
shall not have been dismissed within forty-five (45) days after the filing of
such petition;".
SEVENTEENTH: Section 18 (g), after the word "becomes" insert "significantly".
- -----------
EIGHTEENTH: Section 18 (h), after the word "Lessee." insert ""Material Adverse
- ----------
Change" shall mean a change having a material adverse effect upon the financial
condition of the Lessee or upon the ability of Lessee to perform its obligations
under the Lease or any other agreement relating to the Lease; provided, however,
that the Lessee shall not be deemed to have sustained a material adverse change
in a situation where Lessee requires additional financing and pending the
current consummation of such additional financing Lessee procures bridge
financing by current major investors, which bridge financing is in anticipation
of a preferred stock equity round anticipated to close within six months of the
date of said bridge financing.".
NINETEENTH: Section 19 (e)(iv), before the word "estimated" insert "the present
- ----------
value of the " and then after the word "thereof" insert "discounted at a rate
equal to the discount rate of the Federal Reserve Bank of San Francisco as of
the Default Date".
IN WITNESS WHEREOF, the undersigned have executed this Addendum this 13th day
of May, 1994.
LESSEE: LESSOR:
MEGABIOS Corp. LEASE MANAGEMENT SERVICES, INC.
By: /s/ Kathleen Z. Layendecker By: /s/ Barbara B. Kaiser
--------------------------- --------------------------
Title: Director of Corporate Title: Sr. VP/GM
------------------------ -----------------------
Development
Lease Management Services, Inc.
ADDENDUM TO
MASTER LEASE AGREEMENT NUMBER 10467
BY AND BETWEEN
MEGABIOS Corp., AS LESSEE
AND
LEASE MANAGEMENT SERVICES, INC., AS LESSOR
Attached to and made an integral part of Master Lease Agreement Number 10467, by
and between MEGABIOS Corp., as Lessee, and LEASE MANAGEMENT SERVICES, INC., as
Lessor (the "Master Lease").
In consideration of Lessor acquiring and leasing the equipment as more fully
described in subsequent Lease Schedules of the "Master Lease", Lessor and
Lessee hereby agree that at the end of the initial lease term, Lessee shall
exercise one of the following options:
---
OPTION 1: PURCHASE
------ -----------
Lessee will purchase the leased Equipment at its residual value which the
parties agree is equal to Fifteen percent (15%) of its initial cost. Such
initial cost includes any/all taxes, installation, freight, and other
charges capitalized into the Lease schedule; or
OPTION 2: RENEWAL*
------ -----------
Subject to satisfactory credit review, Lessee may renew the Lease for an
additional Twelve (12) month period at 1.35% of equipment cost per month,
after which time Lessee will own the equipment.
*Exercise of Option 2 requires 45-day prior written notice to Lessor.
No Lease Schedule may be subdivided. All Equipment subject to a Lease Schedule
shall be treated identically for purposes of purchase or renewal.
IN WITNESS WHEREOF, Lessor and Lessee have each caused this Addendum to be duly
executed in their respective names this 13th day of May, 1994.
---- -----
LESSEE: LESSOR:
MEGABIOS Corp. LEASE MANAGEMENT SERVICES, INC.
By: /s/ Kathleen Z. Layendecker By: /s/ Barbara B. Kaiser
--------------------------- ---------------------
Title: Director of Corporate Development Title: Sr. Vice President
--------------------------------- ------------------
/ General Manager
-----------------
Lease Management Services, Inc.
EQUIPMENT FINANCING AGREEMENT
(Number 10767)
THIS EQUIPMENT FINANCING AGREEMENT NUMBER 10767 ("AGREEMENT") is dated as of
the date set forth at the foot hereof and is between LEASE MANAGEMENT SERVICES,
INC., ("Secured Party") and MEGABIOS CORP., ("Debtor").
1. EQUIPMENT; SECURITY INTEREST. The terms and conditions of this Agreement
cover each item of machinery, equipment and other property (individually an
"Item" or "Item of Equipment" and collectively the "Equipment") described in a
schedule now or hereafter executed by the parties hereto and made a part hereof
(individually a "Schedule" and collectively the "Schedules"). Debtor hereby
grants Secured Party a security interest in and to all Debtor's right, title and
interest in and to the Equipment under the Uniform Commercial Code, such grant
with respect to an Item of Equipment to be as of Debtor's execution of a related
Equipment Financing Commitment referencing this Agreement or, if Debtor then has
no interest in such Item, as of such subsequent time as Debtor acquires an
interest in the Item. Such security interest is granted by Debtor to secure
performance by Debtor of Debtor's obligations to Secured Party hereunder and
under any other agreements under which Debtor has or may hereafter have
obligations to Secured Party. Debtor will ensure that such security interest
will be and remain a sole and valid first lien security interest subject only to
the lien of current taxes and assessment not in default but only if such taxes
are entitled to priority as a matter of law.
2. DEBTOR'S OBLIGATIONS. The obligations of Debtor under this Agreement
respecting an Item of Equipment, except the obligation to pay installment
payments with respect thereto which will commence as set forth in Paragraph 3
below, commence upon the grant to Secured Party of a security interest in the
Item. Debtor's obligations hereunder with respect to an Item of Equipment and
Secured Party's security interest therein will continue until payment of all
amounts due, and performance of all terms and conditions required hereunder
provided, however, that if this Agreement is in default said obligations and
security interest will continue during the continuance of said default. Upon
termination of Secured Party's security interest in an Item of Equipment,
Secured Party will execute such release of interest with respect thereto as
Debtor reasonably requests.
3. INSTALLMENT PAYMENTS AND OTHER PAYMENTS. Debtor will repay advances Secured
Party makes on account of the Equipment in installment payments in the amounts
and at the times set forth in the Schedules, whether or not Secured Party has
rendered an invoice therefor, at the office of Secured Party set forth at the
foot hereof, or to such person and/or at such other place as Secured Party may
from time to time designate by notice to Debtor. Any other amounts required to
be paid Secured Party by Debtor hereunder are due upon Debtor's receipt of
Secured Party's invoice therefor and will be payable as directed in the
invoice. Payments under this Agreement may be applied to Debtor's then accrued
obligations to Secured Party in such order as Secured Party may choose.
4. NET AGREEMENT; NO OFFSET, SURVIVAL. This Agreement is a net agreement, and
Debtor will not be entitled to any abatement of installment payments or other
payments due hereunder or any reduction thereof under any circumstance or for
any reason whatsoever. Debtor hereby waives any and all existing and future
claims, as offsets, against any installment payments or other payments due
hereunder and agrees to pay the installment payments and other amounts due
hereunder as and when due regardless of any offset or claim which may be
asserted by Debtor or on its behalf. The obligations and liabilities of Debtor
hereunder will survive the termination of the Agreement.
5. FINANCING AGREEMENT. THIS AGREEMENT IS SOLELY A FINANCING AGREEMENT. DEBTOR
ACKNOWLEDGES THAT THE EQUIPMENT HAS OR WILL HAVE BEEN SELECTED AND ACQUIRED
SOLELY BY DEBTOR FOR DEBTOR'S PURPOSES, THAT SECURED PARTY IS NOT AND WILL NOT
BE THE VENDOR OF ANY EQUIPMENT AND THAT SECURED PARTY HAS NOT MADE AND WILL NOT
MAKE
MEGABIOS Corp.
EQUIPMENT FINANCING AGREEMENT NUMBER 10767
PAGE 2 OF 8
ANY AGREEMENT, REPRESENTATION OR WARRANTY WITH RESPECT TO THE MERCHANTABILITY,
CONDITION, QUALIFICATION OR FITNESS FOR A PARTICULAR PURPOSE OR VALUE OF THE
EQUIPMENT OR ANY OTHER MATTER WITH RESPECT THERETO IN ANY RESPECT WHATSOEVER.
6. NO AGENCY. DEBTOR ACKNOWLEDGES THAT NO AGENT OF THE MANUFACTURER OR OTHER
SUPPLIER OF AN ITEM OF EQUIPMENT OR OF ANY FINANCIAL INTERMEDIARY IN CONNECTION
WITH THIS AGREEMENT IS AN AGENT OF SECURED PARTY. SECURED PARTY IS NOT BOUND BY
A REPRESENTATION OF ANY SUCH PARTY AND, AS CONTEMPLATED IN PARAGRAPH 27 BELOW,
THE ENTIRE AGREEMENT OF SECURED PARTY AND DEBTOR CONCERNING THE FINANCING OF THE
EQUIPMENT IS CONTAINED IN THIS AGREEMENT AS IT MAY BE AMENDED ONLY AS PROVIDED
IN THAT PARAGRAPH.
7. ACCEPTANCE. Execution by Debtor and Secured Party of a Schedule covering
the Equipment or any Items thereof will conclusively establish that such
Equipment has been included under and will be subject to all the terms and
conditions of this Agreement. If Debtor has not furnished Secured Party with an
executed Schedule by the earlier of fourteen (14) days after receipt thereof or
expiration of the commitment period set forth in the applicable Equipment
Financing Agreement, Secured Party may terminate its obligation to advance funds
as to the applicable Equipment.
8. LOCATION; INSPECTION; USE. Debtor will keep, or in the case of motor
vehicles, permanently garage and not remove from the United States, as
appropriate, each Item of Equipment in Debtor's possession and control at the
Equipment Location designated in the applicable Schedule, or at such other
location to which such Item may have been moved with the prior written consent
of Secured Party. Whenever requested by Secured Party, Debtor will advise
Secured Party as to the exact location of an Item of Equipment. Secured Party
will have the right to inspect the Equipment and observe its use during normal
business hours, subject to Debtor's security procedures and to enter into and
upon the premises where the Equipment may be located for such purpose. The
Equipment will at all times be used solely for commercial or business purposes
and operated in a careful and proper manner and in compliance with all
applicable laws, ordinances, rules and regulations, all conditions and
requirements of the policy or policies of insurance required to be carried by
Debtor under the terms of this Agreement and all manufacturer's instructions and
warranty requirements. Any modifications or additions to the Equipment required
by any such governmental edict or insurance policy will be promptly made by
Debtor.
9. ALTERATIONS; SECURITY INTEREST COVERAGE. Without the prior written consent
of Secured Party, Debtor will not make any alterations, additions or
improvements to any Item of Equipment which detract from its economic value or
functional utility, except as may be required pursuant to Paragraph 8 above.
Secured Party's security interest in the Equipment will include all
modifications and additions thereto and replacements and substitutions therefor,
in whole or in part. Such reference to replacements and substitutions will not
grant Debtor greater rights to replace or substitute than are provided in
Paragraph 11 below or as may be allowed upon the prior written consent of
Secured Party.
10. MAINTENANCE: Debtor will maintain the Equipment in good repair,
condition and working order. Debtor will also cause each Item of Equipment for
which a service contract is generally available to be covered by such a contract
which provides coverages typical to property of the type involved and is issued
by a competent servicing entity.
11. LOSS AND DAMAGE; CASUALTY VALUE. In the event of the loss of, theft
of, requisition of, damage to or destruction of an Item of Equipment ("Casualty
Occurrence"), Debtor will give Secured Party prompt notice thereof and will
thereafter place such Item in good repair, condition and working order,
provided, however, that if such Item is determined by Secured Party
MEGABIOS Corp.
EQUIPMENT FINANCING AGREEMENT NUMBER 10767
PAGE 3 OF 8
to be lost, stolen, destroyed or damaged beyond repair, is requisitioned or
suffers a constructive total loss as defined in any applicable insurance policy
carried by Debtor in accordance with Paragraph 14 below, Debtor, at Secured
Party's option, will (a) replace such Item with like Equipment in good
repair, condition and working order whereupon such replacement equipment will be
deemed such Item for all purposes hereof or (b) pay Secured Party the "Casualty
Value" of such Item which will equal the total of (i) all installment payments
and other amounts due from Debtor to Secured Party at the time of such payment
and (ii) future installment payments due with respect to such Item with each
such payment including any final uneven payment discounted at a rate equal to
the discount rate of the Federal Reserve Bank of San Francisco from the date due
to the date of such payment.
Upon such replacement or payment, as appropriate, this Agreement and Secured
Party's security interest will terminate with, and only with, respect to the
Item of Equipment so replaced or as to which such payment is made in accordance
with Paragraph 2 above.
12. TITLING; REGISTRATION. Each item of Equipment subject to title
registration laws will at all times be titled and/or registered by Debtor as
Secured Party's agent and attorney-in-fact with full power and authority to
register (but without power to affect title to) the Equipment in such manner and
in such jurisdiction or jurisdictions as Secured Party directs. Debtor will
promptly notify Secured Party of any necessary or advisable retitling and/or
reregistration of an Item of Equipment in a jurisdiction other than the one in
which such Item is then titled and/or registered. Any and all documents of
title will be furnished or caused to be furnished Secured Party by Debtor within
sixty (60) days of the date any titling or registering or restating or
reregistering, as appropriate, is directed by Secured Party.
13. TAXES. Debtor will make all filings as to and pay when due all personal
property and other ad valorem taxes and all other taxes, fees, charges and
assessments based on the ownership or use of the equipment and will pay as
directed by secured party or reimburse secured party for all other taxes,
including, but not limited to, gross receipt taxes (exclusive of federal and
state taxes based on Secured Party's net income, unless such net income taxes
are in substitution for or relieve Debtor from any taxes which Debtor would
otherwise be obligated to pay under the terms of this Paragraph 13), fees,
charges and assessments whatsoever, however designated, whether based on the
installment payments or other amounts due hereunder, levied, assessed or imposed
upon the Equipment or otherwise related hereto or to the Equipment, now or
hereafter levied, assessed or imposed under the authority of a federal, state,
or local taxing jurisdiction, regardless of when and by whom payable. Filings
with respect to such other amounts will, at Secured Party's option, be made by
Secured Party or by Debtor as directed by Secured Party.
14. INSURANCE. Debtor will procure and continuously maintain all risk
insurance against loss or damage to the Equipment from any cause whatsoever for
not less than the full replacement value thereof naming Secured Party as Loss
Payee. Such insurance must be in a form and with companies approved by Secured
Party, must provide at least thirty (30) days advance written notice to Secured
Party of cancellation, change or modification in any term, condition, or amount
of protection provided therein, must provide full breach of warranty protection
and must provide that the coverage is "primary coverage" (does not require
contribution from any other applicable coverage). Debtor will provide Secured
Party with an original policy or certificate evidencing such insurance. in the
event of an assignment of this Agreement of which Debtor has notice, Debtor will
cause such insurance to provide the same protection to the assignee as its
interests may appear. The proceeds of such insurance, at the option of the
Secured Party or such assignee, as appropriate, will be applied toward (a)
repair or replacement of the appropriate Item or Items of Equipment, (b) payment
of the Casualty Value thereof and/or (c) payment of, or as provision for,
satisfaction of any other accrued obligations of Debtor hereunder. Debtor hereby
appoints Secured Party as Debtor's attorney-in-fact with full power and
authority to do all things, including, but not limited to, making claims,
receiving payments and endorsing documents, checks or drafts, necessary to
secure payments due under any policy contemplated hereby on account of a
Casualty Occurrence. Debtor and Secured Party contemplate that the jurisdictions
where the Equipment will
MEGABIOS Corp.
EQUIPMENT FINANCING AGREEMENT NUMBER 10767
PAGE 4 OF 8
be located will not impose any liability upon Secured Party for personal injury
and/or property damage resulting out of the possession, use, operation or
condition of the Equipment. In the event Secured Party determines that such is
not or may not be the case with respect to a given jurisdiction, Debtor will
provide Secured Party with public liability and property damage coverage
applicable to the Equipment in such amounts and in such form as Secured Party
requires.
15. SECURED PARTY'S PAYMENT. If Debtor fails to pay any amounts due hereunder
or to perform any of its other obligations under this Agreement, Secured Party
may, at its option, but without any obligation to do so, pay such amounts or
perform such obligations, and Debtor will reimburse Secured Party the amount of
such payment or cost of such performance, plus interest at 1.5% per month.
16. INDEMNITY. Debtor does hereby assume liability for and does agree to
indemnify, defend, protect, save and keep harmless Secured Party from and
against any and all liabilities, losses, damages, penalties, claims, actions,
suits, costs, expenses and disbursements, including court costs and legal
expenses, of whatever kind and nature, imposed on, incurred by or asserted
against Secured Party (whether or not also indemnified against by any other
person) in any way relating to or arising out of this Agreement or the
manufacture, financing, ownership, delivery, possession, use, operation,
condition or disposition of the Equipment by Secured Party or Debtor, including,
without limitation, any claim alleging latent and other defects, whether or not
discoverable by Secured Party or Debtor, and any other claim arising out of
strict liability in tort, whether or not in either instance relating to an event
occurring while Debtor remains obligated under this Agreement, and any claim for
patent, trademark or copyright infringement. Debtor agrees to give Secured Party
and Secured Party agrees to give Debtor notice of any claim or liability hereby
indemnified against promptly following learning thereof.
17. DEFAULT. Any of the following will constitute an event of default
hereunder: (a) Debtor's failure to pay when due any installment payment or other
amount due hereunder, which failure continues for ten (10) days after the due
date thereof; (b) Debtor's default in perofrming any other obligation, term or
condition of this Agreement or any other agreement between Debtor and Secured
Party or default under any further agreement providing security for the
performance by Debtor of its obligations hereunder provided such default has
continued for more than twenty (20) days, except as provided in (c) and (d)
hereinbelow, or, without limiting the generality of subparagraph (1)
hereinbelow, default under any lease or any mortgage or other instrument
contemplating the provision of financial accommodation applicable to the real
property where an Item of Equipment is located; (c) any writ or order of
attachment or execution or other legal process being levied on or charged
against any Item of Equipment and not being released or satisfied within ten
(10) days; (d) Debtor's failure to comply with its obligations under Paragraph
14 above or any transfer by Debtor in violation of Paragraph 21 below; (e) a
non-appealable judgment for the payment of money in excess of $100,000 being
rendered by a court of record against Debtor which Debtor does not discharge or
make provision for discharge in accordance with the terms thereof within ninety
(90) days from the date of entry thereof; (f) death or judicial declaration of
incompetency of Debtor, if an individual; (g) the filing by Debtor of a petition
providing for the relief of debtors, including, without limitation, a petition
for reorganization, arrangement or extension, or the commission by Debtor of an
act of bankruptcy; (h) the filing against Debtor of any such petition not
dismissed or permanently stayed within thirty (30) days of the filing thereof;
(i) the voluntary or involuntary making of an assignment of substantial portion
of its assets by Debtor for the benefit of creditors, appointment of a receiver
or trustee for Debtor proceeding (under the Bankruptcy Act or otherwise) or of
any formal or informal proceeding for dissolution, liquidation, settlement of
claims against or winding up of the affairs of Debtor, Debtor's cessation of
business activities or the making by Debtor of a transfer of all or a material
portion of Debtor's assets or inventory not in the ordinary course of business;
(j) the occurrence of any event described in parts (e), (f), (g), (h) or (i)
hereinabove with respect to any guarantor or other party liable for payment or
performance of this Agreement; (k) any certificate, statement,
MEGABIOS CORP.
EQUIPMENT FINANCING AGREEMENT NUMBER 10767
PAGE 5 of 8
representation, warranty or audit heretofore or hereafter furnished with respect
hereto by or on behalf of Debtor or any guarantor or other party liable for
payment or performance of this Agreement proving to have been false in any
material respect at the time as of which the facts therein set forth were stated
or certified or having omitted any substantial contingent or unliquidated
liability or claim against Debtor or any such guarantor or other party; (l)
breach by Debtor of any lease or other agreement providing financial
accommodation under which Debtor or its property is bound; or (m) a transfer of
effective control of Debtor, if an organization.
18. REMEDIES. Upon the occurrence of an event of default, Secured Party will
have the rights, options, duties and remedies of a Secured Party, and Debtor
will have the rights and duties of a debtor, under the Uniform Commercial Code
(regardless of whether such Code or a law similar thereto has been enacted in a
jurisdiction wherein the rights or remedies are asserted) and, without limiting
the foregoing, Secured Party may exercise any one or more of the following
remedies: (a) declare the Casualty Value or such lesser amount as may be set by
law immediately due and payable with respect to any or all Items of Equipment
without notice or demand to Debtor; (b) sue from time to time for and recover
all installment payments and other payments then accrued and which accrue during
the pendency of such action with respect to any or all Items of Equipment; (c)
take possession of and, if deemed appropriate, render unusable any or all Items
of Equipment, without demand or notice, wherever same may be located, without
any court order or other process of law and without liability for any damages
occasioned by such taking of possession and remove, keep and store the same or
use and operate or lease the same until sold; (d) require Debtor to assemble any
or all Items of Equipment at the Equipment Location therefor, or at such
location to which such Equipment may have been moved with the written consent of
Secured Party or such other location in reasonable proximity to either of the
foregoing as Secured Party designates; (e) upon ten (10) days notice to Debtor
or such other notice as may be required by law, sell or otherwise dispose of any
Item of Equipment, whether or not in Secured Party's possession, in a
commercially reasonable manner at public or private sale at any place deemed
appropriate and apply the new proceeds of such sale, after deducting all costs
of such sale, including, but not limited to, costs of transportation,
repossession, storage, refurbishing, advertising and brokers' fees, to the
obligations of Debtor to Secured Party hereunder or otherwise, with Debtor
remaining liable for any deficiency and with any excess being returned to
Debtor; (f) upon thirty (30) days notice to Debtor, retain any repossessed or
assembled Items of Equipment as Secured Party's own property in full
satisfaction of Debtor's liability for the installment payments due hereunder
with respect thereto, provided that Debtor will have the right to redeem such
Items by payment in full of its obligations to Secured Party hereunder or
otherwise or to require Secured Party to sell or otherwise dispose of such Items
in the manner set forth in subparagraph (e) hereinabove upon notice to Secured
Party within such thirty (30) day period; or (g) utilize any other remedy
available to Secured Party under the Uniform Commercial Code or similar
provision of law or otherwise at law or in equity.
No right or remedy conferred herein is exclusive of any other right or remedy
conferred herein or by law; but all such remedies are cumulative of every other
right or remedy conferred hereunder or at law or in equity, by statute or
otherwise, and may be exercised concurrently or separately from time to time.
Any sale contemplated by subparagraph (e) of this Paragraph 18 may be adjourned
from time to time by announcement at the time and place appointed for such sale,
or for any such adjourned sale, without further published notice, Secured Party
may bid and become the purchaser at any such sale. Any sale of an Item of
Equipment, whether under said subparagraph or by virtue of judicial proceedings,
will operate to divest all right, title, interest, claim and demand whatsoever;
either at law or in equity, of Debtor in and to said item and will be a
perpetual bar to any claim against such Item, both at law and in equity, against
Debtor and all persons claiming by, through or under Debtor.
19. DISCONTINUANCE OF REMEDIES. If Secured Party proceeds to enforce any
right under this Agreement and such proceedings are discontinued or abandoned
for any reason or are determined adversely, then and in every such case Debtor
and Secured Party will be restored to their former positions and rights
hereunder.
MEGABIOS Corp.
EQUIPMENT FINANCING AGREEMENT NUMBER 10767
PAGE 6 OF 8
20. SECURED PARTY'S EXPENSES. Debtor will pay Secured Party all costs and
expenses, including attorney's fees and court costs and sales costs not offset
against sales proceeds under Paragraph 18 above, incurred by Secured Party in
exercising any of its rights or remedies hereunder or enforcing any of the
terms, conditions or provisions hereof. This obligation includes the payment or
reimbursement of all such amounts whether an action is ultimately filed and
whether an action is ultimately dismissed.
21. ASSIGNMENT. Without the prior written consent of Secured Party, Debtor
will not sell, lease, pledge or hypothecate, except as provided in this
Agreement, any Item of Equipment or any interest therein or assign, transfer,
pledge, or hypothecate this Agreement or any interest in this Agreement or
permit the Equipment to be subject to any lien, charge or encumbrance of any
nature except the security interest of Secured Party contemplated hereby.
Debtor's interest herein is not assignable and will not be assigned or
transferred by operation of law. Consent to any of the foregoing prohibited
acts applies only in the given instance and is not a consent to any subsequent
like act by Debtor or any other person.
All rights of Secured Party hereunder may be assigned, pledged, mortgaged,
transferred or otherwise disposed of, either in whole or in part, without notice
to Debtor but always, however, subject to the rights of Debtor under this
Agreement. If Debtor is given notice of any such assignment, Debtor will
acknowledge receipt thereof in writing. In the event Secured Party assigns this
Agreement or the installment payments due or to become due hereunder or any
other interest herein, whether as security for any of its indebtedness or
otherwise, no breach or default by Secured Party hereunder or pursuant to any
other agreement between Secured Party and Debtor, should there be one, will
excuse performance by Debtor of any provision hereof, it being understood that
in the event of such default or breach by Secured Party that Debtor will pursue
any rights on account thereof solely against Secured Party. No such assignee,
unless such assignee agrees in writing, will be obligated to perform any duty,
covenant or condition required to be performed by Secured Party in connection
with this Agreement.
Subject always to the foregoing, this Agreement inures to the benefit of, and
is binding upon, the heirs, legatees, personal representative, successors and
assigns of the parties hereto.
22. MARKINGS; PERSONAL PROPERTY. If Secured Party supplies Debtor with labels,
plates, decals or other markings stating that Secured Party has an interest in
the Equipment, Debtor will affix and keep the same prominently displayed on the
Equipment or will otherwise mark the Equipment or its then location or
locations, as appropriate, at Secured Party's request to indicate Secured
Party's security interest in the Equipment. The Equipment is, and at all times
will remain, personal property notwithstanding that the Equipment or any Item
thereof may now be, or hereafter become, in any manner affixed or attached to,
or embedded in, or permanently resting upon real property or any improvement
thereof or attached in any manner to what is permanent as by means of cement,
plaster, nails, bolts, screws or otherwise. If requested by Secured Party,
Debtor will obtain and deliver to Secured Party waivers of interest or liens in
recordable form satisfactory to Secured Party from all persons claiming any
interest in the real property on which an Item of Equipment is or is to be
installed or located.
23. LATE CHARGES. Time is of the essence in this Agreement and if any
Installment Payment is not paid within ten (10) days after the due date
thereof, Secured Party shall have the right to add and collect, and Debtor
agrees to pay: (a) a late charge on and in addition to, such Installment Payment
equal to five percent (5%) of such Installment Payment or a lesser amount if
established by any state or federal statute applicable thereto, and (b) interest
on such Installment Payment from thirty (30) days after the due date until paid
at the highest contract rate enforceable against Debtor under applicable law but
never to exceed eighteen percent (18%) per annum.
24. NON-WAIVER. No covenant or condition of this Agreement can be waived except
by the written consent of Secured Party. Forbearance or indulgence by Secured
Party in regard to any
MEGABIOS Corp.
EQUIPMENT FINANCING AGREEMENT NUMBER 10767
PAGE 7 OF 8
breach hereunder will not constitute a waiver of the related covenant or
condition to be performed by Debtor.
25. ADDITIONAL DOCUMENTS. In connection with and in order to perfect and
evidence the security interest in the Equipment granted Secured Party hereunder
Debtor will execute and deliver to Secured Party such financing statements and
similar documents as Secured Party requests. Debtor authorizes Secured Party
where permitted by law to make filings of such financing statements without
Debtor's signature. Debtor further will furnish Secured Party (a) on a timely
basis, Debtor's future financial statements, including Debtor's most recent
annual report, balance sheet and income statement, prepared in accordance with
generally accepted accounting principles, which reports, Debtor warrants, shall
fully and fairly represent the true financial condition of Debtor (b) any other
information normally provided by Debtor to the public and (c) such other
financial data or information relative to this Agreement and the Equipment,
including, without limitation, copies of vendor proposals and purchase orders
and agreements, listings of serial numbers or other identification data and
confirmations of such information, as Secured Party may from time to time
reasonably request. Debtor will procure and/or execute, have executed,
acknowledge, have acknowledged, deliver to Secured Party, record and file such
other documents and showings as Secured Party deems necessary or desirable to
protect its interest in and rights under this Agreement and interest in the
Equipment. Debtor will pay as directed by Secured Party or reimburse Secured
Party for all filing, search, title report, legal and other fees incurred by
Secured Party in connection with any documents to be provided by Debtor pursuant
to this Paragraph or Paragraph 22 and any further similar documents Secured
Party may procure.
26. DEBTOR'S WARRANTIES. Debtor certifies and warrants that the financial
data and other information which Debtor has submitted, or will submit, to
Secured Party in connection with this Agreement is, or will be at time of
delivery, as appropriate, a true and complete statement of the matters therein
contained. Debtor further certifies and warrants: (a) this Agreement has been
duly authorized by Debtor and when executed and delivered by the person signing
on behalf of Debtor below will constitute the legal, valid and binding
obligation, contract and agreement of Debtor enforceable against Debtor in
accordance with its respective terms; (b) this Agreement and each and every
showing provided by or on behalf of Debtor in connection herewith may be relied
upon by Secured Party in accordance with the terms thereof notwithstanding the
failure of Debtor or other applicable party to ensure proper attestation
thereto, whether by absence of a seal or acknowledgment or otherwise; (c) Debtor
has the right, power and authority to grant a security interest in the Equipment
to Secured Party for the uses and purposes herein set forth and (d) each Item of
Equipment will, at the time such Item becomes subject hereto, be in good
repair, condition and working order.
27. ENTIRE AGREEMENT. This instrument with exhibits and related documentation
constitutes the entire agreement between Secured Party and Debtor and will not
be amended, altered or changed except by a written agreement signed by the
parties.
28. NOTICES. Notices under this Agreement must be in writing and must be
mailed by United States mail, cerified mail with return receipt requested, duly
addressed, with postage prepaid, to the party involved at its respective address
set forth at the foot hereof or at such other address as each party may provide
on notice to the other from time to time. Notices will be effective when
deposited. Each party will promptly notify the other of any change in that
party's address.
29. GENDER, NUMBER: JOINT AND SEVERAL LIABILITY. Whenever the context of this
Agreement requires, the neuter gender includes the feminine or masculine and the
singular number includes the plural; and whenever the words "Secured Party" are
used herein, they include all assignees of Secured Party, it being understood
that specific reference to "assignee" in Paragraph 14 above is for further
emphasis. If there is more than one Debtor named in this Agreement, the
liability of each will be joint and several.
MEGABIOS Corp.
EQUIPMENT FINANCING AGREEMENT NUMBER 10767
PAGE 8 OF 8
30. TITLES. The titles to the Paragraphs of this Agreement are solely for the
convenience of the parties and are not an aid in the interpretation of the
instrument.
31. GOVERNING LAW; VENUE. This Agreement will be governed by and construed
in accordance with the laws of the State of California. Venue for any action
related to the Agreement will be in an appropriate court in San Mateo County,
California, to which Debtor consents, or in another court selected by Secured
Party which has jurisdiction over the parties. In the event any provision hereof
is declared invalid, such provision will be deemed severable from the remaining
provisions of this Agreement, which will remain in full force and effect.
32. TIME. Time is of the essence of this Agreement and for each and all of its
provisions.
In WITNESS WHEREOF, the undersigned have executed this Agreement as of May 13,
------
1994.
DEBTOR:
MEGABIOS Corp.
871 Industrial Road, Suite J & K
San Carlos, CA 94070
By: /s/ Kathleen Z. Layendecker
------------------------------------
Title: Director of Corporate Development
------------------------------------
SECURED PARTY:
LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025
By: /s/ Barbara B. Kaiser
------------------------------------
Title: Sr. Vice President / General Manager
ADDENDUM TO EQUIPMENT FINANCING AGREEMENT
NUMBER 10767
BETWEEN MEGABIOS Corp. ("DEBTOR")
AND LEASE MANAGEMENT SERVICES, INC. ("SECURED PARTY")
The printed form of Equipment Financing Agreement #10767 between the parties
dated May 13, 1994 is amended as follows:
------
FIRST: At the end of the introductory paragraph insert "The terms and conditions
- -----
in the attached commitment letter dated March 25, 1994, are specifically
included as part of this Equipment Financing Agreement, including, without
limitation, a commitment for a $2,300,000 master lease/line of credit; provided
however, that the Warrant shall be a Warrant to purchase Series B Preferred
Stock. In the event of a conflict between the terms of this Agreement and the
commitment letter, the terms of this Agreement and the related loan documents
shall govern.
SECOND: In Section 1, line 11 after the word "agreements" insert "executed by
- ------
Debtor in connection with this Agreement".
THIRD: In Section 7, delete the second sentence in its entirety.
- -----
FOURTH: In Section 8, line 5, after the first appearance of the words "Secured
- ------
Party" insert "which consent shall not be unreasonably withheld".
FIFTH: In Section 11, line 7, after the word "below" insert "Secured Party
- -----
shall first consult with Debtor and then".
SIXTH: In Section 12, line 4, after the words "Secured Party" insert
- -----
"reasonably".
SEVENTH: Section 14, delete section in its entirety and replace with "14.
- -------
INSURANCE. Debtor will procure and continuously maintain insurance against loss
or damage to the Equipment from any cause whatsoever for not less than the full
replacement value thereof naming Secured Party as Loss Payee as its interest may
appear. Such insurance must be in a form and with companies approved by Secured
Party, must provide at least thirty (30) days advance written notice to Secured
Party of cancellation, change or modification in any term, condition, or amount
of protection provided therein, must provide full breach of warranty protection
and must provide that the coverage is "primary coverage" (does not require
contribution from any other applicable coverage). Debtor will provide Secured
Party with an original policy or certificate evidencing such insurance. In the
event of an assignment of this Agreement of which Debtor has notice, Debtor will
cause such insurance to provide the same protection to the assignee as its
interests may appear. The proceeds of such insurance, at the option of the
Secured Party or such assignee (after consultation with Debtor), as appropriate,
will be applied toward (a) repair or replacement of the appropriate Item or
items of Equipment (b) payment of the Casualty Value thereof and/or (c) payment
of, or as provision for, satisfaction of any other accrued obligations of Debtor
hereunder. Debtor hereby appoints Secured
MEGABIOS Corp.
Addendum to Equipment Financing Agreement
2 of 3
Party as Debtor's attorney-in-fact with full power and authority, if an Event of
Default has occurred and is continuing, to do all things, including, but not
limited to, making claims, receiving payments and endorsing documents, checks or
drafts, necessary to secure payments due under any policy contemplated hereby on
account of a Casualty Occurrence. Debtor and Secured Party contemplate that the
jurisdictions where the Equipment will be located will not impose any liability
upon Secured Party for personal injury and/or property damage resulting out of
the possession, use, operation or condition of the Equipment. In the event
Secured Party determines that such is not or may not be the case with respect to
a given jurisdiction, Debtor will provide Secured Party with public liability
and property damage coverage applicable to the Equipment in such amounts and in
such form as Secured Party reasonably requires, provided, however, that public
liability insurance with primary limits of $1,000,000 with an excess policy of
$2,000,000, shall be deemed to satisfy this requirement.
EIGHTH: Section 15, at the beginning of the section insert "Subject to
- ------
Paragraph 23 below,".
NINTH: Section 16, delete section in its entirety and replace with "16.
- -----
INDEMNITY. Debtor shall indemnify and hold Secured Party harmless from and
against all claims, losses, liabilities (including negligence, tort and strict
liability, but excluding gross negligence or willful misconduct of Secured
Party), damages, judgments, suits, and all legal proceedings, and any and
all reasonable cost and expenses in connection therewith (including reasonable
attorneys' fees) arising out of or in any way connected with (a) the purchase,
financing, ownership, delivery, rejection, nondelivery, possession, use,
transportation, storage, operation, maintenance, repair, return or other
disposition of the Equipment by Debtor; or (b) this Equipment Financing
Agreement, including, without limitation, claims for injury or death of persons
and for damage to property, in each case resulting from the lease of the
Equipment by Debtor from Secured Party, and claims for patent, trademark or
copyright infringement, and give Secured Party prompt notice of any claim or
liability.".
TENTH: Section 17, line 1, insert "occurrence and continuance" between "any"
- -----
and "of".
ELEVENTH: Section 17 (h), delete "thirty (30)" and replace it with "forty-five
- --------
(45)".
TWELFTH: Section 17 (k), at the end of the clause insert "in excess of $50,000".
- -------
THIRTEENTH: Section 17 (l), delete the section and replace it with "breach, in
- ----------
excess of $50,000, by Debtor of any lease or other agreement providing financial
accommodation under which Debtor or its property is bound, which breach is not
cured or with respect to which no provision has been made to cure within twenty
(20) days;".
FOURTEENTH: Section 18, line 1, after the word "occurrence" insert "and
- ----------
continuance".
FIFTEENTH: Section 18 (d), line 3, after the word "Secured Party" insert ",
- ---------
which consent shall not be unreasonably withheld".
SIXTEENTH: Section 20, line 1, At the beginning of the section insert "Upon
- ---------
the occurrence and continuation of an Event of Default,".
MEGABIOS CORP.
ADDENDUM TO EQUIPMENT FINANCING AGREEMENT
3 of 3
SEVENTEENTH: Section 20, line 1, insert "reasonable" between "all" and "cost".
- -----------
EIGHTEENTH: Section 20, line 2, insert "reasonable" between "including" and
- ----------
"attorney's".
NINETEENTH: Section 25, line 4, insert "reasonably" before "requests".
- ----------
TWENTIETH: Section 25, line 5, after "Secured Party" insert "at Secured Party's
- ---------
reasonable request or as provided in the commitment letter dated March 25,
1994".
TWENTY-FIRST: Section 25, line 17, Insert "reasonable" between "report," and
- ------------
"legal" and between "other" and "fees".
TWENTY-SECOND: Section 31, line 4, after the words "Secured Party" insert "and
- -------------
consented to by Debtor, which consent shall not be unreasonably withheld,".
IN WITNESS WHEREOF, the undersigned have executed this Addendum this 13th day of
--
May, 1994.
DEBTOR: SECURED PARTY:
MEGABIOS CORP. LEASE MANAGEMENT SERVICES, INC.
By: /s/ Kathleen Z. Layendecker By: /s/ Barbara Kaiser
--------------------------- ---------------------------
Title: Director of Corporate Title: Sr. VP/GM
------------------------ ------------------------
Development
[LOGO] Lease Management Services, Inc.
ADDENDUM TO
EQUIPMENT FINANCING AGREEMENT
NUMBER 10767
BY AND BETWEEN
MEGABIOS CORP., AS DEBTOR,
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY
MEGABIOS CORP., as Debtor, hereby acknowledges our responsibility to pay, and
agrees to pay any additional sales taxes which may be due to the State of
California or where applicable, for the collateral covered under the above
referenced Equipment Financing Agreement.
DEBTOR:
MEGABIOS CORP.
By: /s/ Kathleen Z. Layendecker
---------------------------------
Title: Director of Corporate Development
---------------------------------
Date: May 13, 1994
---------------------------------