Equipment Lease - Mellon US Leasing and Nanogen Inc.
Master Lease Agreement [LOGO] Mellon US Leasing
LESSOR: Mellon US Leasing, a Division LESSEE: Nanogen, Inc.
of Mellon Leasing Corporation ADDRESS: 10398 Pacific Center Court
San Diego, CA 92121
ADDRESS: 525 Market Street, Suite 3500
San Francisco, California 94105-2743
TERMS AND CONDITIONS OF LEASE
The undersigned Lessee hereby requests Lessor to purchase the personal property
described in any Equipment Schedule hereunder (herein called "Equipment") from
supplier listed in any Equipment Schedule hereunder (herein called "Vendor"
and/or "Manufacturer", as applicable) and to lease the Equipment to Lessee on
the terms and conditions of the lease set forth below.
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
Equipment upon the following terms and conditions:
1. NO WARRANTIES BY LESSOR. Lessee has selected the Equipment and may have
entered into certain purchase, licensing, or maintenance agreements with the
Vendor and/or Manufacturer (herein referred to as an "Acquisition Agreement")
covering the Equipment as further described in Paragraph 26 hereof. If Lessee
has entered into any Acquisition Agreement, each agreement shall provide for
certain rights and obligations of the parties thereto with respect to the
Equipment, and Lessee shall perform all of the obligations set forth in each
Acquisition Agreement as if this lease did not exist. LESSOR MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING THE CONDITION OF THE
EQUIPMENT, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, AND,
AS TO LESSOR, LESSEE LEASES THE EQUIPMENT "AS IS." LESSOR SHALL HAVE NO
LIABILITY FOR ANY LOSS, DAMAGE OR EXPENSE OF ANY KIND WHATSOEVER RELATING
THERETO, INCLUDING WITHOUT LIMITATION ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY CHARACTER.
2. CLAIMS AGAINST VENDOR AND/OR MANUFACTURER. If the Equipment is not properly
installed, does not operate as represented or warranted by Vendor and/or
Manufacturer, or is unsatisfactory for any reason, Lessee shall make any claim
on account thereof solely against Vendor and/or Manufacturer pursuant to the
Acquisition Agreement, if any, and shall, nevertheless, pay Lessor all rent
payable under this lease. All warranties from Vendor and/or Manufacturer are, to
the extent they are assignable, hereby assigned to Lessee for the term of this
lease or until an Event of Default occurs hereunder, for Lessee's exercise at
Lessee's expense. Lessee may directly inquire with Vendor and/or Manufacturer to
receive an accurate and complete statement of such warranties, including any
disclaimers or limitations of such warranties or of any remedies with respect
thereto.
3. VENDOR NOT AN AGENT. Lessee understands and agrees that neither Vendor, nor
any sales representative or other agent of Vendor, is an agent of Lessor. Sales
representatives or agents of Vendor, and persons that are not employed by Lessor
(including brokers and agents) are not authorized to waive or alter any term or
condition of this lease, and no representation as to the Equipment or any other
matter by Vendor or any other person that is not employed by Lessor (including
brokers and agents) shall in any way affect Lessee's duty to pay the rent and
perform its other obligations as set forth in this lease.
4. NON-CANCELLABLE LEASE. This lease and any Equipment Schedule hereto cannot be
cancelled or terminated except as expressly provided herein. Lessee agrees that
its obligation to pay all rent and other sums payable hereunder and the rights
of Lessor in and to such rent are absolute and unconditional and are not subject
to any abatement, reduction, setoff, defense, counterclaim or recoupment due or
alleged to be due to, or by reason of, any past, present or future claims which
Lessee may have against Lessor, any assignee, any Manufacturer or Vendor, or
against any person for any reason whatsoever.
5. ORDERING EQUIPMENT. Lessee shall arrange for delivery of the Equipment so
that it can be accepted in accordance with Paragraph 6 hereof within 90 days
after the date on which Lessor accepts Lessee's offer to enter into this lease
with respect to any Equipment Schedule or by such other date as may be set forth
in an Equipment Schedule or Approval Letter issued by lessor as the Approval
Expiration Date. Unless otherwise specified on the Equipment Schedule, Lessee
shall be responsible for all transportation, packing, installation, testing and
other charges in connection with the delivery, installation and use of the
Equipment. Lessee hereby authorizes Lessor to insert in any Equipment Schedule
hereunder the serial numbers and other identification data of Equipment when
determined by Lessor.
6. ACCEPTANCE. Lessee acknowledges that for purposes of receiving or accepting
the Equipment from Vendor, Lessee is acting on Lessor's behalf. Upon delivery of
the Equipment to Lessee and Lessee's inspection thereof, Lessee shall furnish
Lessor a written statement (a) acknowledging receipt of the Equipment in good
condition and repair and (b) accepting it as satisfactory in all respects for
the purposes of this lease (the "Certificate of Acceptance"). The date of
receipt and acceptance of the Equipment covered by an Equipment Schedule (or any
later date that Lessor chooses) shall be the Rent Commencement Date therefor.
Lessor is authorized to fill in on any Equipment Schedule hereunder the Rent
Commencement Date in accordance with the foregoing.
7. TERMINATION BY LESSOR. If, by the Approval Expiration Date, the Equipment
described in any Equipment Schedule has not been delivered to Lessee and
accepted by Lessee as provided in Paragraph 6 hereof, or if other conditions of
Lessor's Approval Letter, if any, have not been met, then Lessor may, at its
option, terminate this lease and its obligations hereunder with respect to such
Equipment Schedule at any time after the expiration of such 90 days or any date
after the Approval Expiration Date, as applicable. Lessor shall give Lessee
written notice whether or not it elects to exercise such option with 10 days
after Lessor's receipt of Lessee's written request for such notice.
8. TERM. The term of this lease commences upon the Rent Commencement Date, as
provided in Paragraph 9 below. The term shall continue until all of Lessee's
obligations are fulfilled hereunder. The Initial Term with respect to any
Equipment Schedule begins on the Rent commencement Date for such Equipment
Schedule (as defined in Paragraph 6) and expires after the later of (i) the
number of periods for which the rent payments are due, or (ii) the date Lessee
fulfills all Lessee's obligations hereunder.
9. RENTAL. Lessee shall pay the rent payments as stated on each Equipment
Schedule, the first of which shall be due on the Rent Commencement Date for said
Equipment Schedule, and subsequent payments shall be due on the same day of each
calendar period as indicated on the Equipment Schedule for the balance of the
Initial Term. Rent payments shall be due whether or not Lessee has received any
notice that such payments are due. All rent payments shall be paid to Lessor at
its address set forth on the Equipment Schedule or as otherwise directed by
Lessor in writing.
10. RENEWAL. If no default shall have occurred and be continuing, Lessee shall
be entitled to renew this lease with respect to all, but not less than all, of
the Equipment covered by an Equipment Schedule for a minimum 12 month period at
an amount equal to the fair market rental value thereof, in use and operational,
in the condition required by this lease, payable on a periodic basis, as
mutually agreed by Lessor and Lessee ("Renewal Rent"). Lessee must give Lessor
written notice of its intention to exercise said option, which notice must be
received by Lessor at least 90 days before expiration of the Initial Term. The
first installment of the Renewal Rent shall be due at expiration of the Initial
Term of this lease. Should Lessee fail to comply with the provisions described
above covering renewal, upon expiration of the Initial Term, the term of this
lease shall be automatically extended for a term of 3 months. Thereafter, the
term of this lease will be extended for subsequent full month periods, on a
month to month basis, until Lessee has given at least 90 days written notice
terminating this lease. Such termination will take effect upon completion of all
Lessee's obligations under this lease (including payment of all periodic rental
payments due during such 90 day period, as provided in Paragraph 9 of this
lease). At any time after the expiration of the Initial Term, if this lease has
been automatically extended as set forth herein, Lessor reserves the right to
terminate this lease by 30 days written notice to Lessee.
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11. LOCATION; INSPECTION; LABELS. The Equipment shall be delivered to and shall
not be removed without Lessor's prior written consent from the "Equipment
Location" shown on the related Equipment Schedule, or if none is specified,
Lessee's billing address shown on the Equipment Schedule. Lessor shall have the
right to inspect the Equipment at any reasonable time. If Lessor supplies
Lessee with labels stating that the Equipment is owned by Lessor, Lessee shall
affix such labels to and keep them in a prominent place on the Equipment.
12. REPAIRS; USE; ALTERATIONS. Lessee, at its own cost and expense, shall keep
the Equipment in good repair and working order, in the same condition as when
delivered to Lessee, reasonable wear and tear excepted, and in accordance with
the manufacturer's recommended specifications; shall use the Equipment
lawfully; shall not alter the Equipment without Lessor's prior written consent;
shall use the Equipment in compliance with any existing Manufacturer's service
and warranty requirements and any insurance policies applicable to the
Equipment and shall furnish all parts and servicing required therefor. All
parts, repairs, additions, alterations and attachments placed on or
incorporated into the Equipment which cannot be removed without damage to the
Equipment shall immediately become part of the Equipment and shall be the
property of the Lessor. Lessee will obtain and maintain all permits, licenses
and registrations necessary to lawfully operate the facility where the
Equipment is located. Lessee shall comply with all applicable environmental and
industrial hygiene laws, rules and regulations (including but not limited to
federal, state, and local environmental protection, occupational, health and
safety or similar laws, ordinances and restrictions). Lessee shall, not later
than 5 days after the occurrence, provide Lessor with copies of any report
required to be filed with governmental agencies regulating environmental
claims. Lessee shall immediately notify Lessor in writing of any existing,
pending or threatened investigation, inquiry, claim or action by any
governmental authority in connection with any law, rule or regulation relating
to industrial hygiene or environmental conditions that could affect the
Equipment.
13. MAINTENANCE. If the Equipment is such that Lessee is not normally capable
of maintaining it, Lessee, at its expense, shall enter into and maintain in
full force and effect throughout the Initial Term, and any renewal term, Vendor
and/or Manufacturer's standard maintenance contract, and shall comply with all
its obligations thereunder. An alternate source of maintenance may be used with
Lessor's prior written consent. Such consent shall be granted if, in Lessor's
reasonable opinion, the Equipment will be maintained in an equivalent state of
good repair, condition and working order.
14. SURRENDER. Provided that Lessee does not exercise the purchase option as
set forth in Paragraph 28 hereof, upon the expiration of the Initial Term, or
any renewal term, or upon demand by Lessor made pursuant to Paragraph 22 of
this lease, Lessee, at its expense, shall return all, but not less than all, of
the Equipment by delivering it to such place or on board such carrier, packed
for shipping, as Lessor may specify. Lessee agrees that the Equipment, when
returned, shall be in the same condition as when delivered to Lessee,
reasonable wear and tear excepted, and in a condition which will permit Lessor
to be eligible for Manufacturer's standard maintenance contract without
incurring any expense to repair or rehabilitate such Equipment. Lessee shall be
liable for reasonable and necessary expenses to place the Equipment in such
condition. Lessee shall remain liable for the condition of the Equipment until
it is received and accepted at the destination designated by Lessor as set
forth above. If any items of Equipment are missing or damaged when returned,
such occurrence shall be treated as an event of Loss or Damage with respect to
such missing or damaged items and shall be subject to the terms specified in
Paragraph 15 below. Lessee shall provide Lessor with a Letter of
Maintainability from the Manufacturer of the Equipment, which letter shall
state that the Equipment will be eligible for the Manufacturer's standard
maintenance contract when sold or leased to a third party. Lessee shall give
Lessor prior written notice that it is returning the Equipment as provided
above, and such notice must be received by Lessor at least 90 days prior to
such return. Should Lessee fail to comply with the provisions described above
covering surrender, upon expiration of the Initial Term, the term of this lease
shall be automatically extended for a term of 3 months. Thereafter, the term of
this lease will be extended for subsequent full month periods, on a month to
month basis, until Lessee has given at least 90 days written notice terminating
this lease. Such termination will take effect upon completion of all Lessee's
obligations under this lease (including payment of all periodic rental payments
due during such 90 day period, as provided in Paragraph 9 of this lease). At
any time alter the expiration of the Initial Term, if this lease has been
automatically extended as set forth herein. Lessor reserves the right to
terminate this lease by 30 days written notice to Lessee.
15. LOSS OR DAMAGE. Lessee shall bear the entire risk of loss, theft,
destruction of or damage to the Equipment or any item thereof (herein "Loss or
Damage") from any cause whatsoever. No Loss or Damage shall relieve Lessee of
the obligation to pay rent or of any other obligation under this lease. In the
event of Loss or Damage, Lessee, at the option of Lessor, shall; (a) place the
same in good condition and repair; (b) replace the same with like equipment
acceptable to Lessor in good condition and repair with clear title thereto in
Lessor; or (c) pay to Lessor the total of the following amounts; (i) the total
rent and other amounts due and owing at the time of such payments, plus (ii) an
amount calculated by Lessor which is the present value at 5% per annum simple
interest discount of all rent and other amounts payable by Lessee with respect
to said item from date of such payment to date of expiration of its Initial
Term, plus (iii) the "reversionary value" of the Equipment, which shall be
determined by Lessor as the total cost of the Equipment less 60% of the total
rent (net of sales/use taxes, if any) required to be paid pursuant to Paragraph
9. Upon Lessor's receipt of such payment, Lessee and/or Lessee's insurer shall
be entitled to Lessor's interest in said item, for salvage purposes, in its
then condition and location, "as-is", without any warranty, express or implied.
16. INSURANCE. Lessee shall provide, maintain and pay for (a) all risk property
insurance against the loss or theft of or damage to the Equipment, for the full
replacement value thereof, naming Lessor as a loss payee, and (b) commercial
general liability insurance (and if Lessee is a doctor, hospital or other
health care provider, medical malpractice insurance). All such policies shall
name Lessor as an additional insured and shall have combined single limits in
amounts acceptable to Lessor. All such insurance policies shall be endorsed to
be primary and non-contributory to any policies maintained by Lessor. In
addition Lessee shall cause Lessor to be named as an additional insured on any
excess or umbrella policies purchased by Lessee. A copy of each paid-up policy
evidencing such insurance (appropriately authenticated by the insurer) or a
certificate of the insurer providing such coverage proving that such policies
have been issued, providing the coverage required hereunder shall be delivered
to Lessor prior to the Rent Commencement Date. All insurance shall be placed
with companies satisfactory to Lessor and shall contain the insurer's agreement
to give 30 days written notice to Lessor before cancellation or any material
change of any policy of insurance.
17. TAXES. Lessee shall reimburse to Lessor (or pay directly if, but only if,
instructed by Lessor) all charges and taxes (local, state and federal) which
may now or hereafter be imposed or levied upon the sale, purchase, ownership,
leasing, possession or use of the Equipment, excluding, however, all income
taxes levied on (a) any rental payments made to Lessor hereunder, (b) any
payment made to Lessor in connection with Loss or Damage to the Equipment under
Paragraph 15 hereof, or (c) any payment made to Lessor in connection with
Lessee's exercise of its purchase option under Paragraph 28 hereof.
18. LESSOR'S PAYMENT. If Lessee fails to provide or maintain said insurance, to
pay said taxes, charges and fees, or to discharge any levies, liens and
encumbrances created by Lessee, Lessor shall have the right, but shall not be
obligated, to obtain such insurance, pay such taxes, charges and fees, or
effect such discharge. In that event, Lessee shall remit to Lessor the cost
thereof with the next rent payment.
19. INDEMNITY. (a) General Indemnity. Lessee shall indemnify Lessor against and
hold Lessor harmless from any and all claims, actions, damages, costs, expenses
including reasonable attorneys' fees, obligations, liabilities and liens
(including any of the foregoing arising or imposed under the doctrines of
"strict liability" or "product liability" and including without limitation the
cost of any fines, remedial action, damage to the environment and cleanup and
the fees and costs of consultants and experts), arising out of the manufacture,
purchase, lease, ownership, possession, operation, condition, return or use of
the Equipment, or by operation of law, excluding however, any of the foregoing
resulting from the gross negligence or willful misconduct of Lessor. Lessee
agrees that upon written notice by Lessor of the assertion of such a claim
action, damage, obligation, liability or lien, Lessee shall assume full
responsibility for the defense thereof. Lessee's choice of counsel shall be
mutually acceptable to both Lessee and Lessor. This indemnity also extends to
any environmental claims arising out of or relating to prior acts or omissions
of any party whatsoever. The provisions of this paragraph shall survive
termination of this lease with respect to events occurring prior to such
termination. (b) Tax Indemnity. Lessee acknowledges that Lessor shall be
entitled to all tax benefits of ownership with respect to the Equipment (the
"Tax Benefits"), including but not limited to, (i) the accelerated cost recovery
deductions determined in accordance with Section 168(b)(1) of the Internal
Revenue Code of 1986 for the Equipment based on the original cost of the
Equipment to Lessor (ii) deductions for interest on any indebtedness incurred by
Lessor to finance the Equipment and (iii) sourcing of income and losses
attributable to this lease to the United States. Lessee represents that the
Equipment shall be depreciable for Federal tax purposes utilizing the MACRS
Recovery Period as set forth in the Equipment Schedule, with such depreciation
commencing as of the date of Equipment acceptance by Lessee as set forth on the
Certificate of Acceptance. Lessee agrees to take no action inconsistent with the
foregoing or any action which would result in the loss, disallowance or
unavailability to Lessor of all or any part of the Tax Benefits. Lessee hereby
indemnifies and holds harmless Lessor and its assigns from and against (i) the
loss, disallowance, unavailability or recapture of all or any part of the Tax
Benefits resulting from any action, statement, misrepresentation or breach of
warranty or covenant by Lessee of any nature whatsoever including but not
limited to the breach of any representations, warranties or covenants contained
in this paragraph, plus (ii) all interest, penalties, fines or additions to tax
resulting from such loss, disallowance, unavailability or recapture, plus
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(iii) all taxes required to be paid by Lessor upon receipt of the indemnity set
forth in this paragraph. Any payments made by Lessee to reimburse Lessor for
lost Tax Benefits shall be calculated (i) on the assumption that Lessor is
subject to the maximum Federal Corporate Income Tax with respect to each year
and that all Tax Benefits are currently utilized, and (ii) without regard to
whether Lessor or any members of a consolidated group of which Lessor is also a
member is then subject to any increase in tax as a result of the loss of Tax
Benefits. For the purposes of this paragraph, "Lessor" includes for all tax
purposes the consolidated taxpayer group of which Lessor is a part.
(c) Payment. The amounts payable pursuant to this Paragraph 19 shall be payable
upon demand of Lessor, accompanied by a statement describing in reasonable
detail such claim, action, damage, cost, expense, fee, obligation, liability,
lien or tax and setting forth the computation of the amount so payable, which
computation shall be binding and conclusive upon Lessee, absent manifest error.
The indemnities and assumptions of liabilities and obligations contained in this
Paragraph 19 shall continue in full force and effect notwithstanding the
expiration or other termination of this Lease.
20. ASSIGNMENT. Without Lessor's prior written consent, Lessee shall not assign,
transfer, pledge, hypothecate or otherwise dispose of this lease, the Equipment,
or any interest therein. Without Lessor's prior written consent, Lessee shall
not sublet or lend the Equipment or permit it to be used by anyone other than
Lessee or Lessee's employees. Lessor may assign this lease in whole or in part
without notice to Lessee. If Lessee is given notice of such assignment it agrees
to acknowledge receipt thereof in writing. Each such assignee shall have all of
the rights, but none of the obligations, of Lessor under this lease. Lessee
shall not assert against assignee any defense, counterclaim or offset that
Lessee may have against Lessor. Notwithstanding any such assignment, Lessor
warrants that Lessee shall quietly enjoy use of the Equipment subject to the
terms and conditions of this lease so long as Lessee is not in default
hereunder. Subject to the forgoing, this lease inures to the benefit of and is
binding upon the successors and assigns of the parties hereto.
21. DELINQUENT PAYMENTS. (a) Service Charge. Since it would be impractical or
extremely difficult to fix Lessor's actual damages for collecting and accounting
for a late payment, if any payment to Lessor required herein (including, but not
limited to, rental, renewal, tax, purchase and other amounts) is not paid on or
before its due date, Lessee shall pay to Lessor an amount equal to 5% of any
such late payment. (b) Interest. Lessee shall also pay interest on any such late
payment from the due date thereof until the date paid at the lesser of 18% per
annum or the maximum rate allowed by law.
22. DEFAULT; REMEDIES. Any of the following shall constitute an Event of
Default: If a) Lessee fails to pay when due any rent or other amount required
herein to be paid by Lessee, or b) Lessee makes an assignment for the benefit of
creditors, whether voluntary or involuntary, or c) a petition is filed by or
against Lessee under any bankruptcy, insolvency or similar legislation , or d)
Lessee violates or fails to perform any provision of either this lease or any
Acquisition Agreement, or violates or fails to perform any covenant or
representation made by Lessee herein, or e) Lessee makes a bulk transfer of
furniture, furnishings, fixtures or other equipment or inventory, or f) Lessee
ceases doing business as a going concern or terminates its existence, or g)
Lessee consolidates with, merges with or into, or conveys or leases all or
substantially all of its assets as an entirety to any person or engages in any
other form of reorganization, or there is a change in the legal structure of
Lessee, in each case which results, in the opinion of Lessor, in a material
adverse change in Lessee's ability to perform its obligations under this lease,
or h) any representation or warranty made by Lessee in this lease or in any
other document or agreement furnished by Lessee to Lessor shall prove to have
been false or misleading in any material respect when made or when deemed to
have been made, or i) Lessee shall be in default under any material obligation
for the payment of borrowed money or the deferred purchase price of, or for the
payment of any rent due with respect to, any real or personal property, or j)
Lessee shall be in default under any other agreement now existing or hereafter
made with Lessor or any of Lessor's affiliates, or k) any event or condition
described in the foregoing clauses (b), (c), (e), (f), (g), (h) (in clauses (g)
and (h) substituting the phrase "guaranty or other credit support document" for
the word "lease"), (i) or (j) shall have occurred with respect to any guarantor
of, or other party liable in whole or in part for, Lessee's obligations
hereunder, or such guarantor or other party shall have defaulted in the
observance or performance of any covenant, condition or agreement to be observed
or performed by it under the guaranty or other credit support document pursuant
to which it is liable for Lessee's obligations hereunder, or such guaranty or
other credit support document shall have been revoked or terminated or shall
have otherwise ceased, for any reason, to be in full force and effect. An Event
of Default with respect to any Equipment Schedule shall constitute an Event of
Default for all Equipment Schedules. Lessee shall promptly notify Lessor of the
occurrence of any Event of Default.
If an Event of Default occurs, Lessor shall have the right to exercise any
one or more of the following remedies in order to protect the interests and
reasonably expected profits and bargains of Lessor: a) Lessor may terminate this
lease with respect to all or any part of the Equipment, b) Lessor may recover
from Lessee all rent and other amounts then due and as they shall thereafter
become due hereunder, c) Lessor may take possession of any or all items of
Equipment, wherever the same may be located, without demand or notice, without
any court order or other process of law and without liability to Lessee for any
damages occasioned by such taking of possession, and any such taking of
possession shall not constitute a termination of this lease, d) Lessor may
recover from Lessee, with respect to any and all items of Equipment, and with or
without repossessing the Equipment the sum of (1) the total amount due and owing
to Lessor at the time of such default, plus (2) an amount calculated by Lessor
which is the present value at 5% per annum simple interest discount of all rent
and other amounts payable by Lessee with respect to said item(s) from date of
such payment to date of expiration of its Initial Term, plus (3) the
"reversionary value" of the Equipment, which shall be determined by Lessor as
the total cost of the Equipment less 60% of the total rent (net of sales/use
taxes, if any) required to be paid pursuant to Paragraph 9; and which the
parties agree is a reasonable estimate of such value; and upon the payment of
all amounts described in clauses (1), (2) and (3) above, Lessee will become
entitled to the Equipment AS IS, WHERE IS, without warranty whatsoever;
provided, however, that if Lessor has repossessed or accepted the surrender of
the Equipment, Lessor shall sell, lease or otherwise dispose of the Equipment in
a commercially reasonable manner, with or without notice and on public or
private bid, and apply the net proceeds thereof (after deducting all expenses,
including attorneys' fees incurred in connection therewith), to the sum of (1),
(2) and (3) above, and e) Lessor may pursue any other remedy available at law or
in equity, including but not limited to seeking damages or specific performance
and/or obtaining an injunction.
No right or remedy herein conferred upon or reserved to Lessor is exclusive
of any right or remedy herein or by law or equity provided or permitted; but
each shall be cumulative of every other right or remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise, and may be
enforced concurrently therewith or from time to time, but Lessor shall not be
entitled to recover a greater amount in damages than Lessor could have gained by
receipt of Lessee's full, timely and complete performance of its obligations
pursuant to the terms of this lease plus accrued delinquent payments under
Paragraph 21.
23. LESSOR'S EXPENSE. Lessee shall pay Lessor all costs and expenses,
including attorneys' fees and the fees of collection agencies, incurred by
Lessor in enforcing any of the terms, conditions, or provisions hereof or in
protecting Lessor's rights herein. Lessee's obligation hereunder includes all
such costs and expenses expended by Lessor (a) prior to filing of an action,
(b) in connection with an action which is dismissed, and (c) in the enforcement
of any judgment. Lessee's obligation to pay Lessor's attorneys' fees incurred in
enforcing any judgment is a separate obligation of Lessee, severable from
Lessee's other obligations hereunder, which obligation will survive such
judgment and will not be deemed to have been merged into such judgment.
24. OWNERSHIP, PERSONAL PROPERTY. The Equipment shall at all times remain the
property of Lessor and Lessee shall have no right, title or interest therein or
thereto except as expressly set forth in this lease and the Equipment shall at
all times be and remain personal property notwithstanding that the Equipment
or any part thereof may now be, or hereafter become, in any manner, affixed or
attached to real property or any improvements thereon.
25. NOTICES. Service of all notices under this lease shall be sufficient if
given personally or mailed to the respective party at its address set forth on
any Equipment Schedule, or at such address as either party may provide in
writing from time to time. Any such notice mailed to said address shall be
effective when deposited in the United States mail, duly addressed and with
postage prepaid.
26. ACQUISITION AGREEMENTS. If the Equipment is subject to any Acquisition
Agreement, Lessee, as part of this lease, transfers and assigns to Lessor all
of its rights, but none of its obligations (except for Lessee's obligation to
pay for the Equipment conditioned upon Lessee's acceptance in accordance with
Paragraph 6), in and to the Acquisition Agreement, including but not limited to
the right to take title to the Equipment. Lessee shall indemnify and hold
Lessor harmless in accordance with Paragraph 19 from any liability resulting
from any Acquisition Agreement as well as liabilities resulting from any
Acquisition Agreement Lessor is required to enter into on behalf of Lessee or
with Lessee for purposes of this lease.
27. UPGRADES. Any existing lease between Lessor and Lessee subject to an
"upgrade" program shall continue in full force and effect and shall be kept
free of default by Lessee (even if the Equipment covered by the existing lease
is sold, traded-in, etc.) until any such existing lease is cancelled by Lessor
when, if applicable, the new Equipment is accepted by Lessee for all purposes
of this lease.
28. PURCHASE OPTION. If no default shall have occurred and be continuing,
Lessee shall be entitled, as its option upon written notice to Lessor, which
notice must be received by Lessor at least 90 days prior to the end of either
the Initial Term or any renewal term of any Equipment Schedule, to purchase
all, but not less than all, of the Equipment covered by such Equipment Schedule
from Lessor at the end of the Initial Term or any renewal term for such
<PAGE> 4
Equipment Schedule at a purchase price equal to the then fair market value of
the Equipment in use and operational, in the condition required by this lease,
as mutually agreed by Lessor and Lessee. On a date which is no later than the
expiration date of the Initial Term or any renewal term, as applicable, Lessee
shall pay to Lessor the purchase price for the Equipment covered by such
Equipment Schedule (plus any taxes levied thereon) and Lessor shall sell the
Equipment "as-is where-is" without any warranties express or implied.
29. RELATED EQUIPMENT SCHEDULES. In the event that any Equipment Schedule
hereunder shall include Equipment that may become attached to, affixed to, or
used in connection with Equipment covered under another Equipment Schedule
hereunder ("Related Equipment Schedule"), Lessee acknowledges the following:
(a) if Lessee elects to exercise a purchase option or renewal option under any
Equipment Schedule, if provided; or (b) if Lessee elects to return the
Equipment under any Equipment Schedule as described in Paragraph 14, then
Lessor, at its discretion, may require the similar disposition of all Related
Equipment Schedules as provided for by this lease.
30. MISCELLANEOUS. This instrument and any Approval Letter issued by Lessor
and any Equipment Schedule hereunder constitutes the entire agreement between
Lessor and Lessee, and shall not be amended, altered or changed except by a
written agreement signed by the parties hereto, and in the case of Lessor, such
agreement shall not be valid unless executed by Lessor at Lessor's home office.
To the extent any provision of this lease may be determined to be invalid or
unenforceable, it shall be ineffective without affecting the other provisions of
this lease. To the extent permitted by applicable law, Lessee hereby waives any
provisions of law which render any provision of this lease unenforceable in any
respect. Unless specified otherwise, in the event such written agreement is
attached to and made a part of an Equipment Schedule, the terms and conditions
of said written agreement shall apply only to said Equipment Schedule and shall
not apply to any other Equipment Schedule made a part of this lease. In the
event Lessee issues a purchase order to Lessor covering Equipment to be leased
hereunder, it is agreed that such purchase order is issued for purposes of
authorization and Lessee's internal use only, and none of its terms and
conditions shall modify the terms and conditions of this lease and/or related
documentation, or affect Lessor's responsibility to Lessee as defined in this
lease. An executed Equipment Schedule that incorporates by reference the terms
of this Master Lease Agreement, marked "Original," shall be the original of this
lease for the Equipment described therein for all purposes. All other executed
counterparts of this lease shall be marked "Duplicate." To the extent this lease
constitutes chattel paper, as such term is defined in the Uniform Commercial
Code of the applicable jurisdiction, no security interest in this lease may be
created through the transfer of possession of any counterpart other than the
Original of this lease. Lessor reserves the right to charge Lessee fees for its
provision of additional administrative services related to this lease requested
by Lessee. Lessee shall provide Lessor with such corporate resolutions, opinions
of counsel, financial statements, and other documents (including documents for
filing or recording) as Lessor may request from time to time. LESSEE REPRESENTS
AND WARRANTS THAT ALL CREDIT AND FINANCIAL INFORMATION SUBMITTED TO LESSOR
HEREWITH OR AT ANY OTHER TIME IS TRUE AND CORRECT. LESSEE HEREBY APPOINTS LESSOR
OR ITS ASSIGNEE ITS TRUE AND LAWFUL ATTORNEY IN FACT TO EXECUTE ON BEHALF OF
LESSEE ALL UNIFORM COMMERCIAL CODE FINANCING STATEMENTS OR OTHER DOCUMENTS
WHICH, IN LESSOR'S DETERMINATION, ARE NECESSARY TO SECURE LESSOR'S INTEREST IN
SAID EQUIPMENT. The filing of UCC Financing Statements is precautionary and
shall not be evidence that this lease is intended as security. If for any reason
this agreement is determined not to be a lease, Lessee hereby grants Lessor a
security interest in this lease, the Equipment or collateral pertaining thereto
and the proceeds thereof, including re-lease, sale or disposition of the
Equipment or other collateral. If more than one Lessee is named in this lease,
the liability of each shall be joint and several. Time is of the essence with
respect to this lease. Lessee represents and warrants that the Equipment is
being leased hereunder for business purposes. The descriptive headings which are
used in this lease are for convenience of the parties only and shall not affect
the meaning of any provision of this lease. Any failure of the Lessor to require
strict performance by the Lessee or any waiver by Lessor of any provision herein
shall not be construed as a consent or waiver of any other breach of the same or
of any other provision. This agreement shall be governed by the laws of the
state of California (without giving effect to principles of conflicts of law
thereof).
31. LESSEE'S REPRESENTATIONS; WAIVER OF JURY TRIAL. Lessee represents and
warrants, as of the date of this lease: (a) Lessee is duly organized, validly
existing and in good standing under the laws of the state of its incorporation
or organization, and is duly qualified to do business wherever necessary to
carry on its present business and operations and to own its property; (b) this
lease (and any Equipment Schedule entered into pursuant to this lease) has been
duly authorized by all necessary action on the part of Lessee, duly executed
and delivered by authorized officers or agents of Lessee, does not require any
further shareholder or partner approval, does not require the approval of, or
the giving notice to, any federal, state, local or foreign governmental
authority, does not contravene any law binding on Lessee or contravene any
certificate or articles of incorporation or by-laws or partnership certificate
or agreement, or any agreement, indenture or other instruments to which Lessee
is a party or by which it or any of its assets or property may be bound; (c)
this lease (and any Equipment Schedule entered into pursuant to this lease)
constitutes the legal, valid and binding obligation of Lessee and is
enforceable in accordance with its terms; (d) all credit and financial
information, and all other information submitted to Lessor at any time is true
and correct, and there does not exist any pending or threatened action or
proceeding before any court or administrative agency which might materially
adversely affect Lessee's financial condition or operations; (e) Lessee agrees
to furnish to Lessor(i) as soon as available, and in any event within 120 days
after the last day of each fiscal year of Lessee, a copy of the financial
statements of Lessee as of the end of such fiscal year, certified by an
independent certified public accounting firm; (ii) as soon as available, and in
any event within 60 days after the last day of each quarter of Lessee's fiscal
year, a copy of quarterly financial statements certified by the principal
financial officer of Lessee; and (iii) such additional information concerning
Lessee as Lessor may reasonably request. LESSEE AND LESSOR HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS LEASE OR ANY OTHER
AGREEMENT EXECUTED IN CONNECTION HEREWITH.
32. GOOD FAITH DEPOSIT REQUIREMENT. Lessee agrees, with respect to each
transaction, to pay the Good Faith Deposit specified in Lessor's proposal for
such transaction or in the Equipment Schedule related thereto. This Good Faith
Deposit is given in consideration for Lessor's costs and expenses in
investigating and appraising and/or establishing credit for Lessee. This Good
Faith Deposit shall not be refunded unless Lessor declines to accept Lessee's
offer to enter into this lease. Upon lessor's acceptance of Lessee's offer to
enter into this lease, unless otherwise specified in the proposal or Equipment
Schedule, the amount shall be applied to the first period's rent payment.
Lessee acknowledges that Leessor's act of depositing any Good Faith Deposit
into Lessor's bank account shall not in itself constitute Lessor's acceptance
of Lessee's offer to enter into this lease.
IN WITNESS WHEREOF, the parties have executed this Master Lease Agreement
effective as of the first date it is executed by Lessee below.
Mellon US Leasing, a Division of Mellon Leasing Corporation (LESSOR)
Name
--------------------------------------
Title
-------------------------------------
HOME OFFICE: 525 MARKET STREET, Suite 3500
SAN FRANCISCO, CA 94105-2743 (415) 538-7100
Nanogen, Inc.
-------------------------(LESSEE) TITLE DATE
By PRESIDENT
x /s/ [SIG] AND COO 11/7/97
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By
X
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------------------------(CO-LESSEE) TITLE DATE
By
X
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<PAGE> 5
EQUIPMENT SCHEDULE DATED AS OF 10/31/97
TO AND INCORPORATING BY REFERENCE
MASTER LEASE AGREEMENT DATED AS OF 10/31/97
LESSOR LESSEE
Mellon US Leasing, a Division of Nanogen, Inc.
Mellon Leasing Corp. 10398 Pacific Center Court
525 Market Street, Suite 350 San Diego, CA 92121
San Francisco, CA 94105-2743
This Equipment Schedule (this "Schedule") is executed pursuant to, and
incorporates by this reference, all the terms and conditions of the Master
Lease Agreement identified above (the "Agreement"). This Schedule, together with
the Agreement, constitutes a separate instrument of lease (the "Lease"). By
their execution of this Schedule, the parties reaffirm all terms and conditions
of the Agreement except as they may be modified hereby.
<TABLE>
<CAPTION>
TOTAL TRANSACTION COST: APPROX. $1.5M EQUIPMENT: AS SET FORTH ON THE EXHIBIT A ATTACHED HERETO
<S> <C> <C> <C> <C>
# OF RENT INITIAL TERM EQUIPMENT LOCATION (ADDRESS, CITY, STATE, ZIP CODE)
PAYMENTS RENTAL AMOUNT FREQUENCY (MONTHS) Same as Above
36 2.71229% monthly 36
or
36 3.21517% monthly 36 X IN CITY LIMITS NOT IN CITY LIMITS COUNTY
softcosts ---- ---- ----
EQUIPMENT CONTACT
VENDOR NAME and ADDRESS NAME: Chris Pyle
PHONE: (619) 546-7700 x 137
various
INVOICING ADDRESS
VENDOR CONTACT Same as Above
NAME:
PHONE:
INVOICE CONTACT
MACRS RECOVER PERIOD 5 YEARS
- NAME: Chris Pyle
PHONE: (619) 546-7700 x 137
LESSEE REFERENCE NUMBER:
SPECIAL TERMS: THE TERMS AND CONDITIONS OF THE AGREEMENT ARE HEREBY MODIFIED FOR THIS SCHEDULE AS FOLLOWS:
WE CERTIFY THAT THE EQUIPMENT DESCRIBED IN THAT ATTACHED EXHIBIT "A" HAS BEEN INSTALLED, OPERATES PROPERLY, AND IS, THEREFORE,
ACCEPTED FOR PURPOSES OF THE LEASE. WE REQUEST THAT LESSOR PAY THE VENDOR FOR THE EQUIPMENT AND WE UNDERSTAND THAT RENTAL PAYMENTS
WILL COMMENCE.
ATTACHMENTS: IN ADDITION TO EXHIBIT A, THE FOLLOWING EXHIBITS ARE ATTACHED HERETO AND INCORPORATED HEREIN
Exhibit B, S and X
IN WITNESS WHEREOF, the parties have executed this Equipment Schedule effective as of the date first set forth above.
Mellon US Leasing, a Division of Mellon Leasing Corp. (LESSOR) LESSEE SIGNATURE TITLE DATE
BY BY
X X [SIG] President & C.O.O. 11/7/97
-------------------------------------------------------------- -----------------------------------------------------------------
TITLE BUSINESS UNIT BY
X X
-------------------------------------------------------------- -----------------------------------------------------------------
HOME OFFICE; 525 MARKET STREET, SUITE 3500 CO-LESSEE SIGNATURE TITLE DATE
SAN FRANCISCO, CA 94105-2743 BY
Not valid unless executed by Lessor at Lessor's home office X
------------------------------------------------------------------
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INTERNAL USE COMMITMENT DATE RENT COMMENCEMENT DATE BILLING ACCOUNT NO. LEASE NO.
ONLY
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</TABLE>
LMS-147 Rev. 03/97