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Exhibit 10.2
Customer No. 1133
MASTER LEASE AGREEMENT
Lessor: TRANSAMERICA BUSINESS CREDIT CORPORATION
RIVERWAY II
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Lessee: MILLENNIUM PHARMACEUTICALS, INC.
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The lessor pursuant to this Master Lease Agreement ("Agreement") dated as of
June 17, 1998, is Transamerica Business Credit Corporation ("Lessor"). All
equipment and leasehold improvements, together with all present and future
additions, parts, accessories, attachments, substitutions, repairs,
improvements, and replacements thereof or thereto, which are the subject of a
Lease (as defined in the next sentence) shall be referred to as "Equipment."
Simultaneous with the execution and delivery of this Agreement, the parties are
entering into, and subsequently may enter into one or more Lease Schedules
(each, a "Schedule") which refer to and incorporate by reference this Agreement,
each of which constitutes a lease (each, a "Lease") for the Equipment specified
therein. Additional details pertaining to each Lease are specified in the
applicable Schedule. Each Schedule that the parties hereafter enter into shall
constitute a Lease. Lessor has no obligation to enter into any additional leases
with, or extend any future financing to, Lessee.
1. LEASE. Subject to and upon all of the terms and conditions of this
Agreement and each Schedule, Lessor hereby agrees to lease to Lessee and Lessee
hereby agrees to lease from Lessor the Equipment for the Term (as defined in
Paragraph 2 below) thereof. The timing and financial scope of Lessor's
obligation to enter into Leases hereunder are limited as set forth in the
Commitment Letter executed by Lessor and Lessee, dated as of May 7, 1998 and
attached hereto as Exhibit A (the "Commitment Letter").
2. TERM. Each Lease shall be effective and the term of each Lease ("Term")
shall commence on the commencement date specified in the applicable Schedule
and, unless sooner terminated (as hereinafter provided), shall expire at the end
of the term specified in such Schedule; provided, however, that obligations due
to be performed by Lessee during the Term shall continue until they have been
performed in full. Schedules will only be executed after the delivery of the
Equipment to Lessee or upon completion of deliveries of items of such Equipment
with aggregate cost of not less than $75,000.
3. RENT. Lessee shall pay as rent to Lessor, for use of the Equipment
during the Term or Renewal Term (as defined in Paragraph 8), rental payments
equal to the sum of all rental payments including, without limitation, security
deposits, advance rents, and interim rents payable in the amounts and on the
dates specified in the applicable Schedule ("Rent"). If any Rent or other amount
payable by Lessee is not paid within five days after the day on which it becomes
payable, Lessee will pay on demand, as a late charge, an amount equal to 5% of
such unpaid Rent or other amount but only to the extent permitted by applicable
law. All payments provided for herein shall be payable to Lessor at its address
specified above, or at any other place designated by Lessor.
4. LEASE NOT CANCELABLE; LESSEE'S OBLIGATIONS ABSOLUTE. No Lease may be
canceled or terminated except as expressly provided herein. Lessee's obligation
to pay all Rent due or to become due hereunder shall be absolute and
unconditional and shall not be subject to any delay, reduction, set-off,
defense, counterclaim, or recoupment for any reason whatsoever, including any
failure of the Equipment or any representations by the manufacturer or the
vendor thereof. If the Equipment is unsatisfactory for any reason, Lessee shall
make any claim solely against the manufacturer or the vendor thereof and shall,
nevertheless, pay Lessor all Rent payable hereunder.
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5. SELECTION AND USE OF EQUIPMENT. Lessee agrees that it shall be
responsible for the selection and use of, and results obtained from, the
Equipment and any other associated equipment or services.
6. WARRANTIES. WITH RESPECT TO THE EQUIPMENT OR LEASEHOLD IMPROVEMENTS,
LESSOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN OR CONDITION OF THE
EQUIPMENT OR ITS MERCHANTABILITY, SUITABILITY, QUALITY, OR FITNESS FOR A
PARTICULAR PURPOSE, AND HEREBY DISCLAIMS ANY SUCH WARRANTY. LESSEE SPECIFICALLY
WAIVES ALL RIGHTS TO MAKE A CLAIM AGAINST LESSOR FOR BREACH OF ANY WARRANTY
WHATSOEVER. LESSEE LEASES THE EQUIPMENT "AS IS." IN NO EVENT SHALL LESSOR HAVE
ANY LIABILITY, NOR SHALL LESSEE HAVE ANY REMEDY AGAINST LESSOR, FOR ANY
LIABILITY, CLAIM, LOSS, DAMAGE, OR EXPENSE CAUSED DIRECTLY OR INDIRECTLY BY THE
EQUIPMENT OR ANY DEFICIENCY OR DEFECT THEREOF OR THE OPERATION, MAINTENANCE, OR
REPAIR THEREOF OR ANY CONSEQUENTIAL DAMAGES AS THAT TERM IS USED IN SECTION
2-719(3) OF THE MODEL UNIFORM COMMERCIAL CODE, AS AMENDED FROM TIME TO TIME
("UCC"). Lessor grants to Lessee, for the sole purpose of prosecuting a claim,
the benefits of any and all warranties made available by the manufacturer or the
vendor of the Equipment to the extent assignable.
7. DELIVERY. Lessor hereby appoints Lessee as Lessor's agent for the sole
and limited purpose of accepting delivery of the Equipment from each vendor
thereof. Lessee shall pay any and all delivery and installation charges. Lessor
shall not be liable to Lessee for any delay in, or failure of, delivery of the
Equipment.
8. RENEWAL. So long as no Event of Default or event which, with the giving
of notice, the passage of time, or both, would constitute an Event of Default,
shall have occurred and be continuing, or the Lessee shall not have exercised
its purchase option under Paragraph 9 hereof, each Lease will automatically
renew for a term specified in the applicable Schedule (the "Renewal Term") on
the terms and conditions of this Agreement or as set forth in such Schedule;
provided, however, that Obligations due to be performed by the Lessee during the
Renewal Term shall continue until they have been performed in full.
9. PURCHASE OPTION. So long as no Event of Default or event which, with the
giving of notice, the passage of time, or both, would constitute an Event of
Default, shall have occurred and be continuing, Lessee may, upon written notice
to Lessor received at least ninety days before the expiration of a Term,
purchase all, but not less than all, the Equipment covered by the applicable
Lease on the date specified therefor in the applicable Schedule ("Purchase
Date"). The purchase price for such Equipment shall be its fair market value as
set forth in the applicable Schedule determined on an "In-place, In-use" basis,
as mutually agreed by Lessor and Lessee, or, if they cannot agree, as determined
by an independent appraiser selected by Lessor and approved by Lessee, which
approval will not be unreasonably delayed or withheld. Lessee shall pay the cost
of any such appraisal. So long as no Event of Default or event which, with the
giving of notice, the passage of time, or both, would constitute an Event of
Default shall have occurred and be continuing, Lessee may, upon written notice
to Lessor received at least ninety days prior to the expiration of the Renewal
Term, purchase all, but not less than all, the Equipment covered by the
applicable Schedule by the last date of the Renewal Term (the "Alternative
Purchase Date") at a purchase price equal to its then fair market value on an
"In-place, In-use" basis. On the Purchase Date or the Alternative Purchase Date,
as the case may be, for any Equipment, Lessee shall pay to Lessor the purchase
price, together with all sales and other taxes applicable to the transfer of the
Equipment and any other amount payable and arising hereunder, in immediately
available funds, whereupon Lessor shall transfer to Lessee, without recourse or
warranty of any kind, express or implied, all of Lessor's right, title, and
interest in and to such Equipment on an "As Is, Where Is" basis together with
all remaining and transferrable warranties from vendors.
10. OWNERSHIP; INSPECTION; MARKING; FINANCING STATEMENTS. Lessee shall
affix to the Equipment any labels supplied by Lessor indicating ownership of
such Equipment. The Equipment is and shall be the sole property of Lessor.
Lessee shall have no right, title, or interest therein, except as lessee under a
Lease. The Equipment is and shall at all times be and remain personal property
and shall not become a fixture. Lessee shall obtain and record such instruments
and take such steps as may be reasonably necessary to prevent any person from
acquiring any rights in the Equipment by reason of the Equipment being claimed
or deemed to be real property. Upon request by Lessor, Lessee shall use
commercially reasonable efforts to obtain and deliver to Lessor
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valid and effective waivers, in recordable form, by the owners, landlords, and
mortgagees of the real property upon which the Equipment is located or
certificates of Lessee that it is the owner of such real property or that such
real property is neither leased nor mortgaged. Lessee shall make the Equipment
and its maintenance records available for inspection by Lessor at reasonable
times and upon reasonable notice. Lessee shall execute and deliver to Lessor for
filing any UCC financing statements or similar documents Lessor may reasonably
request.
11. EQUIPMENT USE. Lessee agrees that the Equipment will be operated by
competent, qualified personnel in connection with Lessee's business for the
purpose for which the Equipment was designed and in all material respects in
accordance with applicable operating instructions, laws, and government
regulations, and that Lessee shall use all reasonable precautions to prevent
loss or damage to the Equipment from fire and other hazards. Lessee shall use
commercially reasonable efforts to procure and maintain in effect all orders,
licenses, certificates, permits, approvals, and consents required by federal,
state, or local laws or by any governmental body, agency, or authority in
connection with the delivery, installation, use, and operation of the Equipment.
12. MAINTENANCE. Lessee, at its sole cost and expense, shall keep the
Equipment in a suitable environment as specified by the manufacturer's
guidelines or the equivalent, shall meet all applicable recertification
requirements, and shall maintain the Equipment in its original condition and
working order, ordinary wear and tear excepted. At the reasonable request of
Lessor, Lessee shall furnish all proof of maintenance.
13. ALTERATION; MODIFICATIONS; PARTS. Lessee may alter or modify the
Equipment only with the prior written consent of Lessor. Any alteration shall be
removed and the Equipment restored to its normal, unaltered condition at
Lessee's expense (without damaging the Equipment's originally intended function
or its value) prior to its return to Lessor. Any part installed in connection
with warranty or maintenance service or which cannot be removed in accordance
with the preceding sentence shall be the property of Lessor.
14. RETURN OF EQUIPMENT. Except for Equipment that has suffered a Casualty
Loss (as defined in Paragraph 15 below) and is not required to be repaired
pursuant to Paragraph 15 below or Equipment purchased by Lessee pursuant to
Paragraph 9 above, upon the expiration of the Renewal Term of a Lease, or upon
demand by Lessor pursuant to Paragraph 22 below, Lessee shall contact Lessor for
shipping instructions and, at Lessee's own risk, immediately return the
Equipment, freight prepaid, to a location in the continental United States
specified by Lessor. At the time of such return to Lessor, the Equipment shall
(i) be in the operating order, repair, and condition as required by or specified
in the original specifications and warranties of each manufacturer and vendor
thereof, ordinary wear and tear excepted, (ii) meet all applicable
recertification requirements, and (iii) be capable of being promptly assembled
and operated by a third party purchaser or third party lessee without further
repair, replacement, alterations, or improvements, and in accordance and
compliance with any and all statutes, laws, ordinances, rules, and regulations
of any governmental authority or any political subdivision thereof applicable to
the use and operation of the Equipment. Except as otherwise provided under
Paragraph 9 hereof, at least ninety days before the expiration of the Renewal
Term, Lessee shall give Lessor notice of its intent to return the Equipment at
the end of such Renewal Term. During the ninety-day period prior to the end of a
Term or the Renewal Term, Lessor and its prospective purchasers or lessees shall
have, upon not less than two business days' prior notice to Lessee and during
normal business hours, or at any time and without prior notice upon the
occurrence and continuance of an Event of Default, the right of access to the
premises on which the Equipment is located to inspect the Equipment, and Lessee
shall cooperate in all other respects with Lessor's remarketing of the
Equipment. The provisions of this Paragraph 14 are of the essence of the Lease,
and upon application to any court of equity having jurisdiction in the premises,
Lessor shall be entitled to a decree against Lessee requiring specific
performance of the covenants of Lessee set forth in this Paragraph 14. If Lessee
fails to return the Equipment when required, the terms and conditions of the
Lease shall continue to be applicable and Lessee shall continue to pay Rent
until the Equipment is received by Lessor.
15. CASUALTY INSURANCE; LOSS OR DAMAGE. Lessee will maintain, at its own
expense, liability and property damage insurance relating to the Equipment,
insuring against such risks as are customarily insured against on the type of
equipment leased hereunder by businesses in which Lessee is engaged in such
amounts, in such form, and with insurers satisfactory to Lessor; provided,
however, that the amount of insurance against damage or loss shall not be less
than the greater of (a) the replacement value of the Equipment and (b) the
stipulated loss value of the Equipment specified in the applicable Schedule
("Stipulated Loss Value"). Each
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liability insurance policy shall provide coverage (including, without
limitation, personal injury coverage) of not less than $1,000,000 for each
occurrence, and shall name Lessor as an additional insured; and each property
damage policy shall name Lessor as sole loss payee and all policies shall
contain a clause requiring the insurer to give Lessor at least thirty days'
prior written notice of any alteration in the terms or cancellation of the
policy. Lessee shall upon request furnish to Lessor a copy of each insurance
policy (with endorsements) or other evidence satisfactory to Lessor that the
required insurance coverage is in effect; provided, however, Lessor shall have
no duty to ascertain the existence of or to examine the insurance policies to
advise Lessee if the insurance coverage does not comply with the requirements of
this Paragraph. If Lessee fails to insure the Equipment as required, Lessor
shall have the right but not the obligation to obtain such insurance, and the
cost of the insurance shall be for the account of Lessee due as part of the next
due Rent. Lessee consents to Lessor's release, upon its failure to obtain
appropriate insurance coverage, of any and all information necessary to obtain
insurance with respect to the Equipment or Lessor's interest therein.
Until the Equipment is returned to and received by Lessor as provided in
Paragraph 14 above, Lessee shall bear the entire risk of theft or destruction
of, or damage to, the Equipment including, without limitation, any condemnation,
seizure, or requisition of title or use ("Casualty Loss"). No Casualty Loss
shall relieve Lessee from its obligations to pay Rent except as provided in
clause (b) below. When any Casualty Loss occurs, Lessee shall immediately notify
Lessor and, at the option of Lessor, shall promptly (a) place such Equipment in
good repair and working order; or (b) pay Lessor an amount equal to the
Stipulated Loss Value of such Equipment and all other amounts (excluding Rent)
payable by Lessee hereunder, together with a late charge on such amounts at a
rate per annum equal to the rate imputed in the Rent payments hereunder from the
date of the Casualty Loss through the date of payment of such amounts, whereupon
Lessor shall transfer to Lessee, without recourse or warranty (express or
implied), all of Lessor's interest, if any, in and to such Equipment on an "AS
IS, WHERE IS" basis. The proceeds of any insurance payable with respect to the
Equipment shall be applied, at the option of Lessor in the event of default by
Lessee, but otherwise at the Lessee's option, either towards (i) repair of the
Equipment or (ii) payment of any of Lessee's obligations hereunder. Lessee
hereby appoints Lessor as Lessee's attorney-in-fact to make claim for, receive
payment of, and execute and endorse all documents, checks or drafts issued with
respect to any Casualty Loss under any insurance policy relating to the
Equipment.
16. TAXES. Lessee shall pay when due, and indemnify and hold Lessor
harmless from, all sales, use, excise, and other taxes, charges, and fees
(including, without limitation, income, franchise, business and occupation,
gross receipts, licensing, registration, titling, personal property, stamp and
interest equalization taxes, levies, imposts, duties, charges, or withholdings
of any nature), and any fines, penalties, or interest thereon, imposed or levied
by any governmental body, agency, or tax authority upon or in connection with
the Equipment during the Term or any Renewal Term, its purchase, ownership,
delivery, leasing, possession, use, or relocation of the Equipment or otherwise
in connection with the transactions contemplated by each Lease or the Rent
thereunder, excluding taxes on or measured by the net income of Lessor. Upon
request, Lessee will provide proof of payment. Unless Lessor elects otherwise,
Lessee will pay all property taxes on the Equipment during the Term or any
Renewal Term. Lessee shall timely prepare and file all reports and returns which
are required to be made with respect to any obligation of Lessee under this
Paragraph 16. Lessee shall, to the extent permitted by law, cause all ▇▇▇▇▇▇▇▇
of such fees, taxes, levies, imposts, duties, withholdings, and governmental
charges to be made to Lessor in care of Lessee. Upon request, Lessee will
provide Lessor with copies of all such ▇▇▇▇▇▇▇▇.
17. LESSOR'S PAYMENT. If Lessee fails to perform its obligations under
Paragraph 15 or 16 above, or Paragraph 23 below, Lessor shall have the right to
substitute performance, in which case Lessee shall immediately reimburse Lessor
therefor.
18. GENERAL INDEMNITY. Each Lease is a net lease. Therefore, Lessee shall
indemnify Lessor and its successors and assigns against, and hold Lessor and its
successors and assigns harmless from, any and all claims, actions, damages,
obligations, liabilities, and all costs and expenses, including, without
limitation, legal fees incurred by Lessor or its successors and assigns arising
out of each Lease including, without limitation, the purchase, ownership,
delivery, lease, possession, maintenance, condition, use, or return of the
Equipment, or arising by operation of law, except that Lessee shall not be
liable for any claims, actions, damages, obligations, and costs and expenses
determined by an United States District Court to have occurred as a result of
the gross negligence or willful misconduct of Lessor or its successors and
assigns. Lessee agrees that upon written notice by Lessor (which notice Lessor
will use its best efforts to provide within five (5) days after having
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knowledge) of the assertion of any claim, action, damage, obligation, liability,
or lien which is subject to indemnification hereunder, Lessee shall assume full
responsibility for the defense thereof, provided that Lessor's failure to give
such notice shall not limit or otherwise affect its rights hereunder, except to
the extent that Lessee shall have been materially prejudiced as a result of such
failure or delay. Lessor shall not agree to settle or compromise any claim
without the consent of the Lessee. Any payment pursuant to this Paragraph
(except for any payment of Rent) shall be of such amount as shall be necessary
so that, after payment of any taxes required to be paid thereon by Lessor,
including taxes on or measured by the net income of Lessor, the balance will
equal the amount due hereunder. The provisions of this Paragraph with regard to
matters arising during a Lease shall survive the expiration or termination of
such Lease.
19. ASSIGNMENT BY LESSEE. Lessee shall not, without the prior written
consent of Lessor which will not by unreasonably withheld, (a) assign, transfer,
pledge, or otherwise dispose of any Lease or Equipment, or any interest therein;
(b) sublease or lend any Equipment or permit it to be used by anyone other than
Lessee and its employees; or (c) move any Equipment from the location specified
for it in the applicable Schedule, except that Lessee may move Equipment to
another location within the United States provided that Lessee has delivered to
Lessor (A) prior written notice thereof and (B) duly executed financing
statements and other agreements and instruments (all in form and substance
satisfactory to Lessor) necessary or, in the opinion of the Lessor, desirable to
protect Lessor's interest in such Equipment. Notwithstanding anything to the
contrary in the immediately preceding sentence, Lessee may keep any Equipment
consisting of motor vehicles or rolling stock at any location in the United
States. Notwithstanding the foregoing, Lessee may sublease Equipment having an
Equipment Cost of up to $3,000,000 to Millennium BioTherapeutics, Inc., and/or
any wholly owned subsidiaries, provided that such sublease in no way diminishes
Lessee's obligations hereunder.
20. ASSIGNMENT BY LESSOR. Lessor may assign its interest or grant a
security interest in any Lease and the Equipment individually or together, in
whole or in part. If Lessee is given written notice of any such assignment, it
shall immediately make all payments of Rent and other amounts hereunder directly
to such assignee. Each such assignee shall have all of the rights of Lessor
under each Lease assigned to it. Lessee shall not assert against any such
assignee any set-off, defense, or counterclaim that Lessee may have against
Lessor or any other person.
21. DEFAULT; NO WAIVER. Lessee or any guarantor of any or all of the
obligations of Lessee hereunder (together with Lessee, the "Lease Parties")
shall be in default under each Lease upon the occurrence of any of the following
events (each, an "Event of Default"): (a) Lessee fails to pay within five days
of when due any amount required to be paid by Lessee under or in connection with
any Lease; (b) any of the Lease Parties fails to perform any other provision
under or in connection with a Lease or violates any of the covenants or
agreements of such Lease Party under or in connection with a Lease; (c) any
representation made or financial information delivered or furnished by any of
the Lease Parties under or in connection with a Lease shall prove to have been
inaccurate in any material respect when made; (d) any of the Lease Parties makes
an assignment for the benefit of creditors, whether voluntary or involuntary, or
consents to the appointment of a trustee or receiver, or if either shall be
appointed for any of the Lease Parties or for a substantial part of its property
without its consent and, in the case of any such involuntary proceeding, such
proceeding remains undismissed or unstayed for forty-five days following the
commencement thereof; (e) any petition or proceeding is filed by or against any
of the Lease Parties under any Federal or State bankruptcy or insolvency code or
similar law and, in the case of any such involuntary petition or proceeding,
such petition or proceeding remains undismissed or unstayed for forty-five days
following the filing or commencement thereof, or any of the Lease Parties takes
any action authorizing any such petition or proceeding; (f) any of the Lease
Parties fails to pay when due any indebtedness for borrowed money or under
conditional sales or installment sales contracts or similar agreements, leases,
or obligations evidenced by bonds, debentures, notes, or other similar
agreements or instruments to any creditor (including Lessor under any other
agreement) after any and all applicable cure periods therefor shall have
elapsed; (g) any material judgment shall be rendered against any of the Lease
Parties which shall remain unpaid or unstayed for a period of sixty days; (h)
any of the Lease Parties shall dissolve, liquidate, wind up or cease its
business, sell or otherwise dispose of all or substantially all of its assets,
or make any material change in its lines of business; (i) any of the Lease
Parties shall amend or modify its name, unless such Lease Party delivers to
Lessor, thirty days prior to any such proposed amendment or modification,
written notice of such amendment or modification and within ten days before such
amendment or modification delivers executed financing statements (in form and
substance satisfactory to the Lessor); (j) any of the Lease Parties shall merge
or consolidate with any other entity or make any material change in
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its capital structure, in each case without Lessor's prior written consent,
which shall not be unreasonably withheld; (k) any of the Lease Parties shall
suffer any loss or suspension of any material license, permit, or other right or
asset necessary to the profitable conduct of its business, fail generally to pay
its debts as they mature, or call a meeting of its creditors for purposes of
compromising its debts; (l) any of the Lease Parties shall deny or disaffirm its
obligations hereunder or under any of the documents delivered in connection
herewith; (m) there is a change, other than a change which results from the sale
of newly issued securities to investors, in more than 35% of the ownership of
any equity interests of the Lessee on the date hereof or more than 35% of such
interests become subject to any contractual, judicial or statutory lien, charge,
security interest, or encumbrance; or (n) any of the Lease Parties suffers a
material adverse change in the business, prospects, operations, results of
operations, assets, liabilities, or condition (financial or otherwise).
22. REMEDIES. Upon the occurrence and continuation of an Event of Default,
Lessor shall have the right, in its sole discretion, to exercise any one or more
of the following remedies: (a) terminate each Lease; (b) declare any and all
Rent and other amounts then due and any and all Rent and other amounts to become
due under each Lease (collectively, the "Lease Obligations") immediately due and
payable; (c) take possession of any or all items of Equipment, wherever located,
without demand, notice, court order, or other process of law, and without
liability for entry to Lessee's premises, for damage to Lessee's property, or
otherwise; (d) demand that Lessee immediately return any or all Equipment to
Lessor in accordance with Paragraph 14 above, and, for each day that Lessee
shall fail to return any item of Equipment, Lessor may demand an amount equal to
the Rent payable for such Equipment in accordance with Paragraph 14 above and to
the extent Lessor has not collected the amounts set forth in (b) above; (e)
lease, sell, or otherwise dispose of the Equipment in a commercially reasonable
manner, with or without notice and on public or private bid; (f) recover the
following amounts (reduced by any payments actively made under (b) and (d)
above) from the Lessee (as damages, including reimbursement of costs and
expenses, liquidated for all purposes and not as a penalty): (i) all costs and
expenses of Lessor reimbursable to it hereunder, including, without limitation,
expenses of disposition of the Equipment, legal fees, and all other amounts
specified in Paragraph 23 below; (ii) an amount equal to the sum of (A) any
accrued and unpaid Rent through the later of (1) the date of the applicable
default, (2) the date that Lessor has obtained possession of the Equipment, or
(3) such other date as Lessee has made an effective tender of possession of the
Equipment to Lessor (the "Default Date") and (B) if Lessor resells or re-lets
the Equipment, Rent at the periodic rate provided for in each Lease for the
additional period that it takes Lessor to resell or re-let all of the Equipment;
(iii) the present value of all future Rent reserved in the Leases and contracted
to be paid over the unexpired Term of the Leases discounted at five percent
compound interest; (iv) the reversionary value of the Equipment as of the
expiration of the Term of the applicable Lease as set forth on the applicable
Schedule; and (v) any indebtedness for Lessee's indemnity under Paragraph 18
above, plus a late charge at the rate specified in Paragraph 3 above, less the
amount received by Lessor, if any, upon sale or re-let of the Equipment; and (g)
exercise any other right or remedy to recover damages or enforce the terms of
the Leases. Upon the occurrence and continuance of an Event of Default or an
event which with the giving of notice or the passage of time, or both, would
result in an Event of Default, Lessor shall have the right, whether or not
Lessor has made any demand or the obligations of Lessee hereunder have matured,
to appropriate and apply to the payment of the obligations of Lessee hereunder
all security deposits and other deposits (general or special, time or demand,
provisional or final) now or hereafter held by and other indebtedness or
property now or hereafter owing by Lessor to Lessee. Lessor may pursue any other
rights or remedies available at law or in equity, including, without limitation,
rights or remedies seeking damages, specific performance, and injunctive relief.
Any failure of Lessor to require strict performance by Lessee, or any waiver by
Lessor of any provision hereunder or under any Schedule, shall not be construed
as a consent or waiver of any other breach of the same or of any other
provision. Any amendment or waiver of any provision hereof or under any Schedule
or consent to any departure by Lessee herefrom or therefrom shall be in writing
and signed by Lessor.
No right or remedy is exclusive of any other provided herein or permitted
by law or equity. All such rights and remedies shall be cumulative and may be
enforced concurrently or individually from time to time.
23. LESSOR'S EXPENSE. Lessee shall pay Lessor on demand all costs and
expenses (including reasonable legal fees and expenses) incurred in connection
with the preparation, execution and delivery of this Agreement and any other
agreements and transactions contemplated hereby and all costs and expenses in
protecting and enforcing Lessor's rights and interests in each Lease and the
equipment, including, without limitation, legal, collection, and remarketing
fees and expenses incured by Lessor in enforcing the terms, conditions, or
provisions of each Lease or upon the occurrence and continuation of an Event of
Default.
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24. 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 2A-508 through 2A-522 of the UCC. 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 22 above
or which may otherwise limit or modify any of Lessor's rights or remedies under
Paragraph 22. Any action by Lessee against Lessor for any default by Lessor
under any Lease shall be commenced within one year after the last day of the
later of the Term or Renewal Term.
25. NOTICES; ADMINISTRATION. Except as otherwise provided herein, all
notices, approvals, consents, correspondence, or other communications required
or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to Lessor, then to Transamerica Technology Finance Division,
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Assistant Vice
President, Lease Administration, with a copy to Lessor at Riverway II, West
Office Tower, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal
Department, if to Lessee, then to Millennium Pharmaceuticals, Inc., ▇▇▇ ▇▇▇▇
▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President of Finance or
such other address as shall be designated by Lessee or Lessor to the other
party. All such notices and correspondence shall be effective when received.
26. REPRESENTATIONS. Lessee represents and warrants to Lessor that (a)
Lessee is duly organized, validly existing, and in good standing under the laws
of the State of its incorporation; (b) the execution, delivery, and performance
by Lessee of this Agreement are within Lessee's powers, have been duly
authorized by all necessary action, and do not and will not contravene (i)
Lessee's organizational documents or (ii) any law, regulation, rule, or
contractual restriction binding on or affecting Lessee; (c) no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery, and
performance by Lessee of this Agreement; (d) each Lease constitutes the legal,
valid, and binding obligations of Lessee enforceable against Lessee in
accordance with its terms; (e) the cost of each item of Equipment does not
exceed the fair and usual price for such type of equipment purchased in like
quantity and reflects all discounts, rebates, and allowances for the Equipment
(including, without limitation, discounts for advertising, prompt payment,
testing, or other services) given to the Lessee by the manufacturer, supplier,
or any other person; and (f) all information supplied by Lessee to Lessor in
connection herewith is correct in all material respects and does not omit any
material statement necessary to insure that the information supplied is not
misleading.
27. FURTHER ASSURANCES. Lessee, upon the request of Lessor, will execute,
acknowledge, record, or file, as the case may be, such further documents and do
such further acts as may be reasonably necessary, desirable, or proper to carry
out more effectively the purposes of this Agreement. Lessee hereby appoints
Lessor as its attorney-in-fact to execute on behalf of Lessee and authorizes
Lessor to file without Lessee's signature any UCC financing statements and
amendments Lessor deems advisable.
28. FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a) as soon as
available, but not later than 120 days after the end of each fiscal year of
Lessee and its consolidated subsidiaries, the consolidated balance sheet, income
statement, and statements of cash flows and shareholders equity for Lessee and
its consolidated subsidiaries (the "Financial Statements") for such year,
reported on by independent certified public accountants without an adverse
qualification; and (b) as soon as available, but not later than 60 days after
the end of each of the first three fiscal quarters in any fiscal year of Lessee
and its consolidated subsidiaries, the Financial Statements for such fiscal
quarter, together with a certification duly executed by a responsible officer of
Lessee that such Financial Statements have been prepared in accordance with
generally accepted accounting principles and are fairly stated in all material
respects (subject to normal year-end audit adjustments). Lessee shall also
deliver to Lessor as soon as available copies of all press releases and other
similar communications issued by Lessee.
29. PARTIAL EARLY TERMINATION. So long as no Event of Default or event
which, with the giving of notice, the passage of time, or both, would constitute
an Event of Default, shall have occurred and be continuing, Lessee may terminate
one or more Leases with respect to up to an aggregate of $3,000,000 of Equipment
Cost at any time after the end of the 18th month of the Term if, in Lessee's
reasonable judgment, the specific items of Equipment subject to such termination
become obsolete or are no longer needed by Lessee. At the
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date of such early termination, Lessee shall pay to Lessor an amount equal to
the then outstanding principal balance of such Lease (calculated as if the Lease
were an amortizing loan) plus 2% of such outstanding balance.
30. CANCELLATION. So long as no Event of Default or event which, with the
giving of notice, the passage of time, or both, would constitute an Event of
Default, shall have occurred and be continuing, Lessee may cancel the Leases as
to all (but not less than all) of the Equipment as of the end of the 36th month
of the Term. At the date of such cancellation Lessee shall (i) pay an amount
equal to 55% of the Equipment Cost plus all Rent and other sums due and unpaid
as of that date including the Rent payment due on that date and (ii) return the
Equipment to Lessor.
31. CONSENT TO JURISDICTION. Lessee irrevocably submits to the jurisdiction
of any Illinois state or federal court sitting in Illinois for any action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby, and Lessee irrevocably agrees that all claims in respect of
any such action or proceeding may be heard and determined in such Illinois state
or federal court.
32. WAIVER OF JURY TRIAL. LESSEE AND LESSOR IRREVOCABLY WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
33. FINANCE LEASE. Lessee and Lessor agree that each Lease is a "Finance
Lease" as defined by Section 2A-103(g) of the UCC. Lessee acknowledges that
Lessee has reviewed and approved each written Supply Contract (as defined by UCC
2A-103(y)) covering Equipment purchased from each "Supplier" (as defined by UCC
2A-103(x)) thereof.
34. NO AGENCY. Lessee acknowledges and agrees that neither the manufacturer
or supplier, nor any salesman, representative, or other agent of the
manufacturer or supplier, is an agent of Lessor. No salesman, representative, or
agent of the manufacturer or supplier is authorized to waive or alter any term
or condition of this Agreement or any Schedule and no representation as to the
Equipment or any other matter by the manufacturer or supplier shall in any way
affect Lessee's duty to pay Rent and perform its other obligations as set forth
in this Agreement or any Schedule.
35. SPECIAL TAX INDEMNIFICATION. Lessee acknowledges that Lessor, in
determining the Rent due hereunder, has assumed that certain tax benefits as are
provided to an owner of property under the Internal Revenue Code of 1986, as
amended (the "Code"), and under applicable state tax law, including, without
limitation, depreciation deductions under Section 168(b) of the Code, and
deductions under Section 163 of the Code in an amount at least equal to the
amount of interest paid or accrued by Lessor with respect to any indebtedness
incurred by Lessor in financing its purchase of the Equipment, are available to
Lessor as a result of the lease of the Equipment. In the event Lessor is unable
to obtain such tax benefits as a result of an act or omission of Lessee, is
required to include in income any amount other than the Rent, or is required to
recognize income in respect of the Rent earlier than anticipated pursuant to
this Agreement, Lessee shall pay Lessor additional rent ("Additional Rent") in a
lump sum in an amount needed to provide Lessor with the same after-tax yield and
after-tax cash flow as would have been realized by Lessor had Lessor (i) been
able to obtain such tax benefits, (ii) not been required to include any amount
in income other than the Rent, and (iii) not been required to recognize income
in respect of the Rent earlier than anticipated pursuant to this Agreement. The
Additional Rent shall be computed by Lessor, which computation shall be binding
on Lessee. The Additional Rent shall be due immediately upon written notice by
Lessor to Lessee of Lessor's inability to obtain tax benefits, the inclusion of
any amount in income other than the Rent or the recognition of income in respect
of the Rent earlier than anticipated pursuant to this Agreement. The provisions
of this Paragraph 35 shall survive the termination of this Agreement.
36. GOVERNING LAW; SEVERABILITY. EACH LEASE SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF. IF ANY PROVISION SHALL BE HELD TO BE INVALID OR UNENFORCEABLE, THE
VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS SHALL NOT IN ANY WAY BE
AFFECTED OR IMPAIRED.
LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND THE SCHEDULE
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HERETO, UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS.
FURTHER, LESSEE AND LESSOR AGREE THAT THIS AGREEMENT, THE SCHEDULES DELIVERED IN
CONNECTION HEREWITH FROM TIME TO TIME, AND THE COMMITMENT LETTER ARE THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES,
SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER
COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF. SHOULD
THERE EXIST ANY INCONSISTENCY BETWEEN THE TERMS OF THE COMMITMENT LETTER AND
THIS AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL PREVAIL.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed by their duly authorized officers as of the date
first written above.
MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President, Finance
Federal Tax ID: ▇▇-▇▇▇▇▇▇▇
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Form1
9
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[TRANSAMERICA BUSINESS CREDIT LETTERHEAD]
May 7, 1998
Exhibit A
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
Vice President of Finance
Millennium Pharmaceuticals Inc.
▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇▇:
Transamerica Business Credit Corporation - Technology Finance Division
("Lessor") is pleased to offer this commitment (this "Commitment") to lease the
equipment described below to Millennium Pharmaceuticals, Inc. ("Lessee"). This
Commitment supercedes all prior correspondence, proposals, and oral or other
communications relating to leasing arrangements between Lessor and Lessee.
The outline of this offer is as follows:
LESSEE: Millennium Pharmaceuticals Inc.
LESSOR: Transamerica Business Credit Corporation -
Technology Finance Division, or any of its
affiliates, successors or assigns.
EQUIPMENT: Laboratory, computer and office equipment and
leasehold improvements (all equipment subject to
Lessor's approval prior to funding), including
without limitation, all additions, improvements,
replacements, repairs, appurtenances,
substitutions, and attachments thereto and all
proceeds thereof ("Equipment").
EQUIPMENT COST: Not to exceed $15,000,000, of which up to
$2,500,000 may be for leasehold improvements.
EQUIPMENT LOCATION: Cambridge, MA
ANTICIPATED DELIVERY: March 1, 1998 - February 28, 1999
LEASE TERM
COMMENCEMENT: Upon delivery of the Equipment or upon each
completion of deliveries of items of Equipment
with aggregate cost of not less than $75,000, but
no later than February 28, 1999.
TERM: From each Lease Term Commencement until 60 months
from the first day of the month next following or
coincident with that Lease Term Commencement.
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MONTHLY RENT: Monthly Rent equal to 2.0198% of Equipment Cost
will be payable monthly in advance. First month's
rent will be due and payable on or before each
Lease Term Commencement.
ADJUSTMENT TO The Lessor reserves the right to increase or
MONTHLY RENT: decrease the Monthly Rent as of the date of each
Lease Term Commencement proportionally to the
change in the weekly average of the interest rates
of like-term U.S. Treasury Securities from the
week ending February 13, 1998 to the week
preceding the date of each Lease Term
Commencement, as published in the Wall Street
Journal. On the date of each Lease Term
Commencement, the Monthly Rent will be calculated
and fixed for the Term. The actual schedule of
Monthly Rent will be provided to the Lessee after
each Lease Term Commencement.
INTERIM RENT: Interim Rent will accrue from each Lease Term
Commencement until the next following first day of
a month (unless the Lease Term Commencement is on
the first day of a month). Interim Rent will be at
the daily equivalent of the currently adjusted
Monthly Rent Payment.
NET LEASE: The lease will be a net lease containing the usual
provisions in the Lessor's lease agreements and
such other or different provisions that are agreed
to by the parties. The Lessee will be responsible
for maintenance, insurance, taxes, and all other
costs and expenses.
TAXES: Sales or use taxes will be added to the Equipment
Cost or collected on the gross rentals, as
appropriate.
INSURANCE: Prior to any delivery of Equipment, the Lessee
will furnish confirmation of insurance acceptable
to the Lessor covering the Equipment including
primary, all risk, physical damage, property
damage and bodily injury with appropriate loss
payee and additional insured endorsements in favor
of the Lessor.
PURCHASE OPTION: The Lessee will have the option to purchase all
(but not less than all) the Equipment at the
expiration of the term of the lease for 10% of the
Equipment Cost, plus applicable sales and other
taxes.
AUTOMATIC RENEWAL: In the event the Lessee does not exercise the
Purchase Option described above, the lease will
automatically renew for a term of one year with
Monthly Rentals equal to 1.25% of Equipment Cost
payable monthly in advance. At the expiration of
the renewal period, the Lessee will have the
option to purchase all (but not less than all) the
Equipment for its then current Fair Market Value,
plus applicable sales and other taxes.
EARLY TERMINATION: Lessee may terminate the lease with respect to up
to $3,000,000 of Equipment Cost at any time after
the end of the 18th month of the lease if, in
Lessee's reasonable judgment, the specific items
of equipment subject to such termination become
obsolete or are no longer needed by Lessee. At the
date of such early termination, Lessee shall pay
to Lessor an amount equal
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to the then outstanding principal balance of the
lease (calculated as if the lease were an
amortizing loan) plus 2% of such outstanding
balance.
CANCELLATION OPTION: Lessee may cancel the lease as to all (but not
less than all) of the equipment as of the end of
the 36th month of the lease. At the date of
cancellation Lessee shall pay a cancellation value
equal to 55% of the Equipment Cost plus all rent
and other sums due and unpaid as of that date
including the rent payment due on that date and
shall return the Equipment to Lessor.
ADDITIONAL COVENANTS: There will be no actual or threatened conflict
with, or violation of, any regulatory statute,
standard or role relating to the Lessee, its
present or future operations, or the Equipment.
All information supplied by the Lessee will be
correct and will not omit any statement necessary
to make the information supplied not be
misleading. There will be no material breach of
the representations and warranties of the Lessee
in the lease. The representations will include
that the Equipment Cost of each item of the
Equipment does not exceed the fair and usual
price for like quantity purchased of such item and
reflects all discounts, rebates and allowances for
the Equipment given to Lessee by the manufacturer,
supplier or anyone else including, without
limitation, discounts for advertising, prompt
payment, testing or other services.
SUBLEASE: Lessee will be permitted to sublease up to
$3,000,000 of equipment to Millennium
BioTherapeutics, Inc., provided that Lessee
remains fully obligated for all amounts due
hereunder.
CONDITIONS PRECEDENT TO
EACH LEASE TERM
COMMENCEMENT:
1. No material adverse change in the
financial condition, operation or
prospects of the Lessee prior to
funding. The Lessor reserves its right
to rescind any unused portion of its
commitment in the event of a material
adverse change in the financial or
business standing of the Lessee.
2. Completion of the documentation and
final terms of the proposed financing
satisfactory to Lessor and Lessor's
counsel.
3. Results of all due diligence, including
lien, judgment and tax searches other
matters Lessor may request shall be
satisfactory in all respects to Lessor
and Lessor's counsel.
4. Receipt by Lessor of duly executed Lease
documentation in form and substance
satisfactory to Lessor and its counsel.
5. Lessor shall receive title and a valid
and perfected first priority lien and
security interest in all Equipment
acquired through the use of the proposed
lease line and Lessor shall have
received satisfactory evidence that
there are no liens on any Equipment
except as expressly permitted herein.
FEES AND EXPENSES: The Lessee will be responsible for the Lessor's
reasonable expenses in connection with the
transaction, whether or not it closes.
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LAW: This letter and the proposed Lease are intended to
be governed by and construed in accordance with
Illinois law without regard to its conflict of law
provisions.
INDEMNITY: Lessee agrees to indemnify and to hold harmless
Lessor, and its officers, directors and employees
against all claims, damages, liabilities and
expenses which may be incurred by or asserted
against any such person in connection with or
arising out of this letter and the transactions
contemplated hereby, other than claims, damages,
liability, and expense resulting from such
person's gross negligence or willful misconduct.
CONFIDENTIALITY: This letter is delivered to you with the
understanding that neither it nor its substance
shall be disclosed publicly or privately to any
third person except those who are in a
confidential relationship to you (such as your
legal counsel and accountants), or where the same
is required by law and then only on the basis that
it not be further disclosed, which conditions
Lessee and its agents agree to be bound by upon
acceptance of this letter.
Without limiting the generality of the foregoing,
none of such persons shall use or refer to Lessor
or to any affiliate name in any disclosures made
in connection with any of the transactions without
Lessor's prior written consent.
Upon completion of the initial takedown by Lessor
and Lessee, the Lessee will no longer be required
to obtain Lessor's prior written consent to
disclose the transaction contemplated hereby. In
addition, the Lessee agrees to provide camera
ready artwork of typestyles and logos of the
Lessee for use in promotional material by the
Lessor.
CONDITIONS OF This Commitment Letter is intended to be a summary
ACCEPTANCE: of the most important elements of the agreement to
enter into a leasing transaction with Lessee, and
it is subject to all requirements and conditions
contained in Lease documentation proposed by
Lessor or its counsel in the course of closing the
Lease described herein. Not every provision that
imposes duties, obligations, burdens, or
limitations on Lessee is contained herein, but
shall be contained in the final Lease
documentation satisfactory to Lessor and its
counsel.
EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATED TO THIS LETTER OR THE
TRANSACTION DESCRIBED IN THIS LETTER.
APPLICATION FEE: The $75,000 Application Fee previously paid by
Lessee shall be first applied to the costs and
expenses of the Lessor in connection with the
transaction, and any remainder shall be applied
pro-rata to the second month's rent due under each
Lease.
PROPOSAL EXPIRATION: This proposal shall expire on May 14, 1998, unless
prior thereto either
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extended in writing by the Lessor or accepted as
provided below by the Lessee.
Should you have any questions, please call me. If you wish to accept this
Commitment, please so indicate by signing and returning the enclosed duplicate
Copy of this letter to me by May 14, 1998.
Yours truly,
Transamerica Business Credit Corporation -
Technology Finance Division
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Accepted this 13th day of May, 1998 ----------------------------------
Millennium Pharmaceuticals Inc. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President - Marketing
By: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------
Title: VP Finance
-------------------
5
