MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT (THE "LEASE") IS MADE THE 15TH DAY OF JUNE,
1998 BETWEEN LEASING TECHNOLOGIES INTERNATIONAL, INC., OFFICE AT ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (THE "LESSOR"), AND CONDUCTUS, INC., WITH ITS
PRINCIPAL OFFICE AT ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (THE
"LESSEE"). THE PARTIES HERETO AGREE AS FOLLOWS:
1. LEASE:
This Lease establishes the general terms and conditions by which Lessor
may lease to Lessee the Equipment (the "Equipment") listed on each Equipment
Schedule executed periodically pursuant to this Lease. Each such Equipment
Schedule shall incorporate by reference the terms of this Lease, and shall be
a separate lease agreement as to the Equipment listed thereon for all
purposes, including default. In the event of any conflict between the terms
and conditions of this Lease and the terms and conditions of any Equipment
Schedule(s) or Rider(s) thereto, the terms and conditions of such Equipment
Schedule(s) or Rider(s) shall prevail.
2. DEFINITIONS:
(a) The "Installation Date" means the date determined in accordance with
the applicable Equipment Schedule.
(b) The "Commencement Date" means, as to any item of Equipment
designated on any Equipment Schedule where the Installation Date for such
item of Equipment falls on the first day of the month, that date, or, in any
other case, the first day of the month following the month in which such
Installation Date falls.
(c) The "Daily Rental" means 1/30th of the amount set forth as the
monthly rental in the applicable Equipment Schedule.
3. TERM OF LEASE:
The term of this Lease, as to all Equipment designated on any Equipment
Schedule, shall commence on the Installation Date for such Equipment, and
shall continue for an initial period ending that number of months as is
specified on the applicable Equipment Schedule from the Commencement Date for
the last item of Equipment to be installed (the "Initial Term"). The term of
this Lease for all such Equipment shall be automatically extended for
successive monthly periods until terminated in accordance with this Lease.
Any termination shall be effective only on the last day of the Initial Term
or the last day of any such successive period.
4. RENTAL:
The monthly rental payable hereunder is as set forth in the Equipment
Schedule(s). Rental shall begin to accrue on the Installation Date for each
item of Equipment and shall be due and payable by Lessee in advance on the
first day of each month. If the Installation Date does not fall on the first
day of a month, the rental for that period of time from the Installation Date
until the Commencement Date shall be an amount equal to the Daily Rental
multiplied by the number of days from (and including) the Installation Date
to (but not including) the Commencement Date and shall be due and payable on
the Installation Date. In addition to the monthly rental set forth in the
Equipment Schedule(s), Lessee shall pay to Lessor an amount equal to all
taxes paid, payable or required to be collected by Lessor, however
designated, which are levied or based on the rental, on the Lease or on the
Equipment or on its purchase for lease hereunder, or on its use, lease,
operation, control or value (including, without limitation, state and local
privilege or excise taxes based on gross revenue), any penalties or interest
in connection therewith which are attributable to Lessee's negligence or
taxes or amounts in lieu thereof paid or payable by Lessor in respect of the
foregoing, but excluding taxes based on Lessor's net income. Personal
property taxes assessed on the Equipment during the term hereof shall be paid
by Lessee. Lessee agrees that Lessor, or Lessor's agent may file all required
property tax returns and reports and pay all taxes thereon pertaining to the
Equipment. In such event, Lessee shall reimburse Lessor or Lessor's agent
for all costs and expenses incurred in connection therewith, provided that
such costs and expenses (including property taxes) shall not exceed the
property taxes pursuant to statutory tax rates and regulations. If
requested by Lessor, Lessee agrees to file, on behalf of Lessor, all required
property tax returns and reports concerning the Equipment with all
appropriate governmental agencies, and, within not more than thirty (30) days
after the due date of such filing to send Lessor confirmation of such filing.
Interest on any past due payments, including but not limited to
administrative charges and any other charges or fees arising out of or
related to this Lease, shall accrue at the rate of 1 1/2% per month, or if
such rate shall exceed the maximum rate allowed by law, then at such maximum
rate, and shall be payable on demand. Charges for taxes, penalties and
interest shall be promptly paid by Lessee when invoiced by Lessor.
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As security for the full performance of all of Lessee's obligations
under each Equipment Schedule, Lessee shall, simultaneously with the
execution and delivery of each Equipment Schedule, deposit with Lessor the
amount set forth on such Equipment Schedule. The security deposit shall be
promptly returned to Lessee by Lessor upon the expiration of such Equipment
Schedule and return or purchase of all Equipment, as the case may be,
provided that all Lessee obligations under such Equipment Schedule have been
fulfilled.
5. INSTALLATION, USE AND QUIET POSSESSION OF EQUIPMENT:
(a) Lessee, at its own expense, will provide the required suitable
electric current to operate the Equipment and appropriate installation
facilities as specified by the manufacturer.
(b) Any equipment, cards, disks, tapes or other items not specified in
the Equipment Schedule(s) which are used on or in connection with the
Equipment must meet the specifications of the manufacturer and shall be
acquired by Lessee at its own expense.
(c) Lessee shall use the Equipment solely in connection with Lessee's
business and for no other purpose. Subject to the preceding sentence, Lessee
shall be entitled to unlimited usage of the Equipment without extra charge by
Lessor.
(d) Unless otherwise set forth in the applicable Equipment Schedule,
Lessee will at all times keep the Equipment in its sole possession and
control. The Equipment shall not be moved from the location stated in the
applicable Equipment Schedule without the prior written consent of Lessor.
(e) After prior notice to Lessor, Lessee may, at its own expense, make
alterations in or add attachments to the Equipment, provided such alterations
or attachments do not interfere with the normal and satisfactory operation or
maintenance of the Equipment or with Lessee's ability to obtain and maintain
the maintenance contract required by Section 5(h) hereof. The manufacturer
or other organization selected by Lessee and approved in writing by Lessor to
maintain the Equipment ("Maintenance Organization") may incorporate
engineering changes or make temporary alterations to the Equipment upon
request of Lessee. All such alterations and attachments shall be and become
the property of Lessor or, at the option of Lessee, shall be removed by
Lessee and the Equipment restored, at Lessee's expense, to its original
condition as of the Installation Date thereof, reasonable wear and tear only
excepted, and upon the removal and restoration, the alteration and/or
attachment which was made by Lessee shall become the property of Lessee.
(f) So long as Lessee is not in default hereunder, neither Lessor nor
any party claiming through or under Lessor shall interfere with Lessee's use
or possession of any Equipment during the term of this Lease.
(g) Lessee shall, during the term of this Lease, at its expense, keep
the Equipment in good working order and condition and make all necessary
adjustments, repairs and replacements and shall not use or permit the
Equipment to be used in any manner or for any purpose for which, in the
opinion of the manufacturer, the Equipment is not designed or reasonably
suitable.
(h) Unless otherwise set forth in the applicable Equipment Schedule,
Lessee shall, during the term of this Lease, at its own expense, enter into
and maintain in force a contract with the manufacturer or the Maintenance
Organization covering at least prime shift maintenance of each item of
Equipment. Such contract shall commence upon expiration of the
manufacturer's warranty period, if any, relating to such item. Lessee shall
furnish Lessor with a copy of such contract(s).
(i) At the termination of the applicable Equipment Schedule, Lessee at
its expense shall return, if permitted by the applicable Equipment Schedule,
not less than all the Equipment subject thereto to Lessor (at the location
designated by Lessor within the Continental United States) in the same
operating order, repair, condition and appearance as on the Installation
Date, reasonable wear and tear only excepted, with all engineering and safety
changes prescribed by the manufacturer or Maintenance Organization
incorporated therein. Lessee shall, prior to such termination, arrange and
pay for any repairs, changes and manufacturer's certifications as are
necessary for the manufacturer or Maintenance Organization to accept the
Equipment under contract maintenance at its then standard rates. Lessee
shall return all accessories supplied with the Equipment, including but not
limited to all manuals, cables and software diskettes. Lessee shall promptly
pay, after receipt of an invoice therefore, all costs and expenses pertaining
to the replacement of any missing items and for the repair of any Equipment,
together with any audit, inspection or certification charges reasonably
incurred by Lessor.
6. LEASEHOLD RIGHTS AND INSPECTION:
(a) Lessee shall have no interest in the Equipment other than the rights
acquired as a lessee hereunder and the Equipment shall remain personalty
regardless of the manner in which it may be installed or attached. Lessee
shall, at Lessor's request, affix to the Equipment, tags, decals or plates
furnished by Lessor, indicating Lessor's ownership and Lessee shall not
permit their removal or
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concealment. Lessee shall replace any such tag, decal or plate which may be
removed or destroyed or become illegible. Lessee shall keep all Equipment
free from any marking or labeling which might be interpreted as a claim of
ownership thereof by Lessee or any party other than Lessor or anyone claiming
through Lessor.
(b) Lessee shall keep the Equipment free and clear of all liens and
encumbrances except liens or encumbrances arising through the actions or
omissions of Lessor. LESSEE SHALL NOT ASSIGN OR OTHERWISE ENCUMBER THIS
LEASE OR ANY OF ITS RIGHTS HEREUNDER OR SUBLEASE THE EQUIPMENT WITHOUT THE
PRIOR WRITTEN CONSENT OF LESSOR except that Lessee may assign this Lease or
sublease the Equipment to its parent or any subsidiary corporation, or to a
corporation which shall have acquired all or substantially all of the
property of Lessee by merger, consolidation or purchase. No permitted
assignment or sublease shall relieve Lessee of any of its obligations
hereunder.
(c) Lessor or its agents shall have free access to the Equipment at all
reasonable times for the purpose of inspection and for any other purpose
contemplated by this Lease.
(d) Lessee shall immediately notify Lessor of all details concerning any
damage to, or loss of, the Equipment arising out of any event or occurrence
whatsoever, including but not limited to, the alleged or apparent improper
manufacture, functioning or operation of the Equipment.
7. NO WARRANTIES BY LESSOR:
Lessee represents that, at the Installation Date thereof, it shall have
(a) thoroughly inspected the Equipment; (b) determined for itself that all
items of Equipment are of a size, design, capacity and manufacture selected
by it; and (c) satisfied itself that the Equipment is suitable for Lessee's
purposes. LESSOR SUPPLIES THE EQUIPMENT AS IS AND NOT BEING THE MANUFACTURER
OF THE EQUIPMENT, THE MANUFACTURER'S AGENT OR THE SELLER'S AGENT, MAKES NO
WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED AS TO THE EQUIPMENT'S
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, DESIGN, CONDITION,
QUALITY, CAPACITY, MATERIAL OR WORKMANSHIP OR AS TO PATENT INFRINGEMENT OR
THE LIKE, it being agreed that all such risks, as between Lessor and Lessee,
are to be borne by Lessee. Lessee agrees to look solely to the manufacturer
or to suppliers of the Equipment for any and all warranty claims and any and
all warranties made by the manufacturer or the supplier of Lessor are, to the
extent to which the same may be assignable, hereby assigned to Lessee for the
term of the applicable Equipment Schedule. Lessee agrees that Lessor shall
not be responsible for the delivery, installation, maintenance, operation or
service of the Equipment or for delay or inadequacy of any or all of the
foregoing. Lessor shall not be responsible for any direct or consequential
loss or damage resulting from the installation, operation or use of the
Equipment or otherwise. Lessee will defend, indemnify and hold Lessor
harmless against any and all claims, demands and liabilities arising out of
or in connection with the design, manufacture, possession or operation of the
Equipment.
8. RISK OF LOSS ON LESSEE:
(a) Beginning on the Installation Date thereof and continuing until the
Equipment is either returned to Lessor or purchased by Lessee as provided in
this Lease, Lessee relieves Lessor of responsibility for all risks of
physical damage to or loss or destruction of the Equipment, howsoever caused.
During the term of this Lease as to any Equipment Schedule, Lessee shall, at
its own expense, keep in effect "all risk" property insurance and public
liability insurance policies covering the Equipment designated in each
Equipment Schedule. The public liability insurance policy shall be in such
amount as is reasonably acceptable to Lessor. The "all risk" property
insurance policy shall be for an amount not less than the replacement cost of
the Equipment. Lessor, its successors and assigns and/or such other party as
may be designated by any thereof to Lessee, in writing, shall be named as
additional insureds and loss payees on such policies, which shall be written
by an insurance company of recognized responsibility which is reasonably
acceptable to Lessor. Evidence of such insurance coverage shall be furnished
to Lessor no later than the Installation Date set forth in the Equipment
Schedule(s) and, from time to time, thereafter as Lessor may request. Such
policies shall provide that no less than ten days written notice shall be
given Lessor and any other party named as loss payee prior to cancellation of
such policies for any reason. To the extent of Lessor's interest therein,
Lessee hereby irrevocably appoints Lessor or any other party named as loss
payee as Lessee's attorney-in-fact coupled with an interest to make claim
for, receive payment of, and execute any and all documents that may be
required to be provided to the insurance carrier in substantiation of any
such claim for loss or damage under said insurance policies, and to endorse
Lessee's name to any and all drafts or checks in payment of the loss proceeds.
(b) If any item of Equipment is rendered unusable as a result of any
physical damage to, or destruction of, the Equipment, Lessee shall give to
Lessor immediate notice thereof and this Lease shall continue in full force
and effect without any abatement of rental. Lessee shall determine, within
fifteen (15) days after the date of occurrence of such damage or destruction,
whether such item of Equipment can be repaired. In the event Lessee
determines that the item of Equipment cannot be repaired, Lessee shall
either, at its expense, promptly replace such item of Equipment and convey
title to such replacement to Lessor free and clear of all
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liens and encumbrances, and this Lease shall continue in full force and
effect as though such damage or destruction had not occurred, or pay Lessor
therefor in cash the Stipulated Loss Value (defined below) within thirty (30)
days of such loss or damage. "Stipulated Loss Value," as used herein, shall
be an amount as shown on Exhibit A to the applicable Equipment Schedule. In
the event Lessee determines that such item of Equipment can be repaired,
Lessee shall cause such item of Equipment to be promptly repaired. All
proceeds of insurance received by Lessor, the designated loss payee, or
Lessee under the policy referred to in the preceding paragraph of this
Section shall be applied toward the cost of any such repair or replacement so
long as Lessee shall not be in default of its obligations hereunder.
9. EVENTS OF DEFAULT AND REMEDIES:
The occurrence of any one of the following shall constitute an Event of
Default hereunder:
(a) Lessee fails to pay an installment of rent on or before the date
when the same becomes due and payable and such failure continues for a period
of five days;
(b) Lessee attempts to remove, sell, transfer, encumber, sublet or part
with possession of the Equipment or any items thereof, except as expressly
permitted herein;
(c) Lessee shall fail to observe or perform any of the other obligations
required to be observed or performed by Lessee hereunder and such failure
shall continue uncured for ten (10) days after written notice thereof to
Lessee by Lessor or the then assignee hereof;
(d) Lessee ceases doing business as a going concern, makes an assignment
for the benefit of creditors, admits in writing its inability to pay its
debts as they become due, files a voluntary petition of bankruptcy, is
adjudicated a bankrupt or an insolvent, files a petition seeking for itself
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar arrangement under any present or future statute, law
or regulation or files an answer admitting the material allegations of the
petition filed against it in any such proceeding, consents to or acquiesces
in the appointment of a trustee, receiver, or liquidator of it or of all or
any substantial part of its assets or properties, or if it or its
shareholders shall take any action looking to its dissolution or liquidation;
(e) Within thirty (30) days after the commencement of any proceedings
against Lessee seeking reorganization, arrangement, readjustment,
liquidation, dissolution or similar relief under any present or future
statute, law or regulation, such proceedings shall not have been dismissed,
or if within thirty (30) days after the appointment without Lessee's consent
or acquiescence of any trustee, receiver or liquidator of it or of all or any
substantial part of its assets and properties, such appointment shall not be
vacated;
(f) Lessee defaults in the performance or observation of any material
term, condition or covenant of any loan agreement, indenture, trust
agreement, lease or similar agreement to which Lessee is a party or by which
Lessee is bound and such default continues beyond any applicable cure period;
(g) Lessee enters into any transaction, the effect of which adversely
affects (i) a material portion of Lessee's business value and (ii) the
ability of Lessee, in Lessor's reasonable judgment, to repay Lessee's
obligations under the Lease as they become due.
Upon the occurrence of an Event of Default, Lessor may at its option do
any one or more of the following: (i) by notice to Lessee terminate this
Lease as to any or all Equipment Schedules; (ii) whether or not this Lease is
terminated as to any or all Equipment Schedules, take possession on not less
than three (3) days' notice of any or all of the Equipment listed on any or
all Equipment Schedules, wherever situated, and for such purpose, enter upon
any premises without liability for so doing or Lessor may cause Lessee and
Lessee hereby agrees, to return said Equipment to Lessor as provided in this
Lease; (iii) recover from Lessee, as liquidated damages for loss of a bargain
and not as a penalty, all past due amounts as well as an amount equal to the
present value of all monies to be paid by Lessee during the remaining Initial
Term or any successive period then in effect, calculated by discounting at
the rate of six percent (6%) per annum compounded monthly, which payment
shall become immediately due and payable; and (iv) sell, dispose of, hold,
use or lease any Equipment as Lessor in its sole discretion may determine
(and Lessor shall not be obligated to give preference to the sale, lease or
other disposition of the Equipment over the sale, lease or other disposition
of similar equipment owned or leased by Lessor).
In the event that Lessee shall have first paid to Lessor or its assigns
the liquidated damages referred to in (iii) above, Lessee shall thereafter be
entitled to receive all rentals or proceeds received from any reletting or
sale of the Equipment during the balance of the Initial Term (after deduction
of Lessor's expected residual value of the Equipment at the expiration of the
Initial Term or any
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extension thereof and of all expenses incurred in connection therewith) said
amount never to exceed the amount of the liquidated damages paid by Lessee.
Lessee agrees that Lessor shall have no obligation to sell the Equipment.
Lessee shall in any event remain fully liable for reasonable damages as
provided by law and for all costs and expenses incurred by Lessor or its
assigns on account of such default including but not limited to all court
costs and reasonable attorney's fees. Lessee hereby agrees that, in any
event, it will be liable for any deficiency after any lease or other
disposition of the Equipment. The rights afforded Lessor hereunder shall not
be deemed to be exclusive, but shall be in addition to any rights or remedies
provided by law.
10. NET LEASE:
Except as otherwise specifically provided in this Lease, it is
understood and agreed that this is a net lease, and that, as between Lessor
and Lessee, Lessee shall be responsible for all costs and expenses of every
nature whatsoever arising out of or in connection with or related to this
Lease or the Equipment (including, but not limited to, equipment inspection,
tagging, transportation in and out, rigging, manufacturer's approved packing,
installation, certification costs and disconnect charges). Lessee hereby
agrees that in the event that Lessee fails to pay or perform any obligation
under this Lease, Lessor may, at its option, pay or perform said obligation
and any payment made or expense incurred by Lessor in connection therewith
shall become additional rent which shall be due and payable by Lessee upon
demand. Lessee acknowledges that Lessor may, from time to time, and at
Lessee's request, execute and deliver purchase orders pertaining to the
purchase of equipment to be leased pursuant to this Lease. Lessee agrees
that it will indemnify and hold Lessor harmless from and against any and all
loss, cost, liability and expense that Lessor may incur as a result of the
execution and delivery of such purchase orders.
11. ASSIGNMENT:
Lessee agrees that Lessor may transfer or assign all or any part of
Lessor's right, title, and interest in, under or to the Equipment and this
Lease and any or all sums due or to become due pursuant to any of the above,
to any third party (the "Assignee") for any reason and that the Assignee may
so re-assign and transfer. Lessee agrees that upon receipt of written notice
from Lessor or Assignee of such assignment, Lessee shall perform all of its
obligations hereunder for the benefit of Assignee and any successor assignee
and, if so directed, shall pay all sums due or to become due thereunder
directly to the Assignee or to any other party designated by the Assignee.
Lessee hereby covenants, represents and warrants as follows and agrees that
the Assignee and any successor assignee shall be entitled to rely on and
shall be considered a third party beneficiary of the following covenants,
representations and warranties: (i) Lessee's obligations hereunder are
absolute and unconditional and are not subject to any abatement, reduction,
recoupment, defense, offset or counterclaim available to Lessee for any
reason whatsoever including operation of law, defect in the Equipment,
failure of Lessor or Assignee to perform any of its obligations hereunder or
for any other cause or reason whatsoever, whether similar or dissimilar to
the foregoing; (ii) Lessee shall not look to Assignee or any successor
assignee to perform any of Lessor's obligations hereunder; (iii) Lessee will
not amend or modify this Agreement without the prior written consent of the
Assignee and any successor assignee; and (iv) Lessee will send a copy to
Assignee and any successor assignee of each notice which Lessee sends to
Lessor.
12. REPRESENTATIONS AND WARRANTIES OF LESSEE:
Lessee represents and warrants to Lessor and its assigns, as follows:
1. The execution, delivery and performance of this Lease has been duly
authorized and, upon execution by Lessor and Lessee, will constitute a valid
obligation binding upon and enforceable against Lessee in accordance with its
terms, subject to laws governing creditors' rights;
2. The performance by Lessee will not result in any breach, default or
violation of, Lessee's certificate of incorporation or by-laws or any
agreement to which Lessee is a party;
3. Lessee is in good standing in its jurisdiction of incorporation and
in any jurisdiction in which any of the Equipment is to be located; and
4. Any and all financial statements or other information with respect
to Lessee heretofore furnished by Lessee to Lessor was, when furnished, and
remains at the time of execution of this Lease, true and complete.
Lessor represents and warrants to Lessee as follows:
1. The execution, delivery and performance of this Lease has been duly
authorized and, upon execution by Lessor and Lessee, will constitute a valid
obligation binding upon and enforceable against Lessor in accordance with its
terms, subject to laws governing creditors' rights; and
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2. The performance by Lessor will not result in any breach, default or
violation of, Lessor's certificate of incorporation or by-laws or any
agreement to which Lessor is a party;
The foregoing representations and warranties shall survive the
expiration or termination of this Lease.
13. END OF LEASE:
Provided (i) no Event of Default has occurred and is continuing and (ii)
Lessee has made all payments in accordance with the Lease, upon written
notice furnished by Lessee no later than four (4) months prior to the
expiration of the Initial Term, Lessee shall, with respect to each Equipment
Schedule elect only such alternatives as may be set forth on the Equipment
Schedule.
To the extent that any of such alternatives involves a determination of
Fair Market Value, the Fair Market Value shall be defined and determined by
the provisions of this Section. For purposes hereof, Fair Market Value shall
mean the amount that would obtain in a retail arm's length transaction
between an informed and willing lessee-buyer in possession and an informed
and willing lessor-seller. Rental charges previously paid pursuant to the
applicable Equipment Schedule shall have no effect on the determination of
Fair Market Value. Unless otherwise stated in the Equipment Schedule: the
Fair Market Value for items set forth on the Equipment Schedule which do not
have a readily ascertainable market value, (including but not limited to
software, cabling and certain equipment) shall be determined by multiplying
the Lessor's acquisition cost of such items by a fraction, the numerator of
which shall be the Fair Market Value of the other items and the denominator
of which shall be the Lessor's acquisition cost of such other items; and the
determination of Fair Market Value shall be based upon the assumption that
all items set forth on the Equipment Schedule or included with the Equipment
may be transferred to, and used by, a third party user. In such
determination, all alternative uses in the hands of each buyer or lessee,
including, without limitation, the further leasing of the Equipment shall be
taken into account in making such determination.
If, on or before a date which is sixty (60) days prior to the expiration
of the Initial Term, Lessor and Lessee are unable to agree upon a
determination of the Fair Market Value of the Equipment, the Fair Market
Value (to be determined in accordance with the definition set forth in this
Section) shall, upon written request by Lessee therefor, be conclusively
established not less than thirty (30) days prior to the expiration of the
Initial Term by an independent appraiser selected by Lessor. Lessor shall
notify Lessee of the name and address of said appraiser. The costs of such
appraiser shall be paid by Lessee within ten (10) days after receipt of an
invoice therefor. The Lease, including the obligation to pay monthly rentals,
shall remain in effect pending the determination of Fair Market Value.
14. MISCELLANEOUS:
(a) During the term of this Lease, Lessee hereby agrees to deliver to
Lessor or Assignee and any successor assignee a copy of Lessee's monthly
unaudited financial statements, and the annual financial budget for the
upcoming year as soon as available and as it may be adjusted during the year.
Lessee shall also furnish, as soon as available and in any event within
ninety (90) days after the last day of Lessee's fiscal year, a copy of
Lessee's annual audited statements and consolidating and consolidated balance
sheet, if any, as of the end of such fiscal year, accompanied by the opinion
of an independent certified public accounting firm of recognized standing.
The Lessee shall furnish such other financial information as may be
reasonably requested by Lessor, including but not limited to any material
changes in budgets or financial reports furnished to the Lessee's Board of
Directors or Shareholders.
(b) This Lease constitutes the entire agreement between Lessee and
Lessor with respect to the Equipment, and except as agreed upon in writing no
covenant, condition or other term or provision hereof may be waived or
modified orally.
(c) All notices hereunder shall be in writing and shall be delivered in
person or sent by registered or certified mail, postage prepaid, or by
facsimile transmission (confirmed by registered mail as set forth in this
section) to the address of the other party as set forth herein or to such
other address as such party shall have designated by proper notice.
(d) This Lease shall be binding upon and inure to the benefit of Lessor
and Lessee and their respective successors and assigns (including any
subsequent assignee of Assignee).
(e) If any term or provision of this Lease or the application thereof to
any person is, to any extent, invalid or unenforceable, the remainder of this
Lease, or the application of such provision to the person other than those to
which it is invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
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(f) No waiver of any of the terms and conditions hereof shall be
effective unless in writing and signed by the party against whom such waiver
is sought to be enforced. Any waiver of the terms hereof shall be effective
only in the specific instance and for the specific purpose given. The
subsequent acceptance of rental payments hereunder by Lessor shall not be
deemed a waiver of any prior existing breach by Lessee regardless of Lessor's
knowledge of such prior existing breach at the time of acceptance of such
rental payments. Where permitted by law, Lessee authorizes any attorney of
record, Clerk of Court or Prothonotary of any state to appear for and confess
judgment (a) against Lessee for all amounts as to which Lessee is in default
under this Agreement and (b) against Lessee in any action for writ of
replevin or possession of the Equipment. No bond shall be required.
(g) Lessor is hereby authorized by Lessee to cause this Lease or other
instruments, including Uniform Commercial Code Financing Statements to be
filed or recorded for the purpose of showing Lessor's interest in the
Equipment and Lessee agrees that Lessor may execute such instruments for and
on behalf of Lessee. All filing fees reasonably incurred by Lessor in
connection therewith and filing fees incurred by Lessor's assignees in
perfecting security interests shall be paid by Lessee or reimbursed to Lessor
by Lessee.
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(h) No consent or approval provided for herein shall be binding upon
Lessor unless signed on its behalf by an officer of Lessor. THIS LEASE AND
EACH EQUIPMENT SCHEDULE SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF
CONNECTICUT AND SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF SUCH STATE.
The Lessee accepts for itself the non-exclusive jurisdiction of any Federal
or State court of competent jurisdiction in the State of Connecticut in any
action, suit or proceeding of any kind against it which arises out of or by
reason of this Lease or any Equipment Schedule.
(i) Lessee acknowledges that the late payment by Lessee to Lessor of
monthly rental and other sums due hereunder will cause Lessor harm and to
incur costs not contemplated by this Lease, the precise amount and severity
of which will be difficult to ascertain. Such costs include, but are not
limited to, administrative, accounting and legal charges which Lessor may
incur due to such late payment. Accordingly, if any monthly rent or any
other sum due from Lessee shall not be received by Lessor or Lessor's
assignee within twenty (20) days after the same is due, Lessee shall pay to
Lessor or Lessor's assignee a late charge equal to five per cent (5%) of such
overdue amount monthly until such overdue amount is paid. Lessee
acknowledges that such late charge represents a fair and reasonable estimate
of the cost Lessor will incur by reason of a late payment by Lessee.
Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's default, if any, with respect to such overdue amounts, nor
prevent Lessor from exercising any of the other rights and remedies which
Lessor may have pursuant to this Lease.
(j) The obligations which Lessee is required to perform during the term
of this Lease shall survive the expiration or other termination of this Lease.
(k) Lessee will promptly execute and deliver to Lessor such further
documents and assurances and take such further action as Lessor may
reasonably request in order to effectuate the intent and purpose of this
Lease and to establish and protect the rights, interests and remedies
intended to be created in favor of Lessor hereunder, including without
limitation, the execution and filing of financing statements and continuation
statements with respect to this Lease, the Equipment and any Equipment
Schedule. Lessee authorizes Lessor to effect any such filing and Lessor's
reasonable expenses (together with the reasonable expenses of Lessor's
assignees in this regard) shall be payable by Lessee on demand.
LESSOR: LESSEE:
LEASING TECHNOLOGIES INTERNATIONAL, INC. CONDUCTUS, INC.
BY:_______________________________ BY:____________________________
NAME:_____________________________ NAME:__________________________
TITLE:____________________________ TITLE:_________________________
DATE:_____________________________ DATE:__________________________
