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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM 10-Q
(Mark one)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
- ------- Exchange Act of 1934. For the quarterly period ended March 31, 1997.
or
Transition report pursuant to Section 13 or 15(d) of the Securities
- ------- Exchange Act of 1934. For the transition period from ___________ to
___________.
Commission File Number:
0-24814
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SUGEN, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3629196
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
351 Galveston Drive, Redwood City, California 94063
(address of principal executive offices)
(415) 306-7700
(Registrant's telephone number, including area code)
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Common Stock $.01 par value;
13,070,643 shares outstanding at April 30, 1997.
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<PAGE>
SUGEN, Inc.
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION --------
Item 1. Financial Statements and Notes
Condensed Balance Sheets - March 31, 1997
and December 31, 1996 3
Statements of Operations - for the three months
ended March 31, 1997 and 1996 4
Condensed Statements of Cash Flows - for the three
months ended March 31, 1997 and 1996 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
Exhibit Index 12
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS AND NOTES
<TABLE>
SUGEN, Inc.
CONDENSED BALANCE SHEETS
(In thousands)
<CAPTION>
March 31, December 31,
1997 1996
-------------- --------------
ASSETS (unaudited)
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 13,395 $ 24,852
Short-term investments 36,345 31,482
Accounts receivable 242 264
Prepaid expenses and other current assets 809 468
-------------- -------------
Total current assets 50,791 57,066
Property and equipment, net 4,322 4,095
Other assets 802 775
-------------- -------------
$ 55,915 $ 61,936
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,138 $ 852
Accrued liabilities 6,602 7,406
Deferred contract revenue 370 375
Capital lease obligations - current portion 2,044 1,835
-------------- -------------
Total current liabilities 11,154 10,468
Capital lease obligations - non-current portion 3,311 2,938
Stockholders' equity:
Common stock 108,471 108,120
Deferred compensation (635) (710)
Note receivable from stockholder (883) (883)
Accumulated deficit (65,503) (57,997)
-------------- -------------
Total stockholders' equity 41,450 48,530
-------------- -------------
$ 55,915 $ 61,936
============== =============
<FN>
See accompanying notes.
</FN>
</TABLE>
3
<PAGE>
SUGEN, Inc.
STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
-----------------------
1997 1996
-------- --------
Contract revenue (includes amounts from
related party) $ 1,487 $ 3,479
Costs and expenses
Research and development 8,006 6,615
General and administrative 1,478 1,380
-------- --------
Total costs and expenses 9,484 7,995
-------- --------
Operating loss (7,997) (4,516)
Other income and expenses:
Interest income 693 690
Interest expense (170) (180)
-------- --------
Other income, net 523 510
-------- --------
Net loss $ (7,474) $ (4,006)
======== ========
Net loss per share $ (0.57) $ (0.38)
======== ========
Shares used in computing net loss
per share 13,022 10,473
======== ========
See accompanying notes.
4
<PAGE>
<TABLE>
SUGEN, Inc.
CONDENSED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(In thousands)
(unaudited)
<CAPTION>
Three Months Ended
March 31,
--------------------------------
1997 1996
----------- -----------
Cash flows from operating activities
<S> <C> <C>
Net loss $ (7,474) $ (4,006)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 739 506
Deferred revenue (5) (1,290)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets (319) (149)
Other assets (27) (203)
Accounts payable 1,286 530
Accrued liabilities (804) 869
----------- -----------
Net cash used in operating activities (6,604) (3,743)
----------- -----------
Cash flows from investing activities
Sales/maturities (purchases) of short-term investments, net (4,895) 4,556
Purchases of property and equipment (891) (435)
----------- -----------
Net cash provided by (used in) investing activities (5,786) 4,121
----------- -----------
Cash flows from financing activities
Proceeds from issuance of common stock, net 351 78
Repurchase of common stock - (2,698)
Proceeds from issuance of warrant - 200
Proceeds from lease financing of property and equipment 1,069 332
Payments under capital lease obligations (487) (323)
----------- -----------
Net cash provided by (used in) financing activities 933 (2,411)
----------- -----------
Net decrease in cash and cash equivalents (11,457) (2,033)
Cash and cash equivalents at beginning of period 24,852 8,226
----------- -----------
Cash and cash equivalents at end of period $ 13,395 $ 6,193
=========== ===========
<FN>
See accompanying notes.
</FN>
</TABLE>
5
<PAGE>
SUGEN, Inc.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
The financial information at March 31, 1997 and for the three months
ended March 31, 1997 and 1996 is unaudited but includes all adjustments
(consisting only of normal recurring adjustments) which SUGEN, Inc.
(the "Company") considers necessary for the fair presentation of the
financial position at such date and the operating results and cash
flows for those periods. The accompanying condensed financial
statements should be read in conjunction with the financial statements
and notes thereto for the year ended December 31, 1996 included in the
Company's Form 10-K. The results of the Company's operations for any
interim period are not necessarily indicative of the results of the
Company's operations for a full fiscal year.
Change in Method of Computing Earnings Per Share
In February 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 128, Earnings
Per Share. Effective December 31, 1997, the Company will adopt
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share." In accordance with the Statement, the Company would be required
to change the method currently used to compute earnings per share and
restate all prior periods. The impact of Statement 128 on the
calculation of basic and dilutive earnings per share is expected to
have no impact on the net loss per share to be presented at year end.
2. Accrued Liabilities
The components of accrued liabilities consist of the following:
March 31, December 31,
1997 1996
-------- --------
(In thousands)
Accrued research & development services $ 3,328 $ 3,724
Accrued compensation 652 883
Accrued professional fees 735 524
Other 1,887 2,275
-------- --------
$ 6,602 $ 7,406
======== ========
6
<PAGE>
SUGEN, Inc.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In addition to historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ significantly from the
results discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include the factors discussed below as well as
the factors discussed in the Company's Form 10-K for the year ended December 31,
1996. The Company undertakes no obligation to release the results of any
revision to these forward-looking statements which may be made to reflect events
or circumstances occurring after the date hereof or to reflect the occurrence of
unanticipated events.
Overview
SUGEN was founded in July 1991 to discover and develop small molecule
drugs that target specific cellular signal transduction pathways. These pathways
have been implicated in diseases such as cancer and diabetes as well as in
dermatologic, immunologic, cardiovascular and neurologic disorders. Through
March 31, 1997, all of the Company's revenue has been earned pursuant to
collaborations with Zeneca Limited ("Zeneca"), ASTA Medica Aktiengesellschaft
("ASTA Medica"), Vision Pharmaceuticals L.P., an affiliate of Allergan, Inc. and
Allergan, Inc. (collectively "Allergan") and Amgen Inc. ("Amgen"). The Company
intends to pursue its drug discovery programs independently and in collaboration
with established pharmaceutical companies.
The Company has not been profitable since inception and expects to
incur substantial losses for the foreseeable future, primarily due to the
expansion of preclinical and clinical development activities as more of its
proprietary cancer-related programs progress toward and into the clinic. The
Company expects that losses will fluctuate from quarter to quarter and that such
fluctuations may be substantial. As of March 31, 1997, the Company's accumulated
deficit was $65.5 million.
Results of Operations
The Company's revenues for the three months ended March 31, 1997 and
1996 were $1.5 million and $3.5 million, respectively. Revenues for the three
months ended March 31, 1997 included contract revenue from the Allergan and
Zeneca collaborations and contract services revenue earned under the ASTA Medica
collaboration for non-collaboration work. 1996 revenues included set-up fees
associated with the ASTA Medica collaboration and wind-down fees in connection
with the termination of the Amgen collaboration agreement. The Company
recognizes revenue from set-up fees and wind-down fees as the related activities
are performed, which is generally over a twelve-month period or less. Through
December 31, 1996, the set-up and wind-down fees from the ASTA Medica and Amgen
collaborations, respectively, had been fully recognized as revenue. Going
forward, the Company will not recognize any additional revenue under the Amgen
collaboration and will recognize additional revenue under the ASTA Medica
collaboration only upon the achievement of specified milestones and for contract
services provided by ASTA Medica for non-collaboration work. As a result, 1997
contract revenue will continue to be lower in 1996 in the absence of additional
collaboration agreements during the year. The Company is actively pursuing
additional collaborations, but no assurance can be given as to the ability of
the Company to enter such collaborations on a timely basis or at all.
Research and development expenses for the three months ended March 31,
1997 and 1996 were $8.0 million and $6.6 million, respectively. The increase
during 1997 was primarily due to higher personnel related costs associated with
the expansion of the Company's research and development programs and the
progression of clinical activities, including expanded Phase I
7
<PAGE>
and Phase II studies of the Company's lead anti-cancer compound, SU101, and the
initiation of clinical studies under the Company's Psoriasis program. The
continued advancement of several earlier stage programs through preclinical
development also contributed to higher expenses in 1997.
General and administrative expenses for the three months ended March
31, 1997 and 1996 were $1.5 million and $1.4 million, respectively. The Company
expects that its general and administrative expenses will continue to increase
in order to support the Company's research and development efforts.
Interest income for the three months ended March 31, 1997 and 1996 were
$693,000 and $690,000, respectively. The Company earned slightly higher interest
income, despite the decline in interest rates from the same period last year,
due to higher investment balances arising primarily from issuances of the
Company's capital stock. Interest expense for the three months ended March 31,
1997 and 1996 were $170,000 and $180,000, respectively. The decrease in interest
expense was primarily due to the scheduled termination of some of the Company's
leases. The Company expects that interest expense will increase in future
periods due to the continued use of capital lease financing for equipment and
facility improvements.
Liquidity and Capital Resources
The Company had cash, cash equivalents and short-term investments of
approximately $49.7 million at March 31, 1997 compared with approximately $56.3
million at December 31, 1996. The decrease in cash and investments during the
three months ended March 31, 1997 was primarily due to the net loss for the
quarter.
Through March 31, 1997, the Company's principal sources of financing
have been its initial and follow-on public offerings of Common Stock, placements
of the Company's Preferred and Common Stock and funds received under the
Company's corporate collaborations. The Company's current principal sources of
liquidity are its research and development collaborations with ASTA Medica,
Zeneca and Allergan, its cash, cash equivalents and short-term investments and
capital lease financing. In March 1997, the Company secured an additional
capital lease line in the amount of $3.5 million for the purchase of equipment
and facilities improvements. At March 31, 1997, the Company had a combined
availability of $3.1 million under this new line and its preceding lease line.
The Company has entered into license and research agreements whereby
the Company funds research projects performed by others or in-licenses compounds
from third parties. Some of the agreements may require the Company to make
milestone and royalty payments. Under these programs, commitments for external
research funding are approximately $2.3 million in 1997. A number of these
agreements expire in late 1997. However, the Company anticipates renewing these
agreements which may increase future commitments of the Company. Most of these
commitments are cancelable within a three to six month period and limit the
amounts payable by the Company for sponsored research under the programs after
notice of cancellation by the Company.
From time to time, the Company evaluates potential investments in
complementary businesses, products or technologies. Currently, the Company is
considering modest investments in such complementary businesses during 1997. The
Company has no other present undertakings, commitments or agreements with
respect to investments in other businesses.
Net additions of equipment and leasehold improvements for the three
months ended March 31, 1997 and 1996 were $891,000 and $435,000, respectively.
Capital additions during the first quarter of 1997 included the initial phases
of a limited facility expansion and the continued investment in enhancing the
Company's laboratory capabilities. The Company expects that its
8
<PAGE>
capital additions for 1997 will be higher than that of the prior year primarily
due to anticipated facility improvements to its laboratory and office space. The
Company intends to fund future capital expenditures principally through lease
financing or other debt arrangements. Accordingly, it is expected that the
Company's capital lease obligations and related interest expense as well as its
depreciation expense will increase in future periods.
The Company estimates that its existing capital resources, together
with facility and equipment financing, anticipated revenues from its current
collaborations and net income from investment activities, will be sufficient to
fund its planned operations through 1998. The Company anticipates that the funds
from future collaborations will extend this time period. However, there can be
no assurance that the Company will enter into any such collaborations. In
addition, there can be no assurance that the underlying assumed levels of
revenue and expense will prove accurate. Whether or not these assumptions prove
to be accurate, the Company will need to raise substantial additional capital to
fund its operations. The Company intends to seek such additional funding through
collaborative arrangements, public or private equity or debt financings and
capital lease transactions; however, there can be no assurance that additional
financing will be available on acceptable terms or at all. If additional funds
are raised by issuing equity securities, further dilution to stockholders may
result. In addition, in the event that additional funds are obtained through
arrangements with collaborative partners, such arrangements may require the
Company to relinquish rights to certain of its technologies, product candidates
or products that the Company would otherwise seek to develop or commercialize
itself. If adequate funds are not available, the Company may be required to
delay, reduce the scope of or eliminate one or more of its research or
development programs, which could have a material adverse effect on the Company.
The Company is at an early stage of development and must be evaluated
in light of the uncertainties and complications present in a biotechnology
company. The Company has been in existence only since 1991 and to date two drug
candidates (SU101 and SU5271) have entered human clinical testing. To achieve
profitable operations on a continuing basis, the Company, alone or with
collaborative partners, must successfully develop, manufacture, introduce and
market its proposed products. Products, if any, resulting from the Company's
research and development programs are not expected to be commercially available
for several years, even if they are developed successfully and proven to be safe
and effective. Before obtaining regulatory clearance for the commercial sale of
any of its products under development, the Company must demonstrate through
preclinical studies and clinical trials that the potential product is safe and
efficacious for use in humans for each target indication. The failure to
adequately demonstrate the safety and efficacy of a product under clinical
development could delay or prevent regulatory clearance of the potential product
and could have a material adverse effect on the Company. In addition, many of
the Company's currently proposed products are subject to development and
licensing arrangements with the Company's collaborators. Therefore, the Company
is dependent on the research and development efforts of these collaborators with
respect to some of its proposed products and is entitled only to a portion of
the revenues, if any, realized from the commercial sale of any of the potential
products covered by the collaborations in many jurisdictions. The Company has
experienced significant operating losses since its inception. The Company
expects to incur significant operating losses at least for the next several
years and expects cumulative losses to increase as the Company's research and
development efforts, including preclinical and clinical testing, are expanded.
All of the Company's revenues to date have been received pursuant to the
Company's collaborations. Should the Company or its collaborators fail to
perform in accordance with the terms of any of their agreements, any consequent
loss of revenue under the agreements could have a material adverse effect on the
Company's results of operations. The foregoing risks reflect the Company's early
stage of development and the nature of the Company's industry and potential
products. Also inherent at the Company's stage of development are a range of
additional risks, including manufacturing uncertainties, the Company's lack of
sales and marketing capabilities, competition, uncertainties regarding
protection of patents and proprietary rights, government regulation and
uncertainties regarding pharmaceutical pricing and reimbursement.
9
<PAGE>
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Number Description
- -------------- -------------
3.1 Restated Certificate of Incorporation (2)
3.2(ii) Bylaws of the Registrant (1)
3.3 Certificate of Designation of Series A Junior Participating
Preferred Stock of the Registrant (3)
10.61+ Master Lease Agreement, dated March 28, 1997, between the
Registrant and Transamerica Business Credit Corporation.
10.62+ Lease Financing Commitment Letter, dated March 20, 1997,
between the Registrant and Transamerica Business Credit
Corporation.
27 Financial Data Schedule
- --------------
+ The Registrant has requested confidential treatment with
respect to portions of this Exhibit.
(1) Incorporated by reference to identically numbered exhibits
filed in response to Item 16 "Exhibits" of the Company's
Registration Statement on Form S-1, as amended (File Number
33-77074), which became effective October 4, 1994.
(2) Incorporated by reference to identically numbered exhibits
filed in response to Item 14 "Exhibits" of the Company's
Annual Report of Form 10-K for the year ended December 31,
1994.
(3) Filed as an exhibit to the Form 8-K Current Report dated
July 26, 1995 and incorporated herein by reference.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31,
1997.
10
<PAGE>
SUGEN, Inc.
SIGNATURES
Date: May 9, 1997 SUGEN, Inc.
By: /s/ Stephen Evans-Freke By: /s/ Christine E. Gray-Smith
---------------------------- ---------------------------
Stephen Evans-Freke Christine E. Gray-Smith
Chairman and Vice President, Finance
Chief Executive Officer (Principal Financial and
Accounting Officer)
11
<PAGE>
SUGEN, Inc.
EXHIBIT INDEX
Exhibit Number Description
- -------------- -------------
3.1 Restated Certificate of Incorporation (2)
3.2(ii) Bylaws of the Registrant (1)
3.3 Certificate of Designation of Series A Junior Participating
Preferred Stock of the Registrant (3)
10.61+ Master Lease Agreement, dated March 28, 1997, between the
Registrant and Transamerica Business Credit Corporation.
10.62+ Lease Financing Commitment Letter, dated March 20, 1997,
between the Registrant and Transamerica Business Credit
Corporation.
27 Financial Data Schedule
- --------------
+ The Registrant has requested confidential treatment with
respect to portions of this Exhibit.
(1) Incorporated by reference to identically numbered exhibits
filed in response to Item 16 "Exhibits" of the Company's
Registration Statement on Form S-1, as amended (File Number
33-77074), which became effective October 4, 1994.
(2) Incorporated by reference to identically numbered exhibits
filed in response to Item 14 "Exhibits" of the Company's
Annual Report of Form 10-K for the year ended December 31,
1994.
(3) Filed as an exhibit to the Form 8-K Current Report dated
July 26, 1995 and incorporated herein by reference.
12
*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SS.SS. 200.80(B)(4),
200.83 AND 240.24B-2
MASTER LEASE AGREEMENT
Lessor: TRANSAMERICA BUSINESS CREDIT CORPORATION
Riverway II
West Office Tower
9399 West Higgins Road
Rosemont, Illinois 60018
Lessee: SUGEN, INC.
351 Galveston Drive
Redwood City, California 94063-4720
The lessor pursuant to this Master Lease Agreement ("Agreement") dated as of
March 28, 1997, is Transamerica Business Credit Corporation ("Lessor"). All
equipment, software (Software), items designated as tenant improvements on the
applicable schedule (Tenant 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
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 other
than stated in Paragraph 1 below.
LEASE. Subject to and upon all of the terms and conditions of
this Agreement and each Schedule, Lessor hereby agrees to lease to Lessee up to
$3,500,000 in Equipment, including up to [...***...] in Tenant Improvements and
up to [...***...] in Software and Lessee hereby agrees to lease from Lessor the
Equipment for the Term (as defined in Paragraph 2 below) thereof.
<PAGE>
TERM. Each Lease shall be effective and the term of each Lease
("Term") shall commence on the commencement date specified in the applicable
Schedule which date shall not be prior to delivery, acceptance and funding 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 [...***...].
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 ten days after the day on which it
becomes payable, Lessee will pay on demand, as a late charge, an amount equal to
[...***...] 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. Lessees commitment
fee paid pursuant to the Commitment Letter dated March 20, 1997 (as amended,
supplemented or otherwise modified from time to time, the (Commitment Letter)),
shall be applied towards the second months rent (after deductions for expenses
under paragraph 23) under the initial Schedules and each monthly rental payment
thereafter until fully applied.
LEASE NOT CANCELABLE; LESSEE'S OBLIGATIONS ABSOLUTE. No Lease
may be canceled or terminated except as expressly provided herein. So long as
Lessor has not wrongfully interfered with Lessees quiet enjoyment of the
Equipment, 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
- -------------------------
*Confidental Treatment Requested
<PAGE>
make any claim solely against the manufacturer or the vendor thereof and shall,
nevertheless, pay Lessor all Rent payable hereunder.
SELECTION AND USE OF EQUIPMENT. Lessee agrees that it shall be
responsible for the selection, use of, and results obtained from, the Equipment
and any other associated equipment or services.
WARRANTIES. 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. ONCE ACCEPTED BY LESSEE, LESSEE LEASES
THE EQUIPMENT "AS IS." IN NO EVENT SHALL LESSOR HAVE ANY LIABILITY FOR, 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 or receiving benefits under
the warranty, the benefits of any and all warranties made available by the
manufacturer or the vendor of the Equipment to the extent assignable.
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.
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, Lessee may elect to
renew upon 60 days prior written notice to Lessor each Lease on the terms and
conditions of this Agreement or as set forth in the
- -------------------------
*Confidental Treatment Requested
<PAGE>
applicable Schedule (the Renewal Term); provided, however, that if Lessee elects
to renew, obligations due to be performed by the Lessee during the Renewal Term
shall continue until they have been performed in full. The monthly rental
payments for the Renewal Term shall be as set forth in the applicable Schedule.
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 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 set forth in the applicable Schedule.
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 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 [...***...].
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 and file UCC-3 termination statements
upon reasonable request by Lessee.
OWNERSHIP; INSPECTION; MARKING; FINANCING STATEMENTS. Lessee
shall affix to the Equipment, other than the Tenant Improvements, 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. Other than Tenant
Improvements, 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 necessary to prevent any person from
acquiring any rights in the Equipment, other than in the Tenant Improvements, by
reason of the Equipment being claimed or deemed to be real property. Upon
request by
- -------------------------
*Confidental Treatment Requested
<PAGE>
Lessor, Lessee shall obtain and deliver to Lessor 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.
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 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 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.
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 and meet all 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.
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.
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 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
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<PAGE>
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, and meet all recertification requirements and (ii) 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 thirty 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 thirty-day period prior to
the end of 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.
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 [...***...] of the Equipment and (b) the [...***...]
of the Equipment specified in the applicable Schedule [...***...]. Each
liability insurance policy shall
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*Confidental Treatment Requested
<PAGE>
provide coverage (including, without limitation, personal injury coverage) of
not less than [...***...] 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 furnish an insurance certificate 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 certificates or 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 [...***...]
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 [...***...] hereunder (as reasonably determined by Lessor) 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 Lessee if no Event of Default has
occurred and is continuing (and otherwise at the option of Lessor), 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
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*Confidental Treatment Requested
<PAGE>
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.
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 if resulting from an act or omission of Lessee, any fines,
penalties or interest thereon, imposed or levied by any governmental body,
agency or tax authority upon or in connection with the Equipment, 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, Lessor will pay all property taxes on the Equipment for which Lessee
shall reimburse Lessor promptly upon request and proof of payment. 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 billings 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
billings. Lessee shall have the option to contest taxes diligently and in good
faith as long as Lessee maintains adequate reserves for such taxes measured in
accordance with General Accepted Accounting Principles.
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.
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, reasonable legal fees, incurred by
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*Confidental Treatment Requested
<PAGE>
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 a non-appealable, final order
of a court of competent jurisdiction 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 of the assertion of any claim, action,
damage, obligation, liability or lien, 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
Lessee incurs a loss as a direct result of such failure. 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.
ASSIGNMENT BY LESSEE. Lessee shall not, without the prior
written consent of Lessor, (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
agents, representatives, contractors and other authorized persons, provided that
Lessee shall indemnify and hold Lessor and its successors and assigns harmless
from any liability arising under, or in connection with such persons use or
operation of the Equipment; 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.
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
<PAGE>
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. Notwithstanding any assignment by
Lessor, Lessor shall not be relieved of its obligations under any Lease, but in
no event shall Lessor be liable for any act or omission of its assignee.
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 ten 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 in any material respect
any other provision under or in connection with a Lease or violates in any
material respect any of the covenants or agreements of such Lease Parties 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 if the amount involved
exceeds [...***...] in the aggregate; (g) any 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; (i) any of the Lease Parties shall amend or modify its name, unless
<PAGE>
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) provided
that Lessee shall have 10 business days after notice to cure any default under
this paragraph (i); (j) any of the Lease Parties shall merge or consolidate with
any other entity or make any material change in 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 which loss has a material
adverse effect on Lessees ability to perform hereunder, or fail generally to pay
its debts as they mature, or call a meeting for purposes of compromising its
debts; or (l) any of the Lease Parties shall deny or disaffirm its obligations
hereunder or under any of the documents delivered in connection herewith.
REMEDIES. Upon the occurrence and continuation of an Event of
Default for ten days after notice for a payment Event of Default and for thirty
days after notice for all other Events 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; (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 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, reasonable legal fees and all other amounts
specified in
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*Confidental Treatment Requested
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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 or (2)
the date that Lessor has obtained possession of the Equipment or such other date
as Lessee has made an effective tender of possession of the Equipment 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 [...***...] simple interest per
annum; (iv) the present value of the reversionary value of the Equipment as of
the expiration of the Term of the applicable Lease as set forth on the
applicable Schedule discounted at [...***...] simple interest; 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 1herefrom 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.
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*Confidental Treatment Requested
<PAGE>
LESSOR'S EXPENSE. Lessee shall pay Lessor on demand all its
reasonable expenses which shall not exceed [...***...] without the written
consent of Lessee (including reasonable legal fees and expenses) incurred in
connection with the preparation, execution and delivery of this Agreement and
any other agreement and transaction 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 incurred by Lessor in enforcing the terms,
conditions or provisions of each Lease or, upon the occurrence and continuation
of an Event of Default.
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; provided, however, that Lessee shall
have the right to recover damages from Lessor for any breach by Lessor of its
obligations under this Agreement. 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, except that Lessee shall have the right to require Lessor to convey to
Lessee, without representation, warranty or recourse, all of Lessors rights,
title and interest in and to the Equipment upon Lessors receipt, following an
event of default and the exercise of the Lessors remedies, of the amounts
specified in Paragraph 22(f). Any action by Lessee against Lessor for any
default by Lessor under any Lease shall be commenced within one year after any
such cause of action accrues.
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 Technology Finance Division, 76 Batterson
Park Road, Farmington, Connecticut 06032, Attention: Assistant Vice President,
Lease Administration, with a copy to Lessor at Riverway II, West Office Tower,
9399 West Higgins Road, Rosemont, Illinois 60018, Attention: Legal
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*Confidental Treatment Requested
<PAGE>
Department, if to Lessee, then to Sugen, Inc., 351 Galveston Drive, Redwood
City, California 94063-4720, Attention: Vice President 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.
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 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
except as may be limited by bankruptcy, reorganization, receivership, insolvency
or other laws affecting the enforcement of creditors rights generally; (e) to
the knowledge of Lessee 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 and does not omit any material statement necessary to insure that the
information supplied is not misleading.
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 limited 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.
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*Confidental Treatment Requested
<PAGE>
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, as filed with the SEC. Lessee shall also deliver to Lessor as soon as
available copies of all press releases and other similar communications issued
by Lessee and upon request of Lessor.
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.
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.
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.
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.
SPECIAL TAX INDEMNIFICATION. Lessee acknowledges that
<PAGE>
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 of which
Lessee has prior written notice and opportunity of comply, 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, and (ii) 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 absent good faith contest by 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 33 shall survive
the termination of this Agreement.
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
SCHEDULES HERETO, UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND
CONDITIONS. FURTHER, LESSEE AND LESSOR AGREE THAT THIS AGREEMENT AND THE
SCHEDULES DELIVERED AND SIGNED BY LESSEE AND LESSOR IN CONNECTION HEREWITH FROM
TIME TO TIME AND THE COMMITMENT LETTER DATED MARCH 20, 1997, AS EXECUTED MARCH
25, 1997, ARE THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE
PARTIES, SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL
<PAGE>
OTHER COMMUNICATIONS BETWE9EN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed by their duly authorized officers as of this ____
day of ______________, 1997.
SUGEN, INC. TRANSAMERICA BUSINESS CREDIT CORPORATION
By: By:
----------------------------- -----------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
-------------------------- --------------------------
Federal Identification
Number 13-3629196
<PAGE>
Schedule for Tenant Improvements
SCHEDULE TO MASTER LEASE AGREEMENT
Dated as of __________
Schedule No. __
Lessor Name & Mailing Address Lessee Name & Mailing Address
Transamerica Business Credit Corporation Sugen, Inc.
Riverway II 351 Galveston Drive
West Office Tower Redwood City, California
9399 West Higgins Road 94063-4720
Rosemont, Illinois 60018
Equipment Location (if different than Lessee's address above):
This Schedule covers the following described equipment ("Equipment").
See Exhibit II attached hereto and made a part hereof.
The Equipment is hereby leased pursuant to the provisions of the Master Lease
Agreement between the undersigned Lessee and Lessor dated as of __________ (the
"Master Lease"), the terms of which are incorporated herein by reference
thereto, plus the following additional terms, provisions and modifications.
Lessor reserves the right to adjust the monthly payments in accordance with the
Commitment Letter dated _____________, between the Lessor and Lessee, if the
Lessor has not received this Schedule executed by the Lessee within ____
business days from the date set forth above.
1. Term (Number of Months)
2. Equipment Cost
3. Commencement Date
4. a. Rate Factor (months)
a. Rate Factor (month)
5. Total Rents
6. Advance Rents (months)
7. Monthly rental payments for months ____
<PAGE>
(including monthly sales/use tax) will be in the amount of
$________ and the second such rental payment will be due on
______________ and subsequent rental payments will be due on ______
each month thereafter. Monthly rental payment for month __
(including sales/use tax) will be in the amount of $__________
1. Security Deposit
2. In addition to the monthly rental payments provided for herein,
Lessee shall pay to Lessor, as interim rent, payable on the
commencement date specified above, an amount equal to 1/30th of the
monthly rental payment (including monthly sales/use tax) multiplied
by the number of days from and including the commencement date
through the end of the same calendar month.
Renewal Terms:
Lessee shall give Lessor ____ days prior written notice if it does not intend to
make the __ Monthly Rent described in __. In the event Lessee fails to give such
notice and Lessee does not make the ____ payment and provided that the Lessee's
Real Estate Lease Term exceeds the Tenant Improvement Term, the lease shall
automatically renew for a term of _____ months with Monthly Rental equal to __%
of Equipment Cost payable monthly in advance. At the expiration of the renewal
period, Lessee may purchase all (but not less than all) the Equipment for $____,
plus sales and other taxes.
Tenant Improvements Termination Provisions:
If Lessee elects to vacate its present operating facilities (which is defined as
any facility in which Lessor's Tenant Improvements reside), then Lessor will
release its ownership in all its Tenant Improvements that cannot be removed and
used and Lessee shall pay a higher monthly rental factor on the remaining term
of such Tenant Improvements by ___% (or from ___% of Tenant Improvements Cost
monthly to ___% of Tenant Improvements Cost).
<PAGE>
Except as expressly provided or modified hereby, all the terms and provisions of
the Master Lease Agreement shall remain in full force and effect.
In the event this Lease is not renewed pursuant to the terms hereof, Lessee
shall make the __th Monthly Rental Payment on the Purchase Date of __________.
On the Purchase Date, Lessee shall purchase all (but not less than all) the
Equipment for $_____, plus applicable sales and other taxes.
The Stipulated Loss Value of any items of Equipment shall be an amount equal to
the present value of all future Rent discounted at a rate of __% per annum plus
the Reversionary Value.
The Reversionary Value of any item of Equipment shall be $____.
In witness whereof, this Schedule is hereby executed and agreed to this ____ day
of ________________, 1997.
TRANSAMERICA BUSINESS CREDIT SUGEN, INC.
CORPORATION (Lessee)
(Lessor)
By: By:
------------------------------ -------------------------------
Title: Title:
--------------------------- ---------------------------
<PAGE>
Schedule for Laboratory, Computer and Office Equipment and Software
SCHEDULE TO MASTER LEASE AGREEMENT
Dated as of __________
Schedule No. __
Lessor Name & Mailing Address Lessee Name & Mailing Address
Transamerica Business Credit Corporation Sugen, Inc.
Riverway II 351 Galveston Drive
West Office Tower Redwood City, California
9399 West Higgins Road 94063-4720
Rosemont, Illinois 60018
Equipment Location (if different than Lessee's address above):
This Schedule covers the following described equipment ("Equipment").
See Exhibit II and Rider I attached hereto and made a part hereof.
The Equipment is hereby leased pursuant to the provisions of the Master Lease
Agreement between the undersigned Lessee and Lessor dated as of __________ (the
"Master Lease"), the terms of which are incorporated herein by reference
thereto, plus the following additional terms, provisions and modifications.
Lessor reserves the right to adjust the monthly payments in accordance with the
Commitment Letter dated _____________, between the Lessor and Lessee, if the
Lessor has not received this Schedule executed by the Lessee within ____
business days from the date set forth above.
I. Term (Number of Months)
II. Equipment Cost
III. Commencement Date
IV. a. Rate Factor (months __ through __)
a) Rate Factor (month __)
V. Total Rents
VI. Advance Rents (months __ and __)
<PAGE>
VII. Monthly rental payments for months __ through __ (including
monthly sales/use tax) will be in the amount of $________ and the
second such rental payment will be due on and subsequent rental
payments will be due on the same day of each month thereafter.
Monthly rental payment for month __ (including sales/use tax) will
be in the amount of $__________
I. Security Deposit
II. In addition to the monthly rental payments provided for herein,
Lessee shall pay to Lessor, as interim rent, payable on the
commencement date specified above, an amount equal to 1/30th of
the monthly rental payment (including monthly sales/use tax)
multiplied by the number of days from and including the
commencement date through the end of the same calendar month;
provided, however, no interim rent shall be due if the
Commencement Date is on or after the last three (3) business days
of a month.
Renewal Terms:
Lessee shall give Lessor ____ days prior written notice if it does not intend to
make the __ monthly rental payment described in __. In the event Lessee fails to
give such notice and Lessee does not make the __ monthly rental payment, the
lease shall automatically renew for a term of _____ months with _____ monthly
rental payments equal to __% of Equipment Cost payable monthly in advance plus
an additional payment equal to __% of Equipment Cost due at the end of the
Renewal Term, plus applicable sales and other taxes. At the expiration of the
Renewal Term, Lessee may purchase all (but not less than all) the Equipment for
$____, plus sales and other taxes.
Except as expressly provided or modified hereby, all the terms and provisions of
the Master Lease Agreement shall remain in full force and effect.
In the event this Lease is not renewed pursuant to the terms hereof, Lessee
shall make the __ Monthly Rental Payment on the Purchase Date of
<PAGE>
__________. On the Purchase Date, Lessee shall purchase all (but not less than
all) the Equipment for $_____, plus applicable sales and other taxes.
The Stipulated Loss Value of any items of Equipment shall be an amount equal to
the present value of all future Rent discounted at a rate of __% per annum plus
the Reversionary Value.
The Reversionary Value of any item of Equipment shall be $____.
In witness whereof, this Schedule is hereby executed and agreed to this ____ day
of ________________, 1997.
TRANSAMERICA BUSINESS CREDIT SUGEN, INC.
CORPORATION (Lessee)
(Lessor)
By: By:
------------------------------ -------------------------------
Title: Title:
--------------------------- ---------------------------
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SS. 200.80(B)(4),
200.83 AND 240.24B-2
GERALD A. MICHAUD
Senior Vice President
Transamerica Business
Credit Corporation
Technology Finance Division
76 Batterson Park Road
Farmington, CT 06032-2571
Telephone 860 677-6466
Fax 860 677-6766
March 20, 1997
Ms. Christine Gray-Smith
Vice President Finance
Sugen, Inc.
515 Galveston Drive
Redwood City, CA 94063-4720
Dear Christine:
Transamerica Business Credit Corporation - Technology Finance Division
("Lessor") is pleased to offer to lease the Equipment described below to Sugen,
Inc. ("Lessee"). This Commitment supersedes all prior correspondence, proposals,
and oral or other communications relating to leasing arrangements between Lessee
and Lessor. The outline of this offer is as follows:
Lessee: Sugen, Inc.
Lessor: Transamerica Business Credit Corporation - Technology
Finance Division and/or its affiliates, successors
and assigns.
Guarantors: None.
Equipment: 1. Laboratory, Computer and Office Equipment and
software as will be further described in the
lease documentation. All equipment subject to
approval of Lessor prior to funding,
<PAGE>
which approval will not be unreasonably withheld.
A. Tenant Improvements as will be further described
in the lease documentation.
B. The Equipment and Tenant Improvements shall
include sale-leaseback items purchased after
December 1, 1996.
Equipment Cost: Not to exceed $3,500,000 (Tenant Improvements
limited to [...***...] and Software limited to
[...***...].
Equipment Location: Redwood City, California or other locations
acceptable to Lessor, which acceptance shall not
be unreasonably withheld.
Anticipated Delivery: December 1, 1996 through June 30, 1998.
Termination of
Commitment: This commitment will terminate if the first
delivery of Equipment is not completed and funded
on or before May 31, 1997. The final delivery of
Equipment shall not be later than June 30, 1998.
Lease Term Commencement: Upon delivery acceptance and funding of the
Equipment or upon each completion of deliveries
of items of Equipment with aggregate cost of not
less than [...***...], but in no event shall any
Equipment be delivered later than June 30, 1998.
Term:
(Equipment and Software) From each Lease Term Commencement until 49 months
from the first day of the month next following or
on the same date as the Lease Term Commencement
if that date is the first date of the month.
Term:
(Tenant Improvements) From each Lease Term Commencement until 37 months
from the first day of the month next following or
on the same date as the Lease Term Commencement
if that date is the first date of the month.
Lease Repayment Terms:
<PAGE>
(Equipment and Software) Monthly Rent for months 1 through 48 equal to
[...***...] of Equipment Cost payable monthly in
advance, plus applicable sales and other taxes.
Monthly Rent for month 49 equal to [...***...] of
Equipment Cost. The first and 48th months' rent
shall be payable in advance. Lessee may elect
Automatic Renewal provision of the lease in lieu
of making the 49th monthly rent payment as
described above upon giving 60 days prior written
notice to Lessor. As of the date of each Lease
Term Commencement, the Monthly Rent Payments
shall be fixed for the term.
Lease Repayment Terms:
(Tenant Improvements) Monthly Rent for months 1 through 36 equal to
[...***...] of Tenant Improvements Cost and
Equipment Cost payable monthly in advance, plus
applicable sales and other taxes. Monthly Rent
for month 37 equal to [...***...] of Equipment
Cost. The first and 36th months' rent shall be
payable in advance. Lessee may elect Automatic
Renewal provision of the lease in lieu of making
the 37th month's rent payment as described above
upon giving 60 days prior written notice to
Lessor. As of the date of each Lease Term
Commencement, the Monthly Rent Payments shall be
fixed for the term.
The Lessor reserves the right to increase the
Monthly Rent Payments as of the date of each
Lease Term Commencement commensurate to the
[...***...] of the interest rates of [...***...]
(in the case of Equipment) and [...***...] (in
the case of Tenant Improvements Cost) from the
week ending March 5, 1997 ([...***...] and
[...***...], respectively) to the week preceding
the date of each Lease Term Commencement, as
published in the Wall Street Journal.
- -------------------------
*Confidental Treatment Requested
<PAGE>
Interim Rent Payments: In the event that the Lease Term Commencement is
not on the first day of the month, Interim Rent
Payments shall accrue from each Lease Term
Commencement until the next following first day
of a month and shall be payable at the end of
that month. Interim Rent Payments shall be
calculated at the daily equivalent of the
currently adjusted Monthly Payment. Lessee will
not be charged Interim Rent on any Schedule that
has a Commencement Date that starts on or after
the last 3 business days of a month.
Purchase Option:
(Equipment and Software) Lessee shall have the option to purchase all (but
not less than all) the Equipment or any schedule
at the expiration of the term of the Lease for
[...***...], plus applicable sales and other
taxes.
Automatic Renewal:
(Equipment and Software) In the event Lessee does not elect to make the
49th monthly rent as described in the Lease
Repayment Terms above, the lease shall
automatically renew for a term of twelve months.
The Monthly Rental will equal [...***...] of the
original Equipment Cost payable monthly in
advance plus [...***...] equal to [...***...] of
the Equipment Cost, after which time the Lessee
may purchase the Equipment for [...***...] plus
sales and other applicable taxes due at the end
of the Renewal Term.
Purchase Option or
Automatic Renewal:
(Tenant Improvements) Lessee shall have the option to purchase all (but
not less than all) of the Tenant Improvements at
the end of the lease term for [...***...] plus
applicable sales and other taxes. If the Lessee
renews its existing Real Estate Lease for a
period that exceeds the Tenant Improvements Lease
Term, then Lessee may automatically renew the
lease in
- -------------------------
*Confidental Treatment Requested
<PAGE>
lieu of making the 37th monthly rent payment as
described in the Lease Repayment Terms above, the
lease shall automatically renew for a term of
twelve months with Monthly Rental equal to
[...***...] of the original Tenant Improvement
costs payable monthly in advance, after which
time the Lessee may purchase all but not less
than all of the Tenant Improvements for
[...***...] plus sales and other applicable taxes
due at the end of the Renewal Term.
Documentation: The documentation relating to this transaction
shall implement the transaction contemplated by
this commitment letter to the satisfaction of
Lessor and its counsel, shall be fully acceptable
to Lessor and Lessee and their counsel, and shall
contain conditions precedent, representations,
warranties and covenants by Lessee and shall
provide for events of defaults and remedies, all
as reasonably required by Lessor for transactions
of this type. The documentation shall include,
but not be limited to, the terms and conditions
described in this commitment letter.
Insurance: Prior to any delivery of Equipment, the Lessee
shall furnish a certificate of insurance
acceptable to the Lessor in amount, type, and
term 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.
Taxes: Sales or use taxes would be added to the
Equipment Cost or collected on the gross rentals,
as appropriate.
Representations and
Additional Covenants: There shall be no actual or threatened conflict
with, or violation of, any regulatory statute,
- -------------------------
*Confidental Treatment Requested
<PAGE>
standard or rule relating to the Lessee, its
present or future operations, or the Collateral.
All information supplied by the Lessee shall be
materially correct and shall not omit any
statement necessary to make the information
supplied not be misleading. There shall be no
material breach of the representations and
warranties of the Lessee in the Lease. The
representations shall include that the Equipment
Cost of each item of the Equipment does not
exceed the fair and usual price for such type of
Equipment purchase in like quantity purchased of
such item and reflects all discounts, rebates and
allowances for the Equipment given to Lessee by
the manufacturer, supplier or any other person
including, without limitation, discounts for
advertising, prompt payment, testing or other
services.
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.
1. Completion of the documentation and final
terms of the proposed financing satisfactory
to Lessor and Lessor's counsel, and Lessee and
Lessee's counsel.
2. Results of all due diligence, including lien,
judgment and tax searches and other matters
Lessor may request shall be satisfactory to
Lessor and Lessor's counsel.
3. Receipt by Lessor of duly executed Lease
documentation in form and substance
satisfactory to Lessor and its counsel.
- -------------------------
*Confidental Treatment Requested
<PAGE>
4. Lessor shall receive title and a valid and
perfected first priority lien and security
interest in the Equipment and all other
Equipment acquired through the use of this
Commitment, and Lessor shall have received
satisfactory evidence that there are no liens
on any Equipment except as expressly permitted
herein.
Tenant Improvements
Termination Provision: If the Lessee elects to vacate its present
operating facility (which is defined as any
facility in which Lessor's Tenant Improvements
reside), then the Lessor will release its
ownership position in all of its Tenant
Improvements. In return, the Lessee will provide
compensation to the Lessor for the release of
Tenant Improvements in the form of an increase to
the monthly rental factor on the remaining rental
of Tenant Improvements which cannot be removed
and used by [...***...] (or from [...***...] to
[...***...] of Tenant Improvements Cost monthly).
The release will be subject to the Lessee being
in substantial compliance with all other terms
and conditions of the lease.
Fees and Expenses: The Lessee shall be responsible for the Lessor's
reasonable expenses not to exceed [...***...]
without Lessee's written consent (including legal
expenses) in connection with the transaction.
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
- -------------------------
*Confidental Treatment Requested
<PAGE>
against any such person in connection without
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 the 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.
Conditions of
Acceptance: This Commitment Letter is intended to be a
summary 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
- -------------------------
*Confidental Treatment Requested
<PAGE>
THIS LETTER OR THE TRANSACTION DESCRIBED IN THIS
LETTER.
Commitment Fee: A Commitment Fee equal to [...***...] of the
total Equipment Cost and Tenant Improvements
[...***...] shall be due the Lessor upon
acceptance of this Commitment. The [...***...]
application Fee previously paid by Lessee to
Lessor shall be applied to the Commitment Fee.
The Commitment Fee shall then be applied to the
cost and expenses incurred by Lessor [...***...]
in connection with the transaction, and the
remainder shall be applied to the second month's
rent due under the Lease or subsequent months
until fully utilized. Upon request by Lessee, the
Commitment Fee shall be refunded to Lessee if the
Lease Agreement is not executed by March 31,
1997.
Commitment Expiration: This Commitment shall expire on March 25, 1997,
unless prior thereto either extended in writing
by the Lessor or accepted as provided below by
the Lessee.
- -------------------------
*Confidental Treatment Requested
<PAGE>
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 March 25, 1997.
Yours truly,
TRANSAMERICA BUSINESS CREDIT
CORPORATION - TECHNOLOGY
FINANCE DIVISION
By: /s/ Gerald A. Michaud
------------------------
Gerald A. Michaud
Senior Vice President -
Marketing
Accepted this 25th day of March, 1997
SUGEN, INC.
By: Christine Gray-Smith
-----------------------
Typed or Printed Name
Title: Vice President, Finance
-----------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FORM 10-Q FOR THE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Mar-31-1997
<CASH> 13,395
<SECURITIES> 36,345
<RECEIVABLES> 242
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 50,791
<PP&E> 9,275
<DEPRECIATION> 4,953
<TOTAL-ASSETS> 55,915
<CURRENT-LIABILITIES> 11,154
<BONDS> 3,311
<COMMON> 108,471
0
0
<OTHER-SE> (67,021)
<TOTAL-LIABILITY-AND-EQUITY> 55,915
<SALES> 0
<TOTAL-REVENUES> 1,487
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,006
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 170
<INCOME-PRETAX> (7,474)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,474)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,474)
<EPS-PRIMARY> (.57)
<EPS-DILUTED> (.57)
</TABLE>
