March 23, 1998
Mr. Paul Goldstein
Senior Director Finance, Controller
ImClone Systems, Inc.
22 Chubb Way
Somerville, NJ 08876
Dear Mr. Goldstein
FINOVA Technology Finance, Inc. ('Lessor') is pleased to offer to lease the
Equipment described below to ImClone Systems, Inc. ('Lessee').
The outline of this Commitment is a follows:
Lessee: ImClone Systems Inc.
Lessor: FINOVA Technology Finance, Inc.
Equipment: Various laboratory, computer and office equipment, and
leasehold improvements. All equipment shall be subject
to review and approval by the Lessor for its
acceptability for lease under this Commitment. The
Equipment Cost of all leasehold improvements shall not
exceed $420,000. However, no leasehold improvements may
be acceptable for lease if, at the time of closing,
their Equipment Cost plus the aggregate Equipment Cost
for previously delivered leasehold improvements shall
exceed 21% of the Equipment Cost of all Equipment then
and previously delivered under prior commitments.
Equipment Cost: $2,000,000
Equipment Location: Somerville, NJ and an office in New York, NY
Anticipated Delivery: February 1, 1998 - March 31, 1999
Closing Date: The date that the Lessor makes payment for the
Equipment covered under each schedule to the Equipment
Lease (each a 'Schedule' and collectively the
'Schedules') with an aggregate cost of not less than
$75,000, but no later than March 31, 1999.
Term: From each Closing Date until 48 months from the
thirtieth day of the month next following or coincident
with that Closing Date.
Monthly Rent: Monthly Rent equal to 2.420% of Equipment Cost shall be
payable monthly in advance. First and last month's rent
due in advance.
Rental Payments: If on the second business day preceding the Closing
Date for each Schedule, the highest yield for four-year
U.S. Treasury Notes as published in The Wall Street
Journal is greater or less than the yield on January
12, 1998, the Monthly Rent Payments shall be increased
or decreased to reflect such change in the yield. The
yield as of January 12, 1998 is 5.26%. As of the
Closing Date, the Monthly Rent Payments shall be fixed
for the entire term.
Interim Rent: Interim Rent shall accrue from each Closing Date until
the 29th day of the month (27th day of the month in the
case of February) unless the Closing Date is on the
30th day of the month. If the Closing Date is the 31st
day of a month, Interim Rent shall accrue until the
29th day of the next following month. Interim Rent
shall be at the daily equivalent of the currently
adjusted Monthly Payment.
Net Lease: The lease shall be a net-net-net lease containing the
usual provisions in the Lessor's lease agreement and
such other or different provisions that are agreed to
by the parties. The Lessee shall be responsible for
maintenance, insurance, taxes, and all other costs and
Taxes: Sales or use taxes shall be added to the Equipment Cost
or collected on the gross rentals, as appropriate. The
Lessee will be given an opportunity to supply tax
exemption certificates where applicable.
Insurance: Prior to any delivery of Equipment, the Lessee shall
furnish confirmation of insurance reasonably acceptable
to the Lessor covering the Equipment including primary,
all risk, physical damage, property damage and bodily
injury with appropriate loss payee endorsement in favor
of the Lessor.
Condition to Closing: Conditions precedent to each Closing Date shall include
that no payment is then past due to the Lessor or any
assign of the Lessor from the Lessee, that the Lessee
is in compliance with the material provisions of this
Commitment and the lease, that information requested by
the Lessor and all documentation then required by the
Lessor's counsel has been received by the Lessor
including resolutions of the Board of Directors of the
Lessee authorizing the transactions contemplated by
this Commitment and an opinion of counsel for the
Lessee satisfactory to counsel for the Lessor, that the
Lessee is not in default under any material contract to
which it is a party or by which it or its property is
bound, and that there has not been any material adverse
change or threatened material adverse change in the
financial or other condition, business, operations,
properties, assets or prospects of the Lessee since
December 31, 1996 or from the written information that
has been supplied to the Lessor prior to the date of
this Commitment by the Lessee.
The Lessor shall not be responsible for any failure of
suppliers or manufactures of the Equipment or their
distributors to perform their obligations to the Lessor
or the Lessee. The Lessee shall provide quarterly
financial statements and status reports during the
Purchase Option: The Lessee shall have the option to purchase all (but
not less than all) the Equipment, at the expiration of
the term of the lease for the then current Fair Market
Value of the Equipment, plus applicable sales and other
Automatic Renewal: In the event the Lessee does not exercise the Purchase
Option described above, the lease shall automatically
renew for a term of one year with Monthly rentals equal
to 1.50% of Equipment Cost payable monthly in advance.
At the expiration of the renewal period, the Lessee
shall have the option to purchase all (but not less
than all) the Equipment for its then current Fair
Market Value, plus applicable sales and other taxes.
Additional Covenants: There shall be no actual or threatened material
conflict with, or material violation of, any regulatory
statute, standard or rule relating to the Lessee, its
present or future operations, or the Equipment.
All statements made by the Lessee to the Lessor shall
be correct in all material respects and shall not omit
any material fact necessary to make the statements not
misleading in light of the circumstances in which they
are made. There shall be no material breach of the
representations and warranties of the Lessee in the
lease during the term of the lease and any renewal
periods. The representations shall include that the
Equipment Cost of each item of the Equipment does not
exceed the fair and usual price for like quantity
purchases of such item and reflects all discounts,
rebates and allowances for the Equipment given to
Lessee or any affiliate of Lessee by the manufacturer,
supplier or anyone else including, without limitation,
discounts for advertising, prompt payment, testing or
Fees and Expenses: The Lessee shall be responsible for the Lessor's
reasonable expenses in connection with the transaction.
Survival: The Commitment Letter shall survive closing. However,
if there is any conflict between the terms and
conditions of the Master Equipment Lease Agreement and
Schedules and those of this Commitment Letter, the
Master Equipment Lease Agreement and Schedules shall
Commitment-Expiration: This Commitment shall expire on March 31, 1998, unless
prior thereto either extended in writing by the Lessor
or accepted as provided below by the Lessee. A $15,000
Commitment Fee shall be due upon signing of this
letter. The $15,000 previously paid Application Fee
shall be applied towards the Commitment Fee. The
Commitment Fee shall be first applied to the costs and
expenses of the Lessor in connection with the
transaction, and any remainder shall be applied to the
second month's rent due under the Schedules on a
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 April 1, 1998.
FINOVA TECHNOLOGY FINANCE, INC.
By: /s/ Linda A. Moschitto
Linda A. Moschitto
Director - Contract Administration
Accepted this 1 day of April, 1998
IMCLONE SYSTEMS, INC.
By: /s/ Paul A. Goldstein
Typed or Printed Name:
Paul A. Goldstein
Title: Senior Director Finance, Controller