Equipment Lease

EXHIBIT 10.33


Transamerica Business Credit Technology Finance Division 76 Batterson Park Road Farmington, CT 06032 (860) 677 6466 (860) 677-6766 Fax


January 2, 1997


Mr. John Monahan Chief Executive Officer Avigen, Inc. 1201 Harbor Bay Parkway, # 1000 Alameda, California 94502


Dear John:


Transamerica Business Credit Corporation - Technology Finance Division ("Lessor") is pleased to offer to lease the Equipment described below to Avigen, 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:


Avigen, Inc.


Lessor:


Transamerica Business Credit Corporation - Technology Finance Division and/or its affiliates, successors and assigns.


Guarantors:


Not Applicable.


Equipment:


A. Equipment (all equipment subject to approval of Lessor). B. Tenant Improvements


Equipment Cost:


Type A Equipment $1,500,000 Type B Tenant Improvements $ 500,000


Equipment Location:


Alameda, California 94502.


Anticipated Delivery:


September 1, 1996 - December 31, 1997


2


Lease Term Commencement:


Upon delivery and acceptance of the Equipment or upon each completion of deliveries and acceptance of items of Equipment with aggregate cost of not less than $50,000, but in no event, shall any Equipment be delivered later than December 31, 1997.


Term for Types A and B Equipment:


From each Lease Term Commencement until 36 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 for Types A and B Equipment:


Monthly Rent equal to 3.1436% of Equipment Cost shall be payable monthly in advance. The first month's rent shall be payable upon signing the Lease and the last month's rent shall be due upon the Lease Term Commencement. 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 change in the weekly average of the interest rates of five-year U.S. Treasury Securities from the week ending November 11, 1996 to the week preceding the date of each Lease Term Commencement, as published in the Wall Street Journal.


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 at the daily equivalent of the currently adjusted Monthly Rent Payment.


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 and Tenant Improvements, plus applicable sales and other taxes.


It shall be agreed that the Fair Market Value will be equal to 10% of Equipment and Tenant Improvements Cost.


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 1.5% of the original Equipment Cost and Tenant Improvement payable monthly in advance. At the expiration of the renewal period, the Lessee shall have the option to purchase ail (but ...