Exhibit 10.35
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT, dated as of November 1, 1996
("Agreement"), between General Electric Capital Corporation, with an office at 0
Xxxxx Xxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, XX 00000 (hereinafter called, together
with its successors and assigns, if any, "Lessor"), and North American Vaccine,
Inc., a Canadian corporation organized and existing under the Canada Business
Corporations Act with its mailing address and chief place of business at 00000
Xxxxxx Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 (hereinafter called together with
its successors and assigns, if any "Lessee").
WITNESSETH:
I. LEASING:
(a) Subject to the terms and conditions set forth below, Lessor agrees
to lease to Lessee, and Lessee agrees to lease from Lessor, the equipment
("EQUIPMENT") described in Annex A to any schedule hereto ("SCHEDULE"). Terms
defined in a Schedule and not otherwise defined herein shall have the meanings
ascribed to them in such Schedule.
(b) The obligation of Lessor to purchase Equipment from the
manufacturer or supplier thereof ("SUPPLIER") and to lease the same to Lessee
under any Schedule shall be subject to receipt by Lessor, prior to the Lease
Commencement Date (with respect to such Equipment), of each of the following
documents in form and substance satisfactory to Lessor: (i) a Schedule relating
to the Equipment then to be leased hereunder, (ii) a Purchase Order Assignment
and Consent in the form of Annex B to the applicable Schedule, unless Lessor
shall have delivered its purchase order for such Equipment, (iii) evidence of
insurance which complies with the requirements of Section X, and (iv) such other
documents as Lessor may reasonably request. As a further condition to such
obligations of Lessor, Lessee shall, upon delivery of such Equipment (but not
later than the Last Delivery Date specified in the applicable Schedule) execute
and deliver to Lessor a Certificate of Acceptance (in the form of Annex C to the
applicable Schedule) covering such Equipment, and deliver to Lessor a xxxx of
sale therefor (in form and substance satisfactory to Lessor). Lessor hereby
appoints Lessee its agent for inspection and acceptance of the Equipment from
the Supplier. Upon execution by Lessee of any Certificate of Acceptance, the
Equipment described thereon shall be deemed to have been delivered to, and
irrevocably accepted by, Lessee for lease hereunder.
II. TERM, RENT AND PAYMENT:
(a) The rent payable hereunder and Lessee's right to use the Equipment
shall commence on the date of execution by Lessee of the Certificate of
Acceptance for such Equipment ("LEASE COMMENCEMENT DATE"). The term of this
Agreement for any Equipment shall be the period specified in the applicable
Schedule for such Equipment. If any term is extended, the word "term" shall be
deemed to refer to all extended terms, and all provisions of this Agreement
shall apply during any extended terms, except as may be otherwise specifically
provided in writing.
(b) Rent shall be paid to Lessor at its address stated above, except as
otherwise directed by Lessor in writing. Payments of rent shall be in the amount
set forth in, and due in accordance with, the provisions of the applicable
Schedule. If one or more Advance Rent(s) (as specified in Schedule) are payable,
such Advance Rent(s) shall be (i) set forth on the applicable Schedule, (ii) due
upon acceptance by Lessor of such Schedule, and (iii) when received by Lessor,
applied to the first rent payment and the balance, if any, to the final rental
payment(s) under such Schedule. In no event shall any Advance Rent or any other
rent payments be refunded to Lessee. If rent is not paid within ten days of its
due date, Lessee agrees to pay a late charge of* on, and in addition to, the
amount of such rent but not exceeding the lawful maximum, if any.
(c) Rent payments under any Schedule shall be allocated proportionately
to the Equipment on such Schedule on the basis of the values assigned to each
unit of such Equipment on Annex A to such Schedule, provided that such
allocation shall not be interpreted to allow Lessee to make partial payment or
to partially terminate this Agreement, except as otherwise permitted hereunder
(d) All Rent and other payments to be paid under this Lease to Lessor
shall be paid in U.S. currency and without any deduction or withholding for, or
on account of, any domestic or foreign taxes. If under applicable law, any Rent
or other sum cannot be paid without a deduction or withholding, then Lessee
shall increase such Rent or other payment to Lessor so that the net amount
received by Lessor after such deduction or withholding (and the payment of any
other amount that must be deducted or withheld as a result of such increase)
shall be equal to the full amount that Lessor would have received had such Rent
or other payment not been subject to any deduction or withholding.
III. RENT ADJUSTMENT:
(a) The periodic rent payments in each Schedule have been calculated on
the assumption (which, as between Lessor and Lessee, is mutual) that the maximum
effective corporate income tax rate (exclusive of any minimum tax rate) for
calendar-year taxpayers ("EFFECTIVE RATE") will be * each year during the lease
term.
(b) If, solely as a result of Congressional enactment of any law
(including, without limitation, any modification of, or amendment or addition
to, the Internal Revenue Code of 1986 (the "CODE")), the Effective Rate is
higher than * for any year during the lease term, then Lessor shall have the
right to increase such rent payments by requiring
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Commission.
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payment of a single additional sum equal to the product of (i) the Effective
Rate (expressed as a decimal) for such year less * (or, in the event that any
adjustment has been made hereunder for any previous year, the Effective Rate
(expressed as a decimal) used in calculating the next previous adjustment) times
(ii) the adjusted Stipulated Loss Value. The adjusted Stipulated Loss Value
shall be the Stipulated Loss Value (calculated as of the first rental due in the
year for which such adjustment is being made) less the product of the Tax
Benefits that would be allowable under Section 168 of the Code (as of the first
day of the year for which such adjustment is being made and all subsequent years
of the lease term) times the Effective Rate (expressed as a decimal) (in the
year for which such adjustment is being made). Lessee shall pay to Lessor the
full amount of the additional rent payment on the later of (i) ten (10) days
after receipt of notice or (ii) the first day of the year for which such
adjustment is being made.
(c) If, solely as a result of Congressional enactment of any law
(including, without limitation, any modification of, or amendment or addition to
the Code), the Effective Rate is lower than* for or any year during the lease
term, then Lessor shall pay to Lessee a single additional sum equal to the
product of (i) the Effective Rate (expressed as a decimal) for such year less *
(or, in the event that any adjustment has been made hereunder for any previous
year, the Effective Rate (expressed as a decimal) used in calculating the next
previous adjustment) times (ii) the adjusted Stipulated Loss Value. The adjusted
Stipulated Loss Value shall be the Stipulated Loss Value (calculated as of the
first rental due in the year for which such adjustment is being made) less the
product of the Tax Benefits that would be allowable under Section 168 of the
Code (as of the first day of the year for which such adjustment is being made
and all subsequent years of the lease term) times the Effective Rate (expressed
as a decimal) (in the year for which such adjustment is being made). Lessor
shall pay to Lessee the full amount of the additional rent payment on the later
of (i) receipt of notice or (ii) the first day of the year for which such
adjustment is being made.
(d) Lessee's and Lessor's obligations under this Section III shall
survive any expiration or termination of this Agreement.
IV. TAXES: Except as provided in Sections III and XV(c), Lessee shall
have no liability for taxes (i) imposed by the United States of America or
any State or political subdivision thereof which are based on or measured
by the net income of Lessor or the net worth of Lessor, (ii) imposed on or
with respect to, or that would not have been imposed but for, any transfer
by Lessor of any interest in any Equipment or any part thereof, (iii)
attributable to any period after the later of the return of the Equipment
to Lessor or the termination of the Lease, except to the extent relating
to Lessee's use or possession of the Equipment or payment due hereunder or
events occurring or matters arising prior to or simultaneously with such
return or termination, or (iv) which would not have been imposed but for
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Commission
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and only to the extent of the negligence or willful misconduct of Lessor or the
failure of Lessor to comply with any certification, documentation, reporting or
similar requirement or that would not have been imposed but for the conduct by
Lessor in any taxing jurisdiction of activities unrelated to the transactions
contemplated by this Lease. Lessee shall report (to the extent that it is
legally permissible) and pay promptly all other taxes, fees and assessments due,
imposed, assessed or levied against any Equipment (or the purchase, ownership,
delivery, leasing, possession, use or operation thereof), this Agreement (or any
rentals or receipts hereunder), any Schedule, Lessor or Lessee by any foreign,
federal, state or local government or taxing authority during or related to the
term of this Agreement, including, without limitation, all license and
registration fees, and all sales, use, personal property, excise, gross
receipts, franchise, stamp or other taxes, imposts, duties and charges, together
with any penalties, fines or interest thereon (all hereinafter called "TAXES").
Lessee shall (i) reimburse Lessor upon receipt of written request for
reimbursement for any Taxes charged to or assessed against Lessor, (ii) on
request of Lessor, submit to Lessor written evidence of Lessee's payment of
Taxes, (iii) on all reports or returns show the ownership of the Equipment by
Lessor, and (iv) send a copy thereof to Lessor. Lessee, at its expense, may
contest any Tax by appropriate legal proceedings provided the non-payment of
such Tax, or such proceedings, will not, in the opinion of counsel for Lessor,
adversely affect the title, property interest or rights of Lessor in the
Equipment and provided, further, that if requested by Lessor, Lessee shall have
given to Lessor security sufficient in form and amount, in Lessor's reasonable
judgment, to fully satisfy the amount of the contested Tax and any potential
fines, penalties or costs.
V. REPORTS:
(a) Lessee will notify Lessor in writing, within ten (10) days after
Lessee becomes aware that any tax or other lien shall attach to any Equipment,
of the full particulars thereof and of the location of such Equipment on the
date of such notification.
(b) Lessee will within one hundred twenty (120) days of the close of
each fiscal year of Lessee, deliver to Lessor, Lessee's balance sheet and profit
and loss statement, certified by a recognized firm of certified public
accountants. Upon request Lessee will deliver to Lessor quarterly, within ninety
(90) days of the close of each fiscal quarter of Lessee, in reasonable detail,
copies of Lessee's quarterly financial report certified by the chief financial
officer of Lessee.
(c) Lessee will permit Lessor to inspect any Equipment during normal
business hours and with reasonable advance notice to Lessee of such inspection;
provided, however, that such persons shall comply with any reasonable conditions
imposed by Lessee regarding such inspection of Equipment in Lessee's
manufacturing areas
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Commission
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(d) The Equipment will initially be delivered to and located at the
Equipment Location (specified in the applicable Schedule) and Lessee will
promptly notify Lessor of any relocation of Equipment. Upon the written request
of Lessor, Lessee will notify Lessor forthwith in writing of the location of any
Equipment as of the date of such notification.
(e) Lessee will promptly and fully report to Lessor in writing if any
Equipment is lost or damaged (where the estimated repair costs would exceed *,
or is otherwise involved in an accident causing personal injury or property
damage.
(f) Within sixty (60) days after any written request by Lessor, Lessee
will furnish a certificate of an authorized officer of Lessee stating that he
has reviewed the activities of Lessee and that, to the best of his knowledge,
there exists no default (as described in Section XII(a) and (d)) or event which
with notice or lapse of time (or both) would become such a default.
VI. DELIVERY, USE AND OPERATION:
(a) All Equipment shall be shipped directly from the Supplier to
Lessee.
(b) Lessee agrees that the Equipment will be used by Lessee solely in
the conduct of its business and in a manner complying with all applicable
federal, state, and local laws and regulations.
(c) LESSEE SHALL NOT MORTGAGE OR HYPOTHECATE ANY EQUIPMENT, OR THE
INTEREST OF LESSEE HEREUNDER, NOR SHALL LESSEE REMOVE ANY EQUIPMENT FROM THE
CONTINENTAL UNITED STATES, WITHOUT THE PRIOR WRITTEN CONSENT OF THE LESSOR.
(d) Lessee may, at its sole cost and expense, sublease any of the
Equipment or assign all of its rights and obligations under the lease for such
Equipment provided Lessee shall have first notified Lessor of the proposed
sublease or assignment of such Equipment and, except as otherwise provided in
this subsection (d), Lessee shall have received Lessor's prior written consent
(such consent not to be unreasonably withheld or delayed) to such sublease or
assignment. Notwithstanding anything to the contrary contained in the preceding
sentence, at any time during the term of the lease for any units of Equipment
under this Agreement, Lessee may sublet all, but not less than all, of the
Equipment described on any one or more Schedules or assign all of its rights
under this Agreement with respect to the lease of such Equipment, (i) to any
transferee which shall, as the result of a reorganization, merger or
consolidation directly involving Lessee, succeed to the business now carried on
by Lessee or (ii) to any entity which is an Affiliate (as defined herein)
subsidiary of Lessee; in each instance, without the prior written consent of
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Commission
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Lessor, provided Lessor is given thirty (30) days' prior written notice of such
proposed sublease or assignment together with a copy of the proposed sublease or
assignment, and such transferee shall (A) have assumed in writing, in form and
substance reasonably satisfactory to Lessor, all of the obligations of Lessee
under this Agreement respecting the applicable Equipment as if such transferee
were an original signatory to this Agreement and (B) be solvent and either (1)
have a net worth which is equal to or in excess of the net worth of Lessee
immediately prior to the execution of this Agreement or (2) have caused
additional security reasonably satisfactory to Lessor to be delivered to Lessor
prior to such sublease or assignment. No such sublease or assignment permitted
by this subsection (d) shall in any way discharge or diminish any of Lessee's
obligations hereunder for the lease of such Equipment. Each sublease and
assignment hereunder shall expressly provide that it is subject and subordinate
to this Agreement, and Lessee shall further assign its rights in and to such
sublease or assignment to Lessor as security for Lessee's obligations hereunder.
No sublease or assignment shall be for a term longer than the subject Schedule.
Lessee and any assignee or sublessee shall execute all reasonable documentation
required by Lessor to evidence the provisions of this subsection(d).
(e) Lessee will keep the Equipment free and clear of all liens and
encumbrances other than those which result from acts of Lessor or any party
claiming by, through or under Lessor, or liens arising in the ordinary course of
the business of Lessee for sums not yet delinquent or which are being contested
in good faith and for payment of which adequate assurance has been provided to
Lessor.
VII. SERVICE:
(a) Lessee will, at its sole expense, maintain each unit of Equipment
in good operating order, repair, condition and appearance in accordance with
manufacturer's recommendations, normal wear and tear excepted. Lessee shall, if
at any time requested by Lessor in writing, affix in a prominent position on
each unit of Equipment plates, tags or other identifying labels showing
ownership thereof by Lessor.
(b) From and after the date of this Agreement, Lessee will not, without
the prior consent of Lessor, affix or install any accessory, equipment or device
on any Equipment if such addition will impair the originally intended function
or use of such Equipment. All additions, repairs, parts, supplies, accessories,
equipment, and devices furnished, attached or affixed to any Equipment which are
not readily removable shall be made only in compliance with applicable law,
including Internal Revenue Service guidelines, and shall become the property of
Lessor. Lessee will not, without the prior written consent of Lessor and subject
to such conditions as Lessor may impose for its protection, affix or install any
Equipment to or in any other personal or real property.
(c) Any alterations or modifications to the Equipment that may, at any
time during the term of this Agreement, be required to comply
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Commission
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with any applicable law, rule or regulation shall be made at the expense of
Lessee.
VIII. STIPULATED LOSS VALUE: Lessee shall promptly and fully notify Lessor in
writing if any unit of Equipment shall be or become lost, stolen, destroyed,
irreparably damaged in the reasonable determination of Lessee, or permanently
rendered unfit for use from any cause whatsoever (such occurrences being
hereinafter called "CASUALTY OCCURRENCES"). On the rental payment date next
succeeding a Casualty Occurrence (the "PAYMENT DATE"), Lessee shall pay Lessor
the sum of (x) the Stipulated Loss Value (as specified on each Schedule) of such
unit calculated as of the rental next preceding such Casualty Occurrence
("CALCULATION DATE"); and (y) all rental and other amounts which are due
hereunder immediately prior to the Payment Date and remaining unpaid. Upon
payment of all sums due hereunder, (i) the term of this lease as to such unit
shall terminate (ii) the Rent and Capitalized Lessor's cost shall be reduced
proportionately based on the value assigned to such unit in Annex A to the
applicable Schedule, and ((iii) except in the case of the loss, theft or
complete destruction of such unit) Lessor shall be entitled to recover
possession of such unit.
IX. LOSS OR DAMAGE: Lessee hereby assumes and shall bear the entire risk of any
loss, theft, damage to, or destruction of, any unit of Equipment from any cause
whatsoever from the time the Equipment is shipped to Lessee until it is returned
to Lessor.
X. INSURANCE: Lessee agrees, at its own expense, to keep all Equipment insured
for such amounts and against such hazards as Lessor may reasonably require,
including, but not limited to, insurance for damage to or loss of such Equipment
and liability coverage for personal injuries, death or property damage, with
Lessor named as additional insured and with a loss payable clause in favor of
Lessor, as its interest may appear, irrespective of any breach of warranty or
other act or omission of Lessee. All such policies shall be with companies, and
on terms reasonably satisfactory to Lessor. Lessee agrees to deliver to Lessor
evidence of insurance satisfactory to Lessor. No insurance shall be subject to
any co-insurance clause. Lessee hereby appoints Lessor as Lessee's
attorney-in-fact to make proof of loss and claim for insurance, and to make
adjustments with insurers and to receive payment of and execute or endorse all
documents, checks or drafts in connection with payments made as a result of such
insurance policies. Any expense of Lessor in adjusting or collecting insurance
shall be borne by Lessee. Lessee will not make adjustments with insurers except
(i) with respect to claims for damage to any unit of Equipment where the repair
costs do not exceed *, or (ii) with Lessor's written consent, such consent shall
not be unreasonably withheld or delayed. Said policies shall provide that the
insurance may not be altered or canceled by the insurer until after twenty (20)
days written notice to Lessor. If Lessee has made the payment described in
Section VIII above, Lessee shall be entitled to the insurance proceeds.
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Commission
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In all other events, Lessor may, at its option, apply proceeds of insurance, in
whole or in part, to (i) repair or replace Equipment or any portion thereof, or
(ii) satisfy any obligation of Lessee to Lessor hereunder. Notwithstanding the
previous sentence or Section VIII, the Lessee may cause any insurance proceeds
to be applied directly for the repair or replacement of Equipment if such
repairs or replacements are less than * for any one casualty and such repairs or
replacements are actually performed.
XI. RETURN OF EQUIPMENT:
(a) Upon any expiration or termination of this Agreement or any
Schedule, Lessee shall promptly, at its own cost and expense: (i) perform any
testing and repairs required to place the affected units of Equipment in the
same condition and appearance as when received by Lessee (reasonable wear and
tear excepted) and in good working order for their originally intended purpose;
(ii) if deinstallation, disassembly or crating is required, cause such units to
be deinstalled, disassembled and crated by an authorized manufacturer's
representative or such other person as is satisfactory to Lessor; and (iii)
return such units to a location within a five hundred (500) mile radius of the
original Equipment location in the continental United States as Lessor shall
direct.
(b) Until Lessee has fully complied with the requirements of Section
XI(a) above, Lessee's rent payment obligation and all other obligations under
this Agreement shall continue from month to month notwithstanding any expiration
or termination of the lease term. Lessor may terminate such continued leasehold
interest upon ten (10) days notice to Lessee.
XII. DEFAULT:
(a) Lessor may in writing declare this Agreement in default if: Lessee
breaches its obligation to pay rent or any other sum when due and fails to cure
the breach within *; Lessee breaches any of its insurance obligations under
Section X; Lessee breaches any of its other obligations under this Agreement and
fails to cure that breach within * after written notice thereof (provided,
however, that no default shall be deemed to have occurred under this clause in
the event that Lessee commences a good faith effort to cure such breach within
the aforesaid * period and diligently prosecutes such cure to completion, and
such cure is completed within * after the date of Lessor's original notice to
Lessee of such breach); any representation or warranty made by Lessee in
connection with this Agreement shall be false or misleading in any material
respect when made; Lessee becomes insolvent or ceases to do business as a going
concern; any Equipment is illegally used; or a petition is filed by or against
Lessee under any bankruptcy or insolvency laws (and if such petition is filed
against Lessee, it is not stayed or dismissed within 60 days). Such declaration
shall apply to all Schedules except as specifically excepted by Lessor.
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Commission
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(b) After default, at the request of Lessor, Lessee shall comply with
the provisions of Section XI(a). Lessee hereby authorizes Lessor to enter any
premises where any Equipment is believed to be and take possession thereof
without liability for damages or otherwise (except for physical damage not
required by the repossession of the Equipment). Lessee shall, without further
demand, forthwith pay to Lessor (i) as liquidated damages for loss of a bargain
and not as a penalty, the Stipulated Loss Value of the Equipment (calculated as
of the rental next preceding the declaration of default), and (ii) all rentals
and other sums then due hereunder. Lessor may, but shall not be required to,
sell Equipment at private or public sale, in bulk or in parcels, with such
notice as may be required by law, and without having the Equipment present at
the place of sale; or Lessor may, but shall not be required to, lease, otherwise
dispose of or keep idle all or part of the Equipment. The proceeds of sale,
lease or other disposition, if any, shall be timely applied in the following
order of priorities: (1) to pay all of Lessor's costs, charges and expenses
incurred in taking, removing, holding, repairing and selling, leasing or
otherwise disposing of Equipment; then, (2) to the extent not previously paid by
Lessee, to pay Lessor all sums due from Lessee hereunder; then (3) to reimburse
to Lessee any sums previously paid by Lessee as liquidated damages; and (4) any
surplus shall be retained by Lessor. Lessee shall pay any deficiency in (1) and
(2) forthwith.
(c) The foregoing remedies are cumulative, and any or all thereof may
be exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee shall pay Lessor's reasonable attorney's fees
and costs upon a default. Waiver of any default shall not be a waiver of any
other or subsequent default.
(d) Any default under the terms of this or any other agreement between
Lessor and Lessee may be declared by Lessor a default under this and any such
other agreement.
XIII. ASSIGNMENT: Lessor may, without the consent of Lessee, assign this
Agreement or any Schedule, provided that any such assignee shall agree in
writing to take no action to interfere with Lessee's quiet enjoyment and use of
the Equipment in accordance with the terms of this Agreement so long as Lessee
is not in default hereunder and to assume the obligations of Lessor in
accordance with the terms of this Agreement. Lessee agrees that if Lessee
receives written notice of an assignment from Lessor, Lessee will pay all rent
and all other amounts payable under any assigned Equipment Schedule to such
assignee or as instructed by Lessor. Lessee further agrees to confirm in writing
receipt of the notice of assignment as may be reasonably requested by assignee.
Lessee hereby waives and agrees not to assert against any such assignee any
defense, set-off, recoupment claim or counterclaim which Lessee has or may at
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Commission
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any time have against Lessor for any reason whatsoever except for any payments
rightfully made by Lessee to an assignee of Lessor pursuant to this Section
shall discharge the obligations of Lessee to Lessor with respect to, and to the
extent of, such payments.
XIV. NET LEASE; NO SET-OFF, ETC: This Agreement is a net lease. Lessee's
obligation to pay rent and other amounts due hereunder shall be absolute and
unconditional. Lessee shall not be entitled to any abatement or reductions of,
or set-offs against, said rent or other amounts, including, without limitation,
those arising or allegedly arising out of claims (present or future, alleged or
actual, and including claims arising out of strict tort or negligence of Lessor)
of Lessee against Lessor under this Agreement or otherwise. Nor shall this
Agreement terminate or the obligations of Lessee be affected by reason of any
defect in or damage to, or loss of possession, use or destruction of, any
Equipment from whatsoever cause, except as otherwise provided herein. It is the
intention of the parties that rents and other amounts due hereunder shall
continue to be payable in all events in the manner and at the times set forth
herein unless the obligation to do so shall have been terminated pursuant to the
express terms hereof. Nothing herein shall be construed to relieve Lessor of any
of its obligations under this Agreement or prevent Lessee from pursuing any
lawful remedy against Lessor for Lessor's breach of its obligations under this
Agreement in a separate action.
XV. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify, save and keep harmless Lessor,
its agents, employees, successors and assigns from and against any and all
losses, damages, penalties, injuries, claims, actions and suits, including
reasonable legal expenses, of whatsoever kind and nature, in contract or tort,
or otherwise (except (i) if and only to the extent caused by the indemnified
party's gross negligence or willful misconduct, (ii) by Lessor's breach of its
representations and warranties contained in Section XIX(f) hereof or (iii) the
claim is based on a loss of Tax Benefits (as defined under subsection XV(b)
below)), and including, but not limited to, Lessor's strict liability in tort,
arising out of (i) the selection, manufacture, purchase, acceptance or rejection
of Equipment, the ownership of Equipment during the term of this Agreement, and
the delivery, lease, possession, maintenance, uses, condition, return or
operation of Equipment (including, without limitation, latent and other defects,
whether or not discoverable by Lessor or Lessee and any claim for patent,
trademark or copyright infringement or environmental damage) or (ii) the
condition of Equipment sold or disposed of after use by Lessee, any sublessee or
employees of Lessee. Lessee shall fully and promptly pay, perform, discharge,
defend, indemnify and hold harmless Lessor and its Affiliates, successors and
assigns, directors, officers, employees and agents from and against any
Environmental Claim or Environmental Loss. Lessee shall, upon request, defend
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Commission
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any actions based on, or arising out of, any of the foregoing. In case any
action, suit or proceeding is brought against any indemnified party in
connection with any claim indemnified against hereunder, such indemnified party
will promptly after receipt of notice of the commencement of such action, suit
or proceeding notify Lessee hereof, enclosing a copy of all papers served upon
such indemnified party, but failure to give such notice or to enclose such
papers shall not relieve Lessee from any liability hereunder unless and only to
the extent such failure prevents or materially prejudices Lessee's ability to
defend such claim, seek coverage under relevant insurance policies or mitigate
damages arising therefrom.
(b) Lessee hereby represents, warrants and covenants that (i) on the
Lease Commencement Date for any unit of Equipment, such unit will qualify for
all of the items of deduction and credit specified in Section C of the
applicable Schedule ("TAX BENEFITS") in the hands of Lessor (all references to
Lessor in this Section XV include Lessor and the consolidated taxpayer group of
which Lessor is a member), and (ii) at no time during the term of this Agreement
will Lessee take or omit to take, nor will it permit any sublessee or assignee
to take or omit to take, any action (whether or not such act or omission is
otherwise permitted by Lessor or the terms of this Agreement), which will result
in the disqualification of any Equipment for, or recapture of, all or any
portion of such Tax Benefits.
(c) If as a result of a breach of any representation, warranty or
covenant of the Lessee contained in this Agreement or any Schedule (x) tax
counsel of Lessor (if Lessor's rights hereunder are assigned the tax counsel
shall be reasonably satisfactory to Lessee) shall determine that Lessor is not
entitled to claim on its Federal income tax return all or any portion of the Tax
Benefits with respect to any Equipment, or (y) any such Tax Benefit claimed on
the Federal income tax return of Lessor is disallowed or adjusted by the
Internal Revenue Service, or (z) any such Tax Benefit is recomputed or
recaptured (any such determination, disallowance, adjustment, recomputation or
recapture being hereinafter called a "LOSS"), then Lessee shall pay to Lessor,
as an indemnity and as additional rent, such amount as shall, in the reasonable
opinion of Lessor, cause Lessor's after-tax economic yields and cash flows,
computed on the same assumptions, including tax rates (unless any adjustment has
been made under Section III hereof, in which case the Effective Rate used in the
next preceding adjustment shall be substituted), as were utilized by Lessor in
originally evaluating the transaction (such yields and flows being hereinafter
called the "NET ECONOMIC RETURN") to equal the Net Economic Return that would
have been realized by Lessor if such Loss had not occurred. Notwithstanding the
foregoing a Loss shall not include any determination, disallowance, adjustment,
recomputation or recapture which is a result of Lessor reporting this Lease as a
capital lease for Federal Income Tax purposes, for reasons other than as a
result of a breach of any representation, warranty or covenant of the Lessee.
[*] Confidential information has been omitted and filed separately with the
Commission
- 11 -
Such amount shall be payable upon demand accompanied by a statement describing
in reasonable detail such Loss and the computation of such amount.
(d) Lessee hereby further represents, warrants and covenants that all
amounts includible in the gross income of Lessor with respect to the Equipment,
and all deductions or credits allowable to Lessor with respect to the Equipment,
will be treated as derived from or allocable to sources within the United States
in each and every taxable year of Lessor throughout the entire term of this
Lease. If as a result of any breach of the representation, warranty and covenant
contained the immediately preceding sentence, any item of income, credit or
deduction with respect to the Equipment shall not be treated as derived from or
allocable to, sources with the United States for any taxable year or Lessor (any
such event hereinafter referred to as a "FOREIGN LOSS"), then Lessee shall pay
to Lessor as an indemnity, on the next succeeding rental payment date, or in any
event within 30 days after written demand to Lessee by Lessor, such amount as,
after deduction of all taxes required to be paid by Lessor in respect of the
receipt of such amounts under the laws of any federal, state or local government
or taxing authority of the United States, shall equal the sum of: (i) the excess
of (x) the foreign tax credits which Lessor would have been entitled to for such
year had no such Foreign Loss occurred over (y) the foreign tax credits to which
Lessor was limited as a result of such Foreign Loss and (ii) the amount of any
interest, penalties or additions to tax payable as a result of such Foreign
Loss.
(e) Lessee further covenants that it shall be responsible for paying,
and shall indemnify and hold harmless Lessor from any liability with respect to,
any Tax in respect of the transactions contemplated by this Lease which results
from a change in Canadian law which, without more, causes Lessor to incur any
Tax attributable either directly or indirectly to its having or being deemed to
have a permanent establishment, residence or place of business or to otherwise
be doing business in Canada.
(f) If, as a result of the operation of Section XV(d) or (e), Lessee
would be required to pay any additional sums Lessee shall have the option to
purchase all (but not less than all) of the Equipment leased hereunder for an
amount equal to * ("Purchase Price") as of the Purchase Date (as defined below).
The "Purchase Date" shall be the Rental Payment next succeeding the
determination of the Fair Market Value of the Equipment as described in Section
XVIII. Lessee may exercise this option provided it is not in default hereunder
and has elected in writing to exercise the option within twenty business days
after Lessor has made demand under Section XV (d) or (e). If Lessee is
purchasing the Equipment under this subsection, Lessee shall pay Lessor the
Purchase Price plus any Rent then due prior to the Purchase Date and any
applicable taxes on the Purchase Date.
[*] Confidential information has been omitted and filed separately with the
Commission
- 12 -
(g) All of Lessor's rights, privileges and indemnities contained in
this Section XV shall survive the expiration or other termination of this
Agreement and the rights, privileges and indemnities contained herein are
expressly made for the benefit of, and shall be enforceable by Lessor, its
successors and assigns.
XVI. DISCLAIMER: LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT
ANY ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS
NOT MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE
EQUIPMENT LEASED HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY
OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR
OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE (except
as provided in Section XIX(f)). All such risks, as between Lessor and Lessee,
are to be borne by Lessee. Without limiting the foregoing, Lessor shall have no
responsibility or liability to Lessee or any other person with respect to any of
the following, regardless of any negligence of Lessor (i) any liability, loss or
damage caused or alleged to be caused directly or indirectly by any Equipment,
any inadequacy thereof, any deficiency or defect (latent or otherwise) therein,
or any other circumstance in connection therewith; (ii) the use, operation or
performance of any Equipment or any risks relating thereto; (iii) any
interruption of service, loss of business or anticipated profits or
consequential damages; or (iv) the delivery, operation, servicing, maintenance,
repair, improvement or replacement of any Equipment. If, and so long as, no
default exists under this Lease, Lessee shall be, and hereby is, authorized
during the term of this Lease to assert and enforce, at Lessee's sole cost and
expense, from time to time, in the name of and for the account of Lessor and/or
Lessee, as their interests may appear, whatever claims and rights Lessor may
have against any Supplier of the Equipment. At Lessee's request and expense,
Lessor agrees to pursue enforcement of any manufacturer's warranty that is not
assignable to Lessee.
XVII. REPRESENTATIONS AND WARRANTIES OF LESSEE: Lessee hereby represents and
warrants to Lessor that on the date hereof and on the date of execution of each
Schedule:
(a) Lessee has adequate power and capacity to enter into, and perform
under, this Agreement and all related documents (together, the "Documents") and
is duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b) The Documents have been duly authorized, executed and delivered by
Lessee and constitute valid, legal and binding agreements of Lessee, enforceable
against Lessee in accordance with their terms, except
[*] Confidential information has been omitted and filed separately with the
Commission
- 13 -
to the extent that the enforcement of remedies therein provided may be limited
under applicable bankruptcy and insolvency laws or similar laws affecting
creditor's rights or principles of equity.
(c) No approval, consent or withholding of objections is required from
any governmental authority or instrumentality with respect to the entry into or
performance by Lessee of the Documents except such as have already been
obtained.
(d) The entry into and performance by Lessee of the Documents will not:
(i) violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or By-Laws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge, security interest or other encumbrance upon any Equipment pursuant to
any indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party.
(e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee, which will have a material adverse effect on the ability of Lessee to
fulfill its obligations under this Agreement.
(f) The Equipment accepted under any Certificate of Acceptance is and
will remain tangible personal property.
(g) Each balance sheet and statement of income delivered to Lessor has
been prepared in accordance with generally accepted accounting principles, and
since the date of the most recent such Balance Sheet and Statement of Income,
there has been no material adverse change.
(h) Lessee is and will be at all times validly existing and in good
standing under the laws of the jurisdiction of its incorporation (specified in
the first sentence of this Agreement).
(i) The Equipment will at all times be used for commercial or business
purposes.
(j) The Lessee is and shall remain a United States Federal Income
Taxpayer.
Notwithstanding anything in this Agreement, Schedules or Addendum's hereto to
the contrary, Lessee makes no representation or warranty regarding the truth or
accuracy of any financial projections or proformas furnished to Lessor by Lessee
except that the financial projections and proformas were reasonable projections
of future events based on information available at the time they were furnished
to Lessor.
[*] Confidential information has been omitted and filed separately with the
Commission.
- 14 -
XVIII. PURCHASE OPTION:
(a) So long as no default exists hereunder and the lease has not been
earlier terminated, Lessee may at lease expiration, upon at least * prior
written notice to Lessor, purchase all (but not less than all) of the Equipment
in any Schedule on an AS IS BASIS for cash equal to its then Fair Market Value
(plus all applicable sales taxes). Upon receipt of the Fair Market Value, plus
all applicable sales taxes, Lessor shall execute and deliver to Lessee a xxxx of
sale, without representation or warranty, except that the Equipment is free and
clear of any liens, claims or encumbrances created by Lessor or any party
claiming by, through or under Lessor and other than those created by Lessee or
any one claiming by, through or under Lessee.
(b) "FAIR MARKET VALUE" shall mean the price which a willing buyer (who
is neither a lessee in possession nor a used equipment dealer) would pay for the
Equipment in an arm's-length transaction to a willing seller under no compulsion
to sell; provided, however, that in such determination: (i) the Equipment shall
be assumed to be in the condition in which it is required to be maintained and
returned under this Agreement; (ii) in the case of any installed Equipment, that
Equipment shall be valued on an installed basis; and (iii) costs of removal from
current location shall not be a deduction from such valuation. If Lessor and
Lessee are unable to agree on the Fair Market Value at least * before lease
expiration, Lessor shall appoint an independent appraiser (reasonably acceptable
to Lessee) to determine Fair Market Value, and that determination shall be
final, binding and conclusive. Lessee shall bear all costs associated with any
such appraisal.
(c) Lessee shall be deemed to have waived this option unless it
provides Lessor with written notice of its irrevocable election to exercise the
same within * after Fair Market Value is determined (by agreement or appraisal).
XIX. MISCELLANEOUS:
(a) LESSEE HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS LEASE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN
LESSEE AND LESSOR RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY
RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN
LESSEE AND LESSOR. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY
[*] Confidential information has been omitted and filed separately with the
Commission.
- 15 -
RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION, THIS LEASE
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(b) Unless and until Lessee exercises its rights under Section XVIII
above or any addendum or Schedule hereto, nothing herein contained shall give or
convey to Lessee any right, title or interest in and to any Equipment except as
a lessee. Any cancellation or termination by Lessor, pursuant to the provision
of this Agreement, any Schedule, supplement or amendment hereto, or the lease of
any Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder. All Equipment shall at all times remain
personal property of Lessor regardless of the degree of its annexation to any
real property and shall not by reason of any installation in, or affixation to,
real or personal property become a part thereof.
(c) each reference contained in this Agreement to:
(1) "Adverse Environmental Condition" shall refer
to (i) the existence or the continuation of the existence,
of an Environmental Emission (including, without
limitation, a sudden or non-sudden accidental or
non-accidental Environmental Emission), of, or exposure
to, any substance, chemical, material, pollutant,
Contaminant, odor or audible noise or other release or
emission in, into or onto the environment (including
without limitation, the air, ground, water or any surface)
at, in, by, from or related to any Equipment, (ii) the
environmental aspect of the transportation, storage,
treatment or disposal of materials in connection with the
operation of any Equipment or (iii) the violation, or
alleged violation of any statutes, ordinances, orders,
rules, regulations, permits or licenses of, by or from any
governmental authority, agency or court relating to
environmental matters connected with any Equipment.
(2) "Affiliate" shall refer, with respect to any
given Person, to any Person that directly or indirectly
through one or more intermediaries, controls, or is
controlled by, or is under common control with, such
Person.
(3) "Contaminant" shall refer to those substances
which are regulated by or form the basis of liability
under any Environmental Law, including without limitation,
asbestos, polychlorinated biphenyls ("PBCs"), and
radioactive substances, or other material or
[*] Confidential information has been omitted and filed separately with the
Commission.
- 16 -
substance which has in the past or could in the future
constitute a health, safety or environmental hazard to any
Person, property or natural resources.
(4) "Environmental Claim" shall refer to any
accusation, allegation, notice of violation, claim,
demand, abatement or other order on direction (conditional
or otherwise) by any governmental authority or any Person
for personal injury (including sickness, disease or
death), tangible or intangible property damage, damage to
the environment or other adverse effects on the
environment, or for fines, penalties or restrictions,
resulting from or based upon any Adverse Environmental
Condition.
(5) "Environmental Emission" shall refer to any
actual or threatened release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or
outdoor environment, or into or out of any of the
Equipment, including, without limitation, the movement of
any Contaminant or other substance through or in the air,
soil, surface water, groundwater or property.
(6) "Environmental Law" shall mean any federal,
foreign, state or local law, rule or regulation pertaining
to the protection of the environment, including, but not
limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA") (42 U.S.C.
Section 9601 et seq.), the Hazardous Material
Transportation Act (49 U.S.C. Section 1801 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section
1251 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Toxic Substances control
Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
Section 1361 et seq.), and the Occupational Safety and
Health Act (19 U.S.C. section 651 et seq.), as these laws
have been amended or supplemented, and any analogous
foreign, federal, state or local statutes, and the
regulations promulgated pursuant thereto.
(7) "Environmental Loss" shall mean any loss,
cost, damage, liability, deficiency, fine, penalty or
expense (including, without limitation, reasonable
attorneys' fees, engineering and other professional or
expert fees), investigation, removal, cleanup and remedial
costs (voluntarily or involuntarily incurred) and damages
[*] Confidential information has been omitted and filed separately with the
Commission.
- 17 -
to, loss of the use of or decrease in value of the
Equipment arising out of or related to any Adverse
Environmental Condition.
(8) "Person" shall include any individual,
partnership, corporation, trust, unincorporated
organization, government or department or agency thereof
and any other entity.
(c) Time is of the essence of this Agreement. Lessor's failure at any
time to require strict performance by Lessee of any of the provisions hereof
shall not waive or diminish Lessor's right thereafter to demand strict
compliance therewith. Lessee agrees, upon Lessor's request, to execute any
instrument necessary or expedient for filing, recording or perfecting the
interest of Lessor. All notices required to be given hereunder shall be deemed
adequately given if sent by registered or certified mail to the addressee at its
address stated herein, or at such other place as such addressee may have
designated in writing. This Agreement, commitment letter (if any), and any
Schedule and Annexes thereto constitute the entire agreement of the parties with
respect to the subject matter hereof. NO VARIATION OR MODIFICATION OF THIS
AGREEMENT OR ANY WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID
UNLESS IN WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE PARTIES
HERETO.
/s/RLD /s/LJH
---------------------------
initials
(d) In case of a failure of Lessee to comply with any provision of this
Agreement, Lessor shall have the right, but shall not be obligated to, effect
such compliance, in whole or in part upon at least 10 days prior written notice
to Lessee; and all moneys spent and expenses and obligations incurred or assumed
by Lessor in effecting such compliance shall constitute additional rent due to
Lessor within five days after the date Lessor sends notice to Lessee requesting
payment. Lessor's effecting such compliance shall not be a waiver of Lessee's
default.
(e) Any rent or other amount not paid to Lessor when due hereunder
shall bear interest, both before and after any judgment or termination hereof,
at the lesser of * per annum or the maximum rate allowed by law. Any provisions
in this Agreement and any Schedule which are in conflict with any statute, law
or applicable rule shall be deemed omitted, modified or altered to conform
thereto.
[*] Confidential information has been omitted and filed separately with the
Commission.
- 18 -
(f) So long as Lessee shall not be in default hereunder, Lessor
warrants to Lessee that Lessee shall be entitled to possess quietly each
unit of Equipment, and that neither Lessor nor any party claiming by,
through or under Lessor shall interfere with Lessee's right of quiet
possession during the term hereof.
(g) If there is any conflict between the terms of this Agreement,
any Schedule and any Addendum(s) to this Agreement or such Schedule, the
terms of the Schedule shall prevail over this Agreement, and any such
Addendum(s) shall prevail over this Agreement and the Schedule.
(h) *
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION NORTH AMERICAN VACCINE, INC.
By: /s/ X. X. Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------- --------------------------
Title: Sr. Trans. Manager Title: Vice President - Finance
----------------------------- ------------------------
[*] Confidential information has been omitted and filed separately with the
Commission.
- 19 -
SCHEDULE NO. 001
DATED THIS November 1, 1996
TO MASTER LEASE AGREEMENT
DATED AS OF 11/1, 1996
Lessor & Mailing Address: Lessee & Mailing Address:
GENERAL ELECTRIC CAPITAL CORPORATION NORTH AMERICAN VACCINE, INC.
0 Xxxxx Xxxx Xxxxx 00000 Xxxxxx Xxxxx Xxxxx
Xxxxx 000 Xxxxxxxxxx, Xxxxxxxx 00000
Xxxx Xxxxxx, Xxxxxxxx 00000
Capitalized terms not defined herein shall have the meanings assigned to them in
the Master Lease Agreement identified above ("Agreement"; said Agreement and
this Schedule being collectively referred to as "Lease").
A. Equipment
---------
Pursuant to the terms of the Lease, Lessor agrees to lease to
Lessee the Equipment listed on Annex A attached hereto and made a
part hereof. Such Equipment was previously leased by Lessor to
Cephalon, Inc. ("Cephalon") as part of a sale-leaseback
transaction. Lessor represents and warrants to Lessee that
Cephalon's leasehold interest in and to the Equipment has
terminated. Lessor purchased the Equipment from Cephalon and has
not transferred its interest in the Equipment.
B. Financial Terms
---------------
1. Advance Rent (if any): $ N/A
2. Capitalized Lessor's Cost: $ 7,664,605
3. Basic Term Lease Rate Factor: *
4. Daily Lease Rate Factor: *
5. Basic Term (No. of Months): 48
6. Basic Term Commencement Date: November 1, 1996
7. Equipment Location: *
8. Lessee Federal Tax ID No.: 00-0000000
9. Supplier: N/A
10. Last Delivery Date: N/A
C. Tax Benefits
------------
Depreciation Deductions:
a. Depreciation Method: *
b. Recovery Period: *
c. Basis: *
d. This Equipment has been Leased to a non related third party
from December 29, 1994 until October 31, 1996. The Lessee's
representations regarding items a, b and c in this Section C shall
be limited to such Tax Benefits that remain from the date hereof
through the end of the Term.
[*] Confidential information has been omitted and filed separately with the
Commission.
D. Term and Rent
-------------
1. Basic Term Rent. Commencing on November 1, 1996 and on the same
day of each month thereafter (each, a "Rent Payment Date") during
the Basic Term, Lessee shall pay as rent ("Basic Term Rent") the
product of the Basic Term Lease Rate Factor times the then
Capitalized Lessor's Cost of all Equipment on this Schedule.
E. Insurance
---------
1. Public Liability: $1MM total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the
higher of the Stipulated Loss Value or the full
replacement cost of the Equipment.
Except as expressly modified hereby, all terms and provisions of the Agreement
shall remain in full force and effect. This Schedule is not binding or effective
with respect to the Agreement or Equipment until executed on behalf of Lessor
and Lessee by authorized representatives of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL NORTH AMERICAN VACCINE, INC.
CORPORATION
By: /s/ X. X. Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------- ---------------------------
Name: X. X. Xxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxx
---------------------- --------------------------
Title: Sr. Trans. Manager Title: Vice President - Finance
-------------------- ------------------------
ANNEX A
TO
SCHEDULE NO. 001
TO MASTER LEASE AGREEMENT
DATED AS OF NOVEMBER 1, 1996
SERIAL NUMBER NUMBER COST
MANUFACTURER TYPE/MODEL OF UNITS PER UNIT
*
Initials:
/s/ RLD /s/ LJH
-------------------------- ------------------------------
Lessor Lessee
[*] Confidential information has been omitted and filed separately with the
Commission.
ANNEX C
TO
SCHEDULE NO. 001
TO MASTER LEASE AGREEMENT
DATED AS OF NOVEMBER 1, 1996
CERTIFICATE OF ACCEPTANCE
-------------------------
To: General Electric Capital Corporation ("Lessor")
Pursuant to the provisions of the above schedule and lease
(collectively, the "Lease",), Lessee hereby certifies and warrants that Lessee
accepts the Equipment for all purposes of the Lease and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is
not in default under the Lease; and (ii) the representations and warranties made
by Lessee pursuant to or under the Lease are true and correct on the date
hereof.
/s/ Xxxxxxxx X. Xxxxxxxx, Vice President-Finance
-------------------------------------------------
Lessee's Authorized Representative
Dated: November 12, 1996
ANNEX D TO SCHEDULE NO. 001
TO MASTER LEASE AGREEMENT
DATED AS OF November 1, 1996
STIPULATED LOSS VALUE TABLE*
----------------------------
Nov-01-96 1 *
Dec-01-96 2 *
Jan-01-96 3 *
Feb-01-97 4 *
Mar-01-97 5 *
Apr-01-97 6 *
May-01-97 7 *
Jun-01-97 8 *
Jul-01-97 9 *
Aug-01-97 10 *
Sep-01-97 11 *
Oct-01-97 12 *
Nov-01-97 13 *
Dec-01-97 14 *
Jan-01-98 15 *
Feb-01-98 16 *
Mar-01-98 17 *
Apr-01-98 18 *
May-01-98 19 *
Jun-01-98 20 *
Jul-01-98 21 *
Aug-01-98 22 *
Sep-01-98 23 *
Oct-01-98 24 *
Nov-01-98 25 *
Dec-01-98 26 *
Jan-01-99 27 *
Feb-01-99 28 *
Mar-01-99 29 *
Apr-01-99 30 *
May-01-99 31 *
Jun-01-99 32 *
Jul-01-99 33 *
Aug-01-99 34 *
Sep-01-99 35 *
Oct-01-99 36 *
Nov-01-99 37 *
Dec-01-99 38 *
Jan-01-00 39 *
Feb-01-00 40 *
Mar-01-00 41 *
[*] Confidential information has been omitted and filed separately with the
Commission.
DATE PAYMENT # STIPULATED LOSS VALUE
---- --------- ---------------------
Apr-01-00 42 *
May-01-00 43 *
Jun-01-00 44 *
Jul-01-00 45 *
Aug-01-00 46 *
Sep-01-00 47 *
Oct-01-00 48 *
* The Stipulated Loss Value for any unit of Equipment shall be equal to
the Capitalized Lessor's Cost of such unit multiplied by the appropriate
percentage derived from the above table. In the event that the Lease is for any
reason extended, then the last percentage figure shown above shall control
throughout any such extended term.
Note: The Capitalized Lessors Cost of any line item of equipment in
Annex A shall be equal to the dollar volume in the column labeled "Total
Funding" on page 1 of Annex A or "Net Book Value" on pages 2 - 21 (as the case
may be) multiplied by *
Initials: /s/ RLD /s/ LJH
------------------ ------------------
Lessor Lessee
[*] Confidential information has been omitted and filed separately
with the Commission.
ADDENDUM NO. 1
TO MASTER LEASE AGREEMENT
DATED AS OF NOVEMBER 1, 1996
THIS ADDENDUM (this "ADDENDUM") amends and supplements the above referenced
lease (the "Lease"), between GENERAL ELECTRIC CAPITAL CORPORATION ("LESSOR") and
NORTH AMERICAN VACCINE, INC. ("LESSEE") and is hereby incorporated into the
Lease as though fully set forth therein. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Lease.
The Lease is hereby amended as follows:
1. XXI. FINANCIAL COVENANTS.
(a) At all times during the term of the Lease, Lessee shall
maintain: (i) Tangible Net Worth of * (ii) A Current Ratio of *; (iii) Total
Liabilities to Tangible Net Worth of *; (iv) unrestricted cash, cash equivalents
and/or marketable securities (collectively "UNRESTRICTED CASH") of * or, Lessee
shall within fifteen (15) days after Lessee ceases to satisfy any of such
requirements cause to be delivered to Lessor an irrevocable standby letter of
credit as described in Section XXI(c) below. "TOTAL LIABILITIES" shall mean
Lessee's total liabilities less convertible subordinated debt and "TANGIBLE NET
WORTH" shall mean Lessee's tangible net worth plus convertible subordinated
debt. Unrestricted Cash shall be shown net of any contingent liability
associated with other lease cash triggers or pledge agreements unless Lessee's
obligations under these agreements are deemed by Lessor to be less restrictive.
"CURRENT RATIO" shall mean current assets divided by current liabilities. Except
as defined herein, accounting terms used herein shall be as defined, and all
calculations hereunder shall be made, in accordance with GAAP.
(b) Lessee's chief financial officer shall notify Lessor of the
amount of Lessee's Unrestricted Cash and shall certify that such amounts are in
compliance with the requirements of Section XXI(a) above, such notification and
certification shall be provided within fifteen (15) days after the end of each
month, reflecting such information as of the end of the month immediately
preceding such month. Lessee's chief financial officer shall also notify Lessor
the amount of Lessee's Tangible Net Worth, Total liabilities to Tangible Net
Worth ratio and Current Ratio, and shall certify that such amounts are in
compliance with the requirements of Section XXI(a) above, such notification and
certification shall be provided within fifteen (15) days after the end of each
month, reflecting such information as of the end of the month immediately
preceding such month. If Lessee is unable or fails timely to provide such
notification and compliance certificates, within fifteen (15) days after such
failure, Lessee shall cause to be delivered to Lessor an irrevocable standby
letter of credit as described in Section XXI(c) below ("Letter of Credit"). A
failure by Lessee to provide such Letter of Credit or otherwise comply with this
Section XXI shall be a default hereunder.
(c) The irrevocable standby letter of credit provided pursuant to
this Addendum shall be *
[*] Confidential information has been omitted and filed separately with the
Commission.
2. XXII. FINANCIAL COVENANTS RELEASE.
At any time if Lessee is not in default, Lessee may provide Lessor
with a letter of credit substantially in the form of Exhibit A attached hereto
(or such other form as may be acceptable to Lessor in its sole discretion) equal
to * . Upon providing this Letter of Credit, the Financial Covenants stated in
Section XXI and Lessee's obligations under those Financial Covenants will be
considered in abeyance, except as described further in this paragraph. Lessee
may later request in writing that Lessor return the Letter of Credit and
re-instate the financial covenants. Lessor agrees to do so as long as: (1)
Lessee is not in default; (2) a default by Lessee is not reasonably imminent in
the judgment of Lessor; and (3) Lessee would not have been in default had the
Financial Covenants not been put into abeyance. Lessee may exercise its right to
provide a letter of credit as described in this Section XXII * times during the
term of the Lease.
Except as expressly modified hereby, all terms and provisions of the
Lease shall remain in full force and effect. This Addendum is not binding nor
effective with respect to the Lease or the Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Addendum to be executed
by their duly authorized representatives as of the date first above written.
LESSEE: LESSOR:
NORTH AMERICAN VACCINE, INC. GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx By: /s/ X. X. Xxxxxxxxxx
-------------------------- ---------------------
Its: Vice President - Finance Its: Sr. Trans Manager
------------------------- ---------------------
Dated: November 12, 1996 Dated: November 12,1996
----------------------- ------------------
[*] Confidential information has been omitted and filed separately with the
Commission.
ADDENDUM NO. 1
TO SCHEDULE NO. 001
TO MASTER LEASE AGREEMENT
DATED AS OF NOVEMBER 1, 1996
This ADDENDUM (this "Addendum") amends and supplements the above
referenced schedule (the "Schedule") to the above referenced lease (the
"Lease"), between GENERAL ELECTRIC CAPITAL CORPORATION ("Lessor") and NORTH
AMERICAN VACCINE, INC. ("Lessee") and is hereby incorporated into the Schedule
as though fully set forth therein. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Lease.
1. For purposes of this Schedule only, Section XVIII of the Lease is
amended by deleting and replaced with the following:
EARLY PURCHASE OPTION.
(a) Provided that the Lease has not been earlier
terminated and provided further that Lessee is not in default under the
Lease or any other agreement between Lessor and Lessee, Lessee may,
UPON AT LEAST * PRIOR WRITTEN NOTICE TO LESSOR OF LESSEE'S IRREVOCABLE
ELECTION TO EXERCISE SUCH OPTION, purchase all (but not less than all)
of the Equipment listed and described in this Schedule on the rent
payment date (the "Early Purchase Date") * for a price equal to * (the
"FMV Early Option Price"), plus all applicable sales taxes on an AS IS
BASIS. Lessor and Lessee agree that the FMV Early Option Price is a
reasonable prediction of the Fair Market Value (as such term is defined
in Section XVIII(b) hereof) of the Equipment at the time the option is
exercisable. Lessor and Lessee agree that if Lessee makes any
non-severable improvement to the Equipment which increases the value of
the Equipment and is not required or permitted by Sections VII or XI of
the Lease prior to lease expiration, then at the time of such option
being exercised, Lessor and Lessee shall adjust the purchase price to
reflect any addition to the price anticipated to result from such
improvement. (The purchase option granted by this subsection shall be
referred to herein as the "Early Purchase Option".)
(b) If Lessee exercises its Early Purchase Option with
respect to the Equipment leased hereunder, then on the Early Purchase
Option Date, Lessee shall pay to Lessor any Rent and other sums due and
unpaid on the Early Purchase Option Date and Lessee shall pay the FMV
Early Option Price, plus all applicable sales taxes, to Lessor in cash.
Upon receipt of the Fair Market Value, plus all applicable sales taxes,
Lessor shall execute and deliver to Lessee a xxxx of sale, without
representations or warranty, except that the Equipment is free and
clear of any liens, claims or encumbrances created by Lessor or any
party claiming by, through or under Lessor and other than those created
by Lessee or anyone claiming by, through or under Lessee.
2. For purposes of this Schedule only, the following additional Financial
Terms are added to Paragraph B of the Schedule:
*
[*] Confidential information has been omitted and filed separately with the
Commission.
3. For purposes of this Schedule only, the following is added to Paragraph
D of the Schedule:
4. Secondary Term Rent. Unless the Schedule has been earlier
terminated as provided therein, commencing on the Secondary Term
Commencement Date and on the same day of each month thereafter (each, a
"Rent Payment Date",) during the Secondary Term, Lessee shall pay as
rent ("Secondary Term Rent",) the product of the Secondary Term Lease
Rate Factor times the Capitalized Lessor's Cost of all Equipment on
this Schedule.
4. For purposes of this Schedule only, Section XVIII(a) of the Agreement is
hereby deleted in its entirety and the following is substituted therefor:
(a) So long as no default exists hereunder and the Lease has not
been earlier terminated, Lessee may at the expiration of the
Secondary Term upon at least * prior written notice to Lessor,
purchase all (but not less than all) of the Equipment in this
Schedule on an AS IS BASIS, for cash equal to its then Fair Market
Value (plus all applicable sales taxes).
5. For purposes of this Schedule only, the following is added to the end
thereof:
END OF BASIC TERM OPTIONS:
At the expiration of the Basic Term (the "Basic Term Expiration Date"),
so long as no default has occurred and is continuing hereunder and this
Agreement has not been earlier terminated, Lessee shall exercise one of the
following options:
(i) EXTENSION OPTION. Lessee may extend the Lease beyond
the Basic Term Expiration Date with respect to all (but not less than
all) of the Equipment covered by this Schedule through the Secondary
Term set forth in this Schedule and Lessee shall pay Secondary Term
Rent as set forth in this Schedule.
(ii) PURCHASE OPTION. Upon at least * written notice to
Lessor prior to the expiration of the Basic Term, purchase all (but
not less than all) of the Equipment covered by this Schedule on an AS
IS WHERE IS basis without representation or warranty, express or
implied ("AS IS BASIS",) for cash equal to * which amount Lessor and
Lessee agree is a reasonable prediction of the Fair Market Value (as
such term is defined in Section XVIII(b) hereof except that it shall
be the Lessee's right to choose an independent qualified appraiser if
the parties can't agree as to the Fair Market Value and such
appraiser's determination of FMV shall be final and binding upon the
parties) of the Equipment at the time the option is exercisable.
[*] Confidential information has been omitted and filed separately with the
Commission.
Lessor and Lessee agree that if Lessee makes any non-severable
improvement to the Equipment which increases the value of the
Equipment and is not required or permitted by Sections VII or XI of
the Lease prior to lease expiration, then at the time of the exercise
of this option, Lessor and Lessee shall adjust the purchase price to
reflect any addition to the price anticipated to result from such
improvement. On the Basic Term Expiration Date, Lessor shall receive
in cash the full purchase price (plus all applicable sales taxes)
together with any Rent or other sums then due under the Lease on such
date. Lessee shall be deemed to have waived this option if it fails
to timely provide Lessor with the required written notice of its
election to exercise the same or unless it provides Lessor with
written notice of its irrevocable election to exercise the same
within * after Fair Market Value is determined (by agreement or
appraisal).
Except as expressly modified hereby, all terms and provisions of the
Lease shall remain in full force and effect. This Addendum is not binding nor
effective with respect to the Lease or the Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Addendum to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION NORTH AMERICAN VACCINE, INC.
By: /s/ X. X. Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
----------------------------------- --------------------------
Its: Sr. Trans. Manager Its: Vice President - Finance
----------------------------------- ------------------------
[*] Confidential information has been omitted and filed separately with the
Commission.
ADDENDUM NO. 2 TO SCHEDULE NO. 1
TO MASTER LEASE AGREEMENT
DATED AS OF NOVEMBER 1, 1996
THIS ADDENDUM amends and supplements the above referenced schedule (the
"Schedule") to the above referenced) lease (the "Lease"), between GENERAL
ELECTRIC CAPITAL CORPORATION ("Lessor") and NORTH AMERICAN VACCINE, INC..
("Lessee") and is hereby incorporated into the Schedule as though fully set
forth therein. Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Lease.
For the purposes of this Schedule only Section XI is hereby amended as
follows:
RETURN PROVISIONS: In addition to the provisions of Section XI of this Lease,
and provided that Lessee has not elected to exercise its option to purchase the
Equipment, Lessee shall, at its expense:
(a) At least ninety (90) days and not more than two hundred ten (210)
days prior to expiration or earlier termination of the Lease, provide to Lessor
a detailed inventory of all components of the Equipment. The inventory should
include, but not be limited to, a listing of model and serial numbers for all
components comprising the Equipment.
(b) At least ninety (90) days prior to expiration or earlier
termination of the Lease, with reference to computer and computer based
equipment comprising the Equipment, provide to Lessor a detailed listing of all
internal circuit boards by both the model and serial number for all hardware
comprising the Equipment and a listing of all software features listed
individually.
(c) At least ninety (90) days prior to expiration or earlier
termination of the Lease, upon receiving reasonable notice from Lessor, provide
or cause the vendor(s) or manufacturer(s) to provide to Lessor the following
documents: (1) one set of service manuals, blue prints, process flow diagrams
and operating manuals including replacements and/or additions thereto, such that
all documentation is completely up-to-date; and (2) one set of documents,
detailing equipment configuration, operating requirements, maintenance records,
and other technical data concerning the set-up and operation of the Equipment,
including replacements and/or additions thereto, such that all documentation is
completely up-to-date.
(d) At least ninety (90) days prior to expiration or earlier
termination of the Lease, upon receiving reasonable notice from Lessor, make the
Equipment available for on-site operational inspections by potential purchasers,
above ground and under power, and provide personnel, power and other
requirements necessary to demonstrate electrical, mechanical and bio reactor
systems for each item of the Equipment; provided however, that such persons
shall comply with any reasonable conditions imposed by Lessee regarding such
inspection of Equipment in Lessee's manufacturing areas.
(e) At least ninety (90) days prior to expiration or earlier
termination of the Lease, cause the manufacturer's representative or a qualified
equipment maintenance provider, acceptable to Lessor, to perform a comprehensive
physical inspection, including testing all material and workmanship of the
Equipment; and if during such inspection, examination and test, the authorized
inspector finds any of the material or workmanship to be defective or the
Equipment not operating within the manufacturer's specifications, then Lessee
shall repair or replace such defective material and, after corrective measures
are completed, Lessee will provide for a follow-up inspection of the Equipment
by the authorized inspector as outlined in the preceding clause.
(f) Have each item of Equipment returned with an in-depth field service
report detailing said inspection as outlined in Section e of this Addendum. The
report shall certify that the Equipment has been properly inspected, examined
and tested and is operating within the manufacturer's specifications.
(g) Provide that all Equipment will be cleaned and cosmetically
acceptable, and in such condition so that it may be immediately installed and
placed into use in a similar environment.
(h) Properly remove or treat all rust or corrosion.
(i) Ensure all items of Equipment, where appropriate, will be
completely sterilized, steam-cleaned and de-greased upon redelivery.
(j) Properly remove all Lessee installed markings which are not
necessary for the installation, operation, maintenance or repair of the
Equipment.
(k) Ensure all Equipment and equipment operations conform to all
applicable local, state, and federal laws, health and safety guidelines
(including the then U.S. Food and Drug Administration regulations).
(l) Ensure the Equipment shall be mechanically and structurally sound,
capable of performing the functions for which the Equipment was originally
designed, in accordance with the manufacturer's published and recommended
specifications.
(m) Provide for the deinstallation, packing, transporting, and
certifying of the Equipment to include, but not be limited to, the following:
(1) the manufacturer's representative shall de-install all Equipment (including
all wire, cable and mounting hardware) in accordance with the specifications of
the manufacturer; (2) each item of Equipment will be returned with a certificate
supplied by the manufacturer's representative qualifying the Equipment to be in
good condition and (where applicable) to be eligible for the manufacturer's
maintenance plan; the certificate of eligibility shall be transferable to
another operator of the Equipment; (3) the Equipment shall be packed properly
and in accordance to the manufacturer's recommendations; and (4) Lessee shall
transport the Equipment in a manner consistent with the manufacturer's
recommendations and practices.
(n) Provide for the deinstallation and packing of the Equipment to
include, but not be limited to, the following: (1) all process fluids shall be
removed from the Equipment and disposed of in accordance with the then current
waste disposal laws and regulations. At no time are materials which could be
considered hazardous waste by any regulatory authority to be shipped with
machinery; (2) all internal fluids such as lube oil and hydraulic fluid are to
be filled to operating levels; filler caps are to be secured and disconnected
hoses are to be sealed to avoid spillage; (3) the manufacturer's representative
shall deinstall all Equipment in accordance with the specifications of the
manufacturer; and (4) the Equipment shall be packed properly and in accordance
with the manufacturer's recommendations.
(o) Upon sale of the Equipment to a third party, provide transportation
to not more than three (3) individual locations anywhere within a 500 mile
radius of the original Equipment location elected by Lessor.
(p) Obtain and pay for a policy of transit insurance for the redelivery
period in an amount equal to the replacement value of the Equipment and Lessor
shall be named as the loss payee on all such policies of insurance.
(q) With regard to any Equipment that has been modified or reconfigured
by Lessee, return or restore the Equipment to its original configuration, as
specified by the manufacturer including all upgrades installed by the
manufacturer.
Except as expressly modified hereby, all terms and provisions of the
Lease shall remain in full force and effect. This Addendum is not binding or
effective with respect to the Lease or the Equipment until executed on behalf of
Lessor and Lessee by authorized representatives of Lessor and Lessee.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Addendum to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION NORTH AMERICAN VACCINE, INC.
By: /s/ X. X. Xxxxxxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------- --------------------------
Name: X. X. Xxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxx
----------------------- ------------------------
Title: Sr. Trans Manager Title: Vice President - Finance
---------------------- -------------------------
