Exhibit 10.8
MASTER LEASE AGREEMENT
dated as of May 21, 2002, ("Agreement")
THIS AGREEMENT is between GENERAL ELECTRIC CAPITAL CORPORATION (together
with its successors and assigns, if any, "LESSOR") and ALTUS BIOLOGICS INC.
("LESSEE"). Lessor has an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇.
Lessee is a corporation organized and existing under the laws of the state of
Massachusetts. Lessee's mailing address and chief place of business is ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇. This Agreement contains the general
terms that apply to the leasing of Equipment from Lessor to Lessee. Additional
terms that apply to the Equipment (term, rent, options, etc.) shall be contained
on a schedule ("Schedule").
1. LEASING:
(a) Lessor agrees to lease to Lessee and Lessee agrees to lease from
Lessor, the equipment and the property ("Equipment") described in any Schedule
signed by both parties.
(b) Lessor shall purchase Equipment from the manufacturer or supplier
("Supplier") and lease it to Lessee if on or before the Last Delivery Date
Lessor receives (i) a Schedule for the Equipment, (ii) evidence of insurance
which complies with the requirements of Section 9, and (iii) such other
documents as Lessor may reasonably request. Each of the documents required above
must be in form and substance satisfactory to Lessor. Lessor hereby appoints
Lessee its agent for inspection and acceptance of the Equipment from the
Supplier. Once the Schedule is signed, the Lessee may not cancel the Schedule.
2. TERM, RENT AND PAYMENT:
(a) The rent payable for the Equipment and Lessee's right to use the
Equipment shall begin on the earlier of (i) the date when the Lessee signs the
Schedule and accepts the Equipment or (ii) when Lessee has accepted the
Equipment under a Certificate of Acceptance ("Lease Commencement Date"). The
term of this Agreement shall be the period specified in the applicable Schedule.
The word "term" shall include all basic and any renewal terms.
(b) Lessee shall pay rent to Lessor at its address stated above, except as
otherwise directed by Lessor. Rent payments shall be in the amount set forth in,
and due as stated in the applicable Schedule. If any Advance Rent (as stated in
the Schedule) is payable, it shall be due when the Lessee signs the Schedule.
Advance Rent shall be applied to the first rent payment and the balance, if any,
to the final rent 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 (10) days of its due date, Lessee agrees to pay a late charge of five
cents ($.05) per dollar on, and in addition to, the amount of such rent but not
exceeding the lawful maximum, if any.
3. RENT ADJUSTMENT:
(a) 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, as amended, ("Code")), the maximum
effective corporate income tax rate (exclusive of any
minimum tax rate) for calendar-year taxpayers ("Effective Rate") is higher than
thirty-five percent (35%) for any year during the lease term, then Lessor, shall
have the right to increase such rent payments by requiring payment of a single
additional sum. The additional sum shall be equal to the product of (i) the
Effective Rate (expressed as a decimal) for such year less .35, (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 Termination Value (defined below), divided
by (iii) the difference between the new effective Rate (expressed as a decimal)
and (1). The adjusted Termination Value shall be the Termination Value
(calculated as of the first rent due in the year for which the adjustment is
being made) minus the Tax Benefits that would be allowed under Section 168 of
the Code (as of the first day of the year for which such adjustment is being
made and all future years of the lease term). The Termination Values and Tax
Benefits are defined on the Schedule. Lessee shall pay to Lessor 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.
(b) 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 thirty-five percent (35%) for any
year during the lease term, then Lessor shall upon request reduce such rent
payments by a single sum. The reduction shall be equal to the product of (i) the
Effective Rate (expressed as a decimal) for such year less .35 (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 Termination Value (defined below), divided by (iii) the
difference between the new Effective Tax Rate (expressed as a decimal) and one
(1). The adjusted Termination Value shall be the Termination Value (calculated
as of the first rent due in the year for which the adjustment is being made),
minus 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
future years of the lease term). The Termination Values and Tax Benefits are
defined on the Schedule. Lessor shall pay to Lessee the full amount of the rent
reduction on the later of (i) receipt of notice or (ii) the first day of the
year for which such adjustment is being made.
(c) Lessee's obligations under this Section 3 shall survive any expiration
or termination of this Agreement.
4. TAXES:
(a) If permitted by law, Lessee shall report and pay promptly all taxes,
fees and assessments due, imposed, assessed or levied against any Equipment (or
purchase, ownership, delivery, leasing possession, use or operation thereof),
this Agreement (or any rents or receipts hereunder), any Schedule, Lessor or
Lessee by any governmental entity 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 (collectively "Taxes"). Lessee
shall have no liability for Taxes imposed by the United States of America or any
state or political subdivision thereof which are on or measured by the net
income of Lessor except as provided in Sections 3 and 14(c). Lessee shall
promptly reimburse Lessor (on an after tax basis) for any Taxes charged to or
assessed against Lessor. Lessee shall show
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Lessor as the owner of the Equipment on all tax reports or returns, and send
Lessor a copy of each report or return and evidence of Lessee's payment of Taxes
upon request.
(b) Lessee's obligations, and Lessor's rights and privileges, contained in
this Section 4 shall survive the expiration or other termination of this
Agreement.
5. REPORTS:
(a) If any tax or other lien shall attach to any Equipment, Lessee will
notify Lessor in writing, within ten (10) days after Lessee becomes aware of the
tax or lien. The notice shall include the full particulars of the tax or lien
and the location of such Equipment, on the date of the notice.
(b) Lessee will deliver to Lessor, Lessee's complete financial statements,
certified by a recognized firm of certified public accountants, within ninety
(90) days of the close of each fiscal year of Lessee. Lessee will deliver to
Lessor copies of Lessee's quarterly financial report certified by the chief
financial officer of Lessee, within ninety (90) days of the close of each fiscal
quarter of Lessee. Lessee will deliver to ▇▇▇▇▇▇ all Forms 10-K and 10-Q, if
any, filed with the Securities and Exchange Commission within thirty (30) days
after the date on which they are filed.
(c) Lessor may inspect any Equipment during normal business hours after
giving Lessee reasonable prior notice.
(d) Lessee will keep the Equipment at the Equipment Location (specified in
the applicable Schedule) and will give Lessor prior written notice of any
relocation of Equipment. If Lessor asks, Lessee will promptly notify Lessor in
writing of the location of any Equipment.
(e) If any Equipment is lost or damaged (where the estimated repair costs
would exceed the greater of ten percent (10%) of the original Equipment cost or
ten thousand and 00/100 dollars ($10,000)), or is otherwise involved in an
accident causing personal injury or property damage, Lessee will promptly and
fully report the event to Lessor in writing.
(f) 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 or event which with notice or lapse of
time (or both) would become such a default within thirty (30) days after any
request by Lessor.
(g) Lessee will promptly notify Lessor of any change in Lessee's state of
incorporation or organization.
6. 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 laws,
regulations and insurance policies and Lessee shall not discontinue use of the
Equipment.
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(c) Lessee will not move any equipment from the location specified on the
Schedule, without the prior written consent of Lessor.
(d) Lessee will keep the Equipment free and clear of all liens and
encumbrances other than those which result from acts of Lessor.
(e) Lessor shall not disturb Lessee's quiet enjoyment of the Equipment
during the term of the Agreement unless a default has occurred and is continuing
under this Agreement.
7. MAINTENANCE:
(a) Lessee will, at its sole expense, maintain each unit of Equipment in
good operating order and repair, normal wear and tear excepted. The Lessee shall
also maintain the Equipment in accordance with manufacturer's recommendations.
Lessee shall make all alterations or modifications required to comply with any
applicable law, rule or regulation during the term of this Agreement. If Lessor
requests, Lessee shall affix plates, tags or other identifying labels showing
ownership thereof by Lessor. The tags or labels shall be placed in a prominent
position on each unit of Equipment.
(b) Lessee will not attach or install anything an any Equipment that will
impair the originally intended function or use of such Equipment without the
prior written consent of Lessor. All additions, parts, supplies, accessories,
and equipment ("Additions") furnished or attached to any Equipment that are not
readily removable shall become the property of Lessor. All Additions shall be
made only in compliance with applicable law. Lessee will not attach or install
any Equipment to or in any other personal or real property without the prior
written consent of Lessor.
8. STIPULATED LOSS VALUE: If for any reason any unit of Equipment becomes worn
out, lost, stolen, destroyed, irreparably damaged or unusable ("CASUALTY
OCCURRENCES") Lessee shall promptly and fully notify Lessor in writing. Lessee
shall pay Lessor the sum of (i) the Stipulated Loss Value (see Schedule) of the
affected unit determined as of the rent payment date prior to the Casualty
Occurrence; and (ii) all rent and other amounts which are then due under this
Agreement on the Payment Date (defined below) for the affected unit. The Payment
Date shall be the next rent payment date after the Casualty Occurrence. Upon
Payment of all sums due hereunder, the term of this lease as to such unit shall
terminate.
9. INSURANCE:
(a) Lessee 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.
(b) Lessee agrees, at its own expense, to keep all Equipment insured for
such amounts and against such hazards as Lessor may reasonably require. All such
policies shall be with companies, and on terms, reasonably satisfactory to
Lessor. The insurance shall include coverage for damage to or loss of the
Equipment, liability for personal injuries, death or property damage. Lessor
shall be named as additional insured 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
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of Lessee. The insurance shall provide for liability coverage in an amount equal
to at least ONE MILLION U.S. DOLLARS ($1,000,000.00) total liability per
occurrence, unless otherwise stated in any Schedule. The casualty/property
damage coverage shall be in an amount equal to the higher of the Stipulated Loss
Value or the full replacement cost of the Equipment. No insurance shall be
subject to any co-insurance clause. The insurance policies shall provide that
the insurance may not be altered or canceled by the insurer until after thirty
(30) days written notice to Lessor. Lessee agrees to deliver to Lessor evidence
of insurance reasonably satisfactory to Lessor.
(c) 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 insurance payments. Lessor shall not act as Lessee's
attorney-in-fact unless Lessee is in default. Lessee shall pay any reasonable
expenses of Lessor in adjusting or collecting insurance. Lessee will not make
adjustments with insurers with respect to claims for damage to any unit of
Equipment where the repair costs are less than the lesser of ten percent (10%)
of the original Equipment cost or ten thousand and 00/100 dollars ($10,000).
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 under this Agreement.
10. RETURN OF EQUIPMENT:
(a) At the expiration or termination of this Agreement or any Schedule,
Lessee shall perform any testing and repairs required to place the 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 the original
intended purpose of the Equipment. If required the units of Equipment shall be
deinstalled, disassembled and crated, by an authorized manufacturer's
representative or such other service person as is reasonably satisfactory to
Lessor. Lessee shall remove installed markings that are not necessary for the
operation, maintenance or repair of the Equipment. All Equipment will be
cleaned, cosmetically acceptable, and in such condition as to be immediately
installed into use in similar environment for which the Equipment was originally
intended to be used. All waste material and fluid must be removed from the
Equipment and disposed of in accordance with then current waste disposal laws.
Lessee shall return the units of Equipment to a location within the continental
United States as Lessor shall direct. Lessee shall obtain and pay for a policy
of transit insurance for the redelivery period in an amount equal to the
replacement value of the Equipment. The transit insurance must name Lessor as
the loss payee. The Lessee shall pay for all costs to comply with this section
(a).
(b) Until Lessee has fully complied with the requirements of Section 10(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 the Lessee's right to use
the Equipment upon ten (10) days notice to Lessee.
(c) Lessee shall provide to Lessor a detailed inventory of all components
of the Equipment including model and serial numbers. Lessee shall also provide
an up-to-date copy of all other documentation pertaining to the Equipment. All
service manuals, blue prints, process flow diagrams, operating manuals,
inventory and maintenance records shall be given to Lessor at
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least ninety (90) days and not more than one hundred twenty (120) days prior to
lease termination.
(d) Lessee shall make the Equipment available for on-site operational
inspections by potential purchasers at least one hundred twenty (120) days prior
to and continuing up to lease termination. Lessor shall provide Lessee with
reasonable notice prior to any inspection. Lessee shall provide personnel, power
and other requirements necessary to demonstrate electrical, hydraulic and
mechanical systems for each item of Equipment.
11. DEFAULT AND REMEDIES:
(a) Lessor may in writing declare this Agreement in default if: (i) Lessee
breaches its obligation to pay rent or any other sum when due and fails to cure
the breach within ten (10) days; (ii) Lessee breaches any of its insurance
obligations under Section 9; (iii) Lessee breaches any of its other obligations
and fails to cure that breach within thirty (30) days after written notice from
Lessor; (iv) any representation or warranty made by Lessee in connection with
this Agreement shall be false or misleading in any material respect; (v) Lessee
or any guarantor or other obligor for the Lessee's obligations hereunder
("Guarantor") becomes insolvent or ceases to do business as a going concern;
(vi) any Equipment is illegally used; (vii) if Lessee or any Guarantor is a
natural person, any death or incompetency of Lessee or such Guarantor; or (viii)
a petition is filed by or against Lessee or any Guarantor under any bankruptcy
or insolvency laws and in the event of an involuntary petition, the petition is
not dismissed within forty-five (45) days of the filing date. The default
declaration shall apply to all Schedules unless specifically excepted by Lessor.
(b) After a default, at the request of Lessor, Lessee shall comply with the
provisions of Section 10(a). Lessee hereby authorizes Lessor to peacefully enter
any premises where any Equipment may be and take possession of the Equipment.
Lessee shall immediately pay to Lessor without further demand as liquidated
damages for loss of a bargain and not as a penalty, the Stipulated Loss Value of
the Equipment (calculated as of the rent payment date prior to the declaration
of default), and all rents and other sums then due under this Agreement and all
Schedules. Lessor may terminate this Agreement as to any or all of the
Equipment. A termination shall occur only upon written notice by Lessor to
Lessee and only as to the units of Equipment specified in any such notice.
Lessor may, but shall not be required to, sell Equipment at private or public
sale, in bulk or in parcels, with or without notice, and without having the
Equipment present at the place of sale. Lessor may also, but shall not be
required to, lease, otherwise dispose of or keep idle all or part of the
Equipment. Lessor may use Lessee's premises for a reasonable period of time for
any or all of the purposes stated above without liability for rent, costs,
damages or otherwise. The proceeds of sale, lease or other disposition, if any,
shall be applied in the following order of priorities: (i) 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, (ii)
to the extent not previously paid by Lessee, to pay Lessor all sums due from
Lessee under this Agreement; than (iii) to reimburse to Lessee any sums
previously paid by Lessee as liquidated damages; and (iv) any surplus shall be
retained by Lessor. Lessee shall immediately pay any deficiency in (i) and (ii)
above.
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(c) The foregoing remedies are cumulative, and any or all thereof may be
exercised instead of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. Lessee
shall pay Lessor's actual attorney's fees incurred in connection with the
enforcement assertion, defense or preservation of Lessor's rights and remedies
under this Agreement or if prohibited by law, such lesser sum as may be
permitted. 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.
12. ASSIGNMENT: LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, ENCUMBER OR SUBLET ANY
EQUIPMENT OR THE INTEREST OF LESSEE IN THE EQUIPMENT WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR. Lessor may, without the consent of Lessee assign this
Agreement, any Schedule or the right to enter into a Schedule. 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 Schedule to such
assignee or as instructed by Lessor. Lessee also 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
any time have against Lessor for any reason whatsoever.
13. NET LEASE: Lessee is unconditionally obligated to pay all rent and other
amounts due for the entire lease term no matter what happens, even if the
Equipment is damaged or destroyed, if it is defective or if Lessee no longer can
use it. Lessee is not entitled to reduce or set-off against rent or other
amounts due to Lessor or to anyone to whom Lessor assigns this Agreement or any
Schedule whether Lessee's claim arises out of this Agreement, any Schedule, any
statement by Lessor, Lessor's liability or any manufacturer's liability,
negligence or otherwise.
14. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify Lessor, its agents, employees,
successors and assigns (on an after tax basis) from and against any and all
losses, damages, penalties, injuries, claims, actions and suits, including legal
expenses, of whatsoever kind and nature arising out of or relating to the
Equipment or this Agreement, except to the extent the losses, damages,
penalties, injuries, claims, actions, suits or expenses result from Lessor's
gross negligence or willful misconduct ("Claims"). This Indemnity shall include,
but is not limited to, Lessor's strict liability in tort and Claims, 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 use by Lessee, any sublessee or employees of
Lessee. Lessee shall, upon request, defend any actions based on, or arising out
of any of the foregoing.
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(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, and (ii) at any 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 by 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 (i) tax counsel of
Lessor 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 (ii) any Tax Benefit claimed on the Federal income tax return of
Lessor is disallowed or adjusted by the Internal Revenue Service, or (iii) any
Tax Benefit is recalculated or recaptured (any determination, disallowance,
adjustment recalculation or recapture being a "Loss"), then Lessee shall pay to
Lessor, as an indemnity and as additional rent, an amount that shall, in the
reasonable opinion of Lessor, cause Lessor's after-tax economic yields and each
flows to equal the Net Economic Return that would have been realized by Lessor
if such Loss had not occurred. Such amount shall be payable upon demand
accompanied by a statement describing in reasonable detail such Loss and the
computation of such amount. The economic yields and cash flows shall be computed
on the same assumptions, including tax rates as were used by Lessor in
originally evaluating the transaction ("Net Economic Return"). If an adjustment
has been made under Section 3 then the Effective Rate used in the next preceding
adjustment shall be substituted.
(d) All references to Lessor in this Section 14 include Lessor and the
consolidated taxpayer group of which Lessor is a member. All of Lessor's rights,
privileges and indemnities contained in this Section 14 shall survive the
expiration or other termination of this Agreement. The rights, privileges and
indemnities contained herein are expressly made for the benefit of, and shall be
enforceable by Lessor, its successors and assigns.
15. 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 UNDER THIS AGREEMENT 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.
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: (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) of the Equipment, or any other circumstance in connection with the
Equipment; (ii) the use, operation or performance of any Equipment or any risks
relating to it; (iii) any interruption of service, loss
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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 Agreement,
Lessee shall be, and hereby is, authorized during the term of this Agreement to
assert and enforce whatever claims and rights Lessor may have against say
Supplier of the Equipment at Lessee's sole cost and expense, in the name of and
for the account of Lesser and/or Lessee, as their interests may appear.
16. REPRESENTATIONS AND WARRANTIES OE LESSEE: Lessee makes each of the following
representations and warranties to Lessor 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").
Lessee 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, enforceable in
accordance with their terms, except to the extent that the enforcement of
remedies may be limited under applicable bankruptcy and insolvency laws.
(c) No approval, consent or withholding of objections is required from any
governmental authority or entity with respect to the entry into or performance
by Lessee of the Documents except arch 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 bylaws; 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, dead 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 if decided against Lessee 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 financial statement delivered to Lessor has been prepared in
accordance with generally accepted accounting principles consistently applied.
Since the date of the most recent financial statement, there has been no
material adverse change.
(h) Lessee's exact legal name is as set forth in the first sentence of this
Agreement and Lessee is and will be at all times validly existing and in good
standing under the laws of the State of its incorporation or organization
(specified in the first sentence of this Agreement).
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(i) The Equipment will at all times be used for commercial or business
purposes.
17. EARLY TERMINATION:
(a) On or after the First Termination Date (specified in the applicable
Schedule), Lessee may, so long as no default exists hereunder, terminate this
Agreement as to all (but not less than all) of the Equipment on such Schedule as
of a rent payment date ("Termination Date"). Lessee must give Lessor at least
ninety (90) days prior written notice of the termination.
(b) Lessee shall, and Lessor may, solicit cash bids for the Equipment on an
AS IS, WHERE IS BASIS without recourse to or warranty from Lessor, express or
implied ("AS IS BASIS"). Prior to the Termination Date, Lessee shall (i) certify
to Lessor any bids received by Lessee and (ii) pay to Lessor (A) the Termination
Value (calculated as of the rent due on the Termination Date) for the Equipment,
and (B) all rent and other sums due and unpaid as of the Termination Date.
(c) If all amounts due hereunder have been paid on the Termination Date,
Lessor shall (i) sell the Equipment on an AS IS BASIS for cash to the highest
bidder and (ii) refund the proceeds of such sale (net of any related expenses)
to Lessee up to the amount of the Termination Value. If such sale is not
consummated, no termination shall occur and Lessor shall refund the Termination
Value (less any expenses incurred by Lessor) to Lessee.
(d) Notwithstanding the foregoing, Lessor may elect by written notice, at
any time prior to the Termination Date, not to sell the Equipment. In that
event, on the Termination Date Lessee shall (i) return the Equipment (in
accordance with Section 10) and (ii) pay to Lessor all amounts required under
Section 17(b) less the amount of the highest bid certified by Lessee to Lesser.
18. PURCHASE OPTION:
(a) Lessee may at lease expiration 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). Lessee must notify Lessor of its
intent to purchase the Equipment in writing at least one hundred eighty (180)
days in advance. If Lessee is in default or if the Lease has already been
terminated Lessee may not purchase the Equipment.
(b) "Fair Market Value" shall mean the price that 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. In determining the Fair Market Value the Equipment shall be assumed to
be in the condition in which it is required to be maintained and returned under
this Agreement. If the Equipment is installed it shall be valued on an installed
basis. The costs of removal from current location shall not be a deduction from
the value of the Equipment. If Lessor and Lessee are unable to agree on the Fair
Market Value at least one hundred thirty-five (135) days before lease
expiration, Lessor shall appoint an independent appraiser (reasonably acceptable
to Lessee) to determine Fair Market Value. The independent appraiser's
determination shall be final, binding and conclusive. Lessee shall bear all
costs associated with any appraisal.
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(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 fifteen (15) days after Fair Market Value is told to Lessee.
19. MISCELLANEOUS:
(a) LESSEE AND LESSOR UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, 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. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
(b) The Equipment shall remain Lessor's property unless Lessee purchases
the Equipment from Lessor and until such time Lessee shall only have the right
to use the Equipment as a lessee. Any cancellation or termination by Lessor 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 even though it may be attached to real property. The
Equipment shall not become part of any other property by reason of any
installation in, or attachment to, other real or personal property.
(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 at any other time to demand strict
compliance with this Agreement. Lessee, agrees, upon Lessor's request, to
execute, or otherwise authenticate, any document, record or instrument necessary
or expedient for filing; recording or perfecting the interest of Lessor or to
carry out the intent of this Agreement. In addition, Lessee hereby authorizes
Lessor to file a financing statement and amendments thereto describing the
Equipment described in any and all Schedules now and hereafter executed pursuant
hereto and adding any other collateral described therein and containing any
other information required by the applicable Uniform Commercial Code. Lessee
irrevocably grants to Lessor the power to sign Lessee's name and generally to
act on behalf of Lessee to execute and file financing statements and other
documents pertaining to any or all of the Equipment. All notices required to be
given hereunder shall be deemed adequately given if sent by registered of
certified mail to the addressee at its address stated herein, or at each other
place as such addressee may have specified in writing. This Agreement 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
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WRITING AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OE THE PARTIES HERETO.
(d) If Lessee does not 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. All reasonable amounts spent and obligations incurred or
assumed by Lessor in effecting such compliance shall constitute additional rent
due to Lessor. Lessee shall pay the additional rent 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 shall bear
interest, from the due date until paid, at the lesser of eighteen percent (18%)
per annum or the maximum rate allowed by law. Any provisions in this Agreement
and any Schedule that are in conflict with any statute, laid or applicable rule
shall be deemed omitted, modified, or altered to conform thereto.
(f) Lessee hereby irrevocably authorizes Lessor to adjust the Capitalized
Lessor's Cost up or down by no more than ten percent (10%) within each Schedule
to account for equipment change orders, equipment returns, invoicing errors, and
similar matters. Lessee acknowledges and agrees that the rent shall be adjusted
as a result of the change in the Capitalized Lessor's Cost. Lessor shall send
Lessee a written notice stating the final Capitalized Lessor's Cost, has
changed.
(g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF CONNNECTICUT (WITHOUT REGARD TO THE CONFLICT OF
LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT.
(h) Any cancellation or termination by Lessor, pursuant to the provisions
of this Agreement, any Schedule, supplement or amendment hereto, of the lease of
any Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder.
(i) To the extent that any Schedule would constitute chattel paper, as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest therein may be created through the transfer
or possession of this Agreement in and of itself without the transfer or
possession of the original of a Schedule executed pursuant to this Agreement and
incorporating this Agreement by reference; and no security interest in this
Agreement and a Schedule may be created by the transfer or possession of any
counterpart of the Schedule other than the original thereof, which shall be
identified as the document marked "Original" and all other counterparts shall be
marked "Duplicate".
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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 Altus Biologics Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------- -----------------------------------
Name: ▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: SVP Title: CEO
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AMENDMENT
THIS AMENDMENT is made as of the 25th day of September, 2002, between
General Electric Capital Corporation ("Secured Party") and Altus Biologics, Inc.
("Debtor") in connection with that certain Master Lease Agreement, dated as of
May 21, 2002 ("Agreement"). The terms of this Amendment are hereby incorporated
into the Agreement as though fully set forth therein. Section references below
refer to the section numbers of the Agreement. The Agreement is hereby amended
as follows:
5. REPORTS:
Subsection (b) is hereby amended with the following:
"(b) Lessee will deliver to Lessor, Lessee's complete financial
statements, certified by a recognized firm of certified public
accountants within one hundred twenty (120) days of the close of each
fiscal year of Lessee. Lessee will deliver to Lessor copies of
Lessee's quarterly financial report certified by the chief financial
officer of Lessee, within ninety (90) days of the close of each fiscal
quarter of Lessee. Lessee will deliver to Lessor all Forms 10-K and
10-Q, if any, filed with the Securities and Exchange Commission within
thirty (30) days after the date on which they are filed."
14. INDEMNIFICATION:
Subsection (b) is hereby amended with the following:
"(b) Lessee acknowledges that Lessor asserts that the financial terms
of each Schedule are based on the assumption that on the Lease
Commencement Date for any unit of Equipment described in such
Schedule, such unit will qualify for all of the items of deduction and
credit specified in Section C of such Schedule ("Tax Benefits") in the
hands of Lessor. Lessee represents, warrants and covenants that each
unit of Equipment will be first placed into service on the Lease
Commencement Date for such unit, and that at no time during the term
of this Agreement will Lessee do any of the following: (i) locate or
use any Equipment outside the United States, (ii) sublease any
Equipment to, or allow any Equipment to be used by, a tax-exempt
entity; (iii) use any Equipment in any manner that will cause a change
in the ADR class life of such Equipment; (iv) make any additions,
modifications or improvements to any Equipment, which are not readily
removable; (v) use or install any Equipment in a way which results in
it being deemed "limited use property" as such term is used in Revenue
Procedure 2001-28."
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16. REPRESENTATIONS AND WARRANTIES OF LESSEE:
Subsection (g) is hereby amended with the following:
"(g) Each financial statement delivered to Lessor has been prepared
in accordance with generally accepted accounting principles
consistently applied (except that the unaudited financial statements
may not contain all footnotes required by generally accepted
accounting principles). Since the date of the most recent financial
statement, there has been no material adverse change."
18. PURCHASE OPTION:
Subsection (a) is hereby amended with the following:
"(a) So long as no default exists hereunder and the Lease has not been
earlier terminated, Lessee may at lease expiration, upon at least 180
days but no more than 270 days prior written notice to Lessor,
purchase all (but not less than all) of the Equipment under the
Agreement on an AS IS BASIS for cash equal to the greater of (i) ten
percent (10%) of the Capitalized Lessor's Cost of the Equipment, plus
all applicable sales taxes, or (ii) the Fair market Value of the
Equipment. In the event Lessor does not exercise the purchase option,
it will return the equipment and pay a remarketing fee equal to five
percent (5%) of the Capitalized Lessor's Cost."
TERMS USED, BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN
TO THEM IN THE AGREEMENT. EXCEPT AS EXPRESSLY AMENDED HEREBY, THE AGREEMENT
SHALL REMAIN IN FULL FORCE. IF THERE IS ANY CONFLICT BETWEEN THE PROVISIONS OF
THE AGREEMENT AND THIS AMENDMENT, THEN THIS AMENDMENT SHALL CONTROL.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
simultaneously with the Agreement by signature of their respective authorized
representative set forth below.
General Electric Capital Corporation Altus Biologics, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------- -----------------------------------
Name: ▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: SVP Title: CEO
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State of Massachusetts
County of Middlesex
CONSENT TO INSTALLATION AND WAIVER
The undersigned depose and say that:
Each has and claims the interest set forth beneath his signature hereto in and
to all that tract, piece of parcel of land (the "PREMISES") commonly known as:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
and briefly described as follows: All of the first floor of the building at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, comprising about 9,500 square feet and with
the right to use in common, with others entitled thereto, the hallways and
stairways necessary for access to said leased premises
and as more particularly set forth in __________________ at page(s)
______________ Liber and page of recorded deeds, mortgages and leases;
Said premises are presently occupied by ALTUS BIOLOGICS, INC. ("CUSTOMER"),
Customer has entered into a lease, security agreement, chattel mortgage or
similar agreement dated _______ __, 2002, ("THE AGREEMENT") with GENERAL
ELECTRIC CAPITAL CORPORATION ("INTEREST HOLDER"), whereby the said Interest
Holder shall have the ownership of, first lien on or other paramount rights to
the personal property ("PERSONAL PROPERTY") as described in said Agreement
subject only to the customer's rights as provided in said Agreement.
THEREFORE, in consideration of One Dollar ($1.00) and other good and valuable
consideration the receipt of which is hereby acknowledged and in order to induce
the Interest Holder to enter into an Agreement to permit the Customer to locate
the Personal Property on the Premises and any assignee to purchase and/or take
any assignment of said Agreement, the undersigned do hereby jointly ad severally
covenant and agree that the Personal Property has been or may be affixed or
otherwise installed or kept at, in, or upon the premises and that the Interest
Holder's claim in and to such Personal Property shall remain undiminished and
unaffected by such affixation, installation or storage throughout the term of
the Agreement and any extension thereof, and until and unless the Interest
Holder or any assignee therefore shall formally release or transfer its
interests in and to such Personal Property or in favor of such Customer.
The undersigned further agree that the Interest Holder and any assignee may
enter upon the Premises at all reasonable times to inspect and/or remove said
Personal Property from the Premises whenever it deems necessary to do so to
protect its interest, and without accountability of any kind to the undersigned
for any such entry, removal and retaking.
Each undersigned hereby waives each and every right which he now has in the
Personal Property or which he may hereafter acquire under the laws of the State
of MASSACHUSETTS or by virtue of any deed, lease, mortgage or other agreement
now in affect or hereafter received by the undersigned to own, levy upon,
distrain, seize, restrain or otherwise hold or possess said Personal Property
for any reason.
WITNESS our hands and seal this ________________ day of _______________, 20___.
Real Estate Owner/Lessor RIZIKA REALTY TRUST
Address ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Signature /s/ [Illegible] Phone ▇▇▇-▇▇▇-▇▇▇▇
----------------------------
Sworn to before me this ___ day of ______, ____.
--------------------------------------
Notary Public
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