Document:

exv4w8

 

Exhibit 4.8

EMPLOYMENT AGREEMENT made                      30 April, 2003

	 	 	 
	PARTIES

	 	NOVOGEN LABORATORIES PTY LTD ACN 002 489 947 of
140 Wicks Road, North Ryde 2113, New South Wales (“Company”)
	 
	 	 
	

	 	AND
	 
	 	 
	

	 	RONALD LEA ERRATT

of 10 Bega Road, Northbridge, NSW, 2063 (“Employee”)

INTRODUCTION

	A.	 	The Company carries on the Business.
	 
	B.	 	The Company wishes to employ the Employee to provide the Services.
	 
	C.	 	The parties have agreed to the employment of the Employee in accordance with the provisions
of this Agreement and with the intention that this Agreement will supersede any written or
oral agreement between the parties or between the Employee and any other member of Novogen
Group.

IT IS AGREED

1. Definitions and Interpretations

	1.1	 	In this Agreement, unless the context otherwise requires:

	 	(1)	 	“Agreement” means this employment agreement and any variation amendment or
replacement of it;
	 
	 	(2)	 	“Business” means the business carried on by the Company and the members of
the Novogen Group;
	 
	 	(3)	 	“Business Day” means a day that is not a Saturday, Sunday or any other day
which is a public holiday or a bank holiday in the place where an act is to be
performed or a payment is to be made;
	 
	 	(4)	 	“Commencement Date” means the date set out in Item 1 of the Schedule, but if
no date is specified, the commencement date is the date of this Agreement;
	 
	 	(5)	 	“Company” means Novogen Laboratories Pty Limited ACN 002 489 947 and includes
the successors and assigns of that company;
	 
	 	(6)	 	“Confidential Information” means the information described in clause 16 and
includes any information concerning the Business or business

 

 

	 	 	 	methods of the Company and any member of the Novogen Group, its pricing policies,
its marketing strategies, its Intellectual Property or any other information
relating to the affairs of the Company or the Novogen Group;
	 
	 	(7)	 	“Design” has the same meaning as in the Designs Act 1906;
	 
	 	(8)	 	“Intellectual Property” means all trade marks, logos, service marks, trade
names, business names, copyrights, designs, patents, inventions, processes and other
technical know-how (including extraction and manufacturing know-how), secret
information and other rights in industrial or intellectual property and applications
for them or licence agreements or other arrangements under which a person has the
right to use any of them;
	 
	 	(9)	 	“Inventions” means all inventions, discoveries and novel designs, whether or
not registrable as designs under the Designs Act 1906, patents under the Patents Act
1952, or trademarks under the Trade Marks Act 1955 including any inventions,
development or improvement to equipment, technology, methods or techniques made by the
Employee solely or jointly with others;
	 
	 	(10)	 	“Novogen Group” means the Company and each of Novogen Research Pty Limited
ACN 060 202 931, Novogen Limited ACN 063 259 754 and any Related Body Corporate of any
of them from time to time;
	 
	 	(11)	 	“Patents” has the same meaning as in the Patents Act 1952;
	 
	 	(12)	 	“Related Body Corporate” in relation to a body corporate means a body
corporate that is related to the first mentioned body by virtue of section 50 of the
Corporations Law;
	 
	 	(13)	 	“Restraint Period” means the period described in Item 11 of the Schedule.
	 
	 	(14)	 	“Services” means the services described in clause 4 to be provided in
accordance with this Agreement;
	 
	 	(15)	 	“Term” means the period of operation of this Agreement from the Commencement
Date until the date of termination in accordance with clause 18; and
	 
	 	(16)	 	“Works” includes but is not limited to all literary and other works as
defined in the Copyright Act 1968.

	1.2	 	Interpretation

	 	(1)	 	Reference to:

	 	(a)	 	one gender includes the other genders;

 

 

	 	(b)	 	the singular includes the plural and the plural includes the
singular;
	 
	 	(c)	 	a person includes a body corporate;
	 
	 	(d)	 	a party includes the party’s executors, administrators,
successors and permitted assigns; and
	 
	 	(e)	 	a statute, regulation or provision of a statute or
regulation (“Statutory Provision”) includes:

	 	(i)	 	that Statutory Provision as amended or
re-enacted from time to time; and
	 
	 	(ii)	 	a statute, regulation or provision enacted
in replacement of that Statutory Provision.

	 	(2)	 	All monetary amounts are in Australian dollars, unless otherwise stated.
	 
	 	(3)	 	Headings are for convenience only and do not affect the interpretation, or
form part, of this Agreement.
	 
	 	(4)	 	Where a word or expression is given a particular meaning, other parts of
speech and grammatical forms of that word or expression have a corresponding meaning.
	 
	 	(5)	 	If an act must be done on a specified day which is not a Business Day, the
act must be done instead on the next Business Day.

2. Employment

	2.1	 	The Company employs the Employee to provide the Services to the Company upon and subject to
the terms and conditions of this Agreement and the Employee accepts such employment.
	 
	2.2	 	The position in which the Employee is employed by the Company as and from the Commencement
Date is as set out in Item 4 of the Schedule.
	 
	2.3	 	The Employee shall as at the Commencement Date be located at the office of the Company set
out in Item 5 of the Schedule.

3. Term

	3.1	 	The Company employs the Employee to provide the Services to the Company for the period set
out in Item 2 of the Schedule (“Initial Term”) unless such employment is terminated earlier in
accordance with any other provision of this Agreement.
	 
	3.2	 	At the expiration of the Initial Term, the Term will continue until the expiration of the
period of notice, which shall not be less than that period set out in Item 3 of the Schedule,
given by either party to the other. The earliest date on which either

 

 

	 	 	party may give notice is the expiration of the Initial Term at which point the period in
Item 3 will begin to run.

4. Services

	4.1	 	The Employee will perform all the functions of a person in the position set out in Item 4 of
the Schedule or such other services as may be determined by the Company from time to time.
	 
	4.2	 	The Employee must carry out his employment in the capacity referred to in clause 4.1 or as
amended by the Company in such manner and at such time as the Company may from time to time
reasonably determine.
	 
	4.3	 	It shall be at the Company’s sole determination to adjust, amend, replace, delete or add
duties, responsibilities, or reporting relationships which are included from time to time in
this contract or in the schedules to this contract.

5. General Duties and Obligations

	5.1	 	Without limiting any other provision of this Agreement the Employee must at all:

	 	(1)	 	be just and faithful in all transactions relating to the Company and the
Novogen Group and must show the utmost good faith in the business of the Company and
the Novogen Group;
	 
	 	(2)	 	give to the Company a just and faithful account of such transaction and also
upon every reasonable request furnish a full and correct explanation thereof to the
Company;
	 
	 	(3)	 	divulge to the Company all information or knowledge which he may possess in
relation to the affairs, business and activities of the Company;
	 
	 	(4)	 	use his best skill and endeavour to promote the interest and welfare of the
Company and the Novogen Group and carry out the same for the utmost benefit of the
Company and the Novogen Group and diligently and faithfully apply himself to the
affairs, business and activities of the Company; and
	 
	 	(5)	 	not at any time intentionally do anything which directly or indirectly may
impair or be likely to impair the good name and reputation of the Company or the
Novogen Group.

	5.2	 	The Employee must carry out his employment and must conduct himself at all times in a
professional manner.

6. Compliance with Directions

	6.1	 	The Employee must at all times during his employment hereunder obey, comply with and carry
out the proper and reasonable directions, orders and instructions of and shall be directly
responsible and answerable to the Individual or Group

 

 

	 	 	identified in Item 12 of the Schedule or as amended by the Company from time to time uncer
clause 4.3.

7. Time Devoted to Employment

	7.1	 	The Employee must at all times during his employment hereunder devote the whole of his
attention and abilities to the business and activities of the Company and in the performance
of his responsibilities and duties under this Agreement.
	 
	7.2	 	Without the prior written consent of the Company, the Employee must not be a director of any
body corporate which carries on or is concerned with any activity identical to or
substantially similar to that of the Novogen Group or where being a director may directly or
indirectly affect the Business of the Novogen Group.
	 
	7.3	 	Nothing contained in this clause 7 prohibits the Employee from making any purchase or sale of
stocks, securities, real estate or personal property (tangible or intangible) for purposes of
investment or from making any other private investment other than as may be prohibited by
clause 17 or one which is, in the opinion of the Company, reasonably held, detrimental to the
interest of the Novogen Group.

8. Duty to Act within Limits

	8.1	 	The Employee must at all times comply with and act within such limits as to expenditure on
either a revenue or capital account of the Company as may be set by the Company from time to
time.
	 
	8.2	 	Without limiting the generality of the foregoing and in addition thereto the Employee must
not without the prior written consent of the Company:

	 	(1)	 	employ any of the money, goods or effects of the Company or any member of
Novogen Group or pledge the credit thereof except in the ordinary course of business
and upon the account of and or the benefit of the Company or member of the Novogen
Group;
	 
	 	(2)	 	with any person whom the Company has previously in writing forbidden the
Employee to deal with, lend money or give credit on behalf of the Company or any
member of the Novogen Group or have any dealings;
	 
	 	(3)	 	give any guarantee, undertaking or indemnity or enter into any bond with or
become bail, surety or surety for any person or do or knowingly cause or suffer to be
done anything whereby the property of the Company or any member of the Novogen Group
or any part thereof may be seized, attached or taken in execution, after the Company
has previously in writing forbidden the Employee to deal with such person;
	 
	 	(4)	 	buy, order or contract on behalf of the Company or any member of the Novogen
Group for any goods, articles, property or services exceeding such limit as may be
determined by the Company from time to time;

 

 

	 	(5)	 	compromise or compound or (except upon payment thereof in full) release or
discharge any debt due to the Company in excess of such limit as may be determined by
the Company from time to time; or
	 
	 	(6)	 	enter into any leasing, hiring, hire-purchase, rental or financing
arrangements or transactions with respect to assets or property acquired or to be
acquired by the Company or any member of the Novogen Group.

9. Indemnity by Employee.

	9.1	 	Unless otherwise resolved by the Board of Directors of the Company, the Employee covenants
that at all times during his engagement hereunder and thereafter indemnify and keep
indemnified the Company or member of the Novogen Group, as the case may be, in respect of any
loss or damage or actions, proceedings costs, claims, demands or judgements it may incur or
suffer by reason of any breach by the Employee of any of the provisions of clause 8. This
indemnity is in addition to and not in substitution for any other right or remedy available to
the Company in the event of such breach.

10. Indemnity by Company

	10.1	 	Subject to the Corporations Law and the Constitution of the Company, the Company agrees to
indemnify and keep indemnified the Employee and his executors, administrators and legal
personal representatives against any loss, costs, damages, judgements or liability suffered or
incurred by the Employee in respect of any act, neglect, default or error or judgment in the
course of his employment and for which the Company would be vicariously liable other than any
wilful or gross neglect, default or breach of duty or breach of trust.
	 
	10.2	 	Without limiting clause 10.1 :

	 	(1)	 	the Employee may be indemnified by the Company where the Board of
Directors of the Company consider it appropriate, against any liability incurred by
the Employee in the connection with the performance by him of his position with the
Company, unless the liability arises out of conduct involving lack of good faith;
	 
	 	(2)	 	the Employee shall be indemnified by the Company against any liability
incurred by him in defending any proceedings in connection with the performance by
him of his position with the Company whether civil or criminal in which judgment is
given in his favour or in which the Employee is acquitted or in connection with any
application in relation to any proceedings in which relief under the Corporations
Law is granted to him by the court;
	 
	 	(3)	 	the Company may, pay a premium in respect of a contract insuring the
Employee against a liability incurred by the Employee in connection with the
performance by him of his position with the Company except for a liability arising
out of conduct involving a wilful breach of duty in relation to the Company or a
contravention of sections 232(5) or 232(6) of the Corporations Law.

 

 

11. Annual Leave

	11.1	 	During the course of his employment hereunder the Employee is entitled to paid annual leave
of 20 working days for every period of 12 months of service as from the Commencement Date.
	 
	11.2	 	The days of annual leave referred to in clause 11.1 are in addition to any day which is
proclaimed to be a public holiday in the place in which the Employee is at the relevant time
located.
	 
	11.3	 	The entitlement to annual leave is deemed to arise prorata.
	 
	11.4	 	Any annual leave entitlement must be taken by the Employee at such time or times as is
mutually convenient to the Employee and the Company.
	 
	11.5	 	Any annual leave entitlement not taken may be added to and taken with any further annual
leave entitlement.

12. Sick Leave

	12.1	 	The Employee is entitled to be paid sick leave of 11 working days for every 12 months of
service.
	 
	12.2	 	Any sick leave entitlement not taken in any year may be taken by the Employee in another year
provided that any accumulated sick leave entitlement which immediately prior to the
termination of the employment of the Employee hereunder has not been taken shall be forfeited
on termination.

13. Long Service Leave

	13.1	 	The Employee is entitled to long service leave as if the provisions of the Long Service Leave
Act of the State or Territory in which the Employee is located, as the same may exist from
time to time, were deemed to apply.

14. Remuneration

	14.1	 	In consideration of the provision by the Employee of his services to the Company hereunder,
the Company shall pay the Employee remuneration, the amount of which and the rate of payment
of which shall be, if not otherwise determined under this clause 14, determined by the Board
at its first meeting after the first day of July in each and every year during the term of
this Agreement; and which may consist of:

	 	(a)	 	a base salary;
	 
	 	(b)	 	superannuation loadings or superannuation funding;
	 
	 	(c)	 	motor vehicles;
	 
	 	(d)	 	other allowances; and
	 
	 	(e)	 	otherwise,

 

 

     as the Board may determine from time to time.

     14.2 Notwithstanding the provision of clause 14.1 the Employee, as and from the Commencement Date,
shall receive from the Company such remuneration salary as is set out in Item 9 and Item 10 of
the Schedule.

     14.4 The Employee is not entitled to any payment of overtime rates during the term of his
employment hereunder.

15. Directorships

	15.1	 	It is acknowledged by the employee that the Company and any other member of the Novogen
Group may require the Employee to serve as a director on the Board of any member to the
Novogen Group.
	 
	15.2	 	It is further acknowledged that the Employee shall serve as a director of another member
of the Novogen Group as the nominee of the Company, and that the Employee must retire as a
director from any such Board forthwith upon his being requested to do so by the Company.
	 
	15.3	 	In the event of the Employee ceasing to be an employee of the Company or member of the
Novogen Group, he is deemed to have automatically retired from and vacated his office as a
member of the Board of each member of the Novogen Group.

 

 

16. Confidentiality

	16.1	 	Without limiting or derogating from in any way any rule of law or equity the Employee
covenants with the Company that he shall not at any time without the prior written consent of
the Company publish or divulge any Confidential Information of any nature whatsoever or any
information concerning the Business, the business and activities of the Company or of any of
the members of the Novogen Group or of any of the dealings, transactions or affairs of the
same which may come to his knowledge unless such publication or disclosure is made in the
normal course of his employment.
	 
	16.2	 	The provisions of this clause 16 do not prejudice any other express or implied obligation on
the part of the Employee to maintain confidentiality.
	 
	16.3	 	Without limiting the extent of clauses 16.1 or 16.2 Confidential Information includes
information disclosed to the Company or the Employee by any existing or potential customer,
supplier, contractor, agent, licensee or licensor of the Company or the Novogen Group.
	 
	16.4	 	The Employee will at the request of the Company sign a confidentiality agreement containing
provision similar to the provisions in this clause 16 in favour of any of the persons referred
to in clause 16.3.

17. Restraint on Competition

	17.1	 	The Employee covenants and agrees with the Company that without derogating from or limiting
the effect of clause 7 he shall not either alone or jointly or in partnership or by way of a
joint venture or otherwise with or as a shareholder, servant, agent, consultant, adviser,
officer or contractor of any other person or persons, other than as an employee of the Company
or a member of the Novogen Group, either directly or indirectly carry on or manage or be
concerned or interested in or assist any other person or persons to carry on or be concerned
or to obtain any interest in any industry or business engaged in the research, development,
manufacture, extraction, processing, marketing, distribution or sale of any veterinary or
human pharmaceutics or therapeutics or any business or industry identical to or substantially
similar to the Business of the Company, or any of the members of the Novogen Group in any
State or Territory of Australia or any other place in the world at any time during the course
of his employment hereunder.
	 
	17.2	 	Notwithstanding the provisions of clause 17.1 the Company agrees with the Employee that the
Employee may hold shares in a public company the shares of which are quoted on any share or
stock exchange in the world.
	 
	17.3	 	The Employee convenants and agrees with the Company that he will not for the period set out
in Item 11 of the Schedule as from the date upon which this Agreement is terminated either
directly or indirectly on his own account or for or with any other person or persons, solicit,
interfere with or endeavour to entice away from the Company, or any of the members of the
Novogen Group any person who, during the employment of the Employee with the Company or any
member of the Novogen Group was a customer, supplier, contractor, agent,

 

 

	 	 	licensee or licensor or to the knowledge of the Employee was a person with whom any of the
aforesaid was negotiating with a view to that person becoming a customer, supplier,
contractor, agent, licensee or licensor of any of the aforesaid.
	 
	17.4	 	It is expressly acknowledged and agreed that the provision of clauses 17.1 and 17.3 are
necessary in order to protect the interests of the Company, the Novogen Group and of the
Business and the confidentiality of the knowledge of the Employee as to the affairs, business
and activities of the Company and the Novogen Group.
	 
	17.5	 	It is expressly acknowledged and agreed by the Employee that the provisions of clause 17.1
and 17.3 are reasonable particularly in light of the provisions of clause 17.4 and in so far
as the provisions of clause 17.1 relate to any activities, state or territory the restraint is
distinct and severable from any other activity, state or territory and the invalidity of the
restraint in respect of one or more of such activities, states or territories shall not affect
its validity in respect of any of the other such activities, states or territories.
	 
	17.6	 	Nothing in clauses 17.1, 17.3, or 17.4 shall be construed as limiting or fettering the right
of any court of competent jurisdiction upon the application of any party in appropriate
proceedings from imposing upon the Employee a lesser restraint in circumstances where the
restraint sought to be imposed in clauses 17.1 or 17.3 is, in the opinion of such court,
excessive or unreasonable in the circumstances.

18. Termination of Employment

	18.1	 	Either party may terminate this Agreement in accordance with clause 3.2.
	 
	18.2	 	This Agreement is terminated automatically on the death or Total or Permanent Disability of
the Employee.
	 
	18.3	 	For the purpose of this Agreement “Total or Permanent Disability” includes the Employee being
absent from his employment by reason of sickness, ill health or other incapacity or disability
for a period of more than 3 months in excess of accrued sick leave in any period of 12
consecutive months.
	 
	18.4	 	This Agreement may be terminated forthwith by the Company in the event that the Employee:

	 	(1)	 	is guilty of any criminal or indictable offence or of any dishonesty whether
in relation to the affairs of the Company or any of the members of the Novogen Group
or not; or
	 
	 	(2)	 	is guilty of any serious breach of faith, or serious neglect or default or
wilful disregard of directions or serious professional misconduct or gross misconduct;
or
	 
	 	(3)	 	is in serious and fundamental breach of this Agreement and persists in such
breach after being previously directed in writing by the Company to remedy such breach
and fails to do so within 14 days of the giving of such direction, which direction
shall specifically draw the attention of the

 

 

	 	 	 	Employee to this clause 18.4 (3); or
	 
	 	(4)	 	if and for so long as he is a member of any board of directors of any body
corporate has his office vacated under section 224 of the Corporations Law; or
	 
	 	(5)	 	a person whose person or estate is being dealt with under the law relating to
mental health; or
	 
	 	(6)	 	ceases to be registered or has his registration suspended for any reason
whatsoever under the provision of any legislation for the time being in force dealing
with the registration of persons providing services of the nature of those provided by
the Employee to the Company and which registration is required for the provision by
the Employee of those services.

	18.5	 	The parties agree that the parties may mutually agree to terminate this Agreement at any time
upon and subject to such terms and conditions as may be then agreed.
	 
	18.6	 	In the event that this Agreement is terminated by the Company during the Initial Term (other
than by the Company pursuant to clauses 18.1 or 18.4, in which event clause 20.1 applies) or
pursuant to clause 18.2, then subject to clause 18.7 the amount that shall be payable by the
Company to the Employee by reason of termination of employment or by way of compensation, loss
or damages is an amount equal to the then current annual remuneration of the Employee pro rata
for the unexpired period of the Initial Term, plus an additional amount equal to one and one
half times the then current annual remuneration of the Employee.
	 
	18.7	 	The maximum amount that shall be payable to the Employee under clause 18.6 is an amount which
totals three years of the then current annual remuneration of the Employee. The minimum
amount payable to the Employee under clause 18.6 is an amount equal to one and one half times
the then current annual remuneration of the Employee. For the avoidance of doubt the minimum
amount would be payable at or after the expiration of the Initial Term.

19. Compliance with Obligations on Termination

	19.1	 	Termination of this Agreement for any reasons whatsoever does not relieve the Company from
payment in full of all sums then owing by the Company to the Employee by way of remuneration
accrued to the date of termination.
	 
	19.2	 	Termination of this Agreement for any reason whatsoever shall not relieve the Employee from
payment in full of all sums then owing to the Company or which may become owing in respect of
any period prior to termination and shall be without prejudice to the rights of the Company to
sue for antecedent breach by the Employee of the terms and conditions of this Agreement.

20. No Claim for Compensation on Termination

 

 

	20.1	 	In the event that this Agreement is terminated for any reason whatsoever by the Company
pursuant to clauses 18.1 or 18.4 the Employee subject to the provisions of any right conferred
on the Employee by legislation, has no claim against the Company for compensation, damages or
otherwise for or in respect of or by a reason of such termination.

21. Duty to Deliver Up

	21.1	 	Upon the termination of this Agreement and the employment of the Employee for any reason
whatsoever the Employee, on request from the Company must delivery up to the Company all
correspondence, documents, records, papers, prints, manuals, paper, disks, computer codes,
access codes, keys and property of any nature whatsoever belonging to the Company, or to any
member of the Novogen Group which may be in the possession or under custody or control of the
Employee. Any such request must not be made unreasonably.

22. Inventions and Copyright Works

	22.1	 	The Employee assigns to the Company:

	 	(1)	 	all Inventions; and
	 
	 	(2)	 	the entire copyright in all Works

	 	 	created by the Employee in the course of his employment.
	 
	22.2	 	The assignment of the Employee’s Inventions and copyright in the Works pursuant to clause
22.1 does not restrict the Employee’s right to utilise the general expertise and knowledge
accumulated by the Employee in the performance of the Services and the Employee is entitled to
use routine procedures developed by the Employee in the performance of the Services, provided
that the Employee will not make any reproduction or substantial reproduction of any of the
Inventions or Works without the written licence of the Company.
	 
	22.3	 	Where the Employee makes a Design arising out of the Services, the Design will be owned by
the Company or the member of the Novogen Group for whom it was made.
	 
	22.4	 	Where the Employee makes any patentable process or article, the Patent will be owned by the
Company or the member of the Novogen Group for whom it was made.

23. Future Copyright

	23.1	 	The Employee by this Agreement and pursuant to section 197 of the Copyright Act 1968 assigns
to the Company the copyright that will subsist in respect of any new Works and the new Works
will form part of the Works under this Agreement and the terms and conditions of this
Agreement will apply to those new Works.
	 
	23.2	 	The Employee must immediately provide the Company with copies of any new Works he prints,
publishes, makes or procures during the Term.

 

 

	23.3	 	The Employee must immediately assign the copyright in the new Works to the Company.

24. Further Assurances as to Intellectual Property

	24.1	 	The Employee must during and after the Term do all acts and things and sign all documents as
the Company may reasonably request to secure the Company’s ownership of rights in the
Inventions, Works or Designs.

25. Severability

	25.1	 	Each word, phrase, sentence, paragraph and clause (“provision”) of this Agreement is
severable.
	 
	25.2	 	If a Court determines that any provision of this Agreement is unenforceable, illegal or void
then it is severed and the other provisions of this Agreement remain operative unless without
the offending provision they are fundamentally different.

26. Waiver

	26.1	 	A party’s failure or delay to exercise a power or right does not operate as a waiver of that
power or right.
	 
	26.2	 	The exercise of power or right does not preclude either its exercise in the future or the
exercise of any other power or right.
	 
	26.3	 	No waiver is effective unless it is in writing.
	 
	26.4	 	The waiver of a power or right is effective only in respect of the specific instance to which
it relates and for the specific purpose for which it is given.

27. Entire Understanding

	27.1	 	This Agreement:

	 	(1)	 	contains the entire agreement and understanding between the parties on
everything connected with the subject matter of this Agreement; and
	 
	 	(2)	 	supersedes and merges any prior agreement or understanding on anything
connected with that subject matter.

	27.2	 	Each party has entered into this Agreement without relying on any representation by any other
party or any person purporting to represent that party.

28. Variation

	28.1	 	An amendment or variation to this Agreement is not effective unless it is in writing and
signed by both parties.

 

 

29. Further Assurance

	29.1	 	Each party must promptly at its own cost do all things (including executing all documents)
necessary or desirable to give full effect to this Agreement.

.30. Dispute Resolution

	30.1	 	Unless a party has complied with clauses 30.2, 30.3 and 30.4, that party may not commence
court proceedings relating to any dispute under this Agreement, except where that party seeks
urgent interlocutory relief.
	 
	30.2	 	If there is a dispute under this Agreement the parties must negotiate in good faith to
resolve the dispute in a spirit of goodwill and compromise.
	 
	30.3	 	If there is a dispute under this Agreement that is not resolved in accordance with clause
33.2, either party may give written notice to the other party stating that it is a notice
under this clause and specifying the dispute.
	 
	33.4	 	If the dispute is not settled by agreement within 14 days after the notice referred to in
clause 33.3 is given, the parties must appoint a mediator and must seek in good faith to
settle the dispute through mediation. If the parties are unable to agree upon a mediator
within 14 days after the expiration of the initial 14 days referred to in this clause 33.4,
the mediator must be a person nominated by the President of the Law Society of New South Wales
or his or her delegate, and either party may request the nomination at any time after the
expiration of the second 14 days referred to in this clause.

31. Notices

	31.1	 	A notice or other communication required or permitted to be given by a party to another will
be in writing and;

	 	(1)	 	delivered; or
	 
	 	(2)	 	sent by postage prepaid to that party’s address set out in this Agreement or as notified to each party at any time.

	31.2	 	A notice or other communication is deemed given and received if:

	 	(1)	 	delivered, upon delivery; or
	 
	 	(2)	 	mailed, on the expiration of 2 Business Days (at the place of mailing) after mailing.

32. Governing Law and Jurisdiction

	32.1	 	The law of New South Wales governs this Agreement.
	 
	32.2	 	The parties submit to the non-exclusive jurisdiction of the courts of New South Wales and the
Federal Court of Australia.

 

 

SCHEDULE

	 	 	 	 	 	 	 
	Item 1.	 	Commencement Date
	 
	 	 	 	 	 	 
	 	 	The date of this Agreement as first written on the first page.
	 
	 	 	 	 	 	 
	Item 2.	 	Initial Term
	 
	 	 	 	 	 	 
	 	 	Three years.
	 
	 	 	 	 	 	 
	Item 3.	 	Notice Period
	 
	 	 	 	 	 	 
	 	 	Six months.
	 
	 	 	 	 	 	 
	Item 4.	 	Position
	 
	 	 	 	 	 	 
	

	 	 	(1	)	 	Company Secretary of the Novogen Group
	 
	 	 	 	 	 	 
	

	 	 	(2	)	 	with responsibilities for:
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	(a) all Company Secretarial matters for the Novogen Group of Companies
including Company Secretarial support to the Company Secretary of Marshall
Edwards Inc and Marshall Edwards Pty Ltd;
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	(b) Trade Marks and copy write;
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	(c) treasury;
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	(d) Insurance;
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	(e) Information Technology;
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	(e) legal and financial duties delegated from the Managing Director;
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	(f) represent the Company in its best interests; and
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	(g) provide recommendations to the Executive and the Board for any of
these matters for the Company.

	 	 	 
	Item 5.

	 	Location
	 
	 	 
	

	 	140 Wicks Road, North Ryde, 2113, New South Wales or such other
place within the Metropolitan Sydney area as is designated from
time to time by the Board of Directors.
	 
	 	 
	Item 6.

	 	Accrued Annual Leave
	 
	 	 
	

	 	As accrued from 30 August, 1994
	Item 7.

	 	Accrued Sick Leave
	 
	 	 
	

	 	As accrued from 30 August, 1994
	 
	 	 
	Item 8.

	 	Long Service Leave
	 
	 	 
	

	 	As accrued from 30 August, 1994

 

 

	 	 	 	 	 	 	 
	Item 9.	 	Remuneration
	 
	 	 	 	 	 	 
	 	 	$164,780 or such other amount as agreed to from time to time.
	 
	 	 	 	 	 	 
	Item 10.	 	Remuneration shall include:
	 
	 	 	 	 	 	 
	

	 	 	(1	)	 	Superannuation:
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	minimum that the Company would be obliged to pay to ensure no shortfall in respect of
the Employee under Superannuation Guarantee (Administration) Act 1992 (Com).
	 
	 	 	 	 	 	 
	

	 	 	(2	)	 	Motor Vehicles
	 
	 	 	 	 	 	 
	Item 11.	 	Restraint Period
	 
	 	 	 	 	 	 
	 	 	5 years
	 
	 	 	 	 	 	 
	Item 12.	 	The Managing Director.

 

 

EXECUTED as an agreement on the date set out at the commencement of this Agreement.

	 	 	 	 	 
	THE COMMON SEAL OF

	 	          )	 	 
	NOVOGEN LABORATORIES PTY LTD

	)	 	 	 
	was affixed in accordance with its

	 	      )	 	 
	Articles of Association in the presence of:

	 	        )	 	 

	 	 	 	 	 
	s// C NAUGHTON	 	S// P A JOHNSTON
	Director	 	Director
	 
	 	 	 	 
	CHRISTOPHER NAUGHTON	 	PHILIP ANDREW JOHNSTON
	Name of Director	 	Name of Director

	 	 	 
	

	 	S// PETER B SIMPSON
	

	 	Director OF Novogen Limited
	 
	 	 
	

	 	PETER BUCHANAN SIMPSON
	

	 	Name of Director

	 	 	 	 	 	 	 
	SIGNED by:

	)	 	 	 	 	 
	Ronald Lea Erratt

	 	)	 	 	 	 
	in the presence of:

	 	 	 	)	 	s// R L ERRATT
	 
	 	 	 	 	 	 
	S// C M ERRATT
	 	 	 	 	 	 
	Signature of Witness
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CHRISTINE M ERRATT
	 	 	 	 	 	 
	Name of Witnessexv10w45

 

Exhibit 10.45

M&T CREDIT SERVICES, LLC

MASTER EQUIPMENT LEASE

Lease Date: October 29, 2004

Lessee: MARTEK BIOSCIENCES KINGSTREE CORPORATION, a corporation organized and registered under the
laws of the State of Delaware.

Chief executive office:
6480 Dobbin Road, Columbia, Maryland 21045.

Lessor: M & T CREDIT SERVICES, LLC, a New York corporation having its chief executive office at M
& T Center, One Fountain Plaza, Buffalo, New York 14203, Attn: Counsel’s Office.

1. Lease. Subject to the terms hereof, Lessor shall lease to Lessee, and Lessee shall lease from
Lessor, the units of personal property described on each Equipment Schedule together with all
substitutions, replacements, repairs, upgrades, additions, accessories, products and proceeds
(collectively, the “Equipment” and separately, a “Unit”) described on each Equipment Schedule
(together with all riders and schedules thereto, each an “Equipment Schedule” or “Schedule”) now or
hereafter executed pursuant to this Lease, each of which shall incorporate all the terms and
conditions of this Master Equipment Lease. Each Schedule shall constitute a separate lease and the
term “Lease” as used below shall refer to an individual Schedule which incorporates this Master
Equipment Lease, together with the Certificate of Acceptance for that Schedule. In case of
inconsistency, the terms of the Schedule shall control.

2. Term. The term of this Lease shall consist of (a) the Interim Term, if any, (b) the Base Term,
and (c) the renewal term, if any. The Interim Term, if any, shall commence on the date of the
Lessee’s execution of the Certificate of Acceptance (provided such date is other than the first of
the month) (“Acceptance Date”) and shall extend to the last day of that month (the “Interim Term”).
The Base Term shall commence on the first day of the month following the Interim Term, if any, and
shall continue for the number of periods specified on the Schedule (the “Base Term”). If the
Acceptance Date is the first day of the month there shall be no Interim Term. Lessor is authorized
to enter the commencement date and other ministerial information on the Schedule upon receipt of
the Certificate of Acceptance. The terms and conditions of this Lease shall continue in effect
during any renewal term.

3. Rent; Late Charge. Lessee agrees to pay directly to Lessor at the above address or to Lessor’s
assignee the rental payments plus any interim rent as specified on the Equipment Schedule together
with all other amounts which may become due under this Lease (the “Rent”). All Rent shall be paid
without notice, setoff or demand. If any Rent is not received within ten (10) days of the due
date, Lessor may charge and Lessee shall be obligated to pay a late charge in the amount specified
on the Schedule, or, if none is so specified, five percent (5%) of the delinquent amount.

4. Net Lease; Lessee’s Obligations Absolute. Upon Lessee’s execution thereof, each Schedule shall
constitute a non-cancelable net lease, and Lessee’s obligation to pay Rent, and otherwise to
perform its obligations under or with respect to such Schedule and all of the other documents
executed in connection therewith, are and shall be absolute and unconditional and shall not be
affected by any circumstances whatsoever, including any right of setoff, counterclaim, recoupment,
deduction, defense or other right which Lessee may have against Lessor, the manufacturer or vendor
of the Equipment (the “Vendor”), or anyone else, for any reason whatsoever (each, an “Abatement”).

 

 

5. Disclaimer of Warranties; Lessee’s Obligations. THE EQUIPMENT IS LEASED HEREUNDER “AS IS, WHERE
IS.” LESSEE ACKNOWLEDGES THAT FOR THE PURPOSES OF UCC ARTICLE 2A THIS IS A FINANCE LEASE AND
LESSOR IS NOT AN AGENT OF THE MANUFACTURER OR VENDOR OF THE EQUIPMENT. LESSEE SELECTED THE
EQUIPMENT AND VENDOR. LESSEE IS SATISFIED THAT THE EQUIPMENT IS SUITABLE AND FIT FOR LESSEE’S
PURPOSES. LESSOR MAKES NO WARRANTY EITHER EXPRESS OR IMPLIED, AS TO, WITHOUT LIMITATION, QUALITY,
CONDITION, MERCHANTABILITY, DESIGN, CAPACITY, WORKMANSHIP OR PERFORMANCE OF THE EQUIPMENT, OR ITS
FITNESS FOR ANY PARTICULAR PURPOSE. No defect or unsuitability of the Equipment or delay in
delivery shall relieve Lessee of the obligation to pay Rent or any other obligation under this
Lease. Lessor hereby assigns to Lessee any interest it may have in manufacturers’ warranties which
Lessee may enforce in Lessee’s name and at Lessee’s sole expense. Lessee knows it may have rights
under any vendor purchase documents and can contact the Vendor if any for a description of such
rights.

6. Title, Granting Clause. (a) Lessee and Lessor intend that: (1) each Schedule, incorporating by
reference the terms of this Lease, constitutes a true “lease” and a “finance lease” as such terms
are defined in Article 2A of the Uniform Commercial Code, as in effect in the State of New York
(“UCC”) and not a sale or retention of a security interest; and (2) Lessor is the owner of each
item of Equipment, and Lessee shall not acquire any right, title or interest in or to such
Equipment except the right to use it in accordance with the terms of the related Schedule. (b) In
order to secure the prompt payment of the Rent and all of the other amounts from time to time
outstanding with respect hereto and to each Schedule, and the performance and observance by Lessee
of all of the provisions hereof and thereof, Lessee hereby collaterally assigns, grants, and
conveys to Lessor, a security interest in and lien on all of Lessee’s right, title and interest in
and to all of the following (whether now existing or hereafter created, and including any other
collateral described on any rider hereto; the “Collateral”): (1) (if contrary to the parties’
intentions a court determines that such Schedule is not a true “lease” under the UCC) the Equipment
described in such Schedule or otherwise covered thereby (including all inventory, fixtures or other
property comprising the Equipment), together with all related software (embedded therein or
otherwise), all additions, attachments, accessories and accessions thereto whether or not furnished
by the Vendor; (2) all subleases, chattel paper, accounts, security deposits, and general
intangibles relating thereto, and any and all substitutions, replacements or exchanges for any such
item of Equipment or other collateral, in each such case in which Lessee shall from time to time
acquire an interest; and (3) any and all insurance and/or other proceeds of the property and other
collateral in and against which a security interest is granted hereunder; provided, however, that
in no event shall the Equipment or the collateral include piping and other support infrastructure
not specifically identified on any Schedule. The collateral assignment, security interest and lien
granted herein shall survive the termination, cancellation or expiration of each Schedule until
such time as Lessee’s obligations thereunder and under all Schedules are fully and indefeasibly
discharged.

7. Assignment. (a) LESSEE SHALL NOT ASSIGN, DELEGATE, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER OR UNDER ANY SCHEDULE, OR ITS LEASEHOLD INTEREST OR ANY COLLATERAL, SUBLET
THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED BY, OR TO COME INTO OR
REMAIN IN THE POSSESSION OF, ANYONE BUT LESSEE. (b) Lessor may at any time with or without notice
to Lessee grant a security interest in, sell, assign, delegate or otherwise transfer (an
“Assignment”) all or any part of its interest in the Equipment, this Lease or any Schedule and any
related documents or any Rent thereunder, or the right to enter into any Schedule, and Lessee shall
perform all of its obligations thereunder, to the extent so transferred, for the benefit of the
beneficiary of such Assignment (such beneficiary, including any successors and assigns, an
“Assignee”). Lessee agrees not to assert against any Assignee any Abatement (without limiting the
provisions of Section 4) or claim that Lessee may have against Lessor, and Assignee shall not be
bound by, or otherwise required to perform any of Lessor’s obligations, unless Assignee is an
Affiliate of Lessor or Lessor’s

 

 

obligations are expressly assumed by such Assignee. Lessor shall
be relieved of any such assumed obligations. If so directed in writing, Lessee shall pay all Rent
and all other sums that become due under the
assigned Schedule directly to the Assignee or any other party designated in writing by Lessor or
such Assignee. Lessee acknowledges that Lessor’s right to enter into an Assignment is essential to
Lessor and, accordingly, waives any restrictions under applicable law with respect to an Assignment
and any related remedies. Upon the request of Lessor or any Assignee, Lessee also agrees (i) to
promptly execute and deliver to Lessor or to such Assignee an acknowledgment of the Assignment in
form and substance satisfactory to the requesting party, an insurance certificate and such other
documents and assurances reasonably requested by Lessor or Assignee, and (ii) to comply with all
other reasonable requirements of any such Assignee in connection with any such Assignment. Upon
such Assignment and except as may otherwise be provided herein, all references in this Lease to
“Lessor” shall include such Assignee. (c) Subject always to the foregoing, this Lease and each
Schedule shall inure to the benefit of, and are binding upon, Lessee’s and Lessor’s respective
successors and assigns.

8. Risk of Loss.

     (a) At all times until the Equipment is returned to Lessor in accordance with this Lease,
Lessee shall bear the risk of loss, theft, confiscation, taking, unavailability, damage or partial
destruction of the Equipment and shall not be released from its obligations under this Lease in any
such event.

     (b) Lessee shall provide prompt written notice to Lessor of any Total Loss (as hereafter
defined) or any material damage to the Equipment. Any such notice must be provided together with
any damage reports provided to any governmental authority, the insurer or Vendor, and any documents
pertaining to the repair of such damage, including copies of work orders, and all invoices for
related charges.

     (c) Without limiting any other provision hereof, Lessee shall repair all damage to any item of
Equipment from any and all causes, other than a Total Loss, so as to cause it to be in the
condition and repair required by this Lease.

     (d) A “Total Loss” shall be deemed to have occurred to an item of Equipment upon: (1) the
actual or constructive total loss of any item of the Equipment, (2) the loss, disappearance, theft
or destruction of any item of the Equipment, or damage to any item of the Equipment that is
uneconomical to repair or renders it unfit for normal use, or (3) the condemnation, confiscation,
requisition, seizure, forfeiture or other taking of title to or use of any item of the Equipment or
the imposition of any lien thereon by any governmental authority. On the next rent payment date
following a Total Loss (a “Loss Payment Date”), Lessee shall pay to Lessor the Rent due on that
date plus the Stipulated Loss Value of the item or items of the Equipment with respect to which the
Total Loss has occurred (the “Lost Equipment”), together with any other payments due hereunder with
respect to the Lost Equipment. Upon making such payment, (i) Lessee’s obligation to pay future
Rent shall terminate solely with respect to the items of Lost Equipment so paid for, but Lessee
shall remain liable for, and pay as and when due, all other payments, and (ii) Lessor shall convey
to Lessee all of Lessor’s right, title and interest in the Lost Equipment, “AS IS WHERE IS”, but
subject to the requirements of any third party insurance carrier in order to settle an insurance
claim. As used in this Lease, “Stipulated Loss Value” shall mean the product of the Total Invoice
Cost (as specified in the applicable Schedule) of the Lost Equipment, times the “termination value
% of cost” applicable to the Loss Payment Date, as set forth on the schedule of Stipulated Loss
Values attached to such Schedule. After the final rent payment date of the Base Term or any
renewal term of a Schedule, the Stipulated Loss Value shall be determined as of the last rent
payment date during the applicable term of such Schedule, and the applicable percentage factor
shall be the last percentage factor set forth on the schedule of Stipulated Loss Values
incorporated in such Schedule.

     (e) Lessor shall be under no duty to Lessee to pursue any claim against any person in
connection with a Total Loss or other loss or damage.

 

 

     (f) If Lessor receives a payment under an insurance policy required under this Lease in
connection with any Total Loss or other loss of or damage to an item of Equipment, and such payment
is both unconditional and indefeasible, then provided Lessee shall have complied with the
applicable provisions of this Section, Lessor shall either (1) if received pursuant to a Total
Loss, remit such proceeds to Lessee up to an amount equal to the amount paid by Lessee to Lessor as
the Stipulated Loss Value, or credit such proceeds against any amounts owed by Lessee pursuant to
Section 8(d), or (2) if received with respect to repairs made pursuant to Section 8(c), remit such
proceeds to Lessee up to an amount equal to the amount of the costs of repair actually incurred by
Lessee, as established to Lessor’s satisfaction.

9. Representations and Warranties of Lessee. Lessee represents, warrants and agrees that, as of
the effective date of this Lease and of each Schedule:

     (a) Lessee has the form of business organization indicated, and is and will remain duly
organized and existing in good standing under the laws of the state specified, under Lessee’s
signature and is duly qualified to do business wherever necessary to perform its obligations under
this Lease and the other documents executed in connection herewith (“Lease Documents”), including
each jurisdiction in which the Equipment is or will be located. Lessee’s legal name is as shown in
the preamble of this Lease. Within the previous five (5) years, Lessee has not changed its name,
done business under any other name, or merged or been the surviving entity of any merger, except as
disclosed to Lessor in writing or as disclosed in public filings made by Parent with the Securities
and Exchange Commission.

     (b) The Lease Documents (1) have been duly authorized by all necessary action consistent with
Lessee’s form of organization, (2) do not require the approval of, or giving notice to, any
governmental authority, (3) do not contravene or constitute a default under any applicable law,
Lessee’s organizational documents, or any agreement, indenture, or other instrument to which Lessee
is a party or by which it may be bound, and (4) constitute legal, valid and binding obligations of
Lessee enforceable against Lessee, in accordance with the terms thereof.

     (c) There are no pending actions or proceedings to which Lessee is a party, and there are no
other pending or threatened actions or proceedings of which Lessee has knowledge, before any court,
arbitrator or administrative agency, which, either individually or in the aggregate, would result
in a judgment or judgments against Lessee for the payment of money aggregating in excess of Two
Million Dollars ($2,000,000.00).

     (d) All of the Equipment covered by such Schedule is located solely in the jurisdiction(s)
specified in such Schedule.

     (e) Under the applicable laws of each such jurisdiction, such Equipment consists (and shall
continue to consist) solely of personal property and not fixtures. Such Equipment is removable
from and is not essential to the premises at which it is located.

     (f) The financial statements of Lessee (copies of which have been furnished to Lessor) have
been prepared in accordance with generally accepted accounting principles consistently applied
(“GAAP”), and fairly present Lessee’s financial condition and the results of its operations as of
the date of and for the period covered by such statements.

 

 

10. Use and Maintenance.

     (a) Lessee shall (1) use the Equipment solely in its present location and in the conduct of
its business, for the purpose for which the Equipment was designed, in a careful and proper manner,
and shall not permanently discontinue use of the Equipment; (2) operate, maintain, service and
repair the Equipment, and maintain all records and other materials relating thereto, (A) in
accordance and consistent with (i) the manufacturer’s recommendations and all maintenance and
operating manuals or service agreements, whenever furnished or entered into, including any
subsequent amendments or replacements thereof, issued by the manufacturer or service provider, (ii)
the requirements of all applicable insurance policies, (iii) the purchase documents pursuant to
which the Equipment was acquired, so as to preserve all of Lessee’s and Lessor’s rights thereunder,
including all rights to any warranties, indemnities or other rights or remedies, (iv) all
applicable laws, and (v) the prudent practice of other similar companies in the same business as
Lessee, but in any event, to no lesser standard than that employed by Lessee for comparable
equipment owned or leased by it; and (B) without limiting the foregoing, so as to cause the
Equipment to be in good repair and operating condition and in at least the same condition as when
delivered to Lessee hereunder, except for ordinary wear and tear resulting despite Lessee’s full
compliance with the terms hereof; and (3) not attach or incorporate the Equipment to or in any
other property in such a manner that the Equipment may be deemed to have become an accession to or
a part of such other property.

     (b) Within a reasonable time, Lessee will replace any parts of the Equipment which become worn
out, lost, destroyed, damaged beyond repair or otherwise unfit for use, by new or reconditioned
replacement parts which are free and clear of all liens and have a value, utility and remaining
useful life at least equal to the parts replaced (assuming that they were in the condition required
by this Lease). Any modification or addition to the Equipment that is required by this Lease shall
be made by Lessee. Title to all such parts, modifications and additions to the Equipment
immediately shall vest in Lessor, without any further action by Lessor or any other person, and
they shall be deemed incorporated in the Equipment for all purposes of the related Schedule.
Unless replaced in accordance with this Section, Lessee shall not remove any parts originally or
from time to time attached to the Equipment, if such parts are essential to the operation of the
Equipment, are required by any other provision of this Lease or cannot be detached from the
Equipment without materially interfering with the operation of the Equipment or adversely affecting
the value, utility and remaining useful life which the Equipment would have had without the
addition of such parts. Except as permitted in this Section, Lessee shall not make any material
alterations to the Equipment.

     (c) Upon forty-eight (48) hours’ notice, Lessee shall afford Lessor and/or its designated
representatives access to the premises where the Equipment is located for the purpose of inspecting
such Equipment and all applicable maintenance or other records relating thereto at any reasonable
time during normal business hours; provided, however, if an Event of Default or a default of any of
the terms of any of the Lease Documents shall have occurred and then be continuing, no notice of
any inspection by Lessor shall be required. If any material discrepancies are found as they
pertain to the general condition of the Equipment, Lessor will communicate these discrepancies to
Lessee in writing. Lessee shall then have thirty (30) days to rectify these discrepancies at its
sole expense. Lessee shall pay all expenses of a re-inspection by Lessor’s appointed
representative, if corrective measures were required.

11. Insurance. Lessee shall maintain at its own expense and at all times property damage, fire,
theft and comprehensive insurance for the full replacement value of the Equipment with loss payable
provisions in favor of Lessor as loss payee as its interests may appear and maintain public
liability insurance in the amounts required by Lessor for the relevant Schedule, naming Lessor as
additional insured, all under policies in form, substance and amount and written by companies
approved by Lessor. All policies will require thirty (30) days’ prior written notice to Lessor of
any amendment or cancellation. If Lessee fails to obtain the insurance as provided herein, Lessor
may, but is not obligated, to obtain such insurance as Lessor may deem appropriate

 

 

including, if it so chooses, “single interest insurance” which will cover only Lessor’s interest in the Equipment.
Lessee shall pay to Lessor for the cost of such insurance. Subject to the provisions of Section 8(f) hereof,
Lessor shall have the option to apply any insurance proceeds toward Rent or apply the insurance
proceeds towards repair or replacement of the item of Equipment in respect of which such proceeds
were received; provided, however that if no Total Loss has occurred and no Event of Default shall
have occurred and be continuing, Lessor shall make all insurance proceeds available for the repair
of the Equipment. Upon the request of Lessor, Lessee shall from time to time deliver to Lessor
such insurance policies, or other evidence of such policies satisfactory to Lessor and such other
related information Lessor may request.

12. Compliance. Lessee shall comply in all material respects with all material governmental laws,
regulations, requirements and rules, including without limitation environmental and licensing laws.
Lessee shall also comply with all manufacturer’s operating instructions and warranty requirements
for the Equipment, and with the conditions and requirements of all policies of insurance with
respect to the Equipment and this Lease.

13. Taxes and Costs. Lessee shall pay all applicable sales, use and other taxes whether or not
stated on the Schedule (including without limitation any amounts due pursuant to increases in rates
effective during the term of this Lease), license and registration fees, assessments and other
government charges, however designated, based upon the Equipment or the Rent or upon the operation,
maintenance, repair, return or other disposition of the Equipment, or for titling or registering
the Equipment, including taxes measured by the net income of Lessor to the extent that such taxes
are assessed in lieu of other governmental charges relating to the sale, use, titling or
registration of the Equipment. If Lessee represents that Lessee is exempt from payment of income
taxes and sales taxes, Lessee will provide Lessor with evidence of such exemptions. Lessee shall
pay all shipping and delivery charges and other expenses incurred in connection with the Equipment
and pay all lawful claims which might become a lien on the Equipment. Lessee will also pay all
costs and expenses (including all reasonable fees and disbursements of all counsel retained for
advice, suit, appeal or other proceedings or purpose and of any experts or agents it may retain),
which Lessor may incur in connection with (i) the administration of this Lease, including any
administrative fees Lessor may impose for the preparation of discharges, releases or assignments to
third-parties; (ii) the enforcement and collection of any Rent or any guaranty thereof; (iii) the
exercise, performance, enforcement or protection of any of the rights of Lessor hereunder; or (iv)
the failure of Lessee to perform or observe any provisions hereof. After such demand for payment
of any cost, expense or fee under this Section or elsewhere under this Lease, Lessee shall pay
interest at the rate interest accrues on judgments in the State of New York from the date payment
is demanded by Lessor to the date reimbursed by Lessee. All such costs, expenses or fees under
this Lease shall be added to the Rent, and shall be due and payable on demand.

14. Application of Payments. Payment shall be applied first to Lessor’s costs and Expenses
including without limitation reasonable attorney’s fees, collection costs and expenses incurred in
performing Lessee’s obligations under this Lease, next to charges and fees such as late charges,
and last to Rent.

15. General Indemnity. Lessee shall indemnify Lessor, its Affiliates and any Assignee and each of
their respective officers, employees, accountants, attorneys and other agents (each such person
being an “Indemnified Party”) on demand, without any limitation as to amount, against each
liability, cost and expense (including all reasonable fees and disbursements of all counsel
retained for advice, suit, appeal or other proceedings or purpose, and of any expert or agents an
Indemnified Party may retain) heretofore or hereafter imposed on, incurred by or asserted against
any Indemnified Party (including any claim involving any allegation of any violation of applicable
law of any governmental authority (including any environmental law or criminal law)), however
asserted and whether now existing or hereafter arising, arising out of or in connection with the
manufacture, purchase, ownership, delivery, installation, possession, use, storage, operation,
failure, maintenance, repair, return, repossession or other disposition of the Equipment or with
this Lease

 

 

including without limitation claims for injury to or death of persons and for damage to
property (collectively “Claims”); provided, however, the foregoing indemnity shall not apply to:
(a) any liability, cost or expense incurred by any Indemnified Party in connection with any
challenge by or dispute with any governmental authority arising out of
or in connection with the accounting treatment of this Lease which is adopted (or proposed to be
adopted) by such Indemnified Party, or a determination by any governmental authority that any such
accounting treatment is unavailable or invalid, or (b) any liability, cost or expense solely
attributable to an Indemnified Party’s gross negligence or willful misconduct. Lessee shall give
Lessor and any Assignee prompt notice of any Claim. This indemnity agreement shall survive the
termination of this Lease

16. Redelivery.

     (a) Lessee shall provide written notice to Lessor not less than one hundred eighty (180) days
and not more than two hundred seventy (270) days prior to the expiration of the term of this Lease
with respect to the first Schedule to be executed under this Lease (or of any renewal thereof, if
applicable) of Lessee’s intent to return the Equipment to Lessor upon the expiration of the term of
this Lease (“Election Notice”). Such notice shall be irrevocable and shall be effective with
respect to all Equipment leased under all Schedules. IF LESSEE FAILS TO PROVIDE THE FOREGOING
NOTICE IN A TIMELY MANNER, THE TERMS OF THE SCHEDULES AUTOMATICALLY SHALL BE DEEMED TO HAVE BEEN
EXTENDED, WHICH EXTENSION SHALL CONTINUE UNTIL ONE HUNDRED EIGHTY (180) DAYS AFTER THE DATE ON
WHICH LESSEE PROVIDES THE REQUIRED NOTICE, DURING WHICH EXTENSION PERIOD LESSEE SHALL CONTINUE TO
PAY TO LESSOR PER DIEM RENT AT THE LAST PREVAILING LEASE RATE UNDER THE APPLICABLE SCHEDULES;
provided, however that Lessor may elect to terminate such extension at any time upon ten (10) days
written notice to Lessee. During such extension period, the terms and conditions of this Lease
(including, without limitation, the provisions of this Section 16) shall continue to be applicable.
Solely for purposes of the definition of Stipulated Loss Value in Section 8 hereof, any such
extension shall be deemed a renewal of the term of such Schedule. In the event the Lessee elects
to return the Equipment after the Base Term of the Lease, Lessee shall pay to Lessor upon delivery
of the Election Notice a fee in the amount equal to the Return Fee Percentage (as set forth in the
applicable Schedule) of the Total Invoice Cost of the Equipment (“Initial Return Fee”).

     (b) Upon the expiration or earlier cancellation or termination of any Schedule, Lessee shall
return the Equipment to Lessor free and clear of all liens whatsoever, to such place(s) within the
continental United States as Lessor shall specify. Lessee shall provide, at its expense, 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. During the period
between the expiration of the Lease and the date occurring six (6) months thereafter, Lessee shall,
at its expense: (1) at the request of Lessor, provide for the de-installation and packing of the
Equipment, by a qualified industry authorized representative acceptable to Lessor (“Designate
Person”), in accordance with the Vendor’s specifications (as applicable); (2) at the request of
Lessor deliver the Equipment to Lessor at a location designated by Lessor; and (3) provide
insurance and safe, secured storage for the Equipment. Upon return, the Equipment shall be: (i)
in the same condition as when delivered to Lessee under the applicable Schedule, ordinary wear and
tear excepted; (ii) 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 (as applicable); (iii) redelivered with all component parts in good
operating condition (and all components must meet or exceed the manufacturer’s minimum recommended
specifications, unless otherwise agreed by Lessor in writing); and (iv) cleaned and cosmetically
acceptable, with all Lessee-installed markings removed and all rust, corrosion or other
contamination having been removed or properly treated, and in such condition so that it may be
immediately installed and placed in service by a third party. Upon delivery, the Equipment shall
be in compliance with all applicable Federal, state and local laws, and health and safety
guidelines. Lessee shall be responsible for the cost of all repairs, alterations, inspections,
appraisals, storage charges, insurance costs,

 

 

demonstration costs and other related costs necessary
to cause the Equipment to be in full compliance with the terms of this Lease.

     (c) If requested by Lessor, Lessee shall also deliver all related records and other data to
Lessor, including all records of maintenance, modifications, additions and major repairs,
computerized maintenance history, and
any maintenance and repair manuals (collectively, the “Records”). All manuals or other documents
delivered to Lessor that are subject to periodic revision will be fully up-to-date and current to
the latest revision standard of any particular manual or document. In the event any such Records
are missing or incomplete, Lessor shall have the right to cause the same to be reconstructed at
Lessee’s expense.

     (d) In addition to Lessor’s other rights and remedies hereunder, if the Equipment and the
related Records are not returned in a timely fashion, or if repairs are necessary to place any item
of Equipment in the condition required in this Section, Lessee shall (i) continue to pay to Lessor
per diem rent at the last prevailing lease rate under the applicable Schedule with respect to such
item of Equipment, for the period of delay in redelivery, and/or for the period of time reasonably
necessary to accomplish such repairs, and (ii) pay to Lessor an amount equal to the aggregate cost
of any such repairs. Lessor’s acceptance of such rent on account of such delay and/or repair does
not constitute an extension or renewal of the term of the related Schedule or a waiver of Lessor’s
right to prompt return of the Equipment in proper condition. Such amount shall be payable upon the
earlier of Lessor’s demand or the return of the Equipment in accordance with this Lease.

     (e) During the period between the date occurring six (6) months prior to the expiration of the
term of the Lease (either the Base Term or renewal term) and the expiration of the Lease
(“Remarketing Period”) Lessee shall, at its expense (i) upon receiving reasonable notice from
Lessor, make the Equipment available for onsite operational inspections by potential purchasers,
under power, and provide personnel, power and other operational requirements necessary to
demonstrate electrical, mechanical and operational systems for each item of Equipment, (ii) at the
request of Lessor, provide for an inspection and fair market value appraisal to be performed by an
appraiser of Lessor’s choice, the results of such appraisal to be forwarded to Lessor; and (iii)
assist Lessor in marketing the Equipment for sale. Lessee shall on request pay all of Lessor’s
reasonable cost and expenses incurred in connection with the remarketing of the Equipment during
the Remarketing Period. In the event, following receipt by Lessor of the Initial Return Fee, but
prior to the date occurring thirty (30) days after the expiration of the Base Term of the Lease,
the Lessor receives net proceeds from the sale of the Equipment, pursuant to a contract of sale
entered into during the Remarketing Period, in excess of the amount equal to the Base Net Proceeds
Percentage (as set forth on the applicable Schedule) of the Total Invoice Cost of the Equipment,
the Lessor shall remit to the Lessee the portion of such net proceeds which exceed the amount equal
to the Base Net Proceeds Percentage of the Total Invoice Cost of the Equipment; provided that the
maximum amount to be paid to the Lessee shall not exceed the amount of the Initial Return Fee
received by Lessor.

     (f) Without limiting any other terms or conditions of this Lease, the provisions of this
Section are of the essence of each Schedule, and upon application to any court of equity having
jurisdiction, Lessor shall be entitled to a decree against Lessee requiring Lessee’s specific
performance of its agreements in this Section.

17. Financial Statements And Financial Covenants. Lessee shall cause Martek Biosciences
Corporation (“Parent”) to maintain a system of accounts established and administered in accordance
with generally accepted accounting principles and practices for its industry consistently applied,
and, the Lessee shall promptly deliver to the Lessor: (a) within forty-five (45) days after the
end of each of the Parent’s first three fiscal quarters, an unaudited consolidated financial
statement of the Parent and the Parent’s subsidiaries (collectively, “Companies”) as of the end of
such quarter, which financial statement shall consist of income and cash flows for the quarter, for
the corresponding quarter in the previous fiscal year and for the period from the end of the
previous fiscal year, with a consolidated balance sheet as of the quarter end all in such detail as
the Lessor may request; (b) within ninety (90) days after the end of each fiscal year, consolidated
statements of

 

 

the Companies’ income and cash flows and its consolidated balance sheet as of the end of such
fiscal year, setting forth comparative figures for the preceding fiscal year and to be audited by
an independent certified public accountant acceptable to the Lessor; all such statements shall be
certified by the Parent’s chief financial officer to be correct and in accordance with the
Companies’ records and to present fairly the results of the Companies’ operations and cash flows
and their financial position at year end; and (c) with each statement of income, a certificate
executed by the Parent’s chief executive and chief financial officers or other such person
responsible for the financial management of the Companies (1) setting forth the computations
required to establish the Companies’ compliance with each financial covenant, if any, during the
statement period, (2) stating that the signers of the certificate have reviewed this Lease and the
operations and condition (financial or other) of the Companies during the relevant period and (3)
stating that no Event of Default occurred during the period, or if an Event of Default did occur,
describing its nature, the date(s) of its occurrence or period of existence and what action the
Lessee has taken with respect thereto. The Lessee shall also provide to the Lessor such other
financial information as the Lessor shall request from time to time, provided, that the Lessee
shall not be required to provide to the Lessor any such additional information which the Parent is
not also required to provide to the agents or lenders under the terms of the Loan and Security
Agreement dated January 26, 2004 executed by Parent and various financial institutions in their
capacity as lenders or agents (such agreement, as heretofore amended but without giving effect to
any amendments or modifications thereof made after the date of this Lease is herein referred to as
the “Line of Credit Agreement”). The Lessee shall cause Parent to maintain Permitted Investments
with a minimum aggregate value of not less than Twenty-Five Million Dollars ($25,000,000.00) and
Lessee shall provide the Lessor with periodic confirmation thereof as requested by the Lessor from
time to time. The Companies shall maintain: (a) a Fixed Charge Coverage Ratio of not less than
2.5 to 1.0, measured as of the last day of each fiscal quarter; and (b) a Leverage Ratio, measured
as of the last day of each fiscal quarter, of not more than (1) 2.25 to 1.0 from October 31, 2004
through October 30, 2005; and (2) 2.0 to 1.0 on October 31, 2005 and at all times thereafter. As
used herein the terms “Fixed Charge Coverage Ratio,” “Permitted Investments,” and “Leverage Ratio”
shall have the meanings given to such terms in the Line of Credit Agreement. In the event the
financial covenants contained in the Line of Credit Agreement (or any defined terms in connection
therewith) are hereafter amended during a period in which the Lessor (or any affiliate of Lessor)
is a lender under the Line of Credit Agreement, the financial covenants contained herein shall,
solely during the period in which the Lessor (or any affiliate of Lessor) remains a lender under
the Line of Credit Agreement, be deemed to be the same as the financial covenants (or defined
terms) contained in the Line of Credit Agreement as so amended

18. No Liens. Lessee shall not create or suffer to exist any lien or other encumbrance of any kind
upon the Equipment or this Lease and agrees that if Lessee breaches this covenant Lessor may, at
its option, but without any obligation to do so: (a) cancel this Lease; or (b) perform or comply,
or otherwise cause performance or compliance, with such terms including the payment or discharge of
all taxes, fees, security interest or other liens, encumbrances or claims, at any time levied or
placed on the Equipment or this Lease. Nothing in this Section shall be construed to limit,
abridge, supercede, or otherwise invalidate the right of Lessor to make expenditures or to take
action or perform an obligation of Lessee as set forth in Section 22 of this Lease.

19. Quiet Enjoyment; Equipment is Personalty. Lessor covenants that so long as no Event of Default
shall have occurred, Lessee shall be entitled to quiet possession and use of the Equipment in
accordance with this Lease. Lessor and Lessee agree that the Equipment shall remain personal
property. Lessee will obtain and deliver upon Lessor’s request any landlord and mortgagee waivers
in recordable form, satisfactory to Lessor, from all persons claiming any interest in the real
property on or in which the Equipment is located.

20. Events of Default. Any of the following events or conditions shall constitute an “Event of
Default” hereunder and under each Schedule: (a) failure by the Lessee to pay when due (whether at
the stated maturity, by acceleration, upon demand or otherwise) the Rent, or any part thereof and
such failure shall remain uncured for a period of five (5) days, or there occurs any event or
condition which after notice, lapse of time or after both notice and lapse of time will permit
acceleration of Rent; (b) default by the Lessee in the performance of

 

 

any obligation, term or condition of this Lease, or any other agreement with the Lessor or any of
Lessor’s affiliates or subsidiaries (collectively, “Affiliates”) and such default is not cured
within thirty (30) days after written notice from the Lessor to the Lessee; (c) failure by the
Lessee to pay when due (whether at the stated maturity, by acceleration, upon demand or otherwise)
any indebtedness or obligation in an aggregate amount of Two Million Dollars ($2,000,000.00) or
more owing to any third party or any Affiliate, or the occurrence of any event which could result
in acceleration of payment of any such indebtedness; (d) the Lessee is dissolved, becomes
insolvent, generally fails to pay or admits in writing its inability generally to pay its debts as
they become due; (e) the Lessee makes a general assignment, arrangement or composition agreement
with or for the benefit of its creditors or makes, or sends notice of any intended, bulk sale; the
sale, assignment, transfer or delivery of all or substantially all of the assets of the Lessee to a
third party; or the cessation by the Lessee as a going business concern; (f) the Lessee files a
petition in bankruptcy or institutes any action under federal or state law for the relief of
debtors or seeks or consents to the appointment of an administrator, receiver, custodian or similar
official for the wind up of its business (or has such a petition or action filed against it and
such petition action or appointment is not dismissed or stayed within sixty (60) days); (g) the
occurrence of a “Change of Control” as that term is presently defined in the Line of Credit
Agreement with respect to the Parent; (h) dissolution of the Lessee (or the making of any agreement
therefor); (i) the occurrence of an “Event of Default,” as that term is defined in the Line of
Credit Agreement or any subsequent agreement evidencing or documenting a working capital line of
credit to any of the Companies (excluding, however, any Event of Default under Section 7.12 of the
Line of Credit Agreement or any similar event of default under any other agreement evidencing or
documenting a working capital line of credit to any of the Companies); (j) the entry of one or more
judgments or orders of any court, other governmental authority or arbitrator against the Lessee
involving in the aggregate liability of Two Million Dollars ($2,000,000.00) or more and which is
not discharged, stayed pending appeal within thirty (30) days from the entry thereof; (k) material
falsity, omission or inaccuracy of facts submitted to the Lessor or any Affiliate (whether in a
financial statement or otherwise); (l) the failure to comply with the financial covenants contained
in Section 17 of this Lease; (m) the occurrence of any event described in Section 20 (a) through
and including 20(l) with respect to any subsidiary or to any endorser, guarantor (“Guarantor”) or
any other party liable for, or whose assets or any interest therein secures, payment of any of the
Rent. The occurrence of an Event of Default under any Schedule shall constitute an Event of
Default under all Schedules.

21. Remedies. (a) If an Event of Default occurs with respect to any Schedule, the Lessor
thereunder may (in its sole discretion) exercise any one or more of the following remedies with
respect to such Schedule and any or all other Schedules to which such Lessor is then a party: (1)
proceed at law or in equity, to enforce specifically Lessee’s performance or to recover damages;
(2) declare each such Schedule in default, and cancel each such Schedule or otherwise terminate
Lessee’s right to use the Equipment and Lessee’s other rights, but not its obligations, thereunder
and Lessee shall immediately assemble, make available and, if Lessor requests, return the Equipment
to Lessor in accordance with the terms of this Lease; (3) enter any premises where any item of
Equipment is located and take immediate possession of and remove (or disable in place) such item
(and/or any unattached parts) by self-help, summary proceedings or otherwise without liability; (4)
use Lessee’s premises for storage without liability; (5) sell, re-lease or otherwise dispose of any
or all of the Equipment, whether or not in Lessor’s possession, at public or private sale, with or
without notice to Lessee, and apply or retain the net proceeds of such disposition, with Lessee
remaining liable for any deficiency and with any excess being retained by Lessor; (6) enforce any
or all of the preceding remedies with respect to any related Collateral, and apply any deposit or
other cash collateral, or any proceeds of any such Collateral, at any time to reduce any amounts
due to Lessor; (7) demand and recover from Lessee all Liquidated Damages and all other sums due
under the Schedules whenever the same shall be due; and (8) exercise any and all other remedies
allowed by applicable law, including the UCC. As used herein, “Liquidated Damages” shall mean the
liquidated damages (all of which, Lessee hereby acknowledges, are damages to be paid in lieu of
future Rent and are reasonable in light of the anticipated harm arising by reason of an Event of
Default, and are not a penalty) described in the first sentence of parts (1) or (2) of Section
21(b), depending upon the recovery and

 

 

disposition of the Equipment leased under the applicable Schedule.

     (b) If an Event of Default occurs with respect to any Schedule, (1) if Lessor recovers the
Equipment and disposes of it by a lease or elects not to dispose of the Equipment after recovery,
upon demand, Lessee shall pay to Lessor an amount equal to the sum of (A) any accrued and unpaid
Rent as of the date Lessor recovers possession of the Equipment, plus (B) the present value
as of such date of the total Rent for the then remaining term of such Schedule; plus (C)
present value of the Initial Return Fee, to be paid under the applicable Schedule pursuant to
Section 16(a) of this Lease, minus (D) either, as applicable, (i) the present value, as of
the commencement date of any substantially similar re-lease of the Equipment, of the re-lease rent
payable for that period, commencing on such date, which is comparable to the then remaining term of
such Schedule or (ii) the present value, as of that certain date which may be determined by taking
into account Lessor’s having a reasonable opportunity to remarket the Equipment, of the “market
rent” for such Equipment (as computed pursuant to Article 2A of the UCC) in the continental United
States on that date, computed for that period, commencing on such date, which is comparable to the
then remaining term of such Schedule; provided, however, Lessee acknowledges that if Lessor is
unable after reasonable effort to dispose of the Equipment at a reasonable price and pursuant to
other reasonable terms, or the circumstances reasonably indicate that such an effort will be
unavailing, the “market rent” in such event will be deemed to be $0.00, but in the event that
Lessor does eventually re-lease or otherwise dispose of the Equipment, it will apply the net
proceeds of such disposition, to the extent received in good and indefeasible funds, as a credit or
reimbursement, as applicable, in a manner consistent with the applicable provisions of Article 2A
of the UCC. Any amounts discounted to present value, shall be discounted at the rate of three
percent (3%) per annum, compounded annually.

                    (2) If Lessee fails to return the Equipment in the manner and condition required by this
Lease, or Lessor recovers and sells the Equipment, upon demand, Lessee shall pay to Lessor an
amount calculated as the Stipulated Loss Value of the Equipment (determined as of the next rent
payment date after the date of the occurrence of the subject Event of Default), together with all
other Rent due with respect to the related Schedule as of such determination date, and all
Enforcement Costs (defined in Section 21(c)), less a credit for any disposition proceeds, if
applicable pursuant to the application provisions in the next sentence. If Lessor demands the
Liquidated Damages under this part (2), and recovers and sells the Equipment, any proceeds received
in good and indefeasible funds shall be applied by Lessor, with respect to the related Schedule:
first, to pay all Enforcement Costs, to the extent not previously paid; second, to
pay to Lessor an amount equal to any unpaid Rent due and payable, together with the Liquidated
Damage amounts specified in this part (2), to the extent not previously paid; third, to pay
to Lessor any interest accruing on the amounts covered by the preceding clauses, at the rate
interest accrues on judgments in the State of New York, from and after the date the same becomes
due, through the date of payment; and fourth, (A) to satisfy any remaining obligations
under any or all other Schedules to the Lease, or (B) if Lessee’s obligations under the other
Schedules have been fully satisfied, to reimburse Lessee for such amounts to the extent paid by
Lessee as Liquidated Damages pursuant to this part (2).

     (c) A cancellation of any Schedule shall occur only upon written notice by Lessor to Lessee.
Unless already specifically provided for in Section 21(b), if an Event of Default occurs with
respect to any Schedule, Lessee shall also be liable for all of the following (“Enforcement
Costs”): (1) all unpaid Rent due before, during or after exercise of any of the foregoing remedies,
and (2) all reasonable legal fees (including consultation, drafting notices or other documents,
expert witness fees, sending notices or instituting, prosecuting or defending litigation or
arbitration) and other enforcement costs and expenses incurred by reason of any Event of Default or
the exercise of Lessor’s rights or remedies, including all expenses incurred in connection with the
return or other recovery of any Equipment in accordance with the terms of this Lease or in placing
such Equipment in the condition required hereby, or the sale, re-lease or other disposition
(including but not limited to costs of transportation, possession, storage, insurance, taxes, lien
removal, repair,

 

 

refurbishing, advertising and brokers’ fees), and all other pre-judgment and post-judgment
enforcement related actions taken by Lessor or any actions taken by Lessor in any bankruptcy case
involving Lessee, the Equipment, or any other person. No right or remedy is exclusive and each may
be used successively and cumulatively. Any failure to exercise the rights granted hereunder upon
any Event of Default shall not constitute a waiver of any such right. The execution of a Schedule
shall not constitute a waiver by Lessor of any pre-existing Event of Default. With respect to any
disposition of any Equipment or Collateral pursuant to this Section, (i) Lessor shall have no
obligation, subject to the requirements of commercial reasonableness, to clean-up or otherwise
prepare the same for disposition, (ii) Lessor may comply with any applicable law in connection with
any such disposition, and any actions taken in connection therewith shall not be deemed to have
adversely affected the commercial reasonableness of any disposition thereof, (iii) Lessor may
disclaim any title or other warranties in connection with any such disposition except for a
warranty that title is conveyed free and clear of all claims or liens arising by reason of any act
of Lessor, and (iv) Lessee shall remain responsible for any deficiency remaining after Lessor’s
exercise of its remedies and application of any funds or credits against Lessee’s obligations under
any Schedule, and Lessor shall retain any excess after such application (subject to the provisions
of Section 21(b)(2)).

22. Lessor’s Right to Cure. If Lessee fails to perform or comply with any of the terms hereof,
Lessor, at its option, but without any obligation to do so, may perform or comply, or otherwise
cause performance or compliance, with such terms including the payment or discharge of all taxes,
fees, security interest or other liens, encumbrances or claims, at any time levied or placed on the
Equipment. An election to make expenditures or to take action or perform an obligation of Lessee
under the Lease, after Lessee’s failure to perform, shall not affect Lessor’s right to declare an
Event of Default and to exercise its remedies. Nor shall the provisions of this Section relieve
Lessee of any of its obligations hereunder with respect to the Equipment or impose any obligation
on Lessor to proceed in any particular manner with respect to the Equipment.

23. Purchase Options And Renewal Options. Lessee shall have only such option to purchase the
Equipment or renew the term of the Lease as specified in: (a) the Purchase and Renewal Option
Rider attached to each Schedule, if any; (b) the Early Buyout Rider attached to each Schedule, if
any; and (c) the Tax Indemnification Rider attached to each Schedule, if any.

24. Further Assurances. Lessee will execute all documents and take all further actions reasonably
requested by Lessor to protect Lessor’s interests under this Lease. Lessee hereby authorizes
Uniform Commercial Code financing statements naming Lessee as debtor and the equipment as
collateral. Lessee will pay all costs of filing financing statements with respect to this Lease.
Lessee will cause Lessor’s interest in the Equipment to be noted on any certificate of title
relating to the Equipment.

25. Power of Attorney. Lessee hereby irrevocably appoints Lessor, its officers, employees and
agents, or any of them, as attorneys-in-fact for Lessee with full power and authority in the place
and stead of Lessee and in the name of Lessee or its own name from time to time in Lessor’s
discretion at any time during the continuance of an Event of Default, to (a) endorse checks, drafts
or other instruments drawn by the issuer of insurance covering the Equipment or (b) execute and
deliver any writing and take any other actions that the Lessor deems necessary or desirable to
perfect or protect Lessor’s interests under this Lease. This power is coupled with an interest and
if Lessee is a natural person shall not be affected by any subsequent disability of the Lessee.

26. Enforceability. This Lease shall be binding upon Lessee’s successors and assigns and shall be
enforceable by Lessor’s successors and assigns.

27. Waivers; Changes in Writing. No course of dealing nor any omission, failure or delay of the
Lessor in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or

 

 

power, preclude any other or further exercise thereof or the exercise of any other right or power.
Lessee expressly disclaims any reliance on any course of dealing or usage of trade or oral
representation of the Lessor and agrees that none of the foregoing shall operate as a waiver of any
right or remedy of the Lessor. No notice to or demand on the Lessee in any case shall entitle the
Lessee to any other or further notice or demand in similar or other circumstances. No waiver of
any provision of this Lease or consent to any departure by the Lessee therefrom shall in any event
be effective unless made specifically in writing by the Lessor and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which given. No
modification to any provision of this Lease shall be effective unless made in writing in an
agreement signed by the Lessee and the Lessor.

28. No Commitment; Lessor’s Right to Terminate Commitments. This Master Equipment Lease is not a
legal commitment to enter into any lease transaction and Lessor shall have no obligation to enter
into any Schedule unless (a) Lessor has issued a specific commitment for such Schedule, (b) no
Event of Default or any event which with lapse of time or notice, or both, would become an Event of
Default exists with respect to any agreement or other obligation of Lessee in any capacity to
Lessor or any of its Affiliates in any capacity, and (c) none of the following has occurred: (1)
there has been a material adverse change in Lessee’s financial position or credit standing as
determined by Lessor in its sole discretion; (2) the Equipment fails to be delivered and accepted
by Lessee before the commitment expires; (3) Lessee or any Guarantor fails to cause its counsel to
deliver on its behalf any legal opinion requested by the Lessor; (4) Lessee fails to deliver
evidence satisfactory to Lessor that Lessee has obtained and will maintain in force during the term
of this Lease all federal, state and local permits, licenses and approvals necessary for the
acquisition, transportation, operation and maintenance of the Equipment, including without
limitation disposal of all associated wastes and by-products and protection of operators and other
persons in the vicinity of the Equipment; or (5) any other condition specified in the Schedule has
not been fulfilled. Immediately upon Lessor’s termination or rejection of a Schedule or commitment
based on this section, Lessee will return, and reimburse Lessor on demand for all sums disbursed by
Lessor with respect to, the Equipment and proposed Schedule, including without limitation all
Lessor’s attorneys’ fees and disbursements, whereupon, if Lessee is not in default with respect to
any agreement with Lessor, Lessor will transfer to Lessee without warranty or recourse any rights
Lessor may have with respect to the Equipment.

29. Entire Agreement. This Lease and the Schedules and Riders to be executed in connection
herewith constitute the entire agreement between Lessor and Lessee relating to the Equipment and
supersedes all prior dealings. This Lease may be amended only in a writing signed by both parties.

30. Notices. Any demand or notice hereunder or under any applicable law pertaining hereto shall be
in writing and duly given if delivered to Lessee (at its address on the Lessor’s records) or to the
Lessor (at the address on page one and separately to the representative of the Lessor responsible
for Lessee’s relationship with the Lessor as advised to the Lessee by the Lessor from time to
time). Such notice or demand shall be deemed sufficiently given for all purposes when delivered
(a) by personal delivery and shall be deemed effective when delivered, or (b) by mail or courier
and shall be deemed effective three (3) business days after deposit in an official depository
maintained by the United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognized overnight courier service (e.g., Federal Express).
Notice by e-mail is not valid notice under this or any other agreement between Lessee and the
Lessor. Lessee shall immediately notify Lessor and any assignee of any change in the location of
the Equipment or in Lessee’s address, name, management, financial condition or form of
organization. Time is of the essence with regard to all Notices.

31. Generally Accepted Accounting Principles. Any financial calculation to be made, all financial
statements and other financial information to be provided, and all books and records, system of
accounting and reserves to be kept in connection with the provisions of this Lease, shall be in
accordance with generally

 

 

accepted accounting principles consistently applied during each interval and from interval to
interval; provided, however, that in the event changes in generally accepted accounting principles
shall be mandated by the Financial Accounting Standards Board or any similar accounting body of
comparable standing, or should be recommended by Lessee’s certified public accountants, to the
extent such changes would affect any financial calculations to be made in connection herewith, such
changes shall be implemented in making such calculations only from and after such date as Lessee
and the Lessor shall have amended this Lease to the extent necessary to reflect such changes in the
financial and other covenants to which such calculations relate.

32. Cumulative Nature and Non-Exclusive Exercise of Rights and Remedies. All rights and remedies
of the Lessor pursuant to this Lease shall be cumulative, and no such right or remedy shall be
exclusive of any other such right or remedy. No single or partial exercise by the Lessor of any
right or remedy pursuant to this Lease or otherwise shall preclude any other or further exercise
thereof, or any exercise of any other such right or remedy, by the Lessor.

33. Governing Law; Jurisdiction. This Lease has been delivered to and accepted by the Lessor and
will be deemed to be made in the State of New York. Except as otherwise provided under federal
law, this Lease will be interpreted in accordance with the laws of the State of New York excluding
its conflict of laws rules. LESSEE HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE THE LESSOR
OR ANY OF ITS AFFILIATES MAINTAINS A BRANCH AND CONSENTS THAT THE LESSOR MAY EFFECT ANY SERVICE OF
PROCESS IN THE MANNER AND AT LESSEE’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND;
PROVIDED THAT NOTHING CONTAINED IN THIS LEASE WILL PREVENT THE LESSOR FROM BRINGING ANY ACTION,
ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST LESSEE INDIVIDUALLY, AGAINST ANY
SECURITY OR AGAINST ANY PROPERTY OF LESSEE WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR
DOMESTIC JURISDICTION. Lessee acknowledges and agrees that the venue provided above is the most
convenient forum for both the Lessor and Lessee. Lessee waives any objection to venue and any
objection based on a more convenient forum in any action instituted under this Lease.

34. Additional Waivers by Lessee. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW LESSEE WAIVES
ANY AND ALL RIGHTS AND REMEDIES CONFERRED BY UCC ARTICLE 2A SECTIONS 505-522 (PROVIDED LESSEE
RESERVES THE RIGHT TO SUE FOR DAMAGES IF LESSOR BREACHES THIS LEASE), INCLUDING WITHOUT LIMITATION
ANY RIGHTS TO (a) CANCEL OR REPUDIATE THE LEASE, (b) REJECT OR REVOKE ACCEPTANCE OF THE EQUIPMENT,
(c) RECOVER DAMAGES FROM THE LESSOR FOR BREACH OF WARRANTY RELATING TO THE EQUIPMENT, (d) CLAIM A
SECURITY INTEREST IN ANY REJECTED EQUIPMENT IN LESSEE’S POSSESSION OR CONTROL, (e) DEDUCT FROM RENT
ALL OR ANY PART OF ANY CLAIMED DAMAGES RESULTING FROM THE LESSOR’S DEFAULT UNDER THE LEASE, (f)
ACCEPT PARTIAL DELIVERY OF THE EQUIPMENT, (g) RECOVER FROM LESSOR OR ASSIGNEE ANY GENERAL, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR ANY REASON WHATSOEVER, AND (h) SPECIFIC PERFORMANCE,
REPLEVIN OR THE LIKE FOR ANY OF THE EQUIPMENT.

35. Interpretation. Unless the context otherwise clearly requires, references to plural includes
the singular and references to the singular include the plural; references to “individual” shall
mean a natural person and shall include a natural person doing business under an assumed name
(e.g., a “DBA”); the word “or” has the inclusive meaning represented by the phrase “and/or”; the
word “including”, “includes” and “include” shall be deemed to be followed by the words “without
limitation”; and captions or section headings are solely for convenience and not part of the
substance of this Lease. Any representation, warranty, covenant or agreement

 

 

\

herein shall survive execution and delivery of this Lease and shall be deemed continuous. Each
provision of this Lease shall be interpreted as consistent with existing law and shall be deemed
amended to the extent necessary to comply with any conflicting law. If any provision nevertheless
is held invalid, the other provisions shall remain in effect. The Lessee agrees that in any legal
proceeding, a photocopy of this Lease kept in the Lessor’s course of business may be admitted into
evidence as an original. The captions in this Lease are for convenience only.

36. Waiver of Jury Trial. The Lessee and the Lessor hereby knowingly, voluntarily, and
intentionally waive any right to trial by jury the Lessee and the Lessor may have in any action or
proceeding, in law or in equity, in connection with this Lease or any transactions related hereto.
The Lessee represents and warrants that no representative or agent of the Lessor has represented,
expressly or otherwise, that the Lessor will not, in the event of litigation, seek to enforce this
jury trial waiver. The Lessee acknowledges that the Lessor has been induced to enter into this
Lease by, among other things, the provisions of this Section.

Acknowledgment. LESSEE ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS ALL THE PROVISIONS OF THIS
LEASE, INCLUDING THE GOVERNING LAW, JURISDICTION AND WAIVER OF JURY TRIAL, AND HAS BEEN ADVISED BY
COUNSEL AS NECESSARY OR APPROPRIATE.

LESSEE ALSO ACKNOWLEDGES THAT ONLY LESSOR’S ORIGINAL OF EACH EQUIPMENT SCHEDULE CONSTITUTES CHATTEL
PAPER FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE. NO SECURITY INTEREST CAN BE PERFECTED BY
POSSESSION OF ANY OTHER COUNTERPART.

	 	 	 	 	 	 	 
	Date: October 29, 2004	 	 	 	Accepted on: October 29, 2004
	 	 	 	 	 
	LESSEE:	 	 	 	LESSOR:
	MARTEK BIOSCIENCES KINGSTREE

      CORPORATION	 	 	 	M&T CREDIT SERVICES, LLC
	 	 	 	 	 
	By:

	 	/s/ Peter L. Buzy
	 	By:
	 	/s/ Mohannad Jishi
	

	 	 
	 	 	 	 
	

	 	Name: Peter L. Buzy

Title:   CFO
	 	 	 	Name: Mohannad Jishi

Title:   VP

 

 

M&T CREDIT SERVICES, LLC

EQUIPMENT SCHEDULE NO. 1

UNDER MASTER EQUIPMENT LEASE dated as of October 29, 2004

	 	 	 	 
	Equipment Schedule Date: October 29, 2004	 	 	Equipment Schedule No. 1
	 	 	 	 
	Lessee’s Name and Address:

	 	 	     Lessor’s
Name and Address:

	MARTEK BIOSCIENCES KINGSTREE

CORPORATION

6480 Dobbin Road

Columbia, Maryland 21045

	 	 	M&T Credit Services, LLC

M&T Center

One Fountain Plaza

Buffalo, New York 14203
	 
	 	 	 
	Attn: Phone:

	 	 	Attn: Counsel’s Office Phone: (716) 842-5094
	 	 	 	 

LESSEE: Martek Biosciences Kingstree Corporation

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	EQUIPMENT DESCRIPTION	 	 	 	 	 	 	 
	 	QTY	 	 	(Manufacturer,Model No., Item)	 	 	SERIAL NO.	 	 	TOTAL INVOICE COST	 
	 	 	 	 	See Schedule A attached hereto
and made a part hereof
	 	 	See
Schedule A
	 	 	$ 5,370,186.25	 	 
	 

Equipment Location: 1416 Williamsburg County Highway, Kingstree, South Carolina

Earliest Date Any Of Equipment Was Placed In Service: _______10/29_______, 2004

Lease Term (initial term): Commencement Date:  November 1, 2004  End Date: October
31, 2009

Interim Term: Period Covering: October 29, 2004 To And Including October 31, 2004
Interim Rent: $1,802.81

Base Term: 60 Months
Beginning:  November 1,
2004       Last Payment: October 1,
2009

Return Fee Percentage: 15.5%                                               Base Net Proceeds Percentage: 9.5%

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Payment Number	 	 	 	 	 	Total Each	 	 	Advance Rent
	Rent Payable	 	 	and Amounts	 	 	Sales Tax	 	 	Lease Payment	 	 	Received by Lessor
	 	 	 	 	 	 	 	 	 	 	 	 	 
	þ Monthly

o Quarterly

o Semiannually

o Annually

o See Schedule

	 	 	Periodic Rent: at

$79,576.76
	 	 	$          N/A

o Sales Tax

þ Exempt
	 	 	$79,576.76 per month
	 	 	N/A

		
	Insurance: 	Lessee’s insurance policy covering the Equipment shall contain minimum liability limits
of $3,000,000 for each person, $5,000,000 for each occurrence and insure against claims for

 

 

		
	 	property damage in an amount not less than $5,000,000.

Lease. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the personal property
described above together with all substitutions, replacements, repairs, upgrades, additions,
accessories, products and proceeds (collectively, the “Equipment”), subject to the terms and
conditions of the Master Equipment Lease identified above, which is incorporated herein in its
entirety. LESSEE ACKNOWLEDGES THAT ONLY LESSOR’S ORIGINAL OF THIS EQUIPMENT SCHEDULE CONSTITUTES
CHATTEL PAPER FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE. No security interest can be perfected
by possession of any other counterpart. THIS LEASE CAN BE AMENDED OR MODIFIED ONLY IN WRITING.
THIS IS A NON-CANCELABLE LEASE.

This Equipment Schedule also has attached hereto and made a part hereof the following schedules and
riders: (i) Schedule A of equipment; (ii) Schedule of Stipulated Loss Values; (iii) Sale-Leaseback
Rider; (iv) Purchase Option and Renewal Option Rider; and (v) Early Buyout Rider.

	 	 	 	 	 	 	 
	LESSEE:	 	LESSOR:
	 
	 	 	 	 	 	 
	MARTEK BIOSCIENCES KINGSTREE

     CORPORATION	 	M&T CREDIT SERVICES, LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Peter L. Buzy
	 	By:
	 	/s/ Mohannad Jishi
	

	 	 
	 	 	 	 
	

	 	Name: Peter L. Buzy
	 	 	 	Name: Mohannad Jishi
	

	 	Title: CFO
	 	 	 	Title: VP

 

 

M&T CREDIT SERVICES, LLC

EQUIPMENT SCHEDULE NO. 2

UNDER MASTER EQUIPMENT LEASE dated as of October 29, 2004

	 	 	 
	Equipment Schedule Date: October 29, 2004

	 	Equipment Schedule No. 2

	 	 	 	 
	Lessee’s
Name and Address:

	 	 	Lessor’s
Name and Address:

	MARTEK BIOSCIENCES KINGSTREE CORPORATION

	 	 	M&T Credit Services, LLC
	6480 Dobbin Road

	 	 	M&T Center
	Columbia, Maryland 21045

	 	 	One Fountain Plaza
	

	 	 	Buffalo, New York 14203
	

Attn: Phone:

	 	 	

Attn: Counsel’s Office Phone: (716) 842-5094

LESSEE: Martek Biosciences Kingstree Corporation

	 	 	 	 
	 
	 	EQUIPMENT DESCRIPTION	 	TOTAL INVOICE
	QTY	(Manufacturer, Model No., Item)	SERIAL NO.	COST
	 

	See Schedule A attached hereto
and made a part hereof
	See
Schedule A
	$5,394,675.23
	 

Equipment Location: 1416 Williamsburg County Highway, Kingstree, South Carolina

Earliest Date Any Of Equipment Was Placed In Service: _______10/29_______, 2004

Designation of Whether Qualified Property: All Equipment is Qualified Property except as set forth
on Schedule A attached hereto.

Lease Term (initial term): Commencement Date: November 1, 2004 End Date: October
31, 2009

Interim Term: Period Covering: October 29, 2004 To And Including October 31, 2004

Interim Rent: $1,811.02

	 	 	 
	Base
Term: 60 Months Beginning: November 1, 2004

 
	 	Last Payment: October 1,
2009

	Return Fee Percentage: 15.5%
	 	Base Net Proceeds Percentage: 9.5%

	 	 	 	 	 	 	 	 	 	 	 	 	 
		 	 	 	 	 	 	 	 	 	 	 	Advance Rent
	 	 	 	Payment Number	 	 	 	 	 	Total Each	 	 	Received by
	Rent Payable	 	 	and Amounts	 	 	Sales Tax	 	 	Lease Payment	 	 	Lessor
	 	 	 	 	 	 	 	 	 	 	 	 	 
	þ Monthly

	 	 	 	 	 	 	 	 	 	 	 	 
	o Quarterly

	 	 	Periodic Rent: at 	 	 	$    N/A
	 	 	 $80,172.42	 	 	N/A
	o Semiannually

	 	 	$80,172.42	 	 	 	 	 	 per month	 	 	 
	o Annually

	 	 	 	 	 	o Sales Tax

	 	 		 	 	 
	o See Schedule

	 	 	 	 	 	þ Exempt

	 	 	 	 	 	 

 

 

	Insurance:   	 Lessee’s insurance policy covering the Equipment shall contain minimum liability limits
of $3,000,000 for each person, $5,000,000 for each occurrence and insure against claims for
property damage in an amount not less than $5,000,000.

Lease. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the personal property
described above together with all substitutions, replacements, repairs, upgrades, additions,
accessories, products and proceeds (collectively, the “Equipment”), subject to the terms and
conditions of the Master Equipment Lease identified above, which is incorporated herein in its
entirety. LESSEE ACKNOWLEDGES THAT ONLY LESSOR’S ORIGINAL OF THIS EQUIPMENT SCHEDULE CONSTITUTES
CHATTEL PAPER FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE. No security interest can be perfected
by possession of any other counterpart. THIS LEASE CAN BE AMENDED OR MODIFIED ONLY IN WRITING.
THIS IS A NON-CANCELABLE LEASE.

This Equipment Schedule also has attached hereto and made a part hereof the following schedules and
riders: (i) Schedule A of equipment; (ii) Schedule of Stipulated Loss Values; (iii) Sale-Leaseback
Rider; (iv) Purchase Option and Renewal Option Rider; and (v) Early Buyout Rider.

	 	 	 	 	 	 	 
	LESSEE:	 	LESSOR:
	 
	 	 	 	 	 	 
	MARTEK BIOSCIENCES KINGSTREE
    CORPORATION	 	M&T CREDIT SERVICES, LLC
	 
	 	 	 	 	 	 
	By:

	 	/s/ Peter L. Buzy
	 	By:
	 	/s/ Mohannad Jishi
	

	 	 
	 	 	 	 
	

	 	Name: Peter L. Buzy
	 	 	 	Name: Mohannad Jishi
	

	 	Title: CFO
	 	 	 	Title: VP

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