EXHIBIT 10.5.2
EXECUTION COPY
LEASEHOLD MORTGAGE AND SECURITY AGREEMENT
Dated: June 29, 2006
THIS LEASEHOLD MORTGAGE AND SECURITY AGREEMENT (together with all
amendments and supplements hereto, the "Mortgage"), by and between BIOVEX, INC.,
a Delaware corporation with a principal place of business and mailing address
presently of 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Borrower")
and MASSACHUSETTS DEVELOPMENT FINANCE AGENCY, a body politic and corporate
created by Chapter 289 of the Acts of 1998 and established under Massachusetts
General Laws Chapter 23G, as amended, with a principal place of business and
mailing address of 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
"Lender").
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower holds a leasehold interest (the "Leasehold Estate")
in certain real property located at 00-X Xxxxxxxx Xxx, Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx and more fully described in Exhibit A hereto (the "Land") pursuant
to that certain Commercial Lease dated December 2, 2005, including all addenda
and riders thereto (the "Lease") between Xxxxxxxx Properties, LLC (the "Lessor")
and Borrower demising the "Leased Premises" defined in the Lease, notice of
which is recorded at the Middlesex South Registry of Deeds in Book 46685, Page
490;
WHEREAS, the Borrower has executed a promissory note of even date herewith
with the Lender in the principal sum of Two Million Five Hundred Thousand and
NO/100 Dollars ($2,500,000.00) in lawful money of the United States, pursuant to
that certain Promissory Note as it may be extended, renewed, modified or amended
(the "Note"), which Note is guaranteed by that certain Guaranty (the "Guaranty")
of even date herewith given by BioVex Group, Inc. (the "Guarantor") (the Note,
together with this Mortgage, the Guaranty and other collateral or related loan
documents are hereinafter collectively referred to as the "Loan Documents");
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to secure: (i) the payment of all sums payable on the
Note; (ii) the Borrower's performance of every term, covenant, condition and
provision of this Mortgage and the Loan Documents and (iii) the Borrower's
payment and performance of any other indebtedness, liability or obligation of
the Borrower to the Lender now or hereafter arising under the terms hereof or
under any other instrument constituting additional security for the Loan
Documents (the obligations set forth in clauses (i), (ii) and (iii) above are
hereinafter collectively referred to as the "Obligations"), the Borrower hereby
grants a security interest in, and by these presents does also grant WITH
MORTGAGE COVENANTS as herein provided unto the Lender and its successors and
assigns forever, all of the Borrower's estate, right, title and interest in, to
and under any and all of the property described in the following granting
clause. The following-described realty and
collateral within the Leased Premises, together with any and all improvements
now thereon, or from time to time thereon, and any additions thereto or
replacements thereof, are herein collectively referred to as the "Property",
subject only to matters of record as of the date of this Mortgage and other
encumbrances and liens permitted herein (collectively, the "Permitted Liens"),
unless otherwise indicated:
GRANTING CLAUSE
The entire estate, right, title and interest of the Borrower in and to the
Property, including, without limitation:
(a) the entire right, title and interest of the Borrower in and to the
Lease including without limitation all of the rights, privileges and
prerogatives of tenant under said Lease to terminate, cancel, modify, change,
supplement, alter or amend said Lease and all extensions and renewals of the
term of the Lease, together with any and all other, further or additional title,
estates, interests or rights which may at any time be acquired by Borrower in or
to the premises demised by the Lease, and Borrower expressly agrees that if
Borrower shall, at any time prior to payment in full of all indebtedness secured
hereby, acquire fee title or any other greater estate to the premises demised by
said Lease, the lien of this Mortgage shall attach, extend to, cover and be a
lien upon such fee simple title or other greater estate;
(b) the entire right, title and interest of the Borrower in and to the
alterations and improvements described in Section H of the Rider to the Lease
(the "Tenant Improvements") and Borrower's rights to possession and use thereof;
(c) the entire right, title and interest of the Borrower in and to all the
tenements, hereditaments, easements, rights-of-way, rights, licenses, mineral
rights, privileges and appurtenances in and to the Leased Premises, including,
without limitation, the entire right, title and interest of the Borrower in, to
and under any streets, ways, alleys, vaults, gores or strips of land adjoining
the Leased Premises;
(d) the entire right, title and interest of the Borrower in and to all
compensation, judgments, damages, settlements, rights of action, proceeds of any
award or claims, whether at law, in equity or otherwise, resulting from or in
connection with (i) any damage to, loss of, trespass on, interference with,
destruction of or failure to support the Property; (ii) any taking of the
Property, any part thereof or interest therein, or damage to or loss of the
Property, any part thereof or interest therein from any governmental action not
constituting a taking or (iii) any similar claim, demand, proceeding or action
of any sort for interference with the rights of the Borrower or the Lender to
and in the Property;
(e) all right, title and interest of the Borrower in and to all fixtures,
fittings, furnishings in, or about the Leased Premises, Tenant Improvements,
including, without limitation, all gas and electric fixtures, radiators,
heaters, boilers, elevators and motors, plus all bathtubs, sinks, water closets,
basins, pipes, faucets and other air conditioning, plumbing, and heating
fixtures, together with any and all mirrors, mantles, refrigerating plant,
carpeting and appurtenances, and all building material supplies and equipment
now or hereafter delivered to
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the Leased Premises and intended to be installed as Tenant Improvements; all
other fixtures of whatever kind and nature at present contained in or hereafter
placed in, on or about the building standing on the Land, which shall be deemed
to be fixtures and an accession to the Leased Premises as part thereof, and all
persons claiming by, through or under them and shall be deemed to be a portion
of the security for the Obligations;
(f) all right, title and interest of the Borrower in and to all insurance
proceeds or payments paid, to be paid or claimed in connection with the
Property, any damage to or destruction of the Property, any theft or taking of
the Property, any other loss of or diminution of the value of the Property or
any other interference with the rights of the Borrower or the Lender therein,
this Grant to include the right to make claim for, adjust, settle claims for,
bring suit for, collect, receive and give receipt for all such insurance
proceeds and payments;
(g) all right, title and interest of the Borrower in and to all extensions,
improvements, betterments, renewals, replacements, restorations, repairs or
substitutions of the Property and all additions and appurtenances thereto,
including without limitation all parts, materials and labor used in connection
with the construction, assembling, placement, installation and making thereof;
(h) all right, title and interest of the Borrower in and to all rents,
income, revenues, issues and profits from and in respect of the Property,
including without limitation all rents and other sums payable under any leases
or tenancies in which the Borrower is lessor now existing or hereafter created
of the Property, and the present and continuing right to make claim for,
collect, settle claims for, bring suit for, receive and give receipt for the
same, it being the intention of the parties hereto that, so far as may be
permitted by law, all of the Property which is now owned or is hereafter
acquired by the Borrower shall be and remain or become and constitute a portion
of the estate hereby granted and the security covered by and subject to the lien
of this Mortgage; and
(i) all assets of Borrower, including, without limitation, the following,
and each item thereof, whether now owned or now due, or in which Borrower has an
interest, or hereafter, at any time in the future, acquired, arising, or to
become due, or in which Borrower obtains an interest, and all products,
proceeds, substitutions, and accessions of or to any of the following: (1) all
Accounts and Accounts Receivable; (2) all Inventory; (3) all Contract Rights;
(4) all General Intangibles; (5) all Equipment; (6) all Farm Products; (7) all
Goods; (8) all Chattel Paper; (9) all Fixtures; (10) all books, records, and
information relating to the Collateral and/or to the operation of Borrower's
business, and all rights of access to such books, records, and information, and
all property in which such books, records, and information are stored, recorded,
and maintained; (11) all Instruments, Documents of Title, Documents, policies
and certificates of insurance, Securities, deposits, deposit accounts, money,
cash, or other property; (12) all federal, state, and local tax refunds and/or
abatements to which Borrower is, or becomes entitled, no matter how or when
arising, including, but not limited to any loss carryback tax refunds; (13) all
insurance proceeds, refunds, and premium rebates, including, without limitation,
proceeds of fire and credit insurance, whether any of such proceeds, refunds,
and premium rebates, arise out of any of the foregoing (1 through 12), or
otherwise; (14) all liens, guaranties, rights, remedies, and
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privileges pertaining to any of the foregoing (1 through 13) including the right
of stoppage in transit. As used herein, the following terms have the following
meanings:
(A) "Accounts" and "Accounts Receivable" include, without limitation,
"accounts" as defined in the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts (the "UCC"), and all: accounts, accounts
receivable, notes, drafts, acceptances, and other forms of obligations and
receivables and rights to payment for credit extended and for goods sold or
leased, or services rendered, whether or not yet earned by performance; all
Inventory which gave rise thereto, and all rights associated with such
inventory, including the right of stoppage in transit; all reclaimed, returned,
rejected, or repossessed Inventory (if any) the sale of which gave rise to any
Account.
(B) "Inventory" includes, without limitation, "inventory" as defined
in the UCC and all: goods, wares, merchandise, raw materials, work in process,
finished goods, and all packaging, advertising, shipping material and documents
related to any of the foregoing, and all labels, and other devices, names or
marks affixed or to be affixed thereto for identifying or selling the same, and
other personal property of every description held for sale or lease or furnished
or to be furnished under a contract or contracts of sale or service by the
Borrower, or used or consumed or to be used or consumed in the Borrower's
business, and all goods of said description which are in transit, and all
returned, repossessed and rejected goods of said description, and all such goods
of said description which are detained from or rejected for entry into the
United States, and all documents (whether or not negotiable) which represent any
of the foregoing.
(C) "Contract Rights" includes, without limitation, "contract rights"
as now or formerly defined in the UCC and any right to payment under a contract
not yet earned by performance and not evidenced by an instrument or Chattel
Paper.
(D) "General Intangibles" includes, without limitation, "general
intangibles" as defined in the UCC; and all: rights to payment for credit
extended; deposits; amounts due to the Borrower; credit memoranda in favor of
the Borrower; warranty claims; all means and vehicles of investment or hedging,
including, without limitation, options, warrants, and futures contracts;
records; customer lists; goodwill; causes of action; judgments; payments under
any settlement or other agreement; literary rights; rights to performance;
royalties; license fees; franchise fees; rights of admission; licenses;
franchises; permits, certificates of convenience and necessity, and similar
rights granted by any governmental authority; copyrights; developmental ideas
and concepts; proprietary processes not subject to existing patents or pending
patent applications; blueprints; drawings; designs; diagrams, plans, reports,
charts; catalogs; manuals; technical data; computer programs, computer records,
computer software, rights of access to computer record service bureaus, service
bureau computer contracts, and computer data; proposals; costs estimates, and
other reproductions on paper, or otherwise, of any and all concepts or ideas,
and any matter related to, or connection with, the design, development,
manufacture, sale, marketing, leasing, or use of any or all property produced,
sold, or leased, by the Borrower or credit extended or services performed by the
Borrower, whether intended for an individual customer or the general business of
the Borrower, or used or useful in connection with research by the Borrower.
"General Intangibles" shall not include copyrights; trademarks, tradenames,
service
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marks, patents, patent applications, patents pending, and other intellectual
property, developmental ideas and concepts, and proprietary processes.
(E) "Equipment" includes, without limitation, "equipment" as defined
in the UCC, and all motor vehicles, rolling stock, machinery, office equipment,
plant equipment, tools, dies, molds, store fixtures, furniture, and other goods,
property, and assets which are used and/or were purchased for use in the
operation of furtherance of the Borrower's business.
(F) "Farm Products", "Goods", "Chattel Paper", "Instruments",
"Documents of Title", "Documents", "Securities", "Fixtures", and "Account
Debtors" each has the same meaning respectively given that term in the UCC.
Notwithstanding the foregoing or anything to the contrary herein:
(i) This Mortgage and the security interest granted hereby shall exclude
all equipment, including any accessions, improvements thereto and proceeds
thereof, which is the subject of third party lender financing. (It is understood
that such borrowings and liens to secure such borrowings shall be considered
Permitted Encumbrances for purposes of this Mortgage and if requested by any
such third party lender, Lender agrees to enter into a commercially reasonable
writing evidencing such exclusion as set forth herein.); and
(ii) This Mortgage and the security interest granted hereby shall exclude
Borrower's right, title and interest in or to any copyrights; trademarks,
tradenames, service marks, patents, patent applications, patents pending, and
other intellectual property, developmental ideas and concepts, and proprietary
processes and all products and proceeds thereof.
TO HAVE AND TO HOLD the above granted Leased Premises and Property, with
all the privileges and appurtenances to the same belonging, to the said Lender,
its successors and assigns, to its and their use forever, but upon and subject
to the provisions of this Mortgage.
This Mortgage is upon the STATUTORY CONDITION and upon the further
condition that all covenants and agreements of the Borrower will be observed and
performed, and upon any Event of Default the Lender shall, in addition to its
other rights and remedies hereunder, have the STATUTORY POWER OF SALE.
This Mortgage is expressly made subject and subordinate to those
encumbrances set forth on the Lender's title insurance policy delivered by
Borrower to Lender and Permitted Liens (the "Permitted Encumbrances") except as
otherwise specifically provided therein or herein.
PROVIDED, HOWEVER, that if the Borrower shall fully and finally pay or
cause to be fully and finally paid to the Lender the principal and interest and
charges, if any, to become due upon the Note at the time and as stipulated in
the Loan Documents, and shall fully and finally pay or cause to be fully and
finally paid all other sums payable hereunder and thereunder and all other
Obligations, then, in such case, the estate, right, title and interest of the
Lender in the Leased Premises and Property shall cease, determine and become
void, and upon payment of all fees, costs, charges, expenses and liabilities
chargeable or incurred or to be incurred by the
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Lender, upon the terms hereof of any other sums as herein provided, the Lender
shall deliver a release and discharge of this Mortgage to the Borrower.
THE BORROWER'S COVENANTS:
The Borrower hereby represents, warrants, covenants and agrees as follows:
1.01. Interest in the Leased Premises and other Property. (a) (1) The
Borrower has good and marketable title to the Property and the Leasehold Estate
free and clear of all liens save the Permitted Encumbrances; (2) the Leasehold
Estate is a valid and subsisting leasehold interest in the Leased Premises
subject to no liens save the Permitted Encumbrances; (3) the Borrower has a
leasehold interest in the Tenant Improvements subject to the Lease free and
clear of all liens except for Permitted Encumbrances; (4) the term of the Lease
has commenced, and the Lease is in full force and effect; (5) all rents,
additional rents, and other charges provided for in the Lease have been paid, to
the extent that they were payable prior to the date hereof; (6) there is no
existing default under the Lease in the performance of any of the covenants and
conditions in the Lease, and no event has occurred or is occurring which, with
notice or passage of time or both, will result in such a default; (7) no notice,
claim or demand from the Lessor has been received which has not been complied
with; and (8) the Lease has not been amended or modified.
(b) The Borrower has and shall maintain its interest in the Property and
the Leased Premises under the Lease for the full term of the Note, free of all
liens, other than the Permitted Encumbrances, and other than the Lease, and has
good right to subject the Property and the Leased Premises to the security
interest created hereunder.
(c) This Mortgage constitutes a valid lien on the Property and the Leased
Premises subject only to (i) the Permitted Encumbrances and (ii) the Lease.
(d) The Borrower and its successors and assigns shall warrant and defend
the interest of the Lender and its successors and assigns in the Property and
the Leasehold Estate pursuant to this Mortgage and the priority of said interest
against the claims and demands of all persons claiming by, through or under
Borrower.
1.02. Further Assurances. The Borrower shall, at the sole cost of the
Borrower, and without expense to the Lender, do, execute, acknowledge and
deliver all such further acts, deeds, conveyances, mortgages, assignments,
notices of assignments, transfers and assurances as the Lender shall from time
to time reasonably require, for the better assuring, conveying, assigning,
transferring and confirming unto the Lender the Property and rights hereby
conveyed or assigned or intended now or hereafter so to be conveyed, or which
the Borrower may be or may hereafter become bound to convey or assign to the
Lender, or for carrying out the intention of or facilitating the performance of
the terms of this Mortgage, or for filing, registering or recording this
Mortgage.
No release or forbearance of any of Borrower's obligations under said
Lease, pursuant to said Lease or otherwise, shall release Borrower from any of
his obligations under this Mortgage.
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1.03. Recording. The Borrower forthwith upon the execution and delivery of
this Mortgage and thereafter from time to time, shall cause this Mortgage, and
any security instrument creating a lien or evidencing the lien hereof upon the
Property and the Leased Premises, and each supplement and amendment to each of
such instruments, financing statements with respect thereto and each instrument
of further assurance to be filed, registered or recorded in such manner and in
such places as may be required by or useful under any present or future law in
order to publish notice of and fully to protect the lien hereof upon, and the
interest of the Lender in, the Property and the Leased Premises and as the
Lender may request.
The Borrower shall pay all filing, registration or recording fees, and all
expenses incident to the preparation, execution and acknowledgment of this
Mortgage, any mortgage supplemental hereto, any security instrument with respect
to the Property and the Leased Premises, and any instrument of further
assurance, and all federal, state, county and municipal stamp taxes and other
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of the Loan Documents, this Mortgage, any
mortgage supplement hereto, any security instrument with respect to the Property
and the Leased Premises or any instrument of further assurance, but excluding
the Lender's income taxes.
1.04. Performance of the Lease. The Borrower covenants that the Borrower:
(a) will punctually pay when due all base rent, additional rent, and other
payments and charges required to be paid by the Borrower, as Tenant, under,
pursuant to and in compliance with the Lease within applicable grace periods;
(b) will diligently perform and observe all of the terms, covenants and
conditions of the Lease required to be performed and observed by the Borrower as
the Tenant thereunder unless such performance or observance shall have been
waived by the Lessor in writing, with a copy of such waiver supplied to the
Lender, to the end that all things shall be done which are necessary to keep
unimpaired the Borrower's rights as Tenant under the Lease;
(c) unless cured within three (3) days of notice thereof, immediately upon
the fourth day of the giving of notice thereof to the Lessor notify the Lender
in writing of any default by the Lessor in the performance or observance of any
terms, covenants or conditions of the Lease on the part of the Lessor to be
performed or observed;
(d) unless cured within three (3) days of notice thereof, immediately upon
the fourth day of the receipt thereof advise the Lender in writing of the giving
of any notice by the Lessor to the Borrower of any default by the Borrower, as
the Tenant, in the performance or observance of any of the terms, covenants or
conditions of the Lease;
(e) will immediately upon the execution and delivery of this Mortgage or of
any instrument or agreement supplemental hereto, notify the Lessor in writing of
the execution and delivery hereof or thereof and deliver to the Lessor a copy of
each such instrument or agreement as required under the Lease;
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(f) will immediately notify the Lender in writing in the event of the
initiation of any legal proceeding, including any arbitration or mediation, in
respect to the Lease, it being expressly agreed that if, at the time any such
legal proceeding, arbitration or mediation shall be initiated, the Borrower
shall be in default in the performance or observance of any of the terms,
covenants, conditions, provisions or other requirements hereof continuing beyond
applicable grace periods, the Lender shall have, and is hereby granted, the sole
and exclusive right to designate and appoint counsel, arbitrator or mediator
that would otherwise be appointed by the Borrower in such proceeding;
(g) will warrant and defend the Leasehold Estate against any person
claiming rights therein by, through or under the Borrower; and the Borrower will
do all things necessary to preserve and keep unimpaired the Borrower's right,
title and interest in the Lease;
(h) will not commit or allow to exist any act or condition that constitutes
a Lessee default under the Lease as provided in Section 20 thereof;
(i) will not, without the Lender's prior written consent cancel, terminate
or surrender the Lease; amend or modify the Lease; transfer the Lease; or allow,
or consent to, any of the foregoing; and
(j) if Borrower shall fail to perform and observe all of the material
covenants and conditions of the Lease as aforesaid, Lender may (but shall not be
obligated to) take any action Lender deems necessary or desirable to cure any
default by Borrower in the performance of or compliance with any of Borrower's
covenants or obligations under the Lease. Upon receipt by Lender from the Lessor
of any written notice of default by the Tenant thereunder, Lender may rely
thereon and take any action as aforesaid to cure such default even though the
existence of such default or the nature thereof be questioned or denied by
Borrower or by any party on behalf of Borrower. Borrower hereby expressly grants
to Lender, and agrees that Lender shall have, the absolute and immediate right
to enter in and upon the Leased Premises or any part thereof to such extent and
as often as Lender, in its sole discretion, deems necessary or desirable in
order to cure any such default by Borrower. Lender may pay and expend such sums
of money as Lender in its reasonable discretion deems necessary for any such
purpose, and Borrower hereby agrees to pay to Lender, immediately upon demand,
all such sums so paid and expended by Lender, together with interest thereon
from the date of each such payment at the Default Rate of the Note. All sums so
paid and expended by Lender, and the interest thereon, shall be added to and be
secured by the lien of this Mortgage.
1.05. The Property and the Leased Premises shall not be further encumbered
by the Borrower and the Borrower shall not create or suffer to be created,
directly or indirectly, any lien against the Property or the Leased Premises,
whether such lien is subordinated to that of Lender hereunder or not, unless (i)
such lien is a Permitted Encumbrance (in which case the Borrower shall provide
the Lender with prompt written notice of any Permitted Encumbrance in excess of
Fifty Thousand Dollars ($50,000), providing Lender with the name of the lender
and the nature and extent of the Permitted Encumbrance) or the Lease; (ii) such
encumbrance is a utility easement arising in the ordinary course of business of
the Borrower and ownership of the Property and does not, either individually or
in the aggregate with any other lien or encumbrance
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materially impair the value or use of the Property or the lien of the Mortgage;
or (iii) the Borrower secures the prior written approval of the Lender, which
approval may be withheld by the Lender in its sole, absolute discretion.
1.06. After-Acquired Property. The Borrower covenants and agrees that, as
of the execution hereof and upon the subsequent acquisition of any Property,
including Tenant Improvements, the Borrower shall, at the election of Lender:
(a) provide the holder with a precise inventory of the same, as and when
acquired;
(b) provide to the holder such other assurances as may be required by the
holder to establish the holder's security interest in such Property
subject only to the Permitted Encumbrances; and
(c) execute, deliver and cause to be recorded and filed from time to time,
without notice or demand, and at the Borrower's sole cost and expense,
continuances and such other instruments as will maintain the holder's
security in such Property; and Borrower hereby authorizes Lender to
file financing and continuation statements with respect to the
Property without the signature of the Borrower whenever lawful.
Borrower agrees that, without the prior written consent of Lender, Borrower
will not remove or permit to be removed from the Leased Premises, any of the
Property except in the ordinary course of business or ownership of the Property.
All replacements of and renewals to the Property shall become and be immediately
subject to the security interest of this Mortgage and be covered thereby.
Borrower warrants and represents that all Property now is, and that all
replacements thereof, substitutions therefor or additions thereto will be, free
and clear of liens, encumbrances or security interests of others, except for (i)
security interests junior in priority to the interest created by this Mortgage
and to which the Lender, at its option and in its sole and absolute discretion,
shall consent, and (ii) Permitted Encumbrances.
The Borrower warrants and represents that the Borrower is a corporation,
duly established under the laws of the State of Delaware and qualified to
conduct business in the Commonwealth of Massachusetts, and that the execution of
this Mortgage and any other instruments executed in connection herewith
constitute representations by the Borrower, that such execution has received all
such authorization as may be necessary to permit such execution, and that this
Mortgage and said instruments are binding and in force against the Borrower.
1.07. The Borrower also covenants:
(1) to pay before the same become delinquent (and to provide, by such
time, evidence of such payment, satisfactory to the holder) all
real estate taxes on the Property and/or Leased Premises as
required by the Lease; and to pay before the same become
delinquent (and to provide, by such time, evidence of such
payment, satisfactory to the holder) all other taxes, charges,
sewer use fees, water rates and assessments of every name and
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nature, whether or not assessed against the Borrower, if
applicable or related to the Property, or any interest therein,
or the debt, obligation or any agreement secured hereby, or the
disbursement or the application or the proceeds thereof in the
case of each of the foregoing, unless they are being contested in
good faith as provided in the next sentence. The Borrower shall
have the right to contest the validity, applicability or amount
of any asserted tax provided that, in the Lender's sole
discretion exercised in good faith, such contest will not impair
the validity or priority of the lien of this Mortgage and
provided that the full amount of such tax is either paid to the
taxing authority under protest or escrowed with the Lender;
(2) that if at any time any law or court decree prohibits the
performance of any material obligation undertaken hereby by the
Borrower which would materially impair the Property or the
Lender's right to payment under the Note, or, at any time
provides that any amount to be paid hereunder by the Borrower,
other than a payment on account of the principal or of interest
on the indebtedness secured hereby, must be credited against the
Borrower's obligations under the Note, the holder shall have the
right on thirty (30) days' prior notice to the Borrower, to
require payment in full of the entire indebtedness secured hereby
unless Borrower reverses such prohibition or otherwise satisfies
the Lender within said thirty (30) day period;
(3) [reserved];
(4) to notify the holder promptly of any accidental damage to the
Property in excess of Fifty Thousand Dollars ($50,000) (the
"Damage Threshold"), provided, however that such Damage Threshold
shall be increased to Two Hundred Fifty Thousand Dollars
($250,000) once Borrower has completed Phase I of the Tenant
Improvements and commences the build-out for Phase II of the
Tenant Improvements; to keep the Property in good order, repair
and condition, damage from casualty or condemnation expressly
excepted, and not to permit or commit waste on the Property nor
remove or alter anything which constitutes a part of the
Property, except in the ordinary course of business, without the
consent of the holder, except as otherwise provided herein; and
all construction on the Property shall comply with, and each and
every part of the Property shall be maintained in accordance
with, any lawful requirements or provisions, public or private,
relating to the same or the use thereof;
(5) to carry with respect to the Property and its use such insurance
as the holder may from time to time reasonably require and as may
from time to time be required by any applicable Federal, State or
local law or regulation including, without limitation, general
liability insurance with limits of liability reasonably
satisfactory to Lender and fire and extended coverage
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insurance against loss or damage to the Property by fire and any
of the risks covered by insurance of the type now known as
"special coverage", "differences in condition", "all risk", and
"change in building code requirements" including without
limitation earthquake, cost of demolition, vandalism, malicious
mischief, lightning, windstorm, hail, explosion, riot, civil
commotion, damage from aircraft and vehicles, smoke damage, and
sprinkler damage for not less than full replacement cost of the
Property from time to time during the period of time this
Mortgage remains outstanding; and all insurance or certificates
thereof (with evidence of payments of premiums thereon reasonably
satisfactory to the holder) required by the holder to be
maintained, together with any other insurance with respect to the
Property maintained by the Borrower, shall be deposited with,
and, the Lender shall be added and named as an insured first
mortgagee and loss payee, and shall be first payable in case of
loss to the holder; all renewals or replacements of such
insurance from time to time in force, together with evidence of
payment of premiums thereon reasonably satisfactory to the
holder, shall be delivered to the holder ten (10) days at least
before the expiration date of the then current insurance; all
insurance required by the holder to be maintained with respect to
the Property shall be written by such companies on such terms, in
such form and for such periods and amounts as the holder shall
from time to time reasonably approve (provided, that Borrower
agrees to increase the limits of such insurance to such higher
amounts as the holder may from time to time reasonably require)
and shall contain a provision requiring at least thirty (30)
days' advance written notice to the Lender before any such policy
may be cancelled or modified; and no settlement on account of any
loss to Property in excess of $100,000 covered by such insurance
shall be effected without the consent of the holder;
(6) that all proceeds of casualty insurance policies maintained by
Borrower in excess of $100,000 shall be paid to the Lender and,
at the Lender's option, shall be released to the Borrower to pay
for the costs of repair and restoration of the Property; and to
the extent the Lender retains any funds not required for repair
and restoration, those funds shall be, at the Lender's option,
applied toward the indebtedness secured hereby; provided,
however, that all proceeds of casualty insurance policies which
are less than $100,000 and are paid directly to Borrower shall be
used by Borrower to pay for the costs of repair, restoration or
replacement of the Property; in the event that the Lease is
terminated by either the Lessor or the Borrower as a result of
any damage to the Leased Premises from casualty, any and all
proceeds of casualty insurance policies maintained by Borrower
shall be paid to the holder and applied towards the indebtedness
secured hereby;
(7) that the awards of damages on account of any condemnation for
public use of or injury to the Property shall be paid to the
holder; and promptly upon
11
obtaining knowledge of the institution of any proceedings on
account of any condemnation for public use of or injury to the
Property, or any portion thereof, the Borrower will notify the
holder of the pendency of such proceedings, and no settlement
respecting such awards shall be effected without the consent of
the holder;
(8) not to lease the Property or any part thereof without obtaining
the prior written consent of the Lender; otherwise faithfully to
keep, observe and satisfy all obligations of the Borrower under
all leases or other tenancy arrangements, licenses or permits
from time to time affecting the Property or any part thereof, not
to accept any prepaid rentals for more than the amount required
of under such leases or other tenancy arrangements affecting the
Property; and, at any time on notice from the holder, to execute
and deliver to the holder such collateral assignments of leases
and other tenancy arrangements of portions of the Property and
rents payable thereunder, and not to cancel, accept a surrender
of, reduce the rentals under, anticipate any rentals under, or
modify any such leases or tenancy arrangements, or consent to any
assignment or subletting thereof, in whole or in part; and
nothing herein shall obligate the holder to perform the
obligations of lessor under any of such leases or other tenancy
arrangements which obligations the Borrower shall keep, observe
and perform;
(9) that if this Mortgage, by its terms, is now, or at any time,
subject or subordinate to a prior mortgage (other than a
Permitted Encumbrance), the Borrower shall not, without the
consent of the holder, agree to the modification, amendment or
extension of the terms or conditions of such prior mortgage,
which would diminish the value of the Property secured by this
Mortgage; and to pay promptly when due, under any such prior
mortgage and the note or obligations secured thereby, all
installments on account of interest, principal or other charges,
and to keep, perform, observe and comply with, or cause to be
kept, performed, observed and complied with, all covenants and
agreements and each and every obligation of the Borrower under
the prior mortgage to the end that no default, and no event,
happening or condition, which with the giving of notice or lapse
of time or both would constitute a default, shall occur
thereunder;
(10) to pay when due all reasonable out-of-pocket fees and charges
incurred by the Lender incident to the loan transaction evidenced
by the Loan Documents, as well as any and all commitment fees due
thereunder;
(11) that, from time to time, on the request of the holder, the
Borrower shall furnish a written statement, signed and if
requested, acknowledged, setting forth the amount of the
indebtedness which the Borrower acknowledges to be due on the
Note and under this Mortgage, specifying any claims of
12
off-set or defense which the Borrower asserts against the
indebtedness secured hereby or any obligations to be paid or
performed hereunder, and the then state of facts relative to the
condition of the Property; and to deliver to the holder promptly
copies of all junior mortgages, security agreements, assignments
of leases and rents and similar instruments which the Borrower
may create with respect to the Property, together with copies of
any notices from any holder of such an instrument claiming that
the Borrower is in default in the performance or observance of
any of the terms thereof;
(12) that whether or not for additional interest or other
consideration paid or payable to the holder, no forbearance on
the part of the holder or extension of the time for payment of
the whole or any part of the obligations secured hereby, whether
oral or in writing, or any other indulgence given by the holder
to the Borrower or to any other party claiming any interest in or
to the Property, shall operate except as provided by the
forbearance or indulgence to release or in any manner affect the
original liability of the Borrower, or impair any right of the
holder, including, without limitation, the right to realize, upon
the security or any part thereof, for the obligations secured
hereby or any of them, notice of any such extension, forbearance
or indulgence being waived by the Borrower and all those claiming
by, through or under the Borrower; and no consent or waiver,
express or implied, by the holder to or of any default by the
Borrower shall be construed as a consent or waiver to or of any
further default in the same or any other term, condition,
covenant or provision of this Mortgage or of the obligations
secured hereby; in case redemption is had by the Borrower after
foreclosure proceedings have begun, the holder shall be entitled
to collect all reasonable costs, charges and expenses incurred up
to the time of redemption; and in case any one or more of the
provisions of this Mortgage may be found to be invalid or
unenforceable for any reason or in any respect, such invalidity
shall not limit or impair enforcement of any other provision
hereof;
(13) that wherever notice, demand or a request may properly be given
to the Borrower under this Mortgage, the same shall always be
sufficient to serve as a notice, demand or request hereunder if
in writing and delivered by hand delivery or by Federal Express
or similar delivery service which shall provide a receipt of
deliveries made, or posted in the United States Mail by
Registered or Certified Mail, in each case with delivery charges
or postage prepaid addressed to the Borrower at the address given
in this Mortgage as the Borrower's address or the business
address of the Borrower last known to the holder hereof; and any
such notice, demand or request shall be treated as having been
given upon such deposit with such delivery service or in the
United States Mails, as the case may be; and a notice so
addressed shall always be a sufficient notice, notwithstanding a
change in the ownership of the equity of redemption of the
Property,
13
whether or not consented to by the holder; and where more than
one person constitutes the Borrower, one notice sent to the
address given in this Mortgage as the Borrower's address or the
last known business address of any one of them shall constitute
sufficient notice to all;
(14) that the following are conditions of this Mortgage:
(a) the foregoing covenants shall not be breached;
(b) except for real estate taxes and assessments before any
delinquency therein (delinquency with reference to such
taxes and assessments being herein defined, for the purpose
of this Mortgage, as meaning the time when, on the
nonpayment thereof, interest or penalties commence to
accrue) not to create, permit or suffer to be created or
permitted to remain (and shall discharge or promptly cause
to be discharged or bonded over) any mechanics' or laborers'
lien of record, or any attachment, on the Property or any
part thereof or interest therein (except Permitted
Encumbrances), without the consent of the holder which may
be withheld in the Lender's sole and absolute discretion,
even if such encumbrance is inferior to this Mortgage;
without limitation, and except where the holder receives
independent security satisfactory to the holder during the
pendency of legal proceedings contesting the imposition of a
Governmental lien, the filing of a notice of Federal or
State tax lien with the holder or the office at which, by
law, such notice is to be filed to be effective against the
Property, whether or not such lien applies, in terms, to the
Property, shall be a breach of this condition if,
notwithstanding the Borrower's good faith attempt to contest
such Federal and State tax lien, the holder has a good faith
belief that a forbearance of the exercise of any of its
rights and remedies hereunder or under any Loan Documents
may materially and adversely effect its security;
(c) the Borrower shall not grant any junior or inferior
mortgage, security agreement, assignment of leases and rents
or similar instrument with respect to any Property (except
Permitted Encumbrances) without obtaining the Lender's prior
written consent which may be withheld in the Lender's sole
and absolute discretion, and in the event of such consent,
each such instrument shall contain a provision under which
the holder of such subordinate and inferior liens agrees to
notify the holder hereof in writing of any default on the
part of the Borrower under such instruments prior to the
commencement of any action based on such default; and the
Borrower will not permit any encumbrance or lien (except
Permitted Encumbrances) to be created which may be or become
superior to any lease of the Property;
14
(d) except as otherwise provided herein or transactions in the
ordinary course of business (or the disposition of obsolete
or worn-out assets), the Borrower shall not voluntarily
transfer, nor suffer or permit the transfer of, whether by
operation of law or otherwise, the legal or equitable
interest in the equity of redemption in the Property, or any
part thereof, and it shall not dissolve or permit its
dissolution;
(e) [intentionally deleted];
(f) [intentionally deleted];
(g) that prior to the date hereof it has never: disposed of,
transported, or arranged for the transport of any hazardous
material or oil without compliance with all applicable
statutes, regulations, ordinances, directives, and orders;
been legally responsible for any release or threat of
release of any hazardous material or oil that is reportable
under the Massachusetts Contingency Plan; received
notification of any potential or known release or threat of
release of any hazardous material or oil from any site or
vessel occupied or operated by the Borrower and/or of the
incurrence of any expense or loss in connection with the
assessment, containment, or removal of any release or threat
of release of any hazardous material or oil from any such
site or vessel;
(h) the Borrower shall not dispose of any hazardous material or
oil on the Land in violation of law; not store or transport
or arrange for the transport of any hazardous material or
oil on the property except if such storage or transport is
in the ordinary course of the Borrower's business and is in
compliance with all such statutes, regulations, ordinances,
directives and orders; if the Borrower obtains knowledge or
notice of any potential or known release or threat of
release of any hazardous material or oil, that is reportable
under the Massachusetts Contingency Plan, at or from any
site or vessel occupied or operated by the Borrower, and/or
upon the Borrower's obtaining knowledge of any incurrence of
any expense or loss by any governmental authority in
connection with the assessment, containment, or removal of
any hazardous material or oil for which expense or loss the
Borrower may be liable, then in either of such events,
Borrower shall take to the extent commercially reasonable
all such action, including without limitation the conducting
of engineering tests, to confirm whether or not a potential
or known release or threat of release of any hazardous
material or oil exists and to undertake all necessary
15
remediation required under Mass. Gen. Laws Ch. 21E and the
Massachusetts Contingency Plan; and
(i) that no default shall occur by the Borrower as Tenant under
the Lease, which shall remain, uncured beyond any applicable
grace period therein contained;
(15) that if there shall be any breach of the conditions of Paragraphs
14(d), (g), (h) or (i) of this Section 1.07 or the covenant in
Paragraph (5) of this Section 1.07, in each case, which continues
beyond the applicable grace or cure period (or, if no such grace
or cure period is specified, then beyond thirty (30) days
following the occurrence of any such breach), provided, however,
that if such breach cannot be cured within the applicable grace
or cure period, provided Borrower commences cure within thirty
(30) days of such breach and continuously and diligently pursues
such cure thereafter, such applicable grace or cure period shall
be extended an additional sixty (60) days, or if any payment
required under the Note or under this Mortgage shall not be made
within five (5) days after written notice of the due date thereof
(provided, however, that Lender shall not be required to provide
such written notice more than twice in any twelve (12) month
period), or if, in any respect other than the filing of a
Governmental lien, there shall be any breach of the condition of
Paragraph 14(c) of this Section 1.07 or if there shall be any
breach of the other conditions or covenants of this Mortgage
continuing for more than thirty (30) days after the giving of
notice by the holder (except that where, for any of the
foregoing, a period of grace is specifically otherwise provided
or negated, such specific periods of time or negation shall
govern in each case), or if there occurs any default, which
remains uncured, under any prior or subordinate mortgage covering
the Property, or under any note or other obligation secured
thereby, in any event in an amount, individually or in the
aggregate, of at least Two Hundred Fifty Thousand Dollars
($250,000.00), which default may result in the acceleration of
the indebtedness secured thereby, or if there shall occur the
commencement of foreclosure or other enforcement proceedings
under any prior or subordinate mortgage covering the Property, or
under any note or other obligation secured thereby, in any event
in an amount, individually or in the aggregate, of at least Two
Hundred Fifty Thousand Dollars ($250,000.00), or if the Lessor
has given the Lender notice of Borrower's default under the Lease
and the Borrower is not proceeding diligently to cure such
default, or if the Borrower shall file a petition or any
application for relief, extension, moratorium or reorganization
under any bankruptcy, insolvency or debtor's relief law, or make
an assignment for the benefit of creditors or enter into any
trust mortgage arrangements, so-called, or consent to the
appointment of a receiver of any of the Property of the Borrower,
or if the Borrower shall permit any petition under any
bankruptcy, insolvency or debtor's relief law to be filed against
it, or
16
permit the appointment of a receiver of any of the Property of
the Borrower, then the holder hereof, in addition to, and not in
limitation of, any and all other rights or remedies available to
it by law or by any other provision of any of the instruments
given to secure the Note, shall have the right, during the
continuance of the default beyond any applicable grace period,
and without notice:
(a) to enter upon and take possession of the Property, or any
part thereof; and to perform any acts the holder shall deem
necessary or proper to conserve the Property (including,
without limitation, the making of repairs, replacements and
alterations), to cure any default of the Borrower under the
Lease, and to manage and operate the Property, to collect
and receive all rents, revenues, income, issues and profits
from the Property, past-due and thereafter accruing, and to
exercise all other rights of the Borrower with respect to
the Property;
(b) to have a receiver appointed to enter and take possession of
the Property, or any part thereof, and to perform any acts
said receiver shall deem necessary or proper to conserve the
Property (including, without limitation, the making of
repairs, replacements and alterations), to maintain the
Lease in good standing without uncured defaults, to manage
and operate the Property, to collect and receive all rents,
revenues, income, issues and profits from the Property,
past-due and thereafter accruing, and to exercise all other
rights of the Borrower with respect to the Property;
(c) to declare the entire indebtedness of the Borrower under the
Note and this Mortgage forthwith due and payable;
(d) to sell the Property at public auction on such terms and
conditions as the holder shall determine, having first given
such notice, prior to the sale, of the time and place of
sale and terms and conditions of sale by publication in one
(1) or more newspapers having a general circulation in the
municipality in which the Property, or part thereof, is
located, all subject, however, to the requirements of this
Mortgage and applicable law; or to foreclose this Mortgage
in any other manner permitted by law; and
(e) to obtain judgment and execution for the indebtedness
secured by this Mortgage, to the extent not otherwise
satisfied;
(16) that if there shall be any breach in any condition or covenant of
this Mortgage beyond any applicable grace period, the holder
shall have the right, but without any obligation so to do, to
cure such default for the account of the Borrower, and, to the
fullest extent permissible according to
17
law, apply any funds credited by or due from the holder to the
Borrower against the same (without any obligation first to
enforce any other rights of the holder, including, without
limitation, any rights under the Note or this Mortgage, or any
guarantee thereof, and without prejudice to any such rights);
without limiting the generality of the foregoing, the Borrower
hereby authorizes the holder to pay all taxes, sewer use fees,
water rates and assessments, with interest, costs and charges
accrued thereon, which may at any time be a lien upon the
Property, or any part thereof, not paid when due; to pay the
premiums for any insurance required hereunder not paid when due;
to incur and pay reasonable expenses in protecting its rights
hereunder and the security hereby granted, including, again
without limitation, all payments on account of principal,
interest and such other charges as may become due to cure default
under any prior mortgage or under any subordinate mortgage,
including the notes or obligations secured thereby, affecting the
Property; to pay any balance due under any security agreement on
any articles, fixtures and equipment owed by the Borrower
included as a part of the Property; to pay any monies necessary
to maintain the Lease in good standing in accordance with the
terms thereof, not paid when due; and the payment of all amounts
so incurred shall be secured hereby as fully and effectually as
any other obligation of the Borrower secured hereby; and, to the
fullest extent permissible according to law, to apply to any of
these purposes or to the repayment of any amounts so paid by the
holder of any sums paid on the Note or this Mortgage by the
Borrower as interest or otherwise;
(17) that, at any foreclosure sale, any combination or all of the
Property or security given to secure the indebtedness secured
hereby, may be offered for sale for one total price, and the
proceeds of such sale accounted for in one account without
distinction between the items of security or without assigning to
them any proportion of such proceeds, the Borrower hereby waiving
the application of any doctrine of marshalling; and, in case the
holder, in the exercise of the power of sale herein given, elects
to sell in parts or parcels, said sales may be held from time to
time, and the power shall not be fully executed until all of the
Property not previously sold shall have been sold;
(18) that, if the holder shall exercise the right described in either
subdivision (a) or (b) of Paragraph 15 of this Section 1.07, the
expenses (including, without limitation, reasonable receiver's
fees and reasonable attorney's fees) incurred pursuant to the
powers herein contained likewise shall be secured hereby, and
holder shall apply such rents, income, issues and profits as
shall be received by it first to the payment of all costs and
expenses incurred and thereafter to the indebtedness secured
hereby in such order of priority as the holder, in its sole
discretion, shall determine; and the exercise of such rights and
disposition of such funds shall not
18
constitute a waiver of any foreclosure, once commenced, nor
preclude the later commencement or foreclosure for breach hereof;
(19) that, if the holder shall exercise the right described in
subdivision (d) of Paragraph 15 of this Section 1.07, the holder
may adjourn, from time to time, any sale by announcement of such
adjournment at the time and place appointed for such sale or such
adjourned sale; and, except as otherwise provided by law, the
holder may, without further notice or publication, make such sale
at the time and place to which the same shall be so adjourned.
Upon completion of any sale, the holder shall execute and deliver
an instrument conveying, assigning and transferring all right,
title and interest in the Property, and rights sold, in the name
of holder, or in the name of Borrower, and the same shall operate
to divest all right, title and interest of the Borrower in any
property or right so sold and shall be a perpetual bar, both at
law and in equity, against Borrower and all persons claiming
under Borrower unless the Lender acts with willful neglect, gross
negligence or in bad faith;
(20) that the rights and remedies of the holder for any default under
any of the instruments given as security for the indebtedness
secured hereby are not mutually exclusive, and may be exercised
successively or concurrently and from time to time for as long as
any default exists, and the failure of the holder to exercise any
such rights in any one or more instances, or the acceptance by
the holder of partial payments of amounts in default secured
hereby, shall not constitute a waiver of such default, but such
right shall remain continuously in force; and acceleration of
maturity, once claimed hereby by the holder, may, at the holder's
option, be rescinded by written acknowledgment to that effect
without waiving the default or any rights, including the right to
accelerate once again, with respect thereto; moreover, the tender
and acceptance of partial payment of amounts in default after
acceleration, or the commencement of any foreclosure action,
shall not in any way affect, rescind or terminate such
acceleration of maturity or such foreclosure action;
(21) that, from time to time, on the request of the holder, the
Borrower shall furnish to the holder a written statement, signed
and, if requested, acknowledged, setting forth, as of the end of
the month next preceding receipt by the Borrower of such request
from the holder, the names of the lessees of the Property, if
any, the term of their respective leases, the amount of such
space occupied by each lessee and the rent and other charges paid
by each lessee, such written statement to be furnished not later
than thirty (30) days following such request from the holder;
(22) that the Borrower, at Borrower's expense, shall furnish or cause
to be furnished to Lender (a) within one hundred twenty (120)
days of the end of Borrower's and Guarantor's fiscal year, a copy
of the audited
19
consolidated annual financial statements of the Guarantor and its
subsidiaries (including the Borrower) prepared by an independent
certified public accountant in accordance with GAAP, as and when
prepared, for such fiscal year, certified as complete and true by
the President or Chief Financial Officer of Borrower and the
President or Chief Financial Officer of the Guarantor, (b) within
ten (10) days of filing with the Internal revenue Service, a copy
of the consolidated Federal Income Tax Returns of the Guarantor
and its subsidiaries (including the Borrower), as and when filed,
for each fiscal year, certified as complete and true by the
President or Chief Financial Officer of Borrower and the
President or Chief Financial Officer of the Guarantor, (c) within
forty-five (45) days of the end of each fiscal quarter of
Borrower and Guarantor, a copy of the consolidated
company-prepared financial statements of the Guarantor and its
subsidiaries (including the Borrower) consisting of a balance
sheet and profit and loss statement, certified as complete and
true by the President or Chief Financial Officer of Borrower and
the President or Chief Financial Officer of the Guarantor and (d)
any additional financial reporting documentation reasonably
requested by the holder; to the extent that any of the foregoing
financial documents or reports are publicly available through the
United States Securities and Exchange Commission website,
Borrower need not provide such financial statements to Lender;
the holder shall have the right to inspect at its sole cost the
books and records of Borrower for the purpose of verifying the
accuracy of such reports (or, for the purpose of conducting its
own audit at Borrower's cost of the records and books of account
of Borrower if Borrower fails to furnish or cause to be furnished
and delivered the aforesaid financial documents and reports);
(23) that the Borrower shall cause the Guarantor and its subsidiaries
to maintain consolidated cash and/or cash equivalents, including
but not limited to marketable securities, demand or time
deposits, money market accounts, or other cash investments, of at
least Two Million Five Hundred Thousand Dollars ($2,500,000) (the
"Required Cash Amount") during any period where there is
outstanding any indebtedness of Borrower to Lender under the
Note; provided, however, that at least fifty percent (50%) of the
Required Cash Amount shall be maintained only by the assets of
the Borrower; in the event of a default of this Section 1.07(23),
the Borrower shall have thirty (30) days after notice from Lender
to cure any breach of this covenant;
(24) that the Lender may enter the Leased Premises at any reasonable
time with advance notice to Borrower to inspect the Property and
to determine whether the Borrower is in compliance with its
obligations under this Mortgage;
(25) that in the event the leasehold interest of the Borrower in the
Leased Premises or any part thereof becomes vested in any other
person than the
20
Borrower, with or without consent, the holder may, without notice
to the Borrower, deal with such successor or successors in
interest with reference to this Mortgage and the indebtedness and
other obligations secured hereby in the same manner as with the
Borrower, without in any way affecting or discharging the
Borrower's liability hereunder or the indebtedness or other
obligations hereby secured; and no forbearance on the part of the
holder and no extension of the time for the payment, the
performance of any of the obligations of the Borrower as set
forth herein or other indulgences shall operate to release,
discharge, modify, change or affect the liability of the Borrower
herein, either in whole or in part;
(26) that in the event of foreclosure of this Mortgage, or other
transfer of title to the Property covered hereby in
extinguishment of the indebtedness secured hereby, all right,
title and interest of the Borrower, in and to any insurance
policies then in force, shall pass to the purchaser. In the event
that prior to the extinguishment of the indebtedness, any claim
under any hazard insurance policies has not been paid and
distributed in accordance with the terms of this Mortgage, and
any such claim shall be paid subsequent to the extinguishment of
the indebtedness secured hereby, and the foreclosure of this
Mortgage, or other transfer of title to the Property covered
hereby shall have resulted in extinguishing the indebtedness
secured hereby for an amount less than the total of the unpaid
principal balance of the Note, together with accrued interest,
plus costs and other charges at the time of the extinguishment of
the indebtedness secured hereby, then, and in such event that
portion of the payment in satisfaction of the claim which is
equal to the difference between the total indebtedness secured
hereby and the amount in extinguishment of the indebtedness
secured hereby, shall be paid to the holder, and the Borrower
hereby assigns, transfers and sets over to the holder all of the
Borrower's right, title and interest in and to said sum. The
balance, if any, shall belong to the Borrower;
(27) that the principal amount of the Note does not constitute more
than twenty-five percent (25%) of the overall project costs
scheduled to be expended for Borrower's commencement of
operations in the Leased Premises, including the installation of
Tenant Improvements and other build-out expenses and the
acquisition of equipment for use at the Leased Premises;
The word "Borrower" as used herein shall mean the Borrower named herein at
the beginning of this instrument as the Borrower, whether one or more persons or
entities, and any subsequent owner or owners of the equity of redemption of the
Property. Where more than one (1) party constitutes the Borrower, or where, with
reference to bankruptcy, insolvency or similar debtor relief proceedings, or
decease, this Mortgage shall refer to parties or persons in addition to the
Borrower, then, in any such case, provisions in this Mortgage with reference to
bankruptcy or decease (in the case of individuals) shall refer to each of the
parties or persons to which the
21
provisions of this Mortgage are applicable, so that if, for example, but without
limitation, any party who is a Borrower or a guarantor of the Note, shall file a
petition in bankruptcy, such filing shall be treated as a breach of condition of
this Mortgage.
The word "holder" as used herein shall mean the Lender named at the
beginning of this instrument, and any subsequent holder or holders of this
Mortgage.
All the covenants and agreements of the Borrower herein contained shall
constitute covenants running with the land and shall be binding upon the
Borrower and the heirs, executors, administrators, successors and assigns of the
Borrower; and, where more than one party constitutes the Borrower, the liability
of such persons under this Mortgage for the obligations set forth herein shall
be joint and several.
The Borrower acknowledges that all representations and warranties made to
the Lender by or on behalf of the Borrower are material and have been relied
upon by the Lender in granting the loan secured by this Mortgage.
This Mortgage is upon the STATUTORY CONDITION and upon the further
condition that all covenants and agreements on the part of the Borrower herein
undertaken shall be kept and fully and seasonably performed and that no breach
of any other of the conditions specified herein shall be permitted, for any
breach of which conditions, or for any breach of any of the conditions contained
in any prior mortgage or subordinate mortgage, or under the note or obligations
secured thereby, the holder shall have the STATUTORY POWER OF SALE.
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EXECUTED as a Massachusetts sealed instrument as of the day and year first
above written.
BIOVEX, INC.
By: /s/ Xxxxxx Xxxxxx-Xxxxxx
------------------------------------
Xxxxxx Xxxxxx-Xxxxxx,
President
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss. June 29, 2006
Then personally appeared the above-named Xxxxxx Xxxxxx-Xxxxxx, President of
BioVex, Inc. who proved to me through satisfactory evidence of identification,
which was Mass. Driver's License, to be the person whose name is signed on the
preceding document, and acknowledged that s/he signed it voluntarily for its
stated purposes.
/s/ Xxxx X. Xxxxx
----------------------------------------
Notary Public
My Commission expires:
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Exhibit A
LEGAL DESCRIPTION
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EXECUTION COPY
RIDER TO LEASEHOLD MORTGAGE AND SECURITY AGREEMENT
This LEASEHOLD MORTGAGE RIDER is made this 29th day of June, 2006, and is
incorporated into and shall be deemed to supplement the Leasehold Mortgage and
Security Agreement of even date herewith from the Borrower to the Lender to be
recorded with the Middlesex County Registry of Deeds (the "Mortgage"). This
Rider supplements and supersedes any provisions to the contrary contained in the
body of the Mortgage and any defined terms used herein and not defined shall
have the same meaning as given to them in the Mortgage. The Mortgage secures,
inter alia, Borrower's Promissory Note of even date in the original principal
amount of up to Two Million Five Hundred Thousand Dollars ($2,500,000.00) (the
"Note") to the Lender and covering the Leased Premises more particularly
described therein.
The Borrower hereby covenants and agrees to the following conditions of the
Mortgage:
(i) The Borrower proposes and agrees to diligently complete Phase I and
Phase II of the construction and build-out work with respect to
certain Tenant Improvements located on the Leased Premises (the
"Work") in accordance with (i) the construction budget delivered to
and approved in advance by the Lender, (ii) Plans and Specifications
reflecting the Work for both Phase I and Phase II of the project, as
certified by the architect for the Work, (the "Plans") to be delivered
to and approved in advance by the Lender and (iii) such building
permits and all other governmental permits, licenses or approvals
necessary or required for the Work. The Borrower shall be authorized
to make any alterations to the Plans provided, however, that Borrower
shall provide Lender with copies of all change order logs within ten
(10) days of approval by Borrower. The Borrower agrees that the
materials to be used in the Work shall be of good quality and as
called for by the Plans and that the Work shall be completed in a good
and workmanlike manner and that both shall be reasonably satisfactory
to the Lender and its Work inspectors.
(ii) Intentionally deleted.
(iii) The Borrower agrees not to use in the Work any materials which are
purchased upon lease or conditional xxxx of sale, nor any to which
Borrower does not have an absolute title except for any Permitted
Liens; provided, however, that Borrower may finance the acquisition of
any equipment for use on the Leased Premises.
(iv) The Lender agrees to advance to the Borrower the balance of the
proceeds of the Note financing the Work remaining after any prior
disbursements upon the following terms and conditions:
(a) Proceeds of the Note to cover "hard costs" and "soft costs" of
the Work shall be disbursed to the Borrower based on a budget for
the Work (collectively, the "Budget"), approved in advance by the
Lender, and in accordance with this Rider, to pay (i) amounts
owing to the Borrower's general contractor or subcontractors and
(ii) amounts for the Work approved by Lender's inspecting
engineer and in accordance with the Budget.
(b) If for any reason at any time the amount of undistributed
proceeds from the Note shall be, or become, or in the reasonable
judgment of Lender appear reasonably
likely to become, when added to the total funds to be expended
for the Work but to be advanced by sources other than the Lender,
as identified by Borrower in the Budget, insufficient for the
completion of the Work in accordance with the Budget, then no
advances shall be made until the Borrower has, at the Lender's
option (i) advanced such amounts of its own funds toward the
total cost of the Work as are, in the reasonable judgment of the
Lender, sufficient to ensure completion of the Work or (ii)
deposited in escrow with the Lender sums which, in the reasonable
judgment of the Lender, are sufficient to ensure the completion
of the Work, in accordance with the Plans and in a good and
workmanlike manner. In addition, the Borrower's failure to make
such advances or deposit such sums within forty-five (45) days
following written notice from the Lender shall be an Event of
Default under the Note and Mortgage.
(c) Lender shall make one or more advances, each not to be less than
$500,000.00, to the Borrower of sums up to $2,500,000.00 (less
any advances theretofore made under the Note for the purchase of
Equipment) for Phase I of the Work, provided that such advances,
in the aggregate, shall not exceed twenty-five percent (25%) of
the overall project costs for Phase I, upon receipt by Lender, at
least ten (10) business days before the date upon which an
advance is requested, of (A) a requisition prepared on AIA Form
G-702 and Form G-703 in form and substance acceptable to Lender,
(B) a currently dated certificate executed by Borrower in the
form of EXHIBIT A attached hereto and made a part hereof, (C) a
certificate executed by the general contractor certifying to
Lender that the amount to be advanced per the requisition is the
total amount claimed by the general contractor for the Phase I
Work for which the advance is sought, the Borrower is not in
default under any of its obligations to the general contractor,
all obligations to subcontractors, workmen, suppliers and
materialmen for and with respect to all labor and materials
supplied for the Phase I Work for which the advance is sought
have been paid in full and the general contractor has received
partial lien waivers in the statutory form from the
subcontractors to whom total payment in excess of $50,000.00 has
been made pursuant to such requisition, and (D) a certificate
executed by the Borrower's architect or engineer certifying to
Lender that the Phase I Work for which the advance is sought has
been completed in accordance with the Plans, and that such Work,
as so completed, complies in all respects with all applicable
federal, state and local laws, ordinances, rules and regulations
pertaining thereto, which certificates shall be in form and
substance acceptable to Lender. Lender reserves the right, prior
to advancing any sums hereunder, to inspect the Phase I Work
completed upon the Premises to ensure that all such Work has been
completed thereon in a good and workmanlike manner. Borrower
further agrees that Lender shall have no obligation to make
disbursements related to any "hard cost" expenditures unless such
"hard cost" expenditures are approved by the Lender or the
Lender's inspecting engineer. No advances made under this
subsection (c) for Phase I of the Work shall be used for the
purchase of Equipment.
(d) Lender shall make one or more advances, each not to be less than
$500,000.00, to the Borrower of sums up to $2,500,000.00 (less
any advances theretofore made under the Note for the purchase of
Equipment) for Phase II of the Work, provided that all advances
made pursuant to this subsection (d) and subsection (c), above,
in the aggregate, shall not exceed twenty-five percent (25%) of
the
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overall project costs for Phase I and Phase II, upon receipt by
Lender, at least ten (10) business days before the date upon
which an advance is requested, of (A) a requisition prepared on
AIA Form G-702 and Form G-703 in form and substance acceptable to
Lender, (B) a currently dated certificate executed by Borrower in
the form of EXHIBIT A attached hereto and made a part hereof, (C)
a certificate executed by the general contractor certifying to
Lender that the amount to be advanced per the requisition is the
total amount claimed by the general contractor for the Phase II
Work for which the advance is sought, the Borrower is not in
default under any of its obligations to the general contractor,
all obligations to subcontractors, workmen, suppliers and
materialmen for and with respect to all labor and materials
supplied for the Phase II Work for which the advance is sought
have been paid in full and the general contractor has received
partial lien waivers in the statutory form from the
subcontractors to whom total payment in excess of $50,000.00 has
been made pursuant to such requisition, and (D) a certificate
executed by the Borrower's architect or engineer certifying to
Lender that the Phase II Work for which the advance is sought has
been completed in accordance with the Plans, and that such Work,
as so completed, complies in all respects with all applicable
federal, state and local laws, ordinances, rules and regulations
pertaining thereto, which certificates shall be in form and
substance acceptable to Lender. Lender reserves the right, prior
to advancing any sums hereunder, to inspect the Phase II Work
completed upon the Premises to ensure that all such Work has been
completed thereon in a good and workmanlike manner. Borrower
further agrees that Lender shall have no obligation to make
disbursements related to any "hard cost" expenditures unless such
"hard cost" expenditures are approved by the Lender or the
Lender's inspecting engineer. No advances made under this
subsection (d) for Phase II of the Work shall be used for the
purchase of Equipment.
(v) Prior to the final disbursement pursuant to subsection (c) or (d)
above, the Lender shall cause a so-called title rundown of the Leased
Premises to be performed at the Borrower's expense. The Lender shall
not be required to advance such final disbursement if the Borrower
shall fail to discharge any encumbrances of record, other than
Permitted Encumbrances, disclosed by such title rundown. The Lender
shall not be required to advance any disbursements hereunder or under
the Note if at any time the Borrower shall fail to pay sums due or
claimed to be due for labor or materials furnished, nor if at any time
there shall be any recorded statements of mechanics' liens or notices
of contract or any other liens or attachments by any contractor or
subcontractor or materialman on the Leased Premises, or any part
thereof, nor if any restrictions on the Leased Premises shall be
violated, nor if the applicable building laws shall not be complied
with, nor if any attachment shall be made by trustee process or
otherwise of the funds in the hands of the Lender, nor if any
materials shall be used in the Work which shall be purchased on
conditional sale or lease (except as authorized by Section (iii)
hereof), whether the same be recorded or not, nor if there shall be a
substantial, partial, or total loss or damage by fire to the
building(s) on the Leased Premises (except as otherwise provided in
this Mortgage), nor if Borrower is in default under the Mortgage or
Note or any other loan document, or any other indebtedness, agreement
or document between the Borrower and the Lender after any applicable
grace periods, nor if there are any legal actions or other legal or
administrative proceedings pending or threatened which could adversely
affect Borrower, the Leased Premises, or the Work, nor if
representations or warranties made by Borrower prior to any advance
are determined by the Lender to be untrue or incorrect in
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any material respect, but in all other events, the Lender shall
advance the payments upon the terms set forth in Section (iv) above
and the Note. The Lender shall have the right to require reasonable
changes in the Work as the same may be necessary for the proper
completion thereof.
(vi) The Borrower authorizes the Lender to pay and cause to be discharged
any mechanics' liens that may at any time affect the Leased Premises,
and also to pay and cause to be discharged any encumbrances of record,
other than Permitted Encumbrances, and charge the same against such
payment or payments as said Lender may deem appropriate.
(vii) The Lender shall not be bound to make advances hereunder if the Work
shall not be completed by the Amortization Commencement Date, as such
term is defined in the Note. However, it is agreed that the Lender may
advance payments for the completion of the Work, but shall not be
bound to do so, after the Amortization Commencement Date, or
notwithstanding a default under this Mortgage or the Note, and charge
the same against the Note, the Note then being payable upon demand.
(viii) The Work shall be performed in a manner satisfactory to the City of
Woburn Building Department and to the Lender fit for use and occupancy
in all respects. The Work shall fully comply with all laws, ordinances
and regulations of state, municipal or other governmental agencies or
authorities as may apply and shall not violate any restrictions on the
Leased Premises.
(ix) No payment under this Mortgage shall be conclusive evidence of the
performance of its terms in whole or in part, and no advance made
hereunder shall be construed as an acceptance of improper work or
material.
(x) The fact that any of the payments herein mentioned shall have been
suspended shall not qualify or affect the right of any of the
conditions herein set forth.
(xi) The Lender shall not be required to make any advances under this
Mortgage, but may, at its option, declare any advances heretofore made
or sums due under the terms of this Mortgage immediately due and
payable if the Borrower shall fail to perform and comply with the
terms and conditions set out in this Mortgage or the Note after the
expiration of all applicable grace and cure periods.
(xii) The Borrower shall collaterally assign to the Lender its contracts
with the architect and the general contractor for the Work and shall
require its architect and general contractor, respectively, to consent
to such assignments.
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4
BY SIGNING BELOW, Borrower accepts and agrees to the terms and provisions
contained in this Rider.
Executed and delivered as a sealed instrument this 29th day of June, 2006.
BIOVEX, INC.
By: /s/ Xxxxxx Xxxxxx-Xxxxxx
------------------------------------
Xxxxxx Xxxxxx-Xxxxxx,
President
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss. June 29, 2006
Then personally appeared the above-named Xxxxxx Xxxxxx-Xxxxxx, President of
BioVex, Inc. who proved to me through satisfactory evidence of identification,
which was Mass. Driver's License, to be the person whose name is signed on the
preceding document, and acknowledged that s/he signed it voluntarily for its
stated purposes.
/s/ Xxxx X. Xxxxx
----------------------------------------
Notary Public
My Commission expires:
5
EXECUTION COPY
EXHIBIT A
Borrower's Requisition Certificate
BORROWER: BioVex, Inc.
PROJECT: Tenant Improvements at 00-X Xxxxxxxx Xxx, Xxxxxx, Xxxxxxxxxxxxx 00000
REQUISITION NO.
TO: Massachusetts Development Finance Agency (the "Lender")
The undersigned hereby certifies to the Lender that:
A. No material changes have been made in the Plans and Specifications which
have not been previously approved by the Lender or which require the prior
approval of any governmental authority having jurisdiction over the Project;
B. Construction of the Project has been performed in all material respects
in accordance with the Plans and Specifications (along with changes to such
Plans and Specifications previously approved by the Lender and the other parties
referred to in Paragraph A, above);
C. The balance to be advanced under the Loan, along with the funds from
other sources identified by Borrower in the Budget approved by the Lender, shall
be sufficient for the payment of all related direct or indirect costs for the
completion of construction of the Project in accordance with all of the terms
and provisions of that certain Rider to Leasehold Mortgage and Security
Agreement executed by Borrower in favor of Lender and dated June ___, 2006 (the
"Rider").
D. All funds requisitioned by the Borrower and disbursed by the Lender
under previously approved requisitions have been paid to all subcontractors,
vendors and suppliers or otherwise expended for the purpose for which they were
requisitioned;
E. The representations and warranties made in the Rider or any other Loan
Document are true and correct in all material respects as of the date hereof
with the same effect as if made on this date;
F. The Borrower represents and warrants that (i) it is not in default of
any of its obligations to the Lender in connection with the Project, including,
without limitation, the Borrower's obligations under the terms of the Loan
Documents, (ii) has not received notice from or been informed by any
governmental agency having jurisdiction over the Project, of any alleged
deficiencies (other than punch list items) in the work performed to date or any
deviation of such work from the Plans and Specifications or notice of any kind
of any assertion of a claim that the Project is not being constructed in
accordance with all applicable legal requirements, and (iii) asserts no failure
on the part of the Lender to perform its obligations under the Loan Documents;
G. The Borrower represents and warrants that this Certificate is in
identical form to the certificate which is annexed to the Rider as Exhibit "A"
and that there have been no changes or modifications thereto; and
H. All capitalized terms herein shall have the same meanings ascribed under
the aforesaid Rider.
BORROWER:
BIOVEX, INC.
By:
------------------------------------
Xxxxxx Xxxxxx-Xxxxxx,
President
DATED:
------------------------------
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