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Exhibit 10.2
$4,250,000.00 April 1, 2002
UNITED STATES OF AMERICA
COMMONWEALTH OF VIRGINIA
INDUSTRIAL DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA
INDUSTRIAL DEVELOPMENT REVENUE BOND
(BIOTAGE PROJECT)
SERIES 2002
THE INDUSTRIAL DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA, a body
politic and corporate constituting a political subdivision of the Commonwealth
of Virginia, organized and existing under and by virtue of the laws of the
Commonwealth of Virginia (hereinafter called the Authority), acknowledges itself
indebted and for value received hereby promises to pay, solely from the source
and as hereinafter provided, to VIRGINIA NATIONAL BANK, Charlottesville,
Virginia (hereinafter called the Bank), or registered assigns, the principal sum
of FOUR MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($4,250,000), or so much
thereof as may be disbursed from time to time, and interest on such principal
amount from the date hereof as follows:
Interest on this Bond shall accrue beginning as of the date of issuance of
this Bond (the "Closing Date"), and on the first day of each and every month
thereafter until payment of this Bond in full, the Authority shall pay, solely
from the source and as hereinafter provided, interest on the outstanding
principal balance hereof at an annual rate equal to either the Tax-Exempt Rate,
the Taxable Rate or the Default Rate (each as hereinafter defined). Interest
hereon shall be computed on the basis of actual number of days elapsed over a
year of 360 days. From the date hereof through the date that interest and
principal on this Bond is paid in full, or until the effective date of a
Determination of Taxability or an Event of Default, if any, each as defined in
the Loan Agreement dated as of April 1, 2002 (the "Loan Agreement") by and
between the Authority, Biotage Real Estate, LLC, a Virginia limited liability
company (the "Company"), and Biotage, Inc., a Delaware corporation (the
"Lessee"), the rate shall be the Tax-Exempt Rate, which shall be computed as
follows (capitalized terms not otherwise defined herein shall have the meaning
given such term in the Loan Agreement):
The Tax-Exempt Rate shall be (i) 5.83% per annum from the Closing Date
through February 28, 2007, and (ii) for each subsequent five (5) year period,
commencing April 1, 2007, the percentage equal to the published, annualized
interest rate on the five-year U.S. Treasury Note based on the most recent
weekly average yield, adjusted to a constant maturity of five years, as made
available by the Federal Reserve Board, in effect on the April 1 commencing such
five year period, plus 1.58% per annum. For the six (6) month period following
an Event of Deposit Shortfall (as hereafter defined)(each such six (6) month
period shall be referred to as an "Event of Deposit Shortfall Period"), if any,
the Tax-Exempt Rate shall be increased by an additional (i) 0.16% for an
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Event of Deposit Shortfall less than or equal to $50,000, and (ii) 0.32% for an
Event of Deposit Shortfall ranging from $50,001 to $100,000, plus an additional
0.13% for each $50,000 increment in excess of $100,000.
Upon the occurrence of a Determination of Taxability, the interest rate on
this Bond shall be adjusted immediately to the Taxable Rate, which shall be
computed as follows:
The Taxable Rate shall mean (i) 7.00% per annum upon the occurrence of any
Determination of Taxability occurring on or before February 28, 2007, and (ii)
the percentage equal to the published, annualized interest rate for the
five-year U.S. Treasury Note based on the most recent weekly average yield,
adjusted to a constant maturity, as made available by the Federal Reserve Board,
in effect at the time of, and effective upon, the occurrence of any
Determination of Taxability occurring after April 1, 2007, plus 2.75%, and (iii)
in each case to be adjusted in accordance with this definition every five years
after the occurrence of any such Determination of Taxability. For the six (6)
month period following an Event of Deposit Shortfall, if any, the Taxable Rate
shall be increased by an additional (i) 0.25% for an Event of Deposit Shortfall
less than or equal to $50,000, and (ii) 0.50 % for an Event of Deposit Shortfall
ranging from $50,001 to $100,000, plus an additional 0.20% for each $50,000
increment in excess of $100,000.
"Event of Deposit Shortfall" shall mean a failure by the Company and the
Lessee at any time during the term of this Bond to maintain in the aggregate an
average noninterest-bearing deposit account balance at the Bank in an amount
greater than or equal to $750,000, determined by the Bank on a semi-annual basis
commencing on the six month anniversary of the Closing Date.
Upon the occurrence and continuance of an Event of Default, the interest
rate on this Bond shall be adjusted to the Default Rate, which shall mean a per
annum rate equal to the interest rate on this Bond in effect at the time of an
Event of Default (the Tax-Exempt or the Taxable Rate) plus 1%.
Disbursements of principal of this Bond shall be made by the Bank from time
to time pursuant to requisitions submitted by the Company pursuant to the
provisions of the Loan Agreement. The Bank shall keep detailed records of each
disbursement of principal hereunder, and such records shall be conclusive and
binding upon the Authority and the Company, absent manifest error.
On August 1, 2003, and on the first day of each and every month thereafter
to and including August 1, 2023, the Authority shall pay, solely from the source
and as hereinafter provided, monthly payments of principal as set forth for each
such month in an amortization schedule of 20 years to be completed by the Bank
and attached hereto and made a part hereof; subject, however, to earlier
prepayment as hereinafter provided. On August 1, 2023, this Bond shall mature
and all unpaid principal of and interest accrued on this Bond shall be finally
due and payable.
If the Authority fails to pay any amount due hereunder within fifteen (15)
days of the due date thereof, the Authority shall pay to the holder of this
Bond, solely from the source and as hereinafter provided, interest on such
overdue payment from the due date thereof at a rate equal to the Default Rate.
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The Authority or the Company, for and in the place and stead of the
Authority, its successors and assigns, shall have the right to prepay this Bond,
in whole or in part (but if in part, in multiples of $1,000), at any time or
times, upon payment of the (i) applicable principal amount being prepaid, (ii)
accrued interest on this Bond, (iii) all amounts that would have otherwise been
due and payable by the Company during the remainder of any Event of Deposit
Shortfall Period, if applicable, and (iv) any other amounts then due and payable
by the Company under the Bond Documents (as defined in the Loan Agreement).
The Authority or the Company, for and in the place and stead of the
Authority, its successors and assigns, shall pay a prepayment premium (payable
whether such prepayment is undertaken voluntarily or by reason of default,
acceleration or otherwise) determined in accordance with the following
prepayment schedule (expressed as a percentage of the principal amount being
prepaid):
<Table>
Before April 1, 2003 5%
April 1, 2003 - March 31, 2004 4%
April 1, 2004 - March 31, 2005 3%
April 1, 2005 - March 31, 2006 2%
April 1, 2006 - March 31, 2007 1%
April 1, 2007 and thereafter 0%
</Table>
Any prepayment of this Bond, in whole or in part, shall be applied first to the
payment of interest accrued to the prepayment date and then to the reduction of
principal. Any prepayment of this Bond in part shall be applied to principal in
inverse chronological order and shall not reduce the amount of any annual
installment set forth above, except as otherwise agreed to by the Bank.
Payment of the principal of and interest on this Bond shall be made to the
holder hereof at the offices of the Bank located at 1580 Seminole Trail, P.O.
Box 2853, Charlottesville, VA 22902-2853, or at such other place as shall be
designated by the holder of this Bond. The principal of and interest on this
Bond shall be payable in lawful money of the United States of America.
This Bond is issued pursuant to the Virginia Industrial Development and
Revenue Bond Act, Title 15.2, Chapter 49, Code of Virginia of 1950, as amended,
a Bond Resolution duly adopted by the Authority on March 7, 2002 (hereinafter
called the "Resolution"), and a Bond Purchase Agreement dated as of April 1,
2002 (the "Bond Purchase Agreement"), among the Authority, the Bank, the Company
and the Lessee to assist the Company in financing the acquisition of
approximately 7.1 acres of land constituting Parcel F-1A in the University of
Virginia Research Park at North Fork in Albemarle County, Virginia, the
construction of an approximately 50,000 square foot manufacturing facility
thereon and the acquisition and installation of manufacturing equipment therefor
(the "Project"), to be owned by the Company, leased by the Lessee, and used in
the Lessee's business of manufacturing drug purification equipment, and to pay
certain costs of issuance of this Bond, all as more fully detailed in the Bond
Purchase Agreement.
This Bond is secured by an assignment to the Bank of (i) all of the
Authority's rights, title and interest (except for certain rights to notice,
indemnification and payment of fees and expenses) in and to the Loan Agreement,
wherein the Authority has loaned the proceeds of the Bond to the Company
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to provide funds for a portion of the cost of constructing, acquiring and
installing the Project, and (ii) the Company's promissory note, dated as of the
Closing Date, and payable to the Authority in the principal amount of $4,250,000
(the "Company's Note"), given to the Authority pursuant to the Loan Agreement as
security for any and all amounts payable by the Company under the Loan Agreement
and the other Bond Documents. The Company's Note is further secured, among other
things, by a Credit Line Deed of Trust, Assignment and Security Agreement (the
"Deed of Trust") granted by the Company in favor of the Bank dated as of April
1, 2002, conveying certain real property more particularly described therein,
located in the County of Albemarle, Virginia, and granting security interests in
certain personal property, together with the Guaranty Agreements and the Letters
of Credit, each as defined in the Loan Agreement. Executed counterparts or
copies of the Resolution, Bond Purchase Agreement, Loan Agreement, Deed of
Trust, Company's Note, Guaranty Agreements and Letters of Credit are on file at
the offices of the Authority and the Bank and are referred to herein for a
description of the property pledged and assigned and the provisions, among
others, with respect to the nature and extent of the security for this Bond, the
rights, duties and obligations of the Authority and the Bank and the rights of
the holder of this Bond with respect thereto.
The obligations of the Authority hereunder are not general obligations of
the Authority but are limited obligations of the Authority, the principal,
interest and premium (if any) of which are payable solely from and secured by
the security described herein, including the payments to be made by the Company
under the Company's Note and pursuant to the Loan Agreement. The obligations of
the Authority hereunder shall not be deemed to constitute a debt or a pledge of
the faith and credit of the Commonwealth of Virginia or any political
subdivision thereof, including the Authority and the County of Albemarle.
Neither the Commonwealth of Virginia nor any political subdivision thereof,
including the Authority and the County of Albemarle, shall be obligated to pay
the obligations hereunder or other costs incident thereto except from the
revenues and receipts pledged therefor, and neither the faith and credit nor the
taxing power of the Commonwealth of Virginia or any political subdivision
thereof, including the Authority and the County of Albemarle, is pledged to the
payment of the obligations hereunder. The Authority has no taxing power.
Upon failure to pay principal of and interest on this Bond within fifteen
(15) days of when due, or the occurrence of an Event of Default, as defined in
the Bond Purchase Agreement, each of which failure or occurrence shall be a
default hereunder, the holder hereof at its option may thereupon by written
notice to the Authority and the Company declare to be immediately due and
payable the entire principal balance and all accrued interest hereon and any
other amounts due and payable under the Bond Documents.
This Bond may not be modified, renewed or extended without the prior
written approval of the Authority, the Company and the holder.
This Bond shall not be transferred by the registered holder hereof except
upon (i) execution by such registered holder of the form of assignment appearing
at the foot of this Bond, (ii) delivery hereof to such assignee and (iii)
notification of such assignment to the Authority, which shall thereupon be
deemed to be a registration of the new holder hereof by the Authority.
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IN WITNESS WHEREOF, the INDUSTRIAL DEVELOPMENT AUTHORITY OF ALBEMARLE
COUNTY, VIRGINIA, has caused this Bond to be executed in its name by the manual
signature of its Chairman or Vice Chairman, and its corporate seal to be
hereunto affixed, impressed, imprinted or otherwise reproduced hereon, and
attested by the manual signature of its Secretary or Assistant Secretary, all as
of the date first above written.
INDUSTRIAL DEVELOPMENT AUTHORITY OF ALBEMARLE
COUNTY, VIRGINIA
By: /s/ John C. Lowry
---------------------------------------
Vice Chairman
(SEAL)
Attest:
/s/ Ellora Young
- ------------------------------------
Assistant Secretary
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered holder of the foregoing
$4,250,000 principal amount Industrial Development Authority of Albemarle
County, Virginia, Industrial Development Revenue Bond (Biotage Project), Series
2002, does hereby assign, bargain, sell, transfer and convey such Bond to the
below-named assignee:
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<Caption>
SIGNATURE OF
ASSIGNEE AND NEW PRIOR REGISTERED
REGISTERED HOLDER HOLDER AND ASSIGNOR DATE
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- ----------------------- ----------------------------- ----------
- ----------------------- ----------------------------- ----------
- ----------------------- ----------------------------- ----------
- ----------------------- ----------------------------- ----------
- ----------------------- ----------------------------- ----------
</Table>
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SCHEDULE A
$4,250,000
INDUSTRIAL DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA
INDUSTRIAL DEVELOPMENT REVENUE BOND
(BIOTAGE PROJECT)
SERIES 2002
MONTHLY PRINCIPAL PAYMENTS
The principal amounts shown below are due on the first day of each month
during the periods shown below:
<Table>
<Caption>
PERIOD MONTHLY AMOUNT
------ --------------
[To be completed by Bank as provided in the attached Bond.]
</Table>
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THIS BOND PURCHASE AGREEMENT, made as of the 1st day of April, 2002, by and
among the INDUSTRIAL DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA, a
political subdivision of the Commonwealth of Virginia (the "Authority"),
VIRGINIA NATIONAL BANK, a national banking organization (the "Bank"), BIOTAGE
REAL ESTATE, LLC, a Virginia limited liability company (the "Company"), and
BIOTAGE, INC., a Delaware corporation (the "Lessee").
W I T N E S S E T H:
WHEREAS, the Authority intends to issue and sell to the Bank its Industrial
Development Revenue Bond (Biotage Project), Series 2002, in the principal amount
of Four Million Two Hundred Fifty Thousand Dollars ($4,250,000) (the "Bond"), to
assist the Company in financing the acquisition of approximately 7.1 acres of
land constituting Parcel F-1A in the University of Virginia Research Park at
North Fork in Albemarle County, Virginia, the construction of an approximately
50,000 square foot manufacturing facility thereon and the acquisition and
installation of manufacturing equipment therefor (the "Project"), to be owned by
the Company and leased to the Lessee, and used in the Lessee's business of
manufacturing drug purification equipment, and to pay certain costs of issuance
of the Bond.
WHEREAS, the Authority has determined to lend the proceeds of the Bond to
the Company pursuant to a Loan Agreement, dated as of April 1, 2002 (the "Loan
Agreement"), between the Authority, the Company and the Lessee, to pay the cost,
in part, of the construction, acquisition and installation of the Project;
WHEREAS, the Authority intends to assign to the Bank, as security for the
Bond, the Authority's rights (except for certain rights to notices,
indemnification and payment of its fees and expenses) under the Loan Agreement,
together with the Company's promissory note, dated as of the Closing Date, in
the principal amount of $4,250,000 (the "Company's Note"), given to the
Authority pursuant to the Loan Agreement;
WHEREAS, the payment of the Company's Note is secured by a Credit Line Deed
of Trust, Assignment and Security Agreement, dated as of April 1, 2002 (the
"Deed of Trust"), from the Company to certain individual trustees and to the
Bank, mortgaging the Company's interest in the Real Estate (as hereafter
defined), assigning all leases of the Real Estate and all rents, revenues and
profits therefrom and creating security interests in certain personal property
of the Company, together with the Guaranty Agreements and the Letters of Credit
(each as hereafter defined) all as security for the payment of the Company's
Note;
WHEREAS, the Authority, the Bank, the Company and the Lessee desire to set
forth the terms and conditions with respect to the issuance of the Bond and the
construction, acquisition and installation of the Project;
NOW, THEREFORE, the parties hereto agree as follows:
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Section 1. DEFINITIONS. In addition to other terms defined elsewhere in
this Agreement, the following terms shall have the following meanings in this
Agreement unless the context otherwise requires:
"Act" shall mean the Virginia Industrial Development and Revenue Bond Act,
Title 15.2, Chapter 49, Code of Virginia of 1950, as amended.
"Act of Bankruptcy" shall mean the Company's (1) application for or consent
to the appointment of a receiver, trustee, liquidator or custodian or the like
of itself or of its property, or (2) admission in writing its inability to pay
its debts generally as they become due, or (3) making a general assignment for
the benefit of creditors, or (4) adjudication as a bankrupt or insolvent, or (5)
commencement of a voluntary case under the United States Bankruptcy Code, or
filing of a voluntary petition or answer seeking reorganization, an arrangement
with creditors or an order for relief, or seeking to take advantage of any
insolvency law or filing of an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization, or insolvency
proceeding, or taking action for the purpose of effecting any of the foregoing,
or (6) suffering, without the application, approval or consent of the Company,
the institution of a proceeding in any court of competent jurisdiction, under
any law relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking in respect of the Company an order for relief or any adjudication in
bankruptcy, reorganization, dissolution, winding up, liquidation, a composition
or arrangement with creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of the Company or of all
or any substantial part of its assets, or other like relief thereof under any
bankruptcy or insolvency law, and, if such proceeding is being contested by the
Company in good faith, the same shall (A) result in the entry of an order for
relief or any such adjudication or appointment or (B) remain unvacated,
undismissed and undischarged for a period of sixty (60) days.
"Authorized Company Representative" shall mean David B. Patteson, Manager
of Biotage Real Estate, LLC, or such other person or persons as may be
designated to act on behalf of the Company by certificate signed by David B.
Patteson or all of the members of the Company and filed with the Authority and
the Bank.
"Authorized Lessee Representative" shall mean David B. Patteson, President
of the Lessee, or such other person or persons as may be designated to act on
behalf of the Lessee by certificate signed by David B. Patteson or all of the
directors of the Lessee and filed with the Authority and the Bank.
"Bond Documents" shall mean this Agreement, the Bond, the Loan Agreement
and the Company's Note and the assignments thereof to the Bank, the Deed of
Trust, the Guaranty Agreements and the Letters of Credit.
"Building" shall mean all structures now existing or hereafter erected on
the Real Estate.
"Closing Date" shall mean the date of issuance and delivery of the Bond.
"Commonwealth" shall mean the Commonwealth of Virginia.
"Event of Default" shall mean any of the events defined as such in
Section 9.
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"Guaranty Agreements" shall mean the Guaranty Agreements from Dyax Corp.,
and Biotage, Inc. executed in favor of the Bank securing the entire principal
of, premium, if any, interest on the Bond, and all other amounts payable by the
Company under the Bond Documents, in form and substance acceptable to the Bank.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Land" shall mean the Land, as defined in the Deed Of Trust.
"Letters of Credit" shall mean the (i) $300,000 letter of credit secured by
Stephen T. McLean and the (ii) $300,000 letter of credit secured by David P.
Turner, in each case in form and substance acceptable to the Bank, issued by
institutions acceptable to the Bank, and issued in favor of the Bank as security
for repayment of the Bond and any other amounts payable by the Company under the
Bond Documents.
"Real Estate" shall mean the Land and the Building, all as they may at any
time exist.
"Virginia Code" shall mean the Code of Virginia of 1950, as amended.
Section 2. REPRESENTATIONS AND FINDINGS BY AUTHORITY. The Authority makes
the following representations as the basis for its undertakings hereunder:
(a) The Authority is duly organized as a political subdivision, a
body politic and corporate, under the Act, has the power to enter into the
transactions contemplated by this Agreement and to carry out its obligations
hereunder and by proper corporate action has duly authorized the execution and
delivery of, and the performance under, this Agreement.
(b) The Authority has the power to construct, acquire and install
the Project from the proceeds of the sale of the Bond, such construction,
acquisition and installation being in furtherance of the purposes for which the
Authority was organized.
(c) The Authority has the power to enter into this Agreement and
the Loan Agreement, to assign the Company's Note and its rights under the Loan
Agreement to the Bank, and to carry out its obligations hereunder and
thereunder; by proper corporate action has duly authorized the execution and
delivery of this Agreement and the Loan Agreement, the assignment of the
Company's Note and its rights under the Loan Agreement to the Bank and the
performance of its obligations hereunder and thereunder and the issuance of the
Bond; and, simultaneously with the execution and delivery of this Agreement, has
duly executed and delivered the Loan Agreement, assigned the Company's Note and
the Authority's rights under the Loan Agreement to the Bank and issued and sold
the Bond.
(d) The Authority finds that the construction, acquisition and
installation of the Project and the leasing thereof to the Lessee will serve the
purposes of the Act.
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Section 3. REPRESENTATIONS AND AGREEMENTS BY COMPANY. The Company makes the
following representations as the basis for its undertakings hereunder and agrees
with the Authority and the Bank as follows:
(a) The Company is a limited liability company duly organized and
validly existing under the laws of the Commonwealth of Virginia, has the power
to enter into this Agreement, the Loan Agreement, the Company's Note and the
Deed of Trust and the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder, and by proper action has duly
authorized the execution and delivery of this Agreement, the Loan Agreement, the
Company's Note the Deed of Trust and the performance of its obligations
hereunder and thereunder.
(b) This Agreement and the other Bond Documents executed and
delivered by the Company have been duly authorized, executed and delivered by
the Company, constitute the valid and legally binding obligations of the
Company, and are enforceable against the Company in accordance with their
respective terms; except to the extent that enforceability may be affected by
any bankruptcy or insolvency proceeding filed by or against the Company and
subject to the exercise of judicial discretion in accordance with general
principles of equity.
(c) There is no litigation at law or in equity or any proceeding
before any governmental agency involving the Company pending, or to the
knowledge of the Company threatened, in which any liability of the Company is
not adequately covered by insurance or in which any judgment or order would have
a material adverse effect upon the business or assets of the Company, the
Company's ability to do business, the operation of the Project, the validity of
any of the Bond Documents or the performance of the Company's obligations
thereunder.
(d) There is (i) no provision of the Company's articles of
organization, operating agreement or other organizational documents, (ii) no
provision of any existing mortgage, indenture, contract or agreement binding on
the Company or affecting the Company's property (except for certain rights
contained in the Permitted Encumbrances as defined in the Bond Documents), and
(iii) to the knowledge of the Company, no provision of law or order of any court
binding on the Company or affecting any of the Company's property (except for
certain rights contained in the Permitted Encumbrances as defined in the Bond
Documents), which would conflict with or in any way prevent the execution,
delivery, or performance of the terms of this Agreement or any of the other Bond
Documents executed and delivered by the Company, or which would be in default or
violated as a result of such execution, delivery or performance, or for which
adequate consents or waivers have not been obtained.
(e) The Company presently intends to operate the Project, or to
cause it to be operated, as a manufacturing facility for drug purification
equipment until the payment in full of the Bond.
(f) The Company is not in default under or in default under or in
violation of, and the execution and delivery of the Bond Documents, the
performance by the Company of its obligations hereunder and thereunder and the
consummation of the transactions herein and therein
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contemplated will not conflict with or constitute a breach or result in a
violation of, the Company's articles of organization or operating agreement, any
agreement or instrument to which the Company is a party or by which it is bound
or any constitutional or statutory provision or order, rule, regulation, decree
or ordinance of any court, government or governmental authority having
jurisdiction over the Company or its property, and no event has occurred and is
continuing which would, with the lapse of time or giving of notice or both,
constitute or result in such a default or violation.
(g) Neither this Agreement, the Loan Agreement, the Company's Note,
the Deed of Trust nor any information (financial or otherwise) furnished by or
on behalf of the Company in connection with the negotiation of the sale of the
Bond to the Bank contains any untrue statement of a material fact or omits a
material fact necessary to make the statements contained herein or therein not
misleading. There is no fact that the Company has not disclosed in writing to
the Bank that materially affects adversely or, so far as the Company can now
foresee, based on facts known to it and based on opinions concerning such facts,
will materially affect adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Company or the ability of the Company
to perform its obligations under the Bond Documents.
(h) To the best of the Company's knowledge, no person or entity
has, or as a result of any action of or by the Company in connection with the
transactions contemplated hereby and by the other Bond Documents will have, any
right, interest or valid claim against or on the Bank or the Authority for any
commission, fee or other compensation as a broker or finder, or in any similar
capacity (other than a fee to the Bank and an issuance fee to the Authority,
which fees are the obligations solely of the Company). The Company shall pay any
and all such fees, commissions or other compensation and shall indemnify the
Bank and the Authority against any claimed fee, commission or other compensation
arising from or in connection with the transactions contemplated hereby or by
the Bond Documents.
(i) The Company represents that it has not used or allowed the use
of, and agrees that, barring circumstances unforeseen on the Closing Date and to
the extent within its control, it will not use or permit the use of the proceeds
of the Bonds in a manner other than as described in the Non-Arbitrage
Certificate of the Authority delivered at the Closing.
(j) The Company hereby represents and warrants that the information
contained in the certificates, agreements or letters of representation of the
Company with respect to the compliance with the requirements of Sections 141 -
150 of the Internal Revenue Code, including the information in Internal Revenue
Service Form 8038 (excluding the issue number and the employer identification
number of the Authority), filed by the Authority with respect to the Bond and
the Project, and in the Company's Tax Information Certificate and Agreement
delivered on the Closing Date, is true and correct in all material respects.
Section 4. REPRESENTATIONS AND AGREEMENTS BY LESSEE. The Lessee makes the
following representations as the basis for its undertakings hereunder and agrees
with the Authority and the Bank as follows:
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(a) The Lessee is a corporation duly incorporated and validly
existing under the laws of the State of Delaware, has the power to enter into
this Agreement, the Loan Agreement and the transactions contemplated hereby and
thereunder, and to perform its obligations hereunder and thereunder, and by
proper action has duly authorized the execution and delivery of this Agreement
and the Loan Agreement and the performance of its obligations hereunder and
thereunder.
(b) This Agreement, the Loan Agreement and the other Bond Documents
executed and delivered by the Lessee have been duly authorized, executed and
delivered by the Lessee, constitute the valid and legally binding obligations of
the Lessee, and are enforceable against the Lessee in accordance with their
respective terms; except to the extent that enforceability may be affected by
any bankruptcy or insolvency proceeding filed by or against the Lessee and
subject to the exercise of judicial discretion in accordance with general
principles of equity.
(c) There is no litigation at law or in equity or any proceeding
before any governmental agency involving the Lessee pending, or to the knowledge
of the Lessee threatened, in which any liability of the Lessee is not adequately
covered by insurance or in which any judgment or order would have a material
adverse effect upon the business or assets of the Lessee, the Lessee's ability
to do business, the operation of the Project, the validity of any of the Bond
Documents or the performance of the Lessee's obligations thereunder.
(d) There is (i) no provision of the Lessee's articles of
incorporation, by-laws or other incorporating documents, (ii) no provision of
any existing mortgage, indenture, contract or agreement binding on Lessee or
affecting the Lessee's property, and (iii) to the knowledge of the Lessee, no
provision of law or order of any court binding on the Lessee or affecting any of
the Lessee's property, which would conflict with or in any way prevent the
execution, delivery, or performance of the terms of this Agreement, the Loan
Agreement or any of the other Bond Documents executed and delivered by the
Lessee, or which would be in default or violated as a result of such execution,
delivery or performance, or for which adequate consents or waivers have not been
obtained.
(e) The Lessee presently intends to operate the Project, or to
cause it to be operated, as a manufacturing facility for drug purification
equipment until the payment in full of the Bond.
(f) The Lessee is not in default under or in default under or in
violation of, and the execution and delivery of the Bond Documents, the
performance by the Lessee of its obligations hereunder and thereunder and the
consummation of the transactions herein and therein contemplated will not
conflict with or constitute a breach or result in a violation of, the Lessee's
articles of incorporation or by-laws, any agreement or instrument to which the
Lessee is a party or by which it is bound or any constitutional or statutory
provision or order, rule, regulation, decree or ordinance of any court,
government or governmental authority having jurisdiction over the Lessee or its
property, and no event has occurred and is continuing which would, with the
lapse of time or giving of notice or both, constitute or result in such a
default or violation.
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(g) Neither this Agreement, the Loan Agreement nor any information
(financial or otherwise) furnished by or on behalf of the Lessee in connection
with the negotiation of the sale of the Bond to the Bank contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained herein or therein not misleading. There is no fact that the
Lessee has not disclosed in writing to the Bank that materially affects
adversely or, so far as the Lessee can now foresee, based on facts known to it
and based on opinions concerning such facts, will materially affect adversely
the properties, business, prospects, profits or condition (financial or
otherwise) of the Lessee or the ability of the Lessee to perform its obligations
under the Bond Documents.
(h) To the best of the Lessee's knowledge, no person or entity has,
or as a result of any action of or by the Lessee in connection with the
transactions contemplated hereby and by the other Bond Documents will have, any
right, interest or valid claim against or on the Bank or the Authority for any
commission, fee or other compensation as a broker or finder, or in any similar
capacity (other than a fee to the Bank and an issuance fee to the Authority,
which fees are the obligations solely of the Company ). The Lessee shall pay or
Lessee shall cause the Company to pay any and all such fees, commissions or
other compensation and shall indemnify the Bank and the Authority against any
claimed fee, commission or other compensation arising from or in connection with
the transactions contemplated hereby or by the other Bond Documents.
(i) The Lessee represents that it has not used or allowed the use
of, and agrees that, barring circumstances unforeseen on the Closing Date and to
the extent within its control, it will not use or permit the use of the proceeds
of the Bonds in a manner other than as described in the Non-Arbitrage
Certificate of the Authority delivered at the Closing.
(j) The Lessee hereby represents and warrants that the information
contained in any certificates, agreements or letters of representation of the
Lessee with respect to the compliance with the requirements of Sections 141 -
150 of the Internal Revenue Code, including the information in Internal Revenue
Service Form 8038 (excluding the issue number and the employer identification
number of the Authority), filed by the Authority with respect to the Bond and
the Project, and, if applicable, in the Lessee's Tax Information Certificate and
Agreement delivered on the Closing Date, is true and correct in all material
respects.
Section 5. SALE AND PURCHASE OF BOND; REPRESENTATIONS OF BANK; LIMITATION
OF LIABILITY OF AUTHORITY. The Authority shall issue and sell the Bond, in the
form attached hereto as Exhibit A, to the Bank and secure the Bond by assigning
to the Bank the Company's Note and the rights of the Authority under the Loan
Agreement pursuant to Section 4.2 of the Loan Agreement, and the Bank shall
purchase the Bond at the principal amount thereof by accepting the Bond and its
obligations to make disbursement of the principal thereof, including an initial
disbursement on the Closing Date, to pay the costs of the Project according to
the procedures set forth in the Loan Agreement, all upon the terms and
conditions set forth herein and in the Loan Agreement.
The Bank represents the following in connection with its purchase of the
Bond:
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(a) It understands that the Bond (i) is not being registered under
the Securities Act of 1933 and is not being registered or otherwise qualified
for sale under the "Blue Sky" laws and regulations of any state, (ii) will carry
no rating from any rating service and (iii) may not be readily marketable, and
it acknowledges that as purchaser of the Bond it may have to bear the economic
risk of the investment for an indefinite period of time because the Bond has not
been registered under the Securities Act of 1933 and, therefore, cannot be sold
unless it is subsequently registered under such Act or an exemption from such
registration is available. It will not offer the Bond nor any participation
therein for sale in any state of the United States of America except in
accordance with all applicable federal and state securities laws and will
provide the Authority with an opinion of counsel prior to any such offer that no
registration is necessary because of an exemption.
(b) It acknowledges that it is familiar with the operations and
financial condition of the Company and the Lessee based upon information
provided by the Company and that it has made such inquiries as it deems
appropriate in connection with the purchase of the Bond; it is capable of
evaluating the merits and risks of the purchase of the Bond, and it is able to
bear the economic risks of the investment represented by its purchase of the
Bond.
(c) It understands that (i) the Bond is not a general obligation of
the Authority or of the Commonwealth of Virginia or any political subdivision
thereof, (ii) the Bond constitutes a special, limited obligation of the
Authority, (iii) the Bond does not constitute a debt or pledge of the faith and
credit or the revenues, except from the Loan Agreement and the Company's Note,
or the taxing power of the Authority or of the Commonwealth of Virginia or any
political subdivision thereof, and (iv) the payment of interest on and the
premium, if any, and principal of the Bond depends upon the general credit of
the Company and the security provided by the Deed of Trust, the Loan Agreement,
and the Company's Note;
(d) It understands that no offering statement, prospectus, offering
circular, disclosure document or other comprehensive offering statement
containing material information with respect to the Authority, the Company, or
the Lessee is being issued, and it expressly waives the right to receive any
information (including financial information) relating to the Authority, the
Company and the Lessee, and their affairs from the Authority and relieves the
Authority of any liability for failure to provide such information.
It is specifically understood and agreed that the Authority makes no
representation, covenant or agreement as to the financial position or business
condition of the Company or the Lessee and does not represent or warrant as to
any statements, materials, representations or certifications furnished by the
Company or the Lessee in connection with the sale of the Bond, or as to the
correctness, completeness or accuracy thereof.
Section 6. CONDITIONS PRECEDENT TO DELIVERY OF BOND. The Bank shall accept
delivery of and pay for the Bond only upon delivery to it, all in form and
substance satisfactory to it, of the items described in Sections 3.12(a)-(e) of
the Loan Agreement and of the following:
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(a) BOND DOCUMENTS. Executed copies of this Agreement, the Loan
Agreement, the Deed of Trust and the Company's Note (duly assigned to the Bank),
together with evidence of their authorization, execution, delivery and, if
required, recordation.
(b) TITLE INSURANCE. Mortgagee title insurance policies naming the
Bank as insured on ALTA Standard Policy - Revised Coverage in an amount equal to
$4,250,000, issued by a title insurance company acceptable to the Bank, insuring
that the Deed of Trust is a valid lien and that the real property is insured
without exception for any mechanics' liens, materialmen's liens, or any other
liens, easements, restrictions or other encumbrances of any kind whatsoever
(other than such liens and exceptions from coverage as are acceptable to the
Bank), and otherwise in form and substance acceptable to the Bank.
(c) LIABILITY INSURANCE. Evidence of public liability insurance,
workmen's compensation and hazard insurance for the greater of (i) the full
amount of the Bond or (ii) 100% of the insurable value of the Project, with
fire, extended coverage, vandalism and malicious mischief protection, and
subject to a standard mortgagee's endorsement in favor of the Bank and 30 days'
notice to the Bank prior to cancellation, issued by an insurance company
acceptable to the Bank, and otherwise in accordance with the requirements of the
Deed of Trust.
(d) ENVIRONMENTAL SURVEY REPORT. Evidence that the site of the
Project has not been used for handling, storage, transportation, disposal or
other use of any hazardous or toxic waste materials other than in full
compliance with all applicable laws and that there is no evidence of the
presence or use of any toxic material or hazardous waste on the site. The Bank
reserves the right to require an environmental audit acceptable to the Bank, at
the Company's expense.
(e) SURVEY. A current plat of survey prepared by a certified state
engineer or certified land surveyor designating (i) the perimeter of the Real
Estate, (ii) all easements, right-of-ways, set-back lines, etc., (iii) the
location of the improvements and (iv) such other matters as may be required by
the Bank, together with a legal description of the Real Estate certified to the
Bank and, at the Bank's option, the title insurer.
(f) PERMITS, ETC. Evidence that the Project satisfies all
governmental laws, ordinances, rules, charters, bylaws, regulations,
restrictions and environmental matters affecting the Real Estate together with
copies of all building permits and all other permits necessary for the Project.
(g) ORGANIZATIONAL DOCUMENTATION. Copies of the organizational
documents for the Company for the Bank's review and approval, together with
evidence of existence and good standing of the Company in all relevant
jurisdictions, together with certified resolutions at closing, authorizing the
indebtedness evidenced by the Company's Note and the obligations of the Company
under the Bond Documents and specifying the party authorized to sign all
documents on behalf of the Company.
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(h) SPECIAL FLOOD HAZARD. Evidence in a form satisfactory to the
Bank conclusively demonstrating that the Project is not located within a Special
Flood Hazard area as defined by the U.S. Department of Housing and Urban
Development.
(i) OTHER. Any and all other documents, instruments, opinions,
approvals and assurances customary in financing of a type similar to the Bond,
as such may be required pursuant to the Bank Commitment Letter or otherwise
reasonably required by the Authority or the Bank.
(j) COMPANY'S OPINION. A written opinion of counsel to the Company
in form and substance satisfactory to the Bank stating that the Company is a
limited liability company duly organized and validly existing under the laws of
the Commonwealth of Virginia, has full power and authority to construct, acquire
and install the Project, to enter into, execute and deliver this Agreement, the
Loan Agreement, the Company's Note and the Deed of Trust and to perform its
obligations hereunder and thereunder, that the execution and delivery of this
Agreement, the Loan Agreement, the Company's Note and the Deed of Trust will not
violate the articles of organization or operating agreement of the Company or,
to the knowledge of such counsel, any contract or agreement to which the Company
is a party or by which it or any of its properties is bound, that this
Agreement, the Loan Agreement, the Company's Note and the Deed of Trust are each
valid, legal and binding obligations of the Company enforceable in accordance
with their terms.
(k) LESSEE'S OPINION. A written opinion of counsel to the Lessee in
form and substance satisfactory to the Bank stating that the Lessee is a
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware, has full power and authority to construct, acquire and
install the Project, to enter into, execute and deliver this Agreement and the
Loan Agreement, and to perform its obligations hereunder and thereunder, that
the execution and delivery of this Agreement or the Loan Agreement will not
violate the articles of incorporation or by-laws of the Lessee or, to the
knowledge of such counsel, any contract or agreement to which the Lessee is a
party or by which it or any of its properties is bound, that this Agreement and
the Loan Agreement are each valid, legal and binding obligations of the Lessee
enforceable in accordance with its terms.
(l) GUARANTY AGREEMENTS AND LETTERS OF CREDIT OPINIONS. Such legal
opinions, certificates and other documents as the Bank may require with respect
to the validity, legality and binding nature of the Guaranty Agreements and the
Letters of Credit and the accuracy of the representations, warranties and other
information set forth therein, in each case in form and substance acceptable to
the Bank.
(m) BOND COUNSEL OPINION. The written opinion of Williams, Mullen,
Clark & Dobbins, P.C., Richmond, Virginia, Bond Counsel, that the Authority is a
duly constituted political subdivision established under the Act, that the Bond
has been duly authorized, executed and delivered, that this Agreement, the Bond,
the Loan Agreement and the assignments of the Loan Agreement and the Company's
Note to the Bank are valid and binding obligations of the Authority, and that
under existing statutes, regulations, rulings and case law, subject to customary
exceptions, interest on the Bond is not includable in the gross income of the
holder thereof for purposes of
<Page>
Federal income taxation and is exempt from all taxation by the Commonwealth of
Virginia and that no registration is required under the Securities Act of 1933
with respect to the Bond.
(n) FILING. Evidence satisfactory to the Bank of the filing in all
proper offices of financing statements showing the Bank as secured party and
sufficient to perfect the security interests granted in the Deed of Trust.
(o) COMMITMENT LETTER. Evidence satisfactory to the Bank that all
conditions to its purchase of the Bond set forth in its commitment letter
addressed to the Lessee for the benefit of the Company, dated December 13, 2001,
as revised on December 21, 2001 (the "Commitment Letter"), have been satisfied.
(p) FEES AND EXPENSES. Payment by the Borrower to the Bank for all
reasonable costs and expenses incurred by the Bank and its counsel up to the
Closing Date, plus payment for all disbursements and out of pocket expenses
incurred by the Bank and its counsel up to Closing Date.
(q) OTHER. Such other documentation and certificates as may be
required by the Bank or its counsel.
Section 7. DISBURSEMENT OF BOND PROCEEDS. Disbursement of the proceeds of
the sale of the Bond shall be made by the Bank in payment for the Bond through
periodic disbursements to pay (or reimburse the Company for its payment of) the
cost of the Project as provided in the Loan Agreement.
Section 8. COVENANTS OF THE COMPANY AND THE LESSEE. Until the termination
of this Agreement, unless the prior written consent to do otherwise is obtained
from the Bank and the Authority, the Company and the Lessee shall satisfy the
following covenants:
(a) TAXES AND CLAIMS. The Company and the Lessee shall each pay and
discharge or cause to be paid and discharged all taxes imposed upon it or its
income or properties prior to the date on which penalties attach thereto, and
all lawful claims which, if unpaid, might become a lien or charge upon any of
its properties prior to the date on which penalties attach thereto. The Company
and the Lessee shall have the right to contest the validity of any such taxes by
timely and appropriate proceedings, provided that the Company or the Lessee, as
applicable, shall (a) give the Bank and the Authority written notice of its
intention to contest, (b) diligently prosecute such contest, (c) at all times
effectively stay or prevent any official or judicial sale of the Project or any
part thereof by reason of nonpayment of any such taxes, and (d) establish
reasonable reserves for such liabilities being contested if the Bank reasonably
determines such reserves to be necessary.
(b) COMPLIANCE WITH LAWS. The Company and the Lessee shall each
comply with all applicable federal, state, and local laws, rules and
regulations.
Section 9. ARBITRAGE AND REBATE. (a) The Company hereby covenants with, and
certifies to, and for the benefit of, the holder of the Bond and the Authority
that so long as the Bond remains outstanding, moneys on deposit in any fund or
account established, maintained or permitted to be established or maintained
under any of the Bond Documents in connection with the Bond, whether or
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not such moneys were derived from the proceeds of the sale of the Bond or from
any other source, will not be used or invested in a manner which will cause the
Bond to be classified as "arbitrage bonds" within the meaning of Section 148(a)
of the Internal Revenue Code. The Company obligates itself to comply with the
requirements of Section 148 of the Internal Revenue Code and any regulations,
whether temporary or final, promulgated thereunder or relating thereto,
including but not limited to Treasury Regulation Sections 1.148-0 through
1.148-11 (such Section 148 and such regulations hereinafter referred to as the
"Arbitrage Rules").
(b) Except with respect to earnings on funds and accounts
qualifying for an exception to the rebate requirement of Section 148 of the
Internal Revenue Code, the Company will compute and pay to the United States of
America the amount, if any, required by Section 148(f)(2) of the Internal
Revenue Code (the "Rebate Amount"), as provided in the following subsections of
this section.
(c) The Authority, at the direction of the Company, selects April 1
as the end of each bond year with respect to the Bond. The fifth April 1
following the issuance of the Bond will be the initial installment computation
date for the Bond pursuant to Treasury Regulations Section 1.148-3(e) (the
"Initial Installment Computation Date"), unless the Authority, at the direction
of the Company, delivers to the Bank a certificate, signed by an authorized
Authority officer, selecting another date to be the installment computation date
prior to the date on which any amount with respect to the Bond is paid or
required to be paid to the United States of America as required by Section 148
of the Internal Revenue Code.
(d) Within 30 days after the Initial Installment Computation Date,
unless such date is changed by the Authority pursuant to paragraph (c), and at
least once every five years thereafter, the Company will cause the Rebate Amount
with respect to the Bond to be computed and will deliver a copy of such
computation (the "Rebate Amount Certificate") to the Bank. Prior to any payment
of the Rebate Amount with respect to the Bond to the United States of America as
required by Section 148 of the Internal Revenue Code, the Rebate Amount
Certificate setting forth such Rebate Amount shall be prepared or approved by
(i) an independent certified public accountant, (ii) any recognized, independent
arbitrage rebate calculation service acceptable to the Bank or the Authority or
(iii) Bond Counsel.
(e) Not later than 60 days after the Initial Installment
Computation Date, the Company, on behalf of the Authority, shall pay to the
United States of America 90% of the Rebate Amount with respect to the Bond as
set forth in the Rebate Amount Certificate prepared with respect to the Initial
Installment Computation Date. At least once on or before 60 days after the
installment computa-tion date that is the fifth anniversary of the Initial
Installment Computation Date and on or before 60 days after every fifth
anniversary date thereafter until payment in full of the Bond, the Company, on
behalf of the Authority, shall pay to the United States of America the amount,
if any, by which 90% of the Rebate Amount with respect to the Bond set forth in
the most recent Rebate Amount Certificate exceeds the aggregate of all such
payments theretofore made to the United States of America pursuant to this
section. On or before 60 days after payment in full of the Bond, the Company, on
behalf of the Authority, shall pay to the United States of America the amount,
if any, by which 100% of the Rebate Amount with respect to the Bond set forth in
the Rebate Amount
<Page>
Certificate for the date of payment of the Bond exceeds the aggregate of all
payments theretofore made pursuant to this Section.
(f) Notwithstanding anything contained herein to the contrary, no
such payment will be made if the Company receives and delivers to the Authority
and the Bank an opinion of Bond Counsel that such payment is not required under
the Code to prevent the Bond from becoming "arbitrage bonds" within the meaning
of Section 148 of the Internal Revenue Code.
(g) The Authority shall not be liable to the Company by way of
contribution, indemnification, counterclaim, set-off or otherwise for any
payment made or expense incurred by the Company pursuant to this Section,
notwithstanding that payments to the Authority pursuant to this Section or
investment by the Bank of such payments may result in whole or in part in the
Company's liability for such payment or expense.
(h) Within sixty (60) days after the date of payment of the Bond,
the Company shall take all necessary steps to comply with the rebate
requirements of Section 148(f) of the Internal Revenue Code and the Treasury
Regulations thereunder, with respect to the Bond.
NOTHING CONTAINED HEREIN SHALL BE INTERPRETED OR CONSTRUED TO REQUIRE THE
AUTHORITY OR THE BANK TO CALCULATE OR TO PAY THE "REBATE AMOUNT," SAME BEING THE
SOLE AND EXCLUSIVE RESPONSIBILITY AND OBLIGATION OF THE COMPANY.
Section 10. EVENTS OF DEFAULT; REMEDIES OF BANK. Each of the following
shall constitute an Event of Default by the Company or the Lessee, as
applicable, under this Agreement:
(a) An Event of Default under any of the Bond Documents;
(b) Any representation or warranty made herein or any statement or
representation made in any certificate, report or opinion (including legal
opinions), financial statement or other instrument furnished in connection with
this Agreement or any of the other Bond Documents, proves to have been incorrect
in any material respect when made;
(c) The Company or the Lessee fails to duly and promptly perform,
comply with or observe any term, covenant, condition or agreement contained in
this Agreement within a period of thirty (30) days after notice of such failure
is given by the Authority or the Bank to the Company and the Lessee (unless the
Company, the Lessee and the Bank shall agree in writing to an extension of such
time prior to its expiration) specifying such failure and requesting that it be
remedied, or in the case of any such default which cannot with due diligence be
cured within such 30-day period, failure of the Company or the Lessee to proceed
promptly to cure the same and thereafter prosecute the curing of the same with
due diligence; and
(d) An Act of Bankruptcy occurs with respect to the Company or the
Lessee (and in the case of an involuntary petition in bankruptcy or similar
proceeding, such petition or proceeding is not discharged, subject to no further
appeals, within sixty days of the date of filing), or the Company or the Lessee
becomes generally unable to pay its debts as they become due.
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Upon the occurrence and continuation of an Event of Default hereunder, the
Bank may upon written notice to the Company enter into possession of the Project
and exercise any other remedy under the Bond, the Deed of Trust, the Loan
Agreement or the Company's Note.
Section 11. AUTHORITY, DIRECTORS, OFFICERS, AGENTS, ATTORNEYS AND EMPLOYEES
OF AUTHORITY NOT LIABLE. To the extent permitted by law, no recourse shall be
had for the enforcement of any obligation, promise or agreement of the Authority
contained herein or in the other Bond Documents to which the Authority is a
party or for any claim based hereon or thereon or otherwise in respect hereof or
thereof against the Authority, any director, officer, agent, attorney or
employee, as such, in his/her individual capacity, past, present or future, of
the Authority or of any successor entity, either directly or through the
Authority, whether by virtue of any constitutional provision, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise. No
personal liability whatsoever shall attach to, or be incurred by, any director,
officer, agent, attorney or employee, as such, in his/her individual capacity,
past, present or future, of the Authority or of any successor entity, either
directly or through the Authority or any successor entity, under or by reason of
any of the obligations, promises or agreements entered into between the
Authority and the Company, whether herein contained or to be implied herefrom as
being supplemental hereto; and all personal liability of that character against
every such director, officer, agent, attorney or employee is, by the execution
of this Agreement and as a condition of, and as part of the consideration for,
the execution of this Agreement, expressly waived and released.
Notwithstanding any other provision of this Agreement, the Authority shall
not be liable to the Company or the Bank or any other person for any failure of
the Authority to take action required of it under this Agreement unless the
Authority (a) is requested in writing by an appropriate person to take such
action, (b) is assured of payment of, or reimbursement for, any reasonable
expenses in such action, and (c) is afforded, under the existing circumstances,
a reasonable period to take such action. In acting under this Agreement, or in
refraining from acting under this Agreement, the Authority may conclusively rely
on the advice of its counsel.
Section 12. NO LIABILITY OF AUTHORITY; NO CHARGE AGAINST AUTHORITY'S
CREDIT.
(a) No covenant, agreement or obligation contained in this
Agreement shall be deemed to be a covenant, agreement or obligation of any
present or future director, officer, employee or agent of the Authority in his
individual capacity, and neither the directors of the Authority nor any officer
thereof executing the Bond shall be liable personally on the Bond or be subject
to any personal liability or accountability by reason of the issuance thereof.
No director, officer, employee or agent of the Authority shall incur any
personal liability with respect to any other action taken by him pursuant to
this Agreement, the Bond, the Loan Agreement or the Act, provided he does not
act in bad faith.
(b) The obligations of the Authority under this Agreement are not
general obligations of the Authority but are limited obligations of the
Authority, the principal, interest and premium (if any) of which are payable
solely from and secured by the security described in the Bond Documents. The
obligations of the Authority hereunder shall not be deemed to constitute a debt
or a pledge of the faith and credit of the Commonwealth of Virginia or any
political subdivision thereof,
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including the Authority and the County of Albemarle. Neither the Commonwealth of
Virginia nor any political subdivision thereof, including the Authority and the
County of Albemarle, shall be obligated to pay the obligations hereunder or
other costs incident thereto except from the revenues and receipts pledged
therefor, and neither the faith and credit nor the taxing power of the
Commonwealth of Virginia or any political subdivision thereof, including the
Authority and the County of Albemarle, is pledged to the payment of the
obligations hereunder. The Authority has no taxing power.
Section 13. INDEMNIFICATION BY COMPANY AND LESSEE. The Company and the
Lessee, jointly and severally, agree to indemnify and hold harmless the
Authority, any director, officer, official or employee of the Authority, the
Bank, any director, officer or employee of the Bank, and any person who
"controls" the Bank within the meaning of Section 15 of the Securities Act of
1933, as amended, and any other owner or holder of all or a portion of the Bonds
(collectively, the "Indemnified Parties"), against any and all losses, claims,
damages or liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in information submitted to the Authority
or to the Bank by the Company or the Lessee with respect to the issuance and
purchase of the Bond or caused by any omission or alleged omission of any
material fact necessary to be stated therein in order to make such statements to
the Authority and the Bank not misleading or incomplete. The obligation to
indemnify the Authority and the Bank undertaken in this section shall be in
addition to and shall not limit the obligation undertaken in Section 5.2 of the
Loan Agreement.
If any action is brought against any Indemnified Party in respect of which
indemnity may be sought from the Company or the Lessee, such Indemnified Party
shall promptly notify the Company or the Lessee in writing, and the Company or
the Lessee shall assume the defense thereof, including the employment of
counsel, the payment of all expenses and the right to negotiate and consent to
settlement. Each Indemnified Party has the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel will be at the expense of such Indemnified Party unless
the employment of such counsel has been specifically authorized by the Company
or the Lessee, which authorization shall not be unreasonably withheld by the
Company or the Lessee. Neither the Company nor the Lessee will be liable for any
settlement of any such action made without its consent, but if settled with the
consent of the Company or the Lessee, as applicable, or if there be a final
judgment for the plaintiff in any such action, the Company or the Lessee, as
applicable, agrees to indemnify and hold harmless the Indemnified Parties from
and against any loss or liability by reason of such settlement or judgment.
Section 14. NOTICES, ETC. Except as otherwise provided in this Agreement,
any request, demand, authorization, direction, notice, consent, waiver or other
document provided or permitted by this Agreement shall be sufficient for any
purpose under this Agreement and shall be deemed given when mailed by certified
mail, return receipt requested, postage prepaid (with a copy to the other
parties) at the following addresses (or such other address as may be provided by
any party by notice):
To the Authority: Industrial Development Authority
of Albemarle County, Virginia
County Office Building, 4th Floor
401 McIntire Road
<Page>
Charlottesville, VA 22901-4596
Attention: Chairman
To the Company: Biotage Real Estate, LLC
2020 Avon Court
P.O. Box 8006
Charlottesville, Virginia 22902
Attention: Mr. David B. Patteson, Manager
With a copy to: Stephen T. McLean
2164 Orchard House Road
Charlottesville, Virginia 22903
With a copy to: David P. Turner
500 Loblolly Lane
Charlottesville, Virginia 22903
To the Lessee: Biotage, Inc.
2020 Avon Court
P.O. Box 8006
Charlottesville, Virginia 22902
Attention: Mr. David B. Patteson, President
To the Bank: Virginia National Bank
1580 Seminole Trail
P.O. Box 2853
Charlottesville, VA 22902-2853
Attention: David J. Mellen
With a copy to: LeClair Ryan, A Professional Corporation
123 East Main Street, 8th Floor
Charlottesville, VA 22902
Attention: Steven W. Blaine, Esq.
Section 15. MISCELLANEOUS. (a) The Company shall also pay when due and
payable (i) to the Bank, its reasonable costs, fees and expenses, including
attorneys fees, incurred in connection with its ownership of the Bonds and the
enforcement of any of its rights and remedies under the Bond Documents, and (ii)
to the Authority, its reasonable costs, fees and expenses directly related to
the Bond and the Project, including the reasonable fees and expenses of its
counsel, and, if in the future the Authority imposes an annual fee on all
industrial development bonds issued by it, an annual fee, due and payable
without notice or billing upon the issuance of the Bond and thereafter on each
anniversary date thereof until payment of the Bond in full, calculated on the
same basis as the fees imposed on all of the other bonds of the Authority
(provided, however, that such amount shall not equal or exceed an amount which
would cause the "yield" on the Company's Note, the Loan
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Agreement, this Agreement or any other "acquired purpose obligation" to be
"materially higher" than the "yield" on the Bond, as such terms are defined in
the Internal Revenue Code).
(b) As to (i) the existence or non-existence of any fact or (ii)
the sufficiency, authenticity or validity of any notice, requisition, consent,
permit, certificate, authorization, order, instrument, paper, document or
proceeding or (iii) the accuracy, completeness, sufficiency or adequacy of any
statement, opinion or conclusion contained in any certificate, requisition,
request, document or other paper, the Authority shall be entitled to rely
conclusively on a certificate, requisition, request, document or other paper
signed on behalf of the Company by an Authorized Company Representative.
(c) The Bank agrees to furnish to the Authority on request such
information with respect to the Bond as the Authority or its auditors may
reasonably request in connection with any audit of the Authority records or any
reports required to be filed by the Authority.
(d) All accounting terms used herein which are not otherwise
expressly defined in this Agreement shall have the meanings respectively given
to them in accordance with generally accepted accounting principles. Except as
otherwise expressly provided herein, all financial computations made pursuant to
this Agreement shall be made in accordance with generally accepted accounting
principles consistently applied and all balance sheets and other financial
statements shall be prepared in accordance with generally accepted accounting
principles consistently applied.
(e) This Agreement shall be binding upon, inure to the benefit of
and be enforceable by the parties hereto and the subsequent holders of the Bond
and their respective successors and assigns. The representations, covenants and
agreements contained herein shall continue notwithstanding the delivery of the
Bond to the Bank and the disbursement of the proceeds of the Bond to or for the
benefit of the Authority, the Company and the Lessee.
(f) If any provision of this Agreement shall be held invalid by any
court of competent jurisdiction, such holding shall not invalidate any other
provision hereof.
(g) This Agreement shall be governed by the applicable laws of the
Commonwealth. The Bond Documents express the entire understanding and all
agreements among the parties and may not be modified except in writing signed by
the respective parties thereto or their successors in interest thereto.
(h) This Agreement may be executed in several counterparts, each of
which shall be an original, and all of which together shall constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this BOND PURCHASE
AGREEMENT to be executed in their respective names all as of the date first
above written.
INDUSTRIAL DEVELOPMENT AUTHORITY
OF ALBEMARLE COUNTY, VIRGINIA
<Page>
By: /s/ John C. Lowry
---------------------------------
Vice Chairman
VIRGINIA NATIONAL BANK
By: /s/ David J. Mellen
---------------------------------
Its: Managing Officer
---------------------------------
BIOTAGE REAL ESTATE, LLC
By: /s/ David B. Patteson
---------------------------------
Its: Manager
---------------------------------
BIOTAGE, INC.
By: /s/ David B. Patteson
---------------------------------
Its: President
---------------------------------
<Page>
LOAN AGREEMENT
BY AND AMONG
INDUSTRIAL DEVELOPMENT AUTHORITY
OF ALBEMARLE COUNTY, VIRGINIA
AND
BIOTAGE REAL ESTATE, LLC
AND
BIOTAGE, INC.
DATED AS OF APRIL 1, 2002
- --------------------------------------------------------------------------------
THIS LOAN AGREEMENT HAS BEEN ASSIGNED TO, AND IS SUBJECT TO A
SECURITY INTEREST IN FAVOR OF, VIRGINIA NATIONAL BANK, AS HOLDER OF
THE INDUSTRIAL DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA,
INDUSTRIAL DEVELOPMENT REVENUE BOND (BIOTAGE PROJECT), SERIES 2002.
INFORMATION CONCERNING SUCH SECURITY INTEREST MAY BE OBTAINED FROM
VIRGINIA NATIONAL BANK AT ITS OFFICES IN CHARLOTTESVILLE, VIRGINIA.
- --------------------------------------------------------------------------------
<Page>
TABLE OF CONTENTS
<Table>
ARTICLE I 1
DEFINITIONS AND RULES OF CONSTRUCTION 1
Section 1.1. Definitions 1
Section 1.2. Rules of Construction 7
Section 1.3. UCC 8
Section 1.4. References 8
Section 1.5. GAAP. 8
ARTICLE II 8
REPRESENTATIONS 8
Section 2.1. Representations by Authority 8
Section 2.2. Representations by Company 9
ARTICLE III 10
LOAN OF BOND PROCEEDS 10
Section 3.1. Loan of Proceeds 10
Section 3.2. Agreement to Issue Bond 10
Section 3.3. Authority of the Bank 10
Section 3.4. Limitation of Authority's Liability 11
Section 3.5. Disbursement Procedure 11
Section 3.6. Direct Advances 13
Section 3.7. Supervision and Inspection 13
Section 3.8. Material Change Orders 13
Section 3.9. Representations and Warranties Regarding Project Work. 14
Section 3.10. Additional Information 14
<Page>
Section 3.11. Delivery of Funds 14
Section 3.12. Conditions Precedent to Bank's Obligation to Make the
Initial Advance for Project Costs 14
Section 3.13. Conditions Precedent to Bank's Continuing Obligation to
Make Advances 15
Section 3.14. Obligation to Advance 16
Section 3.15. Required Delivery 16
ARTICLE IV 16
PAYMENTS ON BOND 16
Section 4.1. Amounts Payable 16
Section 4.2. Payments and Rights Assigned 17
Section 4.3. Default in Payments. 17
Section 4.4. Obligation of Company Unconditional 17
ARTICLE V 18
SPECIAL COVENANTS 18
Section 5.1. Inspection of Project 18
Section 5.2. Indemnification by Company 18
Section 5.3. Use of Proceeds 19
Section 5.4. Completion of Project. 20
Section 5.5. Restrictions on Mortgage, Sale or Assignment 20
Section 5.6. Notification Upon Event of Default. 21
Section 5.7. Notification of Event of Bankruptcy 21
Section 5.8. Expenses of Operation and Maintenance 21
Section 5.9. Compliance with Laws 21
Section 5.10. Reference to Bond Ineffective After Bond Paid and Other
Obligations Satisfied 21
<Page>
Section 5.11. Reports and Notices. 21
Section 5.12. Fees; Additional Payments 22
Section 5.13. Access and Promotion 23
Section 5.14. Updated Valuations. 23
ARTICLE VI 23
FINANCIAL COVENANTS 23
Section 6.1. Maintain Existence 23
Section 6.2. Financial and Other Information 23
Section 6.3. [Reserved]. 24
Section 6.4. Indebtedness. 24
Section 6.5. Books and Records. 24
Section 6.6 Notice of Loss. 24
Section 6.7. Accrual and Payment of Taxes and Other Charges. 24
Section 6.8. Certificate 25
Section 6.9. Banking Relationship. 25
Section 6.10. Other Acts. 25
Section 6.11. Negative Covenants 25
ARTICLE VII 26
EVENTS OF DEFAULT AND REMEDIES 26
Section 7.1. Event of Default Defined 26
Section 7.2. Remedies on Default 28
Section 7.3. No Remedy Exclusive. 28
Section 7.4. Attorneys' Fees and Other Expenses 28
Section 7.5. No Additional Waiver Implied by One Waiver 29
<Page>
ARTICLE VIII 29
PREPAYMENT 29
Section 8.1. Prepayment. 29
ARTICLE IX 29
MISCELLANEOUS 29
Section 9.1. Term of Agreement. 29
Section 9.2. Notices, etc. 29
Section 9.3. Amendments to Agreement and Company's Note 30
Section 9.4. Successors and Assigns 30
Section 9.5. Severability 30
Section 9.6. Applicable Law; Entire Understanding 30
Section 9.7. Counterparts 30
Section 9.8. Construction of Provisions of this Agreement 30
Section 9.9. Publicity 30
Section 9.10. Controlling Law 30
Section 9.11. Waiver of Jury Trial. 31
Exhibit A - Form of Note
Exhibit B - Form of Requisition
</Table>
<Page>
THIS LOAN AGREEMENT, made as of the 1st day of April, 2002, by and between
the INDUSTRIAL DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA (the
"Authority"), BIOTAGE REAL ESTATE, LLC, a Virginia limited liability company
(the "Company"), and BIOTAGE, INC., a Delaware Corporation (the "Lessee")
provides;
W I T N E S S E T H:
WHEREAS, the Virginia Industrial Development and Revenue Bond Act, Title
15.2, Chapter 49, Code of Virginia of 1950, as amended (the "Act"), authorizes
the creation of the Authority and empowers it to acquire, own, lease and dispose
of properties to the end that the Authority may be able to promote industry and
develop trade; and further authorizes the Authority to lease or sell to others
any or all of its facilities, to issue bonds for the purposes of carrying out
any of its powers, to lend the proceeds of its bonds for such purposes, to
mortgage and pledge any or all of its facilities as security for the payment of
principal of and interest on such bonds and any agreements made in connection
therewith, to pledge the revenues and receipts from such facilities or from any
other source to the payment of such bonds and to issue its refunding bond or
bonds to refund any bond or bonds previously issued by it; and
WHEREAS, at the request of the Company, the Authority intends to issue and
sell to the Bank (hereinafter defined) its Industrial Development Revenue Bond
(Biotage Project), Series 2002, in the principal amount of Four Million Two
Hundred Fifty Thousand Dollars ($4,250,000) (the "Bond") to assist the Company
in financing the acquisition of approximately 7.1 acres of land constituting
Parcel F-1A in the University of Virginia Research Park at North Fork in
Albemarle County, Virginia, the construction of an approximately 50,000 square
foot manufacturing facility thereon and the acquisition and installation of
manufacturing equipment therefor (the "Project"), to be owned by the Company,
and leased to the Lessee, and used in the Lessee's business of manufacturing
drug purification equipment, and to pay certain costs of issuance of the Bond;
and
WHEREAS, the Authority proposes to lend the proceeds of the Bond to the
Company, to be used to pay a portion of the costs of the Project; and
WHEREAS, the Authority will assign this Agreement and the Company's Note to
Virginia National Bank (the "Bank") as security and source of payment for the
Bond.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto covenant and agree as
follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.1. DEFINITIONS. All words and terms defined in the Bond Purchase
Agreement dated as of April 1, 2002 (the "Bond Purchase Agreement"), among the
Authority, the Company, the Bank and the Lessee, shall have the same meanings
when such words and terms are used in this
<Page>
Agreement. In addition, the following words and terms shall have the following
meanings, unless the context otherwise requires:
"ACCEPTABLE RETAINAGE" means the amount of retainage required by the Bank
for the construction contract, and shall be equal to ten percent (10%) of all
hard costs of construction until such time as the Project is complete, final
unconditional certificates of occupancy have been issued, an as-built survey and
a final title insurance date-down endorsement have been submitted to and
approved by the Bank and the Bank has received such lien waivers and affidavits
as it may request from the General Contractor and others supplying labor and
materials to the Project.
"ADVANCES" means the periodic disbursements of the Loan applicable to the
Project, which Advances shall be made in accordance with the provisions of
Article III hereof.
"AGREEMENT" shall mean this Loan Agreement between the Authority, the
Company and the Lessee, as the same may be from time to time amended or
supplemented in accordance with the provisions hereof.
"APPLICABLE ENVIRONMENTAL LAWS" means any applicable laws, rules or
regulations pertaining to the environment, or petroleum products, or radon
radiation, or oil or hazardous substances, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), and the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"). The terms "hazardous substance" and "release" shall have the
meanings specified in CERCLA, and the terms "solid waste," disposal," "dispose,"
and "disposed" shall have the meanings specified in RCRA, except that if such
acts are amended to broaden the meanings thereof, the broader meaning shall
apply herein prospectively from and after the date of such amendments;
notwithstanding the foregoing, provided, to the extent that the laws of the
Commonwealth of Virginia establish a meaning for "hazardous substance" or
"release" which is broader than that specified in CERCLA, as CERCLA may be
amended from time to time, or a meaning for "solid waste," "disposal," and
"disposed" which is broader than specified in RCRA, as RCRA may be amended from
time to time, such broader meanings under said state law shall apply.
"ASSIGNMENTS" means the Assignments of Leases, Contracts and Other Rights
to be executed by the Company as a condition to the purchase of the Bond and in
a form acceptable to the Bank.
"BANK" shall mean Virginia National Bank, as the initial purchaser and
holder of the Bond, and any successor or other holder of the Bond.
"BANK COMMITMENT LETTER" means the Bank's letter addressed to the Lessee
for the benefit of the Company dated December 13, 2001, as revised on December
21, 2001, wherein the Bank agreed to acquire the Bond under certain conditions.
"BOND COUNSEL" shall mean a law firm, appointed by the Company, having a
national reputation in the field of municipal law whose opinions are generally
accepted by purchasers of municipal bonds. The firms of Williams, Mullen, Clark
& Dobbins, Richmond, Virginia, and LeClair Ryan, a Professional Corporation,
Richmond, Virginia shall be deemed acceptable as Bond Counsel.
<Page>
"BOND DOCUMENTS" shall mean this Agreement, the Bond Purchase Agreement,
the Bond, the Company's Note, the Deed of Trust, the assignments of the
Authority's rights under this Agreement, the Guaranty Agreements, and the
Letters of Credit.
"BUSINESS DAY" means a day (other than Saturday, Sunday and legal holidays)
when the Bank is open for business.
"CLOSING DATE" shall mean the date of the issuance and delivery of the
Bond.
"COLLATERAL" means the collateral as defined in the Deed of Trust.
"COMPANY" shall mean Biotage Real Estate, LLC, a Virginia limited liability
company, and any successor to the Company.
"COMPANY'S NOTE" shall mean the promissory note of the Company in the
principal amount of $4,250,000, dated as of the Closing Date, and delivered to
the Authority pursuant to this Agreement.
"CONSTRUCTION CONTRACT" shall mean the contract dated January 4, 2002
between the Company and the General Contractor for the construction of the
Project, as amended from time to time.
"COST(S) OF THE PROJECT" means all costs and allowances which the Authority
or the Company may properly pay or accrue for the Project under the Act and
which, under GAAP are chargeable to the capital account of the Project or could
be so charged either with a proper election to capitalize such costs or, but for
a proper election, to expense such costs, including (without limitation) the
following costs:
(a) fees and expenses incurred in preparing the plans and
specifications for the Project (including any preliminary study or planning or
any aspect thereof); any labor, services, materials and supplies used or
furnished in site improvement and construction; any equipment for the Project;
and any acquisition necessary to provide utility services or other services,
roadways, and parking lots; and all real and tangible personal property deemed
necessary by the Company and acquired in connection with the Project;
(b) fees for architectural, engineering, supervisory and consulting
services;
(c) any fees and expenses incurred in connection with perfecting
and protecting title to the Project and any fees and expenses incurred in
connection with preparing, recording or filing such documents, instruments or
financing statements as either the Authority or the Bank may deem desirable to
perfect or protect the rights of the Authority or the Bank under the Bond
Documents;
(d) any legal, accounting or financial advisory fees and expenses,
including, without limitation, fees and expenses of Bond Counsel and counsel to
the Authority, the Company or the Bank, any fees and expenses of the Authority
or the Bank, filing fees, and printing and engraving costs, incurred in
connection with the authorization, issuance, sale and purchase of the Bond, and
the
<Page>
preparation of the Bond Documents and all other documents in connection with
the authorization, issuance and sale of the Bond;
(e) interest to accrue on the portion of the Bond attributable to
construction costs during construction of the Project;
(f) any administrative or other fees charged by the Authority or
reimbursement thereto of expenses in connection with the Project until the
completion date; and
(g) any other costs and expenses relating to the Project which
could constitute costs or expenses for which the Authority may expend Bond
proceeds under the Act; provided, however, that Costs of the Project shall not
include issuance costs (including counsel fees and Authority fees and costs) in
excess of an amount equal to 2% of the principal amount of the Bond.
"DEED OF TRUST" shall mean the Credit Line Deed of Trust, Assignment and
Security Agreement, dated as of April 1, 2002, granted by the Company to the
trustees named therein to secure the Company's Note.
"DEFAULT RATE" means a per annum rate equal to the interest rate on the
Bonds in effect at the time of an Event of Default (the Tax-Exempt or the
Taxable Rate) plus 4%.
"DETERMINATION OF TAXABILITY" means a determination that the interest
income on the Bonds does not qualify as interest that is excludable from the
gross income of the Holder(s) thereof for purposes of federal income taxation
("exempt interest") under Section 103 of the Code, which determination shall be
deemed to have been made, upon the occurrence of the first to occur of the
following events (each an "Event of Taxability"):
(a) the date on which the Bank determines that the interest income
on any Bonds does not qualify as exempt interest, if such determination is
supported by an opinion of Bond Counsel to that effect;
(b) the date on which (i) any change in law or regulation becomes
effective, (ii) the Internal Revenue Service has issued any private ruling,
technical advice or any other written communication, or (iii) there is a
non-appealable final judgment or determination by the Internal Revenue Service
or a court of competent jurisdiction, in each case to the effect that the
interest income on the Bonds does not qualify as exempt interest;
(c) the date on which the Company receives notice from the Bank or
the Escrow Agent in writing indicating that the Internal Revenue Service has
issued a thirty-day letter or other notice which asserts that the interest on
such Bonds does not qualify as exempt interest;
(d) the date when the Company files any statement, supplemental
statement, or other tax schedule, return or document, which discloses that an
Event of Taxability has occurred; or
(e) the date whereupon any act, failure to act or use of the
proceeds of the Loan, a change in use of the Project or any misrepresentation or
inaccuracy in any of the representations,
<Page>
warranties or covenants contained in this Agreement, the Company's Tax
Information Certificate and Agreement delivered on the Closing Date, or any
other Bond Document causes a Determination of Taxability as described above.
"EVENT OF DEPOSIT SHORTFALL" shall mean a failure by the Company and the
Lessee at any time during the term of the Bond to maintain in the aggregate an
average, noninterest-bearing deposit account balance at the Bank in an amount
greater than or equal to $750,000, determined by the Bank on a semi-annual basis
commencing on the six month anniversary of the Closing Date.
"EVENT OF DEPOSIT SHORTFALL PERIOD" shall mean the six (6) month period
following an Event of Deposit Shortfall.
"EVENT OF DEFAULT" shall mean any event defined as such in Section 7.1.
"EVENT OF TAXABILITY" shall have the meaning given such term under the
definition of "Determination of Taxability" provided herein.
"EQUIPMENT" means all furniture, fixtures and equipment owned by the
Company located on, attached to or used or useful in connection with the
Project, provided, however, that with respect to any items which are leased and
not owned by the Company, the Equipment shall include the leasehold interest
with any options to purchase any of said items and any additional or greater
right such items hereafter acquired by the Company (but nothing herein shall
permit the leasing of any Equipment except as otherwise expressly permitted
herein unless the Bank's written consent is first obtained).
"GAAP" means, as in effect from time to time, generally accepted accounting
principles consistently applied as promulgated by the American Institute of
Certified Public Accountants.
"GENERAL CONTRACTOR" means the Class A, Virginia licensed general
contractor for the Project, the choice of which shall be approved by the Bank.
"GUARANTY AGREEMENTS" means the Guaranty Agreements from Dyax Corp., and
the Lessee, executed in favor of the Bank securing entire principal of, premium,
if any, and interest on the Bond and any all other amounts payable by the
Company under the Bond Documents, in form and substance acceptable to the Bank.
"IMPROVEMENTS" means all buildings, structures and improvements of every
nature whatsoever now or hereafter situated on the Property, including, but not
limited to, all gas and electric fixtures, radiators, heaters, engines and
machinery, boilers, ranges, elevators and motors, plumbing and heating fixtures,
air conditioning equipment, carpeting and other floor coverings, water heaters,
awnings and storm sashes, cleaning apparatus, signs, landscaping and printing
areas, which are or shall be attached to the Property or said buildings,
structures or improvements.
"INDEBTEDNESS" means any (i) obligations for borrowed money, (ii)
obligations representing the deferred purchase price of property other than
accounts payable arising in connection with the purchase of inventory customary
in the trade, (iii) obligations, whether or not assumed, secured by
<Page>
liens or payable out of the proceeds or production from property now or
hereafter owned or acquired and (iv) the amount of any other obligation
(including obligations under financing leases) which would be shown as a
liability on a balance sheet prepared in accordance with GAAP.
"INSPECTING ARCHITECT" means nbj Architecture, PLC.
"LETTERS OF CREDIT" shall mean the (i) $300,000 letter of credit secured by
Stephen T. McLean and the (ii) $300,000 letter of credit secured by David P.
Turner, in each case in form and substance acceptable to the Bank, issued by
institutions acceptable to the Bank, and issued in favor of the Bank as security
for repayment of the Bond and any other amounts payable by the Company under the
Bond Documents.
"MATERIAL CHANGE ORDERS" shall mean any amendments to the Plans and
Specifications or the Construction Contract, resulting in an increase or
decrease in the project costs from that shown in the attached Project Budget in
an amount greater than $50,000 in any one instance, or $200,000 in the
aggregate.
"NET INSURANCE PROCEEDS" shall have the same meaning as in the Deed of
Trust.
"PAYMENT OF THE BOND" shall mean the payment in full of principal of and
interest on the Bond or provisions for such payment sufficient to discharge this
Agreement as provided herein.
"PLANS AND SPECIFICATIONS" means the final working plans, drawings and
specifications for the Project, as approved by the Company, the Bank and all
governmental authorities having jurisdiction over the Project.
"PROPERTY" means the real estate constituting Parcel F-1A in the University
of Virginia Research Park at North Fork in Albemarle County, Virginia, and all
Improvements thereon including, but not limited to, the Project.
"TAXABLE RATE" shall mean (i) 7.00% per annum upon the occurrence of any
Determination of Taxability occurring on or before February 28, 2007, and (ii)
the percentage equal to the published, annualized interest rate for the
five-year U.S. Treasury Note based on the most recent weekly average yield,
adjusted to a constant maturity of five years, as made available by the Federal
Reserve Board in effect at the time of, and effective upon, the occurrence of
any Determination of Taxability occurring after April 1, 2007, plus 2.75%, and
(iii) in each case to be adjusted in accordance with this definition every five
years after any such Determination of Taxability. For the six (6) month period
following an Event of Deposit Shortfall, if any, the Taxable Rate shall be
increased by an additional (i) 0.25% for an Event of Deposit Shortfall less than
or equal to $50,000, and (ii) 0.50% for an Event of Deposit Shortfall ranging
from $50,001 to $100,000, plus an additional 0.20% for each $50,000 increment in
excess of $100,000.
In addition to the foregoing, the Taxable Rate shall include the obligation
of the Company to pay to the Bank (or any other previous or current holder of
the Bond) an amount equal to any tax liability, penalties, interest or other
charges assessed against the Bank for failure to include interest on the Bonds
in its gross income, together with any and all attorneys' fees, court costs, or
other out-of-
<Page>
pocket costs incurred by the Bank in connection therewith. The obligations of
the Company with respect to the Taxable Rate shall survive the termination of
this Agreement and the payment and performance of all the Company's other
obligations under the Bond Documents.
"TAX EXEMPT RATE" shall mean (i) 5.83% per annum from the Closing Date
through February 28, 2007, and (ii) for each subsequent five (5) year period,
commencing April 1, 2007, the percentage equal to the published, annualized
interest rate on the five-year U.S. Treasury Note based on the most recent
weekly average yield, adjusted to a constant maturity of five years, as made
available by the Federal Reserve Board in effect on the April 1 commencing such
five year period, plus 1.58% per annum. For the six (6) month period following
an Event of Deposit Shortfall, if any, the Tax-Exempt Rate shall be increased by
an additional (i) 0.16% for an Event of Deposit Shortfall less than or equal to
$50,000, and (ii) 0.32% for an Event of Deposit Shortfall ranging from $50,001
to $100,000, plus an additional 0.13% for each $50,000 increment in excess of
$100,000.
SECTION 1.2. RULES OF CONSTRUCTION. The following rules shall apply to the
construction of this Agreement, unless the context otherwise requires:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) Words importing the redemption or calling for redemption of
Bond shall not be deemed to refer to or connote the payment of Bond at its
stated maturity.
(c) All references herein to particular articles or sections are
references to articles or sections of this Agreement.
(d) The headings herein are solely for convenience of reference and
shall not constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
SECTION 1.3. UCC. Terms contained in this Agreement shall, unless otherwise
defined herein or unless the context otherwise indicates, have the meanings, if
any, assigned to them by Uniform Commercial Code in effect in the applicable
state in which Collateral is located.
SECTION 1.4. REFERENCES. All references to other documents or instruments
shall be deemed to refer to such documents or instruments as they may hereafter
be extended, renewed, modified or amended and all replacements and substitutions
therefor.
SECTION 1.5. GAAP. All accounting terms used in this Agreement shall be
construed in accordance with GAAP, except as otherwise defined.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS BY AUTHORITY. The Authority makes the
following representations as the basis for its undertakings hereunder:
<Page>
(a) The Authority is not (1) in violation of the Act or any
existing law, rule or regulation applicable to it or (2) to the best of its
knowledge, in default under any indenture, mortgage, deed of trust, lien, lease,
contract, note, bond, order, judgment, decree or other agreement, instrument or
restriction of any kind to which any of its assets are subject and which would
affect the validity or enforceability of the Bond Documents.
(b) To the best of its knowledge, no further approval, consent or
withholding of objection on the part of any regulatory body, federal, state or
local, is required in connection with (1) the issuance and delivery of the Bond
by the Authority, (2) the execution or delivery of or compliance by the
Authority with the terms and conditions of the Bond Documents to which it is a
party, or (3) the assignment by the Authority of its rights under this Agreement
and the Company's Note (except for the right of the Authority to
indemnification, notice and payment of fees and expenses) and the performance by
the Authority of its obligations in the manner and under the terms and
conditions as provided herein will comply with all applicable federal, state and
local laws and, to the best of its knowledge, any rules and regulations
promulgated thereunder by any regulatory authority or agency.
(c) No litigation, inquiry or investigation of any kind in or by
any judicial or administrative court or agency is pending or, to its knowledge,
threatened against the Authority with respect to (1) the organization and
existence of the Authority, (2) its authority to execute or deliver the Bond
Documents to which it is a party, (3) the validity or enforceability of any of
such instruments or the transactions contemplated hereby or thereby, (4) the
title of any officer of the Authority who executed such instruments, or (5) any
authority or proceedings related to the execution or delivery of such
instruments on behalf of the Authority, and no such authority or proceedings
have been repealed, revoked, rescinded or amended but are in full force and
effect. The foregoing representation does not include any litigation that may
have been filed, but not served, against the Authority and of which Authority
has no knowledge.
SECTION 2.2. REPRESENTATIONS BY COMPANY. The Company and the Lessee each
make the following representations as the basis for their undertakings
hereunder:
(a) Neither the Company nor the Lessee is in default in the payment
of the principal of or interest on any of its indebtedness for borrowed money
and neither the Company nor the Lessee is in default in any material respect
under any instrument under and subject to which any indebtedness has been
incurred, and no event has occurred and is continuing under the provisions of
any such agreement that, with the lapse of time or the giving of notice, or
both, would constitute an event of default thereunder.
(b) The Company and the Lessee have obtained all consents,
approvals, authorizations and orders of any governmental or regulatory authority
that are required to be obtained by the Company and/or the Lessee as a condition
precedent to the issuance of the Bond or the execution and delivery of the Bond
Documents to which it is a party or the performance by the Company or the Lessee
of its respective obligations hereunder or thereunder.
<Page>
(c) There are no actions, suits or proceedings pending or, to the
best of the Company's or the Lessee's knowledge, threatened, which might
adversely affect the financial condition of the Company or the Lessee, or which
might impair the value of any Collateral. The Company and the Lessee are not in
violation of any agreement the violation of which might reasonably be expected
to have a materially adverse effect on the Company's or the Lessee's business or
assets, and neither the Company nor the Lessee is in violation of any order,
judgment or decree of any court, or any statute or governmental regulation to
which it is subject. Neither the execution nor the performance of this Agreement
or the other Bond Documents will result in any breach of any deed of trust,
lease, credit or loan agreement or any other instrument which binds or affects
the Company or the Lessee.
(d) All financial statements of the Company and the Lessee
heretofore given and hereafter to be given to the Bank are and will be true and
complete in all material respects as of their respective dates, and fairly
represent and will fairly represent the financial conditions of the business or
persons to which they pertain. No materially adverse change has occurred in the
financial conditions reflected in the financial statements most recently
submitted to the Bank since the date thereof. All financial statements of the
Company and the Lessee have been and will be prepared in accordance with GAAP.
(e) The Property will comply at all times, both during construction
and upon completion thereof, with all applicable covenants and restrictions of
record and all laws, ordinances, rules and regulations, including, without
limitation, the Americans with Disabilities Act and regulations thereunder, and
laws, ordinances, rules and regulations relating to zoning, health, building
codes, setback requirements, and Applicable Environmental Laws. All necessary
and appropriate action will be taken to permit the construction of the Project
according to the Plans and Specifications therefor as approved by the Bank, and
full use of such Improvements for their intended purpose under applicable laws,
ordinances and regulations, including, without limitation, zoning, subdivision
regulations and Applicable Environmental Laws. The Company and the Lessee each
agree to indemnify and hold the Bank harmless from any fines or penalties
assessed or any corrective costs incurred by the Bank if the Improvements or the
Property, or any part thereof, is hereafter determined to be in violation of any
covenants or restrictions of record or any applicable laws, ordinances, rules or
regulations, and such indemnity shall survive any foreclosure or deed in lieu of
foreclosure.
(f) The Deed of Trust, when duly executed, delivered and recorded,
will constitute a first priority security lien against the Company's fee simple
interest in the Property, prior to all other liens and encumbrances, including
those which may hereafter accrue, except for such matters as shall have been set
forth in the Deed of Trust as a permitted encumbrance.
(g) All documents furnished to the Bank by or on behalf of the
Company and the Lessee and as part of or in support of the Loan application or
pursuant to the Bank Commitment Letter or this Agreement are true, correct,
complete, and accurately represent the matters to which they pertain as of the
date hereof.
ARTICLE III
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LOAN OF BOND PROCEEDS
SECTION 3.1. LOAN OF PROCEEDS. The Authority hereby lends the proceeds from
the sale of the Bond pursuant to this Loan Agreement to the Company, and the
Company hereby borrows the same from the Authority as evidenced by this Loan
Agreement and the issuance and delivery of the Company's Note to the Authority.
As each Advance is made by the Bank pursuant hereto, the amount of such Advance
shall constitute a portion of the Bank's payment for the purchase of the Bond.
The Company covenants to use the proceeds from the sale of the Bond to pay,
together with other funds available to the Company, the cost of the acquisition,
construction and equipping of the Project.
SECTION 3.2. AGREEMENT TO ISSUE BOND. In order to provide funds for payment
of all or a portion of the cost of the acquisition, construction and equipping
of the Project, the Authority shall simultaneously with the execution and
delivery hereof proceed with the issuance and sale of the Bond bearing interest,
maturing and having the other terms and provisions set forth therein.
SECTION 3.3. AUTHORITY OF THE BANK. In accordance with the Bank's agreement
to purchase the Bond pursuant to the Bond Purchase Agreement, the Authority
hereby agrees that the Bank shall oversee the construction of the Project and
approve the making of each Advance under the Bond.
SECTION 3.4. LIMITATION OF AUTHORITY'S LIABILITY.
(a) No covenant, agreement or obligation contained herein or in the
Bond or the Bond Purchase Agreement shall be deemed to be a covenant, agreement
or obligation of any present or future director, officer, employee or agent of
the Authority in his individual capacity, and neither the directors of the
Authority nor any officer thereof executing the Bond shall be liable personally
on the Bond or be subject to any personal liability or accountability by reason
of the issuance thereof. No director, officer, employee or agent of the
Authority shall incur any personal liability with respect to any other action
taken by him pursuant to this Agreement or the Act provided he does not act in
bad faith.
The obligations of the Authority hereunder are not general obligations of
the Authority but are limited obligations payable solely from the revenues and
receipts derived from the loan of the proceeds of the Bond described in this
Agreement, including without limitation all payments under this Agreement and
the Company's Note and from the security therefor. The obligations of the
Authority hereunder shall not be deemed to constitute a debt or a pledge of the
faith and credit of the Commonwealth of Virginia or any political subdivision
thereof, including the Authority and Albemarle County. Neither the Commonwealth
of Virginia nor any political subdivision thereof, including the Authority and
Albemarle County, shall be obligated to pay the obligations hereunder or under
the Bond or other costs incident thereto except from the revenues and receipts
pledged therefor, and neither the faith and credit nor the taxing power of the
Commonwealth of Virginia or any political subdivision thereof, including the
Authority and Albemarle County, is pledged to the payment of the obligations
hereunder.
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SECTION 3.5. DISBURSEMENT PROCEDURE. Subject to compliance with all of the
provisions of this Agreement, and subject to the terms of this Agreement, the
Loan shall be disbursed from the proceeds of the Bank's purchase of the Bond in
several Advances at such time and in such amounts as the Bank shall determine in
accordance with Section 3.3 and in accordance with the following procedures:
(a) Not less than five (5) Business Days before the date on which
the Company desires an Advance of the Loan, the Company shall submit to the Bank
a requisition for the payment of the Costs of the Project in the form of Exhibit
B to this Agreement, reviewed and approved by the Inspecting Architect, and
otherwise satisfactory to the Bank which shall include, in addition to any other
items set forth in the form of requisition attached hereto as Exhibit B, (a) the
current, updated Project Budget setting forth the original Project Budget, the
proposed revisions thereto (if any), previous amounts advanced, amounts paid
from funds other than the Loan, the amounts requested with the current
requisition and the amounts remaining to be advanced, all itemized under the
line items of the Project Budget, (b) the itemized schedule of values for the
construction work and all costs incurred for construction pursuant to each
category of the schedule of values, (c) a separate itemization of costs not
included in the foregoing general construction contract for equipment,
construction and non-construction expenses in connection with the Project
pursuant to the general construction contract with the General Contractor, an
AIA G702/703 form signed by the General Contractor and the Company, with copies
of invoices for all non hard cost construction items and (d) the percentage of
completion of each line item on the Project Budget and schedule of values. The
accuracy of the costs and percentage of completion shall be certified to the
Bank by the Company and by the General Contractor. The Company hereby appoints
David P. Turner and John W. Hulburt, either of whom may act, as its agent to
make Advance requests. The Company may hereafter by written notice to the Bank
appoint one or more other agents or change agents to make Advance requests,
provided any such notice is not effective until actually received by the Bank.
If the Company appoints more than one agent to make Advance requests, any one
may sign the request, unless notice otherwise is received by the Bank ten (10)
days prior to the Bank's receipt of such request.
(b) The completed progress with respect to the Project must be
reviewed by the Bank as a condition to the Advance. The Bank will determine the
percentage of completion, continuing compliance with the Plans and
Specifications and the maximum allowable Advance, which shall be determined in
accordance with SECTION 3.5(c) below.
(c) The maximum allowable Advance of the Loan will be equal to the
allowable non-construction expenses actually incurred within the amounts set
forth in the Project Budget, plus the lesser of (a) the actual cost of the
completed portion of the Project or (b) the Bank-approved scheduled value of
each completed portion of the Project (as set forth in the Project Budget and
schedule of values prepared by the General Contractor and approved by the Bank),
with no advances for duplication of work for which Loan funds were previously
advanced, work that does not conform to the Plans and Specifications, or work
that is unsatisfactory in the opinion of the Bank. The Advance to be made will
equal the maximum allowable Advance, less: (1) the Acceptable Retainage (except
in the case of the final Advance of the Loan) and (2) the amounts previously
advanced hereunder. The Acceptable Retainage shall be advanced to the Company
only after satisfactory
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completion of all construction work and the furnishing to the Bank of evidence
satisfactory to the Bank that such completion is free of all mechanics' and
materialmen's liens and that appropriate governmental authorities have approved
the Improvements in their entirety for permanent occupancy.
(d) Advances shall be made for costs on each line item shown in the
Project Budget only up to the amount set forth in the Project Budget for such
line item, provided, however, that the Bank agrees that cost savings in any line
item may be re-allocated to other line items in the Company's sole discretion.
The timing of Advances for development fees, overhead or similar charges or
other amounts to the Company or any person or entity affiliated with (other than
for actual construction costs incurred for completed work) shall be in the
Bank's reasonable discretion and the percentage of such category advanced shall
not exceed the percentages of completion of the Project except in the Bank's
sole discretion; provided, however, such Advance shall be made not later than
the final Advance so long as there has not been an Event of Default and
undisbursed Loan proceeds in such categories remain available. No Advance will
be made for materials to be stored for future construction, except in the Bank's
sole discretion. Notwithstanding the foregoing, the Company agrees not to
request any Advance for stored materials unless (i) the Company specifies in
such request that it includes a specified amount for stored materials, which
stored materials are set forth in a detailed listing; (ii) such stored materials
are to be used in the Project within sixty (60) days of the requested Advance
and (iii) such stored materials are fully insured, are subject to the lien and
security interest of the Bank only and are either stored in a bonded warehouse
approved by the Bank and available for inspection by the Bank or stored on the
Property in a locked and secure storage arrangement approved by the Bank.
(e) Notwithstanding the foregoing, the Bank shall not be required
to make an Advance more than once each month, and the Bank reserves the right to
limit the total amount advanced on the Loan at any time to an amount which, when
deducted from the total amount of the Loan, leaves a balance to be advanced
equal to or greater than the cost of completion of the Project, plus all
remaining non-construction expenses and the Acceptable Retainage, each as set
forth in the Project Budget and as determined by the Bank from time to time. The
Bank shall be entitled to retain at all times as undisbursed Loan funds an
amount sufficient to pay all construction and non-construction costs relating to
the Project, as reasonably estimated by the Bank, including, but not limited to,
amounts to become due pursuant to construction contracts and equipment purchase
contracts, amounts to complete the Project but not yet included in any such
contract, estimated interest costs in excess of anticipated cash flow for the
period that the Loan is outstanding, estimated post-closing fees and expenses of
Authority, the Bank and their counsel, estimated permit and license fees,
estimated architectural and engineering fees of the Company and of any
inspecting consultant hired by the Bank, and estimated recording and title
insurance costs, all to the extent reasonably anticipated to be incurred after
the Closing Date.
SECTION 3.6. DIRECT ADVANCES. Regardless of whether the Company has
submitted a requisition therefor, upon an Event of Default and upon three (3)
Business Days prior written notice to the Company, the Bank may from time to
time advance amounts which become due for costs of insurance, title insurance,
fees and expenses of Authority's and the Bank's legal counsel and amounts due
the Bank for payments of principal, interest and fees and other amounts due
pursuant to the Note or others for construction and non-construction expenses
for which the Company is responsible for
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payment. To the extent such Advances are for costs or items which are not part
of the Costs of the Project, any such Advances shall be made from the Bank's own
funds and not from proceeds of the Bond. Such Advances may be made directly to
parties to whom such amounts are due or to Authority or the Bank to reimburse
Authority or the Bank for sums due to them. The Bank will notify the Company
immediately either by mail or telephone of such Advances to parties other than
the Company. All such Advances, including advances to parties other than the
Company, shall be deemed Advances to the Company hereunder and shall be secured
by the Bond Documents to the same extent as if they were made directly to the
Company.
SECTION 3.7. SUPERVISION AND INSPECTION. The Bank and the Inspecting
Architect shall have the right to monitor the Company's progress on construction
of the Project monthly (or at such additional times as the Bank, in its
reasonable discretion, may require) in order to confirm that work is in place
and materials furnished for each Advance request.
SECTION 3.8. MATERIAL CHANGE ORDERS. The Company shall not enter into any
Material Change Order except with the prior written consent of the Bank.
SECTION 3.9. REPRESENTATIONS AND WARRANTIES REGARDING PROJECT WORK. Each
submission by the Company to the Bank of a requisition for an Advance shall
constitute the Company's representation and warranty to Authority and the Bank
that: (a) each item of cost included therein constitutes a Cost of the Project,
(b) completed construction work in connection with the Project is in accordance
with the Plans and Specifications and (c) all construction and non-construction
costs for the payment of which the Bank has previously advanced funds have in
fact been paid.
SECTION 3.10. ADDITIONAL INFORMATION. If the Bank or the title insurance
company insuring the Deed of Trust shall so require, the Company will submit
with its requisitions for Advances estoppel certificates, in form satisfactory
to the Bank and the title insurance company, showing amounts paid and amounts
due to all parties furnishing labor, materials or equipment in connection with
the Project and evidence that the Company has paid all costs designated in the
Project Budget for payment by the Company from its separate funds.
SECTION 3.11. DELIVERY OF FUNDS. Except as otherwise provided herein,
Advances of the Loan will be made by depositing the same to the Company's
deposit account with the Bank. The Bank's approval of any Advance shall not
constitute the Bank's approval or acceptance of the construction theretofore
completed. The Bank's inspection and approval of the Plans and Specifications,
the Project or the workmanship and materials used therein shall impose no
liability of any kind on the Bank, the sole obligation of the Bank as the result
of such inspection and approval being to approve the making of the Advances if,
and to the extent, required by this Agreement.
SECTION 3.12. CONDITIONS PRECEDENT TO BANK'S OBLIGATION TO MAKE THE INITIAL
ADVANCE FOR PROJECT COSTS. The Bank's obligation to make an Advance for the
Costs of the Project shall be effective only upon fulfillment of the following
conditions which shall be in addition to the conditions described in Section 5
of the Bond Purchase agreement:
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(a) PROJECT BUDGET. The Bank has received and approved the Project
Budget and a complete trade breakdown and a detailed final total
cost schedule for the Project.
(b) CONSTRUCTION CONTRACT. The Bank has received and approved
copies of a construction contract with the General Contractor for completion of
the Project in the amount allocated for construction not to exceed the Project
Budget (including the Acceptable Retainage), and payment and performance bonds
on standard AIA Forms with the Bank named as dual obligee on such bonds. If the
construction contract does not require that General Contractor to assume such
risk of loss, the Company shall also provide evidence that builder's risk
insurance has been obtained for the Project.
(c) CONTINUING PERFORMANCE. The Bank has received assignments in
form acceptable to it of the construction contract and the Plans and
Specifications and the right to their use, together with a letter from the
General Contractor stating that upon an Event of Default by the Company, the
General Contractor shall continue performance under the construction contract
and the Plans and Specifications to complete the Project for the benefit of the
Authority and the Bank at no additional cost.
(d) PLANS AND SPECIFICATIONS. The Bank has received and approved
the Plans and Specifications, together with all subsequent material
modifications or amendments thereto, which amendments and modifications must be
approved in writing by the Bank, together with a certificate of General
Contractor certifying that the Plans and Specifications have been approved by
all governmental authorities having jurisdiction over the Project.
(e) APPRAISAL. An updated appraisal of the Property, from an
appraiser acceptable to the Bank and otherwise in form and substance acceptable
to the Bank, showing that the aggregate outstanding amount of the Bond (assuming
the Bond has been fully advanced) shall not exceed the lower of (i) seventy
percent (70%) of the "as completed" fair market value of the Project or (ii)
seventy percent (70%) of the actual construction costs of the Project, including
site development costs and the cost of acquiring the land upon which the Project
will be located.
(f) COMPANY'S EQUITY CONTRIBUTION. The Bank has received evidence
to its satisfaction that the Company has contributed at least $1,250,000 towards
the construction of the Project, all in accordance with the Plans and
Specifications, in addition to the costs incurred by the Company in connection
with the purchase of the land upon which the Project will be located.
SECTION 3.13. CONDITIONS PRECEDENT TO BANK'S CONTINUING OBLIGATION TO MAKE
ADVANCES. The Bank's obligation to make any Advance shall be effective only upon
fulfillment of the following continuing conditions:
(a) The Bank has received and approved all items required to be
provided to and approved by the Bank under the terms of the Bank Commitment
Letter and this Agreement.
(b) The Company has paid all fees and expenses then due as required
by this Agreement and the Bank Commitment Letter.
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(c) The Company has executed, delivered, recorded or filed, as the
case may be, all documents required by this Agreement, all in form and content
satisfactory to the Bank.
(d) The Bank has received an endorsement to the title policy or
other evidence satisfactory to the Bank, increasing the amount of applicable
coverage to include any and all prior draws, removing any survey exceptions and
showing that there has been no change in the status of the title to the
Property, creation of any new encumbrance thereon, or occurrence of any event
that could in the Bank's sole opinion impair the priority of the lien of the
Deed of Trust as of the time of each Advance.
(e) The Bank has received a current plat of survey prepared by a
certified state engineer or certified land surveyor designating (i) the
perimeter of the Property, (ii) all easements, right-of-ways, set-back lines,
etc., (iii) the location of the improvements and (iv) such other matters as may
be required by the Bank, together with a legal description of the Property
certified to the Bank and, at the Bank's option, the title insurer.
SECTION 3.14. OBLIGATION TO ADVANCE. In the event the Bank, at its sole
option, elects to approve the making of one or more Advances prior to receipt
and approval of all items required by this Article, such election shall not
obligate the Bank to approve or to make any subsequent Advance.
SECTION 3.15. REQUIRED DELIVERY. Except as otherwise specifically provided
in this Agreement, the Bank Commitment Letter or any other Bond Document, all
documents, exhibits, instruments, etc. required to be provided to the Bank, or
the Bank's counsel by this Article III, and such other documentation and matters
as the Bank or its counsel may reasonably require in the documentation of the
Loan, shall be in form and content acceptable to the Bank, and submitted in
writing to the Bank and the Bank's counsel, as the case may be, for its approval
at least five (5) Business Days prior to the date on which action is desired.
ARTICLE IV
PAYMENTS ON BOND
SECTION 4.1. AMOUNTS PAYABLE. (a) The Company shall pay to the Bank, for
the account of the Authority, an amount equal to the aggregate principal amount
of the Bond and, as interest on its obligation to pay such amount, an amount
equal to interest on the Bond computed in accordance with the terms of this
Agreement and the Bond, such amounts to be paid in installments due on the
dates, in the amounts and in the manner provided in the Bond, for the payment of
the principal of and interest on the Bond, whether at maturity, upon redemption
or acceleration. Any overdue payment will bear interest at a rate equal to the
Default Rate until payment is made in full. The Company shall provide for the
payment of the principal of the Bond, upon maturity, redemption or acceleration,
and provide for payment of the interest on the Bond, by the delivery of the
Company's Note, in substantially the form thereof attached hereto as Exhibit A,
to the Authority, and the Authority shall assign the Company's Note, without
recourse, to the Bank, simultaneously with the original issuance and delivery of
the Bond. The obligations of the Company under this Section 4.1 are evidenced by
the Company's Note.
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(b) The Company shall pay such other amounts as are described in
Sections 7, 8, 12 and 14 of the Bond Purchase Agreement.
(c) Upon the occurrence of a Determination of Taxability, the
Company shall immediately pay all amounts due as a result of the Determination
of Taxability or otherwise due under the definition of the Taxable Rate, and
with respect to future interest payments, begin making such interest payments
calculated at the Taxable Rate, all in accordance with the terms of this
Agreement.
(d) Upon the occurrence and continuation of an Event of Default,
the entire outstanding principal amount of the Company's Note and the Bonds
shall accrue interest at the Default Rate.
SECTION 4.2. PAYMENTS AND RIGHTS ASSIGNED. It is understood and agreed that
all payments hereon, as well as the Authority's other rights under this
Agreement and the Bond (except its rights to indemnification, to receive notices
and be paid and reimbursed its fees and expenses) are being hereby assigned by
the Authority to the Bank. The Company consents to such assignment and agrees to
pay to the Bank all amounts payable by the Company that are so assigned.
SECTION 4.3. DEFAULT IN PAYMENTS. If the Company should fail to make
payments required by the Bond or this Agreement when due, the Company, to the
extent permitted by law, shall pay interest with respect to the payments thereon
at the Default Rate from the due date until paid.
SECTION 4.4. OBLIGATION OF COMPANY UNCONDITIONAL. The obligation of the
Company to make the payments to the Bank and to perform and observe all other
covenants, conditions and agreements hereunder shall be absolute and
unconditional, irrespective of any defense or any rights of setoff, recoupment
or counterclaim it might otherwise have against the Authority or the Bank.
Subject to prepayment of the Bond in full and termination as provided herein,
the Company shall not suspend or discontinue any such payment hereunder or fail
to observe and perform any of its other covenants, conditions and agreements
hereunder for any cause, including, without limitation, any acts or
circumstances that may constitute an eviction or constructive eviction, failure
of consideration, failure of title to any part or all of the Project, or
commercial frustration of purpose, or any damage to or destruction or
condemnation of all or any part of the Project, or any change in the tax or
other laws of the United States of America, the State or any political
subdivision of either, or any failure of the Authority or the Bank to observe
and perform any covenant, condition or agreement, whether express or implied, or
any duty, liability or obligation arising out of or in connection with the Bond
Purchase Agreement or this Agreement. Notwithstanding the foregoing or any other
provision of this Agreement, the Company does not waive, and shall not be
prevented from otherwise enforcing, any rights it may have against the Authority
or the Bank. The Company may, after giving to the Authority and the Bank 10
days' notice of its intention to do so, at its own expense and in its own name
or, with the consent of the Authority, which consent shall not be unreasonably
withheld, in the name of the Authority, prosecute or defend any action or
proceeding or take any other action involving third persons which the Company
deems reasonably necessary in order to secure or protect any of its rights
hereunder or the rights of the Authority under the Bond Purchase Agreement, and,
in such event, the Authority shall cooperate fully with the Company and take all
action reasonably necessary to effect the substitution of the Company for the
Authority in any such action or
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proceeding if the Company shall so request.
ARTICLE V
SPECIAL COVENANTS
SECTION 5.1. INSPECTION OF PROJECT. The Authority, the Bank and their duly
authorized agents shall have the right, at all reasonable times and upon
reasonable notice, (a) to enter upon and to examine and inspect any part of the
Project, and (b) to examine the books and records of the Company insofar as such
books and records relate to the operation and maintenance of the Project.
SECTION 5.2. INDEMNIFICATION BY COMPANY. The Company shall at all times
protect, indemnify and save harmless the Authority and the Bank from and against
all liabilities, obligations, claims, damages, penalties, causes of action,
costs and expenses (including, without limitation, reasonable counsel fees and
expenses) imposed upon or incurred by or asserted against the Authority or the
Bank on account of (a) any failure of the Company to comply with any of the
terms of this Agreement, or (b) any loss or damage to property or any injury to
or death of any person that may be occasioned by any cause whatsoever pertaining
to the Project or the use thereof, and shall further indemnify and save harmless
the Authority and the Bank and their respective officers, directors, employees
and agents (collectively, the "Indemnitees") from and against all liabilities,
obligations, claims, damages, penalties, fines, losses, reasonable costs and
expenses (the "Damages"), including, without limitation:
(i) all amounts paid in settlement of any litigation commenced or
threatened against the Indemnitees, if such settlement is effected with the
written consent of the Company;
(ii) all expenses reasonably incurred in the investigation of,
preparation for or defense of any litigation, proceeding or investigation of any
nature whatsoever, commenced or threatened against the Company, the Project or
the Indemnitees;
(iii) any judgments, penalties, fines, damages, assessments,
indemnities or contributions; and
(iv) the reasonable fees of attorneys, auditors and consultants;
provided that the Damages arise out of:
(1) any failure by the Company or its officers, directors,
employees or agents to comply with the terms of the Bond Documents or any
document executed by the Company in connection with the issuance and sale of the
Bond (collectively, the Bond Documents) and any agreements, covenants,
obligations, or prohibitions set forth herein or therein;
(2) any action, suit, claim or demand contesting or affecting the
title of the Project;
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(3) any breach of any representation or warranty of the Company
set forth in the Bond Documents or any certificate or any letter of
representation delivered by the Company pursuant thereto, and any claim that any
statement, representation or warranty of the Company contains or contained any
untrue or misleading statement of material fact or omits or omitted to state any
material facts necessary to make the statements made therein not misleading in
light of the circumstances under which they were made;
(4) any action, suit, claim, proceeding or investigation of a
judicial, legislative, administrative or regulatory nature arising from or in
connection with the ownership, operation, construction, occupation or use of the
Project; or
(5) any suit, action, administrative proceeding, enforcement
action, or governmental or private action, of any kind whatsoever (herein
referred to as an "Action"), commenced against the Company, the Project or the
Indemnitees which might adversely affect the validity or enforceability of the
Bond or any of the Bond Documents, the tax-exempt status of interest on the Bond
or the performance by the Company or the Indemnitees of any of their respective
obligations under the Bond Documents; provided that such indemnity shall be
effective only to the extent of any loss that may be sustained by any Indemnitee
in excess of the Net Proceeds received by it or them from insurance, if any,
required under the Deed of Trust with respect to such loss and provided further,
that the benefits of this section shall not inure to any person other than the
Indemnitees and their successors and assigns. Nothing contained herein shall
require the Company to indemnify any Indemnitee for any claim or liability
resulting from (i) in the case of the Authority, the gross negligence or
willful, wrongful acts of the Authority; (ii) in the case of any other
Indemnitee, the negligence or willful, wrongful acts of such Indemnitee; or
(iii) failure of such Indemnitee to act or any action on the part of such
Indemnitee, in either case, in a manner that was not in accordance with the
requirements imposed upon it by the Bond Documents.
If any action, suit or proceeding is brought against any Indemnitee for any
loss or damage for which the Company is required to provide indemnification
under this Section 5.2, such Indemnitee shall promptly notify the Company, and
the Company shall have the right to, upon request, at its expense, resist and
defend such action, suit or proceeding or cause the same to be resisted and
defended by counsel designated by the Company and approved by the Indemnitee,
which approval shall not be unreasonably withheld; provided that such approval
shall not be required in the case of defense by counsel designated by any
insurance company undertaking such defense pursuant to any applicable policy of
insurance. The obligations of the Company under this Section 5.2 shall survive
any termination of this Agreement. The Company shall have full power to
litigate, to compromise or settle the same in its sole discretion.
SECTION 5.3. USE OF PROCEEDS. Neither the Authority knowingly nor the
Company shall cause any proceeds of the Bond to be expended except pursuant to
the Bond Purchase Agreement and this Agreement. The Company shall use Advances
solely and exclusively for the purposes contemplated hereby and to pay such
fees, closing costs and other non-construction expenses relating to the Loan,
the Project or the discharge of the Company's obligations under this Agreement
as the Bank has approved or may from time to time approve.
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SECTION 5.4. COMPLETION OF PROJECT. The Company shall cause the Project to
be completed substantially in accordance with the Plans and Specifications and
in compliance with all applicable regulations including zoning and setback
requirements, and so as not to encroach upon or overhang into any easement or
right-of-way; to cause the Project to proceed continuously beginning on or about
April 1, 2002, and to complete the Project on or before July 1, 2003 and obtain
a certificate of occupancy or other final governmental approval of the Project
for its intended use; to permit no cessation of work on the Project for any
period of twenty (20) consecutive days at any time after the April 1, 2002
commencement date; provided, however, that any delays caused by acts of God,
acts of war, whether declared or not, acts of terror, casualties or events or
circumstances beyond the Company's control shall extend the required twenty (20)
consecutive days pro tanto.
SECTION 5.5. LEASE TO LESSEE; RESTRICTIONS ON FURTHER MORTGAGE, SALE OR
ASSIGNMENT.
(a) The Company shall, at all times when the Bond is outstanding,
lease the Project as a whole to the Lessee for use in the Lessee's business of
manufacturing drug purification equipment and shall not, without the prior
consent of the Authority and the Bank, terminate such lease or allow it to
expire.
(b) Other than the Company's lease to the Lessee, neither the
Authority knowingly nor the Company shall sell, mortgage, lease, assign,
transfer, convey or otherwise encumber (such sale, mortgage, lease, assignment,
transfer, conveyance or other encumbrance hereinafter in this Section referred
to as a Transfer, and the transferee in any such Transfer hereinafter in this
Section 5.5 referred to as the Transferee) the Property or any of its interest
hereunder, except to the Bank, unless there is delivered to the Bank (a)
agreement by the Transferee that it shall be bound by the terms of the Bond
Documents, (b) the written agreement thereto of the Bank unless the transfer is
to any affiliate of the Company in which the Lessee or Dyax Corp. own a majority
of the voting interest, and (c) a written opinion of Bond Counsel that such
Transfer will have no adverse effect on the continued exemption from Federal
income taxation of the interest on the Bond. Nothing contained in this section
shall prevent the consolidation of the Authority with, or the merger of the
Authority into, any public corporation whose property and income are not subject
to taxation and which has corporate authority to carry on the business of
financing facilities of the nature of the Project; provided, however, that any
surviving, resulting or transferee entity shall agree in writing to assume the
liability of the Authority to pay the Bond and to observe and perform all
covenants, conditions and agreements of the Authority under this Agreement and
the Bond Purchase Agreement.
(c) The Company shall keep the Property and all other assets of the
Company free from all liens and encumbrances except for the Deed of Trust or
those contemplated by this Agreement or as shown in the Deed of Trust as a
permitted encumbrance; pay promptly all persons or entities supplying work or
materials for the Project where the Company is not in good faith contesting such
work or materials; discharge or make other arrangements acceptable to the Bank
with respect to (including, without limitation, bonding off or insuring over any
such lien) any mechanic's or other lien filed against any of the Property or the
Company, within thirty (30) days of the date the Company receives notice of the
filing of such lien.
<Page>
SECTION 5.6. NOTIFICATION UPON EVENT OF DEFAULT. The Company shall notify
the Authority and the Bank immediately upon the occurrence of any Event of
Default.
SECTION 5.7. NOTIFICATION OF EVENT OF BANKRUPTCY. The Company shall notify
the Bank in writing within two Business Days if a petition in bankruptcy is
filed by or against the Company or the Authority as debtor under the Federal
bankruptcy laws or other proceedings are commenced with respect to the Company
or the Authority under other applicable bankruptcy, reorganization or insolvency
laws, as now or hereafter constituted.
SECTION 5.8. EXPENSES OF OPERATION AND MAINTENANCE. The Company shall pay,
or cause the Lessee to pay, all expenses of the operation and maintenance of the
Project, including, but without limitation, adequate insurance thereon and
insurance against all liability for injury to persons or property arising from
the operation thereof and all taxes and installments of special assessments
levied upon or with respect to the Project and payable during the term of this
Agreement.
SECTION 5.9. COMPLIANCE WITH LAWS. The Company shall comply, and shall
require the Lessee to comply, with all applicable covenants and restrictions of
record and all laws, ordinances, rules and regulations and to keep the Property
and the Project in compliance with all applicable laws, ordinances, rules and
regulations, including, without limitation, the Americans with Disabilities Act
and regulations thereunder, and laws, ordinances, rules and regulations relating
to zoning, health, building codes, setback requirements and Applicable
Environmental Laws.
SECTION 5.10. REFERENCE TO BOND INEFFECTIVE AFTER BOND PAID AND OTHER
OBLIGATIONS SATISFIED. Upon the discharge of the Bond Purchase Agreement, upon
satisfaction of the rights of the Bank and the Authority under the Bond Purchase
Agreement, and upon payment of all obligations under this Agreement and the
Bond, all references in this Agreement to the Bond shall be ineffective, and the
holder of the Bond shall thereafter have no rights hereunder except as provided
in Section 5.2 and except for such rights as may have theretofore vested or
arisen from the Company's obligations hereunder.
SECTION 5.11. REPORTS AND NOTICES. The Company shall furnish promptly to
the Bank and Authority such information relating to the Property and the Project
as Authority or the Bank may reasonably require concerning costs, progress of
construction, and such other factors as Authority or the Bank may require;
notify the Bank and Authority promptly of any material action, suit, audit or
proceedings at law, in equity or before any governmental entity instituted or
threatened against the Company, any deficiencies asserted or liens filed by the
Internal Revenue Service against the Company or the Property; any audits of any
Federal or State tax return of the Company, and the results of any such audit;
notify the Bank promptly of any condemnation or similar proceedings with respect
to any of the Property, any proceeding seeking to enjoin the intended use of the
Property, and of all changes in governmental requirements pertaining to the
Property, utility availability, anticipated costs of completion and any other
matters which could reasonably be expected adversely to affect the Company's
ability to perform the obligations under any of the Bond Documents or the
tax-exempt status of interest on the Bond.
<Page>
SECTION 5.12. FEES; ADDITIONAL PAYMENTS. The Company shall pay loan and
inspection fees of Authority and the Bank as described herein, and all
reasonable expenses involved in perfecting the lien status or its priority with
respect to the Collateral and all other out-of-pocket expenses of Authority and
the Bank directly related to the Loan or the protection and preservation of the
Property or Improvements or the enforcement of any provision of this Agreement,
including, without limitation, recording fees and taxes, tax, title and lien
search charges, title insurance charges, architects', engineers' and reasonable
attorneys' fees (including reasonable attorneys' fees at trial and on any appeal
by any of the Company, the Bank or Authority), real property taxes and insurance
premiums, and to indemnify against, and hold Authority and the Bank and any
participant (as described in Section 5.2 hereof) harmless from any loss or
liability on account of any claim by any party arising out of the Loan,
including, but not limited to, those related to any environmental concern
relating to the Project and use and construction of the Improvements, or the
Bank's or any participant's interest in or lien upon the Collateral, except for
any loss or liability caused or incurred by the gross negligence of the
Authority, the Bank or any loan participant.
The Company shall pay to the Authority or to the Bank, as appropriate such
other amounts as described in this Agreement and the other Bond Documents as may
be incurred by the Bank or the Authority after the Closing Date in connection
with the performance or enforcement of this Agreement or the other Bond
Documents, the financing of the Project, and the issuance and ongoing ownership
of the Bonds, including but not limited to: if any; (a) indemnification payments
pursuant to the terms of this Agreement, all taxes and assessments of any type
or character charged to the Authority or the in any way arising due to the
transactions contemplated hereby (including taxes and assessments assessed or
levied by any public agency or governmental authority of whatsoever character
having power to levy taxes or assessments), but excluding franchise taxes based
upon the capital and/or income of Authority or the Bank and taxes based upon or
measured by the net income of Authority or the Bank; (b) the fees and expenses
of such accountants, auditors, consultants, inspectors, engineers, attorneys and
other experts as may be engaged by Authority or the Bank to prepare audits,
financial statements, reports or opinions or to provide services in connection
with this Agreement, or otherwise in connection with the Bond Documents or the
issuance or ongoing ownership of the Bonds; (c) insurance premiums not otherwise
paid hereunder; and (d) all other reasonable, direct and necessary
administrative costs of the Bank and such other charges required to be paid in
order to comply with the terms of, or to enforce its rights under, this
Agreement or the other Bond Documents. Such Additional Payments shall be billed
to the Company by or on behalf of the Bank or Authority, as the case may be,
from time to time, together with a statement certifying that the amount so
billed has been paid for one or more of the items described, or that such amount
is then payable for such items. Amounts so billed shall be due and payable by
Company within 15 days after receipt of the bill by Company, and shall
thereafter accrue interest at the Default Rate.
SECTION 5.13. ACCESS AND PROMOTION. The Company shall permit the Bank and
its agents to have access to the Property and Improvements at reasonable times
and upon reasonable notice, and to permit the Bank to erect a sign on the
Property indicating the Bank as the source of financing for the Project.
<Page>
SECTION 5.14. UPDATED VALUATIONS. At any time prior to payment in full of
the Loan, the Bank may have any of the Property re-evaluated. The Company agrees
to cooperate with such re-evaluations and to pay all costs associated therewith.
SECTION 5.15. RELEASE OF LETTERS OF CREDIT. The Letters of Credit shall be
released on the five year anniversary of the date of this Loan Agreement (April
1, 2007) provided that all of the conditions for release of the Letters of
Credit set forth in the Bank Commitment Letter have been fully satisfied by the
Company, the Lessee and Dyax Corp. If the conditions for release are not
satisfied by the five year anniversary of this Deed of Trust, the letters of
credit shall be released on April 1 of the next calendar year provided that all
conditions for release set forth in the Bank Commitment Letter have been fully
satisfied by the Company, the Lessee and Dyax Corp. If the conditions for
release are not satisfied at such time, the letters of credit, until released,
shall be released on the April 1 of each subsequent calendar year provided that
all conditions for release set forth in the Bank Commitment Letter have been
fully satisfied by the Company, the Lessee and Dyax Corp.
ARTICLE VI
FINANCIAL COVENANTS
SECTION 6.1. MAINTAIN EXISTENCE. The Company agrees to maintain its
existence as a Virginia limited liability company and to permit no changes to
such existence without the Bank's prior written approval; and not to make any
loans or advances to any other person or entity, except extensions of credit in
the normal course of business.
SECTION 6.2. FINANCIAL AND OTHER INFORMATION. In addition to any and all
financial information required to be delivered pursuant to the terms and
conditions of the Guaranty Agreements, the Company shall provide the Bank with
the following financial statements and information regarding the Company on a
continuing basis during the term of the Bond:
(a) Within ninety (90) days after the end of each fiscal year of
the Company, financial statements of the Company, which statements shall be
prepared in accordance with GAAP; shall include a balance sheet, a statement of
income and expenses for the fiscal year then ended and a statement of cash
flows, and the financial statements of the Company shall represent the financial
results included in the audited financial statements required to be provided by
Dyax Corp under this Agreement and the Guaranty Agreements;
(b) Within thirty (30) days after the end of each calendar quarter,
internally prepared, unaudited financial statements of the Company's operations,
which statements shall be prepared in accordance with GAAP and shall include a
balance sheet and statement of income and expenses for the month then ended and
for the fiscal year to date, and shall be certified by the Company to be true
and correct in all material respects;
(c) Within thirty (30) days after the end of each calendar month,
an internally prepared, unaudited accounting of the Company's cash expenditures
on the Project for the month then past and for the fiscal year to date, relative
to the Project Budget; and
<Page>
(d) Within ninety (90) days after the end of each calendar year,
the Company shall deliver or cause to be delivered to the Bank, (i) a
consolidated audited income statement, a consolidated audited balance sheet and
a consolidated federal tax return of Dyax Corp. that includes the Company and
the Lessee, and (ii) an income statement and balance sheet of the Lessee that
represents the financial statements included in the audited results for Dyax
Corp.
The Bank reserves the right to require such other financial information
(including tax returns, detailed cash flow information and contingent liability
information) of the Company, all at such times as the Bank shall deem necessary,
and the Company agrees promptly to provide such information to the Bank. All
financial statements must be in the form and detail as the Bank shall from time
to time reasonably request.
SECTION 6.3. [RESERVED].
SECTION 6.4. INDEBTEDNESS. The Company agrees to duly and promptly pay all
of its indebtedness to the Bank according to the terms of this Agreement and the
other Bond Documents, and, except for the Company's Note, to incur no other
indebtedness in any manner whatsoever for so long as the Advances under the Loan
are available or any amounts are outstanding under the Loan.
SECTION 6.5. BOOKS AND RECORDS. The Company shall permit parties designated
by the Bank to inspect the books and records of the Company, and the Project and
to discuss the affairs of the Company, and the Project with officers of the
Company, as designated by the Bank, all at such times as the Bank shall
reasonably request.
SECTION 6.6 NOTICE OF LOSS. The Company shall notify the Bank immediately
of any event causing a loss or depreciation in value of the Company's assets in
excess of $100,000 and the amount of such loss or depreciation.
SECTION 6.7. ACCRUAL AND PAYMENT OF TAXES AND OTHER CHARGES. The Company
shall pay all taxes, assessments, charges, claims for labor, supplies, rent and
other obligations which, if unpaid, might give rise to a lien against property
of the Company, except liens to the extent permitted by this Agreement or
permitted encumbrances under the Deed of Trust. During each fiscal year, to
accrue all current tax liabilities of all kinds (including, without limitation,
federal and state income taxes, franchise taxes and payroll taxes, if any), all
required withholding of income taxes of employees, all required old-age and
unemployment contributions and all required payments to employee benefit plans,
and pay the same when they become due.
SECTION 6.8. CERTIFICATE. Upon the Bank's written request, the Company
shall furnish the Bank with a certificate stating that the Company has complied
with and is in compliance with all terms, covenants and conditions of the Bond
Documents to which it is a party and that there exists no Default or Event of
Default or, if such is not the case, that one or more specified events have
occurred and the steps being taken to cure the same, and that the
representations and warranties contained herein are true with the same effect as
though made on the date of such certificate.
<Page>
SECTION 6.9. BANKING RELATIONSHIP. The Company shall maintain the Company's
primary banking relationships with the Bank, including all deposit accounts,
until the payment in full of the Company's Note and all other amounts due and
payable under the Bond Documents.
SECTION 6.10. OTHER ACTS. At the Bank's request, the Company shall execute
and deliver to the Bank all further documents and perform all other acts which
the Bank reasonably deems necessary or appropriate to perfect or protect its
security for the Bond.
SECTION 6.11. NEGATIVE COVENANTS. Until the Bond has been paid in full, the
Company shall not:
(a) ASSESSMENT OF LICENSES AND PERMITS. Assign or transfer, or
permit the assignment or transfer of, any interest in any license or permit
(including rights to payment thereunder), or assign, transfer or remove or
permit any other person to assign, transfer or remove any records pertaining to
the Project, without the Bank's prior written consent, which consent may be
granted or refused in the Bank's sole discretion.
(b) DISPOSITION OF ASSETS. Without the prior written consent of the
Bank, which may be withheld in the Bank's sole discretion but shall not be
required in the event of a sale, assignment or transfer to a transferee of the
Company in which the Lessee or Dyax Corp. owns a majority of the voting
interest, sell, assign, lease, transfer or otherwise dispose of any material
portion of all or substantially all of its assets, whether in one transaction or
in a series of transactions and whether such assets are now or hereafter
acquired, unless any such disposition shall be in the ordinary course of
business for a full and fair consideration, which in no event shall include a
transfer for full or partial satisfaction of a pre-existing debt.
(c) CHANGE IN BUSINESS. Make any material change in the nature of
its business as is proposed to be conducted as of the date hereof.
(d) CHANGES IN ACCOUNTING. Change its methods of accounting, unless
such change is permitted by GAAP, and provided such change does not have the
effect of curing or preventing what would otherwise be a Default or an Event of
Default had such change not taken place.
(e) CHANGE IN CONTROL. Neither the Company nor the Lessee shall
make or permit a material change in its management or in the voting control of
its membership interests without the prior written consent of the Bank until
payment in full of any and all amounts payable by the Company under this
Agreement, the Company's Note and the other Bond Documents.
(f) ERISA FUNDING AND TERMINATION. Permit (a) the funding
requirements of ERISA with respect to any employee plan to be less than the
minimum required by ERISA at any time or (b) any employee plan to be subject to
involuntary termination proceedings at any time.
(g) TRANSACTIONS WITH AFFILIATES. Enter into any transaction with
any person affiliated with the Company other than in the ordinary course of its
business and on fair and
<Page>
reasonable terms no less favorable to the Company than those that would obtain
in a comparable arms-length transaction with a person not an affiliate.
(h) DIVIDENDS. The Company shall not pay dividends or any other
cash or noncash distributions to its members during the term of the Bonds
without the prior written consent of the Bank.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1. EVENT OF DEFAULT DEFINED. Each of the following events shall
be an Event of Default, provided that the events described in subparagraphs (b),
(c) and (e) below shall not constitute Events of Default unless the Bank
consents thereto:
(a) Failure of the Company to make any payment on the Company's
Note or under this Agreement or any other Bond Document within 15 days after the
same becomes due and payable;
(b) Failure by the Company to observe and perform any other
covenant, condition or agreement on its part under this Agreement for a period
of 30 days after notice (unless the Company and the Bank shall agree in writing
to an extension of such time prior to its expiration) specifying such failure
and requesting that it be remedied, given by the Authority or the Bank to the
Company;
(c) Abandonment of the Project by the Company for a period of more
than 30 days;
(d) If any warranty, representation or other statement by or on
behalf of the Company contained in this Agreement, the Bond Purchase Agreement,
in any other Bond Document or in any instrument furnished in connection with the
issuance or sale of the Bond was false or misleading in any material respect at
the time it was made or delivered;
(e) An Event of Default under any of the other Bond Documents.
(f) The Company shall default (i) in the payment of any
indebtedness to the Bank when and as the same shall become due and payable
whether at stated or scheduled maturity, by acceleration or otherwise or (ii) in
the payment of any other indebtedness in an amount, individually or in the
aggregate, in excess of $25,000 when and as the same shall become due and
payable if such default permits or causes acceleration of the maturity of such
indebtedness.
(g) The Company shall be or become insolvent, or admit in writing
its inability to pay its debts as they mature, or make an assignment for the
benefit of creditors, or the Company shall apply for or consent to the
appointment of any receiver, trustee or similar officer for it or for all or any
substantial part of its property; or such receiver, trustee or similar officer
shall be appointed without the application or consent of the Company; or the
Company shall institute (by petition, application,
<Page>
answer, consent or otherwise) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, liquidation or similar
proceeding relating to it under the laws of any jurisdiction; or any such
proceeding shall be instituted (by petition, application or otherwise) against
Company; or any judgment, writ, warrant of attachment or execution or similar
process shall be issued or levied against a substantial part of the property of
the Company;
Notwithstanding the provisions of Section 7.1, if by reason of force
majeure either party hereto shall be unable in whole in part to carry out its
obligations under this Agreement and if such party shall give notice and full
particulars of such force majeure in writing to the other party and to the Bank,
within a reasonable time after the occurrence of the event or cause relied upon,
the obligations under this Agreement of the party giving such notice, so far as
they are directly affected by, and unable to be performed as a result of, such
force majeure, shall be suspended during the continuance of the inability, which
shall include a reasonable time for the removal of the effect thereof. The
suspension of such obligations for such period shall not be deemed an Event of
Default under this Section. Notwithstanding anything to the contrary in this
subsection, an event of force majeure shall not excuse, delay or in any way
diminish any payment or indemnification obligations of the Company under this
Agreement or any other Bond Document. The term "force majeure" as used herein
shall include, without limitation, acts of God, acts of war, whether or not
declared, acts of terror, strikes, lockouts or other industrial disturbances,
acts of public enemies, orders of any kind of the government of the United
States of America or of the Commonwealth of Virginia or any of their
departments, agencies, governmental subdivisions or officials, or any civil or
military authority, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fire, hurricanes, storms, floods, washouts, droughts, arrests,
restraint of government and people, civil disturbances, explosions, breakage or
accident to machinery, transmission pipes or canals, partial or entire failure
of utilities, or any other cause or event not reasonably within the control of
the party claiming such inability. It is agreed that the settlement of strikes,
lockouts and other industrial disturbances shall be entirely within the
discretion of the party having difficulty, and the party having difficulty shall
not be required to settle any strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties.
SECTION 7.2. REMEDIES ON DEFAULT. Whenever an Event of Default shall have
occurred and be continuing, interest on the entire outstanding principal amount
of the Company's Note and the Bonds shall accrue at the Default Rate. Whenever
an Event of Default shall have happened and be continuing, the Bank shall have
the option to declare all amounts due hereunder and under the Company's Note to
be due and payable, and upon notice to the Company of such declaration, such
amounts shall thereupon become forthwith due and payable. Upon the occurrence
and continuation of an Event of Default resulting in the Bond becoming due and
payable, the Bank may:
(a) Declare all payments on the Company's Note to be immediately
due and payable, whereupon the same shall become immediately due and payable;
(b) Exercise any remedy afforded a secured party under the Uniform
Commercial Code of Virginia;
<Page>
(c) Take whatever action at law or in equity may appear necessary
or desirable to collect the payments then due and thereafter to become due or to
enforce observance or performance of any covenant, condition or agreement of the
Company under this Agreement or the Company's Note;
(d) Inspect, examine and make copies of the books, records and
accounts of the Company pertaining to the Project; or
(e) Exercise any remedies provided in the Bond Purchase Agreement,
the Deed of Trust and any other Bond Document.
If the Bank as the assignee of the Authority exercises any of its rights or
remedies under this section, it shall give notice of such exercise to the
Company (1) in the manner provided in Section 9.2 and (2) by telephone or
telegram; provided, however, that failure to give such notice by telephone or
facsimile shall not affect the validity of the exercise of any right or remedy
under this section.
SECTION 7.3. NO REMEDY EXCLUSIVE. No remedy set forth in Section 7.2 is
intended to be exclusive of any other remedy, and every remedy shall be
cumulative and in addition to every other remedy herein or now or hereafter
existing at law, in equity or by statute. No delay or failure to exercise any
right or power accruing upon an Event of Default shall impair any such right or
power or shall be construed to be a waiver thereof, and any such right or power
may be exercised from time to time and as often as may be deemed expedient.
SECTION 7.4. ATTORNEYS' FEES AND OTHER EXPENSES. The Company shall on
demand pay to the Authority and the Bank the reasonable fees of attorneys and
other reasonable expenses incurred by either of them in connection with the
issuance and ongoing ownership of the Bonds, the collection of payments due on
the Bond, this Agreement or any other Bond Document, or the enforcement of any
other obligation of the Company upon an Event of Default.
SECTION 7.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. If either party or
its assignee waives a default by the other party under any covenant, condition
or agreement herein, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder.
ARTICLE VIII
PREPAYMENT
SECTION 8.1. PREPAYMENT. The Bond and the Company's Note may be prepaid by
the Company in whole or in part at any time in the manner and at the times set
forth in the Bond and the Company's Note, and upon payment of the (i) applicable
principal amount being prepaid, (ii) accrued interest on the Bond, (iii) all
amounts that would have otherwise been due and payable by the Company during the
remainder of any Event of Deposit Shortfall Period, if applicable, (iv) any
other amounts then due and payable by the Company under the Bond Documents, and
a (v) a prepayment
<Page>
premium (payable whether such prepayment is undertaken voluntarily or by reason
of default, acceleration or otherwise) determined in accordance with the
following prepayment schedule (expressed as a percentage of the principal amount
being prepaid):
<Table>
Before April 1, 2003 5%
April 1, 2003 - March 31, 2004 4%
April 1, 2004 - March 31, 2005 3%
April 1, 2005 - March 31, 2006 2%
April 1, 2006 - March 31, 2007 1%
April 1, 2007 and thereafter 0%
</Table>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. TERM OF AGREEMENT. This Agreement shall remain in full force
and effect from the date hereof until Payment of the Bond and all other
obligations of the Company under the Bond Documents have been paid or
discharged.
SECTION 9.2. NOTICES, ETC. Unless otherwise provided herein, all demands,
notices, approvals, consents, requests and other communications hereunder shall
be given as provided in the Bond Purchase Agreement.
SECTION 9.3. AMENDMENTS TO AGREEMENT AND COMPANY'S NOTE. Neither this
Agreement nor the Company's Note shall be amended or supplemented subsequent to
the issuance of the Bond and before Payment of the Bond, except as provided in
the Bond Purchase Agreement.
SECTION 9.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns, including the Bank.
SECTION 9.5. SEVERABILITY. If any provision of this Agreement shall be
held invalid by any court of competent jurisdiction, such holding shall not
invalidate any other provision hereof.
SECTION 9.6. APPLICABLE LAW; ENTIRE UNDERSTANDING. This Agreement and the
other Bond Documents express the entire understanding of the parties, and none
of the agreements between the parties may be modified except in writing signed
by the parties.
SECTION 9.7. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which together shall
constitute but one and the same
<Page>
instrument; except that to the extent, if any, that this Agreement shall
constitute personal property under the Uniform Commercial Code of Virginia, no
security interest in this Agreement may be created or perfected through the
transfer or possession of any counterpart of this Agreement other than the
original counterpart, which shall be the counterpart containing the receipt
therefor executed by the Bank following the signatures to this Agreement.
SECTION 9.8. CONSTRUCTION OF PROVISIONS OF THIS AGREEMENT. The Bank has not
agreed to accept assignment of any loan other than that specifically described
herein. All requirements herein shall be deemed material to the Bank. Except as
specified herein, all conditions and requirements must be satisfied by the
Company prior to the Closing Date. Whenever this Agreement refers to a matter
being "satisfactory" to the Bank, subject to the Bank's "approval" or "consent,"
at the Bank's "option," at the Bank's "determination," "required" by the Bank,
at the Bank's "request," as the Bank shall "deem necessary," or similar
terminology, it is deemed that each of the aforesaid shall be in the sole
discretion of the Bank, and if any term or condition requires the Bank's
approval, consent or satisfaction ("the Bank's Approval"), the Bank's Approval
shall not be implied, but shall be evidenced only by a written notice from the
Bank specifically addressed to the particular requirement or condition and
expressing the Bank's Approval.
SECTION 9.9. PUBLICITY. The Bank shall have the right to advertise
(including, without limitation, photographs of the Property and other print
media) this Loan in industry periodicals and other industry media from time to
time, and the Company hereby consents to such advertising.
SECTION 9.10. CONTROLLING LAW. THE VALIDITY, INTERPRETATION, ENFORCEMENT
AND EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
SECTION 9.11. WAIVER OF JURY TRIAL. THE COMPANY HEREBY WAIVES ANY RIGHT TO
A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF
ACTION (A) ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, THE BOND
DOCUMENTS OR THE LOAN OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED
TO OR INCIDENTAL TO ANY DEALINGS OF AUTHORITY, BANK AND/OR COMPANY WITH RESPECT
TO THE BOND DOCUMENTS OR IN CONNECTION WITH THIS AGREEMENT OR THE EXERCISE OF
ANY PARTY'S RIGHTS AND REMEDIES UNDER THIS AGREEMENT OR OTHERWISE, OR THE
CONDUCT OR THE RELATIONSHIP OF THE PARTIES HERETO, IN ALL OF THE FOREGOING CASES
WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE. THE COMPANY AGREES THAT AUTHORITY AND BANK MAY FILE A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND
BARGAINED AGREEMENT OF COMPANY IRREVOCABLY TO WAIVE ITS RIGHTS TO TRIAL BY JURY
AS AN INDUCEMENT OF AUTHORITY TO MAKE THE LOAN AND TO BANK TO ACCEPT ITS
ASSIGNMENT, AND THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR
CONTROVERSY WHATSOEVER (WHETHER OR NOT MODIFIED HEREIN) BETWEEN
<Page>
THE COMPANY, THE AUTHORITY AND THE BANK SHALL INSTEAD BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY. THE COMPANY CONSENTS
THAT ANY LEGAL ACTION OR PROCEEDING ARISING HEREUNDER, UNDER ANY OF THE BOND
DOCUMENTS, OR UNDER ANY OTHER MATTER OR INSTRUMENT TO WHICH THIS AGREEMENT
RELATES, MAY BE BROUGHT IN THE CIRCUIT COURT OF THE COUNTY OF ALBEMARLE,
VIRGINIA, OR IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF
VIRGINIA AND ASSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY SUCH COURT
IN ANY ACTION OR PROCEEDING INVOLVING SUCH DOCUMENTS, MATTERS, OR INSTRUMENTS.
NOTHING HEREIN SHALL LIMIT THE JURISDICTION OF ANY OTHER COURT.
IN WITNESS WHEREOF, the Authority and the Company have caused this
Agreement to be executed in their respective names by their duly authorized
representatives all as of the date first above written.
INDUSTRIAL DEVELOPMENT AUTHORITY OF
ALBEMARLE COUNTY, VIRGINIA
By: /s/ John C. Lowry
------------------------------
Its: Vice Chairman
------------------------------
BIOTAGE REAL ESTATE, LLC
By: /s/ David B. Patteson
------------------------------
Its: Manager
------------------------------
BIOTAGE, INC.
By: /s/ David B. Patteson
------------------------------
Its: President
------------------------------
The undersigned authorized representative of the Bank executes this Loan
Agreement to evidence its receipt of the original counterpart thereof.
<Page>
VIRGINIA NATIONAL BANK
By: /s/ David J. Mellen
------------------------------
Its: Managing Officer
------------------------------
<Page>
EXHIBIT A
PROMISSORY NOTE
$4,250,000.00 Charlottesville, Virginia
April ___, 2002
FOR VALUE RECEIVED, BIOTAGE REAL ESTATE, LLC, a Virginia limited liability
company (the "Company"), hereby promises to pay to the order of the INDUSTRIAL
DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA, a political subdivision of
the Commonwealth of Virginia (the "Authority"), or its assigns, the principal
sum of FOUR MILLION TWO HUNDRED FIFTY THOUSAND and 00/100 DOLLARS
($4,250,000.00), or so much thereof as may be advanced and outstanding hereon,
as hereinafter provided, together with interest thereon from the date of
advancement thereof, as hereinafter set forth, such payments hereunder to be
made at all such times and in all such amounts as shall be sufficient to pay all
sums, including principal and interest and all costs of collection, including
reasonable attorneys' fees, and any other amounts owing under the "Bond"
hereinafter described, when the sums are due and payable in accordance with the
terms of the Bond and related Loan Agreement, dated as of April 1, 2002, between
the Company, the Authority and the Lessee (the "Agreement").
This Promissory Note is issued and delivered by the Company in accordance
with, and shall be governed by, the provisions of the Agreement, the terms of
which Agreement are incorporated herein by reference.
This Promissory Note is in an original principal amount corresponding to
the aggregate original principal amount of the Authority's Industrial
Development Revenue Bond (Biotage Project), Series 2002 (the "Bond"), issued
pursuant to a Bond Purchase Agreement, dated as of April 1, 2002 (the "Bond
Purchase Agreement"), among the Authority, the Company, the Lessee, and Virginia
National Bank (the "Bank"). As principal advances of the proceeds of the sale of
the Bond to the Bank are made in accordance with the Agreement, the amount of
such principal advances shall be added to the outstanding principal balance
hereof, up to the stated principal amount hereof. Payments due hereunder at all
times shall be sufficient to satisfy, when and as the same shall be due and
payable, all sums owing under said Bond or any note, bond or bonds from time to
time delivered to the holder of the Bond in replacement thereof, whether by
exchange, renewal, substitution for or consolidation of such Bond, and all other
amounts due and payable by the Company under the Agreement and the other Bond
Documents, as defined therein.
This Promissory Note is secured, among other things, by a Credit Line Deed
of Trust, Assignment and Security Agreement granted by the Company in favor of
the Bank dated as of April 1, 2002, conveying certain real property more
particularly described therein, located in the County of
<Page>
Albemarle, Virginia, and granting security interests in certain personal
property, together with the Guaranty Agreements and the Letters of Credit, each
as defined in the Agreement.
All payments under this Promissory Note shall be made in lawful money of
the United States directly to the Bank or its assigns as specified in the
assignment below. Such payments shall be made in immediately available funds,
with information sufficient to identify the source and application of funds.
This Promissory Note may be prepaid, and shall be prepaid, under certain
circumstances pursuant to the same terms governing prepayment of the Bond
contained therein.
Upon the occurrence of an Event of Default (as defined in the Loan
Agreement), the entire balance of principal with all interest then accrued,
together with any other amounts payable by the Company under the Agreement and
the other Bond Documents, may, and under certain circumstances shall, be
declared immediately due and payable, whereupon the same shall become
immediately due and payable, and shall accrue interest thereafter at the Default
Rate, as defined in the Agreement.
IN WITNESS WHEREOF, the Company has caused this Promissory Note to be duly
executed by its duly authorized officer, all as of the date first above written.
BIOTAGE REAL ESTATE, LLC
a Virginia limited liability company
By:
------------------------------------------
Its:-----------------------------------------
<Page>
ASSIGNMENT
The Industrial Development Authority of Albemarle County, Virginia (the
"Authority") hereby irrevocably assigns the foregoing Promissory Note to
Virginia National Bank (the "Bank") and hereby directs Biotage Real Estate, LLC,
as maker of the Promissory Note to make all payments of principal and interest
hereon directly to said Bank at its main office in Charlottesville, Virginia, or
such other place as the holder hereof may designate in writing. This assignment
is made without recourse as security for the payment of the Authority's Bond
described in the foregoing Promissory Note.
INDUSTRIAL DEVELOPMENT AUTHORITY OF
ALBEMARLE COUNTY, VIRGINIA
By:
--------------------------------
Its: Vice Chairman
<Page>
EXHIBIT B
$__________ No. __
REQUISITION AND CERTIFICATE
__________
Virginia National Bank
1580 Seminole Trail
P.O. Box 2853
Charlottesville, Virginia 22902-2853
Attention: _____________
Ladies and Gentlemen:
On behalf of Biotage Real Estate, LLC, a Virginia limited liability company
(the "Company"), I hereby requisition from the funds representing the proceeds
of the sale of the Industrial Development Revenue Bond (Biotage Project), Series
2002, issued by the Industrial Development Authority of Albemarle County,
Virginia (the "Authority") in the principal amount of Four Million Two Hundred
Fifty Thousand Dollars ($4,250,000) and dated as of April 1, 2002 (the "Bond"),
which funds are held by you in accordance with the Loan Agreement dated as of
April 1, 2002 (the "Agreement") between you, the Company and Biotage Inc., a
Delaware corporation (the "Lessee"), the sum of $__________ to be paid to the
person or persons indicated below (capitalized terms not otherwise defined
herein shall have the meaning given such terms in the Agreement):
(1) $__________________ for ________________________________
_______________________________________________________________________
payable to _________________________________, and
(2) $__________________ for ________________________________
_______________________________________________________________________
payable to ____________________________________.
I hereby certify that (a) the obligation to make such payment was incurred
by the Authority or the Company in connection with the Project and is a proper
charge against the Costs of the Project, and has not been the basis for any
prior requisition which has been paid; (b) neither the Company nor, to the best
of the Company's knowledge, the Authority has received written notice of any
lien, right to lien or attachment upon, or claim affecting the right of such
payee to receive payment of, any of the money payable under this requisition to
any of the persons, firms or corporations named herein, or if any notice of any
such lien, attachment or claim has been received such lien, attachment or claim
has been released or discharged or will be released or discharged upon payment
of this requisition; (c) this requisition contains no items representing payment
on account of any retained percentages
<Page>
which the Authority or the Company is entitled to retain at this date; (d) the
payment of this requisition will not result in less than substantially all (95%
or more) of the proceeds of the Bonds to be expended under this requisition and
under all prior requisitions having been used for the acquisition and
installation of real property or property of a character subject to the
allowance for depreciation under the Internal Revenue Code of 1986, as amended;
(e) no "Event of Default" (as defined in the Agreement), or event which after
notice or lapse of time or both would constitute such an "Event of Default" has
occurred and not been waived.
Attached hereto is (a) the current, updated Project Budget setting forth
the original Project Budget, the proposed revisions thereto (if any), previous
amounts advanced, amounts paid from funds other than the Loan, the amounts
requested with the current requisition and the amounts remaining to be advanced,
all itemized under the line items of the Project Budget, (b) the itemized
schedule of values for the construction work and all costs incurred for
construction pursuant to each category of the schedule of values, (c) a separate
itemization of costs not included in the foregoing general construction contract
for equipment, construction and non-construction expenses in connection with the
Project pursuant to the general construction contract with the General
Contractor, an AIA G702/703 form signed by the General Contractor and the
Company, with copies of invoices for all non hard cost construction items, (d)
the percentage of completion of each line item on the Project Budget and
schedule of values, (e) such other vendor invoice(s) and/or bill(s) of sale
evidencing and acknowledging the Company's acceptance, approval and receipt in
good condition, as applicable, of particular services rendered and equipment or
other property improvements received in connection with the construction,
renovation, equipping and installation of the Project, all in forms and amounts
acceptable to the Bank, and (f) any other information required pursuant to
Article III of the Agreement as a condition precedent to disbursement.
The following paragraph is to be completed when any requisition and
certificate includes any item for payment for labor or to contractors, builders
or materialmen.
I hereby certify that insofar as the amount covered by the above
requisition includes payments to be made for labor or to contractors, builders
or materialmen, including materials or supplies, in connection with the
Acquisition of the Project, (i) all obligations to make such payment have been
properly incurred, (ii) any such labor was actually performed and any such
materials or supplies were actually furnished or installed in or about the
Project and are a proper charge against the Costs of the Project, and (iii) such
materials or supplies either are not subject to any lien or security interest
or, if the same are so subject, such lien or security interest will be released
or discharged upon payment of this requisition.
------------------------------------
Company Representative
<Page>
Approved:
INSPECTING ARCHITECT
By:
---------------------------
Its:
---------------------------
VIRGINIA NATIONAL BANK
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
<Page>
PROMISSORY NOTE
$4,250,000.00Charlottesville, Virginia
April 1, 2002
FOR VALUE RECEIVED, BIOTAGE REAL ESTATE, LLC, a Virginia limited liability
company (the "Company"), hereby promises to pay to the order of the INDUSTRIAL
DEVELOPMENT AUTHORITY OF ALBEMARLE COUNTY, VIRGINIA, a political subdivision of
the Commonwealth of Virginia (the "Authority"), or its assigns, the principal
sum of FOUR MILLION TWO HUNDRED FIFTY THOUSAND and 00/100 DOLLARS
($4,250,000.00), or so much thereof as may be advanced and outstanding hereon,
as hereinafter provided, together with interest thereon from the date of
advancement thereof, as hereinafter set forth, such payments hereunder to be
made at all such times and in all such amounts as shall be sufficient to pay all
sums, including principal and interest and all costs of collection, including
reasonable attorneys' fees, and any other amounts owing under the "Bond"
hereinafter described, when the sums are due and payable in accordance with the
terms of the Bond and related Loan Agreement, dated as of April 1, 2002, between
the Company, the Authority and the Lessee (the "Agreement").
This Promissory Note is issued and delivered by the Company in accordance
with, and shall be governed by, the provisions of the Agreement, the terms of
which Agreement are incorporated herein by reference.
This Promissory Note is in an original principal amount corresponding to
the aggregate original principal amount of the Authority's Industrial
Development Revenue Bond (Biotage Project), Series 2002 (the "Bond"), issued
pursuant to a Bond Purchase Agreement, dated as of April 1, 2002 (the "Bond
Purchase Agreement"), among the Authority, the Company, the Lessee, and Virginia
National Bank (the "Bank"). As principal advances of the proceeds of the sale of
the Bond to the Bank are made in accordance with the Agreement, the amount of
such principal advances shall be added to the outstanding principal balance
hereof, up to the stated principal amount hereof. Payments due hereunder at all
times shall be sufficient to satisfy, when and as the same shall be due and
payable, all sums owing under said Bond or any note, bond or bonds from time to
time delivered to the holder of the Bond in replacement thereof, whether by
exchange, renewal, substitution for or consolidation of such Bond, and all other
amounts due and payable by the Company under the Agreement and the other Bond
Documents, as defined therein.
This Promissory Note is secured, among other things, by a Credit Line Deed
of Trust, Assignment and Security Agreement granted by the Company in favor of
the Bank dated as of April 1, 2002, conveying certain real property more
particularly described therein, located in the County of Albemarle, Virginia,
and granting security interests in certain personal property, together with the
Guaranty Agreements and the Letters of Credit, each as defined in the Agreement.
All payments under this Promissory Note shall be made in lawful money of
the United States directly to the Bank or its assigns as specified in the
assignment below. Such payments shall be made
<Page>
in immediately available funds, with information sufficient to identify the
source and application of funds.
This Promissory Note may be prepaid, and shall be prepaid, under certain
circumstances pursuant to the same terms governing prepayment of the Bond
contained therein.
Upon the occurrence of an Event of Default (as defined in the Loan
Agreement), the entire balance of principal with all interest then accrued,
together with any other amounts payable by the Company under the Agreement and
the other Bond Documents, may, and under certain circumstances shall, be
declared immediately due and payable, whereupon the same shall become
immediately due and payable, and shall accrue interest thereafter at the Default
Rate, as defined in the Agreement.
IN WITNESS WHEREOF, the Company has caused this Promissory Note to be duly
executed by its duly authorized officer, all as of the date first above written.
BIOTAGE REAL ESTATE, LLC
a Virginia limited liability company
By: /s/ David B. Patteson
-----------------------------------
Its: Manager
-----------------------------------
<Page>
ASSIGNMENT
The Industrial Development Authority of Albemarle County, Virginia (the
"Authority") hereby irrevocably assigns the foregoing Promissory Note to
Virginia National Bank (the "Bank") and hereby directs Biotage Real Estate, LLC,
as maker of the Promissory Note to make all payments of principal and interest
hereon directly to said Bank at its main office in Charlottesville, Virginia, or
such other place as the holder hereof may designate in writing. This assignment
is made without recourse as security for the payment of the Authority's Bond
described in the foregoing Promissory Note.
INDUSTRIAL DEVELOPMENT AUTHORITY OF
ALBEMARLE COUNTY, VIRGINIA
By: /s/ John C. Lowry
------------------------------
Its: Vice Chairman
<Page>
NOTICE: THE FOLLOWING IS PROVIDED SOLELY TO COMPLY WITH THE PROVISIONS OF
SECTION 55-58.2 OF THE CODE OF VIRGINIA OF 1950, AS AMENDED:
THIS IS A CREDIT LINE DEED OF TRUST.
The name of the beneficiary secured hereby is Virginia National Bank. The
address to which communications to the beneficiary are to be sent is 1580
Seminole Trail, P.O. Box 2853, Charlottesville, VA 22902-2853, Attention: David
J. Mellen. The maximum aggregate amount of principal to be secured hereby at any
one time is Four Million Two Hundred Fifty Thousand Dollars ($4,250,000).
CREDIT LINE DEED OF TRUST,
ASSIGNMENT AND SECURITY AGREEMENT
Dated as of April 1, 2002
from
BIOTAGE REAL ESTATE, LLC
to
J.D. Miller, Jr. and Mark T. Giles
as trustees
Relating to the
$4,250,000
Industrial Development Authority of Albemarle County, Virginia
Industrial Development Revenue Bond
(Biotage Project)
Series 2002
<Page>
TABLE OF CONTENTS
<Table>
Recitals......................................................................................................1
ARTICLE I
SECTION 1.01. Definitions...............................................................................6
SECTION 1.02. Rules of Construction.....................................................................6
ARTICLE II
SECTION 2.01. Grant....................................................................................11
SECTION 2.02. Grantor's Obligations....................................................................11
SECTION 2.03. Quiet Possession.........................................................................12
SECTION 2.04. Condition of Grant.......................................................................12
ARTICLE III
SECTION 3.01. Title to Land; Validity of Deed of Trust.................................................12
SECTION 3.02. Use of the Land..........................................................................13
SECTION 3.03. Utilities; Hazardous Materials............................................................9
SECTION 3.04. Separate Lot..............................................................................9
SECTION 3.05. Payment and Performance of Note and Indebtedness..........................................9
SECTION 3.06. Taxes, Liens and Other Charges...........................................................10
SECTION 3.07. Insurance................................................................................10
SECTION 3.08. Monthly Deposits.........................................................................12
SECTION 3.09. Condemnation.............................................................................13
SECTION 3.10. Damage and Destruction; Condemnation; Application of Net Proceeds....................... 13
SECTION 3.11. Care of Project..........................................................................14
SECTION 3.12. Further Assurances: After-Acquired Property..............................................15
SECTION 3.13. Expenses.................................................................................16
SECTION 3.14. Subrogation..............................................................................16
SECTION 3.15. Right to Cure............................................................................16
SECTION 3.16. Indemnification..........................................................................17
ARTICLE IV
SECTION 4.01. Security Interest: Financing Statements..................................................17
ARTICLE V
SECTION 5.01. Leases and Rents.........................................................................19
<Page>
ARTICLE VI
[RESERVED]..............................................................................................21
ARTICLE VII
SECTION 7.01. Events of Default........................................................................21
SECTION 7.02. Acceleration of Maturity.................................................................22
SECTION 7.03. Remedies Upon an Event of Default........................................................22
SECTION 7.04. Receiver.................................................................................24
SECTION 7.05. Enforcement..............................................................................24
SECTION 7.06. Purchase by Beneficiary..................................................................24
SECTION 7.07. Application of Proceeds of Sale..........................................................25
SECTION 7.08. Tenant Holding Over......................................................................25
SECTION 7.09. Leases...................................................................................25
SECTION 7.10. Discontinuance of Proceeds...............................................................25
SECTION 7.11. Remedies Cumulative......................................................................25
SECTION 7.12. Suits to Protect the Security Property...................................................26
SECTION 7.13. Marshalling..............................................................................26
SECTION 7.14. Security Deposits........................................................................26
SECTION 7.15. Waiver of Appraisement; Valuation........................................................26
SECTION 7.16. Waiver of Trial by Jury..................................................................26
ARTICLE VIII
SECTION 8.01. Successors and Assigns...................................................................27
SECTION 8.02. Severability.............................................................................27
SECTION 8.03. Applicable Law...........................................................................27
SECTION 8.04. Notices, Demands and Requests............................................................27
SECTION 8.05. Consents and Approvals...................................................................27
SECTION 8.06. Waiver...................................................................................28
SECTION 8.07. Execution Counterparts...................................................................29
SECTION 8.08. Time of the Essence......................................................................29
SECTION 8.09. Attorneys' Fees..........................................................................29
SECTION 8.10. No Liability.............................................................................29
SECTION 8.11. Incorporation of Statutory Provisions....................................................29
SECTION 8.12. Debt Secured Subject to Call.............................................................29
<Page>
ARTICLE IX
SECTION 9.01. Performance of Duties; Liability; Compensation...........................................30
SECTION 9.02. Resignation..............................................................................30
SECTION 9.03. Removal and Substitution.................................................................30
SECTION 9.04. Any Trustee May Act......................................................................30
SECTION 9.05. Trustees' Expenses and Indemnity.........................................................30
ERROR! NO TABLE OF CONTENTS ENTRIES FOUND.
Signatures..............................................................................................31 & 32
Exhibit A - Description of the Improved Land
</Table>
<Page>
THIS CREDIT LINE DEED OF TRUST, ASSIGNMENT AND SECURITY AGREEMENT, dated as
of the 1st day of April, 2002, from BIOTAGE REAL ESTATE, LLC, a Virginia limited
liability company (the "Grantor"), to J. D. MILLER, Jr., a resident of
Albemarle County, Virginia, having a business address of 222 East Main Street,
Charlottesville, Virginia 22902, and Mark T. GILES, a resident of Albemarle
County, Virginia, having a business address of 222 East Main Street,
Charlottesville, Virginia, 22902, as trustees (together with their successors
and assigns as trustees hereunder, the "Trustees"), recites and provides:
RECITALS
The Industrial Development Authority of Albemarle County, Virginia, a
political subdivision of the Commonwealth of Virginia (the "Issuer"), has
determined to issue and sell its $4,250,000 Industrial Development Revenue Bond
(Biotage Project), Series 2002 (the "Tax-Exempt Bond"), to Virginia National
Bank (the "Beneficiary"), to assist the Grantor in financing the acquisition of
approximately 7.1 acres of land constituting Parcel F-1A in the University of
Virginia Research Park at North Fork in Albemarle County, Virginia, the
construction of an approximately 50,000 square foot manufacturing, research and
office facility thereon and the acquisition and installation of manufacturing
and research equipment therefor (the "Project"), to be owned by the Grantor and
leased by the Grantor to the Grantor's affiliate, Biotage, Inc., a Delaware
corporation (the "Lessee"), and used in the Lessee's business of manufacturing
drug purification equipment, and to pay certain costs of issuance of the Bond.
In order to secure the Tax-Exempt Bond, the Issuer has assigned to the
Beneficiary substantially all of the Issuer's right, title and interest in and
to the Loan Agreement dated as of April 1, 2002 (the "Loan Agreement"), between
the Issuer, Biotage, Inc., and the Grantor, and the Grantor's $4,250,000
promissory note, dated as of the Closing Date, issued pursuant to the Loan
Agreement and payable to the Issuer. As a condition to its purchase of the
Tax-Exempt Bond, Beneficiary has required the execution and delivery of this
Deed of Trust by Grantor to secure the Grantor's Obligations (hereinafter
defined). Grantor wishes and intends by the execution and delivery of this Deed
of Trust to secure the full and punctual payment and performance of the
Indebtedness up to a maximum principal amount of $4,250,000. Accordingly,
Grantor agrees as follows:
ARTICLE I
DEFINITIONS: RULES OF CONSTRUCTION
SECTION 1.01. DEFINITIONS. As used in this Deed of Trust (including the
Recitals set forth above), the terms listed below shall have the indicated
meanings unless otherwise required by the context:
"ACT" shall have the meaning given that term in the Bond Purchase
Agreement.
"AGREEMENT" shall mean the Loan Agreement dated as of April 1, 2002 between
Grantor, Biotage, Inc., and the Issuer, as the same may be amended, modified or
supplemented from time to time.
"BENEFICIARY" shall mean Virginia National Bank and its successors and
assigns.
"BOND COUNSEL" shall have the meaning given that term in the Loan
Agreement.
<Page>
"BOND DOCUMENTS" shall have the same meaning given that term as in the Bond
Purchase Agreement.
"BOND PURCHASE AGREEMENT" shall mean the Bond Purchase Agreement dated as
of April 1, 2002, among the Issuer, the Grantor, Biotage, Inc., and the
Beneficiary.
"CLOSING DATE" means the date of issuance and delivery of the Tax-Exempt
Bond to the Beneficiary.
"DEED OF TRUST" shall mean this Credit Line Deed of Trust, Assignment and
Security Agreement as it may be amended, modified or supplemented from time to
time as permitted hereby.
"DEFAULT" shall mean any act or occurrence which with notice, lapse of time
or both would constitute an Event of Default.
"DEFAULT RATE" shall have the meaning given such term in the Loan
Agreement.
"EQUIPMENT" shall mean all appliances, apparatus, equipment, machinery,
fixtures, materials and all other items of tangible personal property of Grantor
or any leasehold interests of Grantor therein now or hereafter located on or
used or held in connection with the Project.
"EVENT OF DEFAULT" shall mean any of the events or circumstances described
as such in Section 7.01.
"GRANTOR'S OBLIGATIONS" shall mean the obligations of the Grantor set forth
in Section 2.02.
"HAZARDOUS MATERIALS" shall mean (a) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act of 1976 (42 U.S.C. 6901 et seq.), as
amended from time to time, and regulations promulgated thereunder; (b) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. 9601 et seq.), as amended from
time to time, and regulations promulgated thereunder; (c) any substance the
presence of which on the Security Property or any part thereof is prohibited by
any federal, state or local law, regulation or ordinance similar to those set
forth in this definition; and (d) any other substance which by law requires
special handling in its collection, storage, treatment, or disposal.
"HAZARDOUS MATERIALS CONTAMINATION" shall mean the contamination (whether
presently existing or occurring after the date of this Deed of Trust) of the
Improvements, facilities, soil, ground water, air or other elements on, or of,
the Security Property or any part thereof by Hazardous Materials, or the
contamination of the buildings, facilities, soil, ground water, air or other
elements on, or of, any other property as a result of Hazardous Materials at any
time (whether before or after the date of this Deed of Trust) emanating from the
Security Property or any part thereof.
<Page>
"IMPOSITIONS" shall mean all (a) taxes, levies, fees, water and sewer
rents, assessments and all other governmental charges and all charges for
utility or communications services which may at any time be assessed, levied or
imposed upon Grantor, the Security Property, this Deed of Trust or the
Indebtedness or which may arise in connection with the ownership, use, occupancy
or operation of the Security Property, (b) all income, excess profits, sales,
gross receipts and other taxes, duties or imposts assessed, levied or imposed by
any governmental authority on Grantor or the Security Property, (c) all lawful
claims and demands of mechanics, materialmen and others which, if unpaid, might
create a lien on the Security Property, and (d) insurance premiums and similar
charges with respect to the ownership, use, occupancy or operation of the
Security Property.
"IMPROVEMENTS" shall mean all structures, buildings or other improvements,
and substitutions or replacements thereof and additions or accessions thereto,
now or hereafter standing upon the Land, including all furnaces, boilers,
radiators, piping, plumbing and bathroom fixtures, refrigeration, air
conditioning and sprinkler systems, elevators and motors, building materials,
building equipment, machinery and fixtures of every kind and nature on the Land
or forming part of such structures, buildings or other improvements.
"INCOME" shall mean all income, rents, receipts, royalties, benefits,
revenues, issues and profits of any nature whatsoever now or hereafter due or to
which Grantor may now or hereafter become entitled or may demand or claim,
arising from or out of the Security Property or any part thereof, or from the
ownership or leasing of the Security Property or any part thereof, whether or
not yet earned by performance including, without limitation, all proceeds
payable under any policy of insurance covering loss of rents resulting from
untenantability caused by destruction or damage to the Security Property or any
part thereof and any deposits of cash, securities and property that may be held
at any time and from time to time under the terms of the Leases.
"INDEBTEDNESS" shall mean all indebtedness and obligations of Grantor to
Beneficiary arising under or out of the Bond Documents.
"ISSUER" shall mean the Industrial Development Authority of Albemarle
County, Virginia, a political subdivision of the Commonwealth of Virginia, and
any successor thereto.
"JURISDICTION" shall mean the County of Albemarle, Virginia.
"LAND" shall mean those certain tracts of real estate situated in the
Jurisdiction and more particularly described in EXHIBIT A, including all of the
tenements, hereditaments, rights of way, easements, rights, privileges,
remainders, reversions and appurtenances thereunto belonging or in any way
appertaining, and all of the estate, right, title, interest, claim or demand
whatsoever of Grantor therein and in the streets and ways adjacent thereto and
in any gores or strips of land adjacent thereto, either in law or in equity, in
possession or expectancy, now existing or hereafter acquired.
"LEASE" shall mean any and all leases and agreements, written or oral, now
in existence or hereafter arising, for the use or occupancy of all or any
portion of the Security Property, together with all the right, power and
authority of Grantor to alter, modify or change the terms of such leases and
agreements, to surrender, cancel or terminate such leases and agreements or to
<Page>
exercise any other right of the lessor under such leases and agreements, further
together with any and all extensions and renewals thereof and any and all
further leases and agreements, including subleases, of all or any part of the
Security Property and further together with all of the right, title and interest
of Grantor as beneficiary of any guaranties of such leases and agreements.
"NET PROCEEDS" shall mean when used with respect to any condemnation award
or insurance proceeds allocable to the Security Property or any part thereof,
the gross proceeds from condemnation or insurance so allocable to which Grantor
may be entitled under the Lease or otherwise, remaining after payment of all
expenses (including reasonable attorneys' fees and any expenses of the Trustees
or Beneficiary) incurred in the collection of such gross proceeds.
"NOTE" shall mean the promissory note in the principal amount of the
Tax-Exempt Bond issued by Grantor to the Issuer in accordance with the
provisions of the Loan Agreement.
"PERMITS" shall mean all licenses, permits and approvals issued by any
governmental or quasi-governmental authorities and obtained by Grantor in
connection with the construction, ownership, occupancy, use or operation of the
Security Property or any part thereof.
"PERMITTED ENCUMBRANCES" or "PERMITTED LIENS" shall mean:
(a) Those easements, rights of way, servitudes, utility, access and other
similar reservations, rights and restrictions and other minor defects and
irregularities in title to the Security Property, and zoning laws and land use
regulations, which do not materially lessen the value of the Security Property
or materially impair the use thereof for the purposes contemplated in the Bond
Documents;
(b) The right reserved to or vested in any municipality or public authority
to condemn, appropriate, recapture or designate a purchaser of all or any part
of the Security Property;
(c) Any liens for taxes, assessments and other governmental charges and any
liens of mechanics, materialmen and laborers for work or services performed or
materials furnished in connection with the Security Property which are not due
and payable or the amount or validity of which is being contested at the time by
appropriate legal proceedings which shall operate to prevent the collection
thereof or other realization thereon and the sale or forfeiture of the Security
Property or any part thereof or interest therein to satisfy the same, provided
that Grantor shall have complied with this Deed of Trust dealing with the
contest of any such tax, assessment or other governmental charge or lien;
(d) The easements, rights of way, encumbrances and other title matters
listed in the title insurance commitment approved by Beneficiary in connection
with its purchase of the Tax-Exempt Bond;
(e) The lien hereof and any rights granted hereby;
(f) Any Leases, so long as the same are subject and subordinate to the lien
hereof;
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(g) Any prior deeds of trust or liens granted by the Grantor for the
benefit of the Beneficiary; and
(h) A lien or deed of trust granted by the Grantor for the benefit of
Stephen T. McLean ("McLean") and David P. Turner ("Turner") to secure certain
reimbursement obligations of the Grantor under letters of credit issued by
McLean and Turner in connection with the Agreement in a principal amount not to
exceed $800,000, together with interest thereon, provided that such lien or deed
of trust is at all times subordinate to the liens, assignments and security
interests provided to Beneficiary under this Deed of Trust or any other document
executed in connection with the Agreement.
"RELATED PERSONAL PROPERTY" shall mean architectural and engineering plans
and specifications for the Security Property or any portion thereof, any funds,
escrow accounts, insurance policies and unclassified business records related to
the Security Property or any portion thereof, letters of credit or other
property which are now or hereafter provided by Grantor to assure the payment of
the Indebtedness and performance and observance of the other obligations secured
hereby, and warranties and guaranties by manufacturers, suppliers and installers
pertaining to the condition of the Improvements and the Equipment.
"SECURITY PROPERTY" shall mean any and all of the property of Grantor
referred to in Article II.
"STATE" shall mean the Commonwealth of Virginia.
"THE LIEN HEREOF" or similar words shall mean the liens, assignments and
security interests created under this Deed of Trust.
"UCC" shall mean the Uniform Commercial Code as adopted in the State as of
the date hereof, together with any amendments thereto which do not limit the
rights hereunder of Trustees or Beneficiary or the obligations hereunder of
Grantor.
"UCC PROPERTY" shall mean all components of the Security Property in which
a security interest may be created pursuant to the UCC.
"VIRGINIA CODE" shall mean the Code of Virginia of 1950, as amended.
SECTION 1.02. RULES OF CONSTRUCTION. The following rules shall apply to the
construction of this Deed of Trust unless otherwise required by the context:
Singular words shall connote the plural as well as the singular, and vice
versa.
(a) All references herein to particular articles, sections or exhibits are
references to articles, sections or exhibits of this Deed of Trust.
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(b) The headings and table of contents hereof are solely for convenience of
reference and shall neither constitute a part of this Deed of Trust nor affect
its meaning, construction or effect.
ARTICLE II
GRANTING CLAUSE
SECTION 2.01. GRANT. For and in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby grants, bargains, sells, conveys, mortgages,
assigns, transfers, pledges, grants a security interest in and sets over unto
Trustees in trust as to items (a) through (c) below, and unto the Beneficiary as
to items (d) through (h) below, the following property:
(a) the Grantor's fee and leasehold interests in the Land;
(b) the Improvements;
(c) subject to the grant unto the Beneficiary as to items (d) through (i)
below, all rents, income, revenues, issues, awards, proceeds, and profits from
and in respect of the Land and the Improvements;
(d) the Equipment;
(e) the Leases and the Income;
(f) the Related Personal Property;
(g) any and all monies and other property which may now or hereafter become
subject to the lien hereof or which may come into the control of Beneficiary
pursuant to this Deed of Trust or any Bond Document; and
(h) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims including, without limitation, proceeds
of insurance and condemnation awards.
SECTION 2.02. GRANTOR'S OBLIGATIONS. This Deed of Trust is given to secure
the payment or performance, as the case may be, of all the following:
(a) The Indebtedness, plus interest thereon, fees due with respect to such
Indebtedness, and all costs incurred by Beneficiary or Trustees to enforce this
Deed of Trust;
(b) Any and all additional advances made by Beneficiary to protect or
preserve the Security Property or any part thereof or the liens, assignments or
security interests created hereby on the Security Property or any part thereof,
or for Impositions as hereinafter provided, or for performance of any of the
obligations of Grantor hereunder or under the Bond Documents or under the Lease,
or for any other purpose provided herein (whether or not the original Grantor
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remains the owner of the Security Property at the time of such advances);
provided, however, nothing herein shall be deemed to obligate Beneficiary to
make any such advances;
(c) The due and punctual performance by Grantor of Grantor's obligations
hereunder; and
(d) All costs of collection of the Indebtedness, including reasonable
attorneys' fees if collected by or through an attorney-at-law or under the
advice thereof or if such an attorney is consulted with respect to any Default
or Event of Default.
SECTION 2.03. QUIET POSSESSION. Until the occurrence of an Event of Default
hereunder, and subject to any provision hereof to the contrary, Grantor shall
have the right to remain in quiet and peaceful possession of the Security
Property and to collect, receive and retain the Income.
SECTION 2.04. CONDITION OF GRANT. If Grantor shall pay or cause to be paid
to Beneficiary the Indebtedness in full in the manner stated in this Deed of
Trust and the other Bond Documents at any time before the sale provided for
herein, and shall well and truly perform, comply with and observe each and all
of the obligations of Grantor hereunder, then these presents and the estate
granted hereby shall cease, determine and become void, and upon proof of the
foregoing given to the Trustees to their satisfaction, the Trustees shall (upon
the receipt of the written request of Beneficiary and at the expense of Grantor)
release and discharge this Deed of Trust and the liens, security interests and
assignments created hereby.
ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF GRANTOR
SECTION 3.01. TITLE TO LAND; VALIDITY OF DEED OF TRUST. Grantor represents,
warrants, covenants and agrees that:
(a) Grantor is the owner of a fee interest in the Land and the
Improvements, as described on Exhibit A subject to no lien, charge or
encumbrance other than the Permitted Encumbrances and will preserve such title
and will warrant generally and defend the same to Trustees and Beneficiary
against all claims and demands by any person claiming by, through or under
Grantor;
(b) Grantor has the necessary power, authority and right to execute this
Deed of Trust and encumber the Security Property now or hereafter owned by
Grantor, all as provided herein, and this Deed of Trust constitutes a lien on
the Security Property prior to all other liens other than the Permitted
Encumbrances (excluding for purposes of this subsection, the Lease from
"Permitted Encumbrances");
(c) This Deed of Trust has been duly authorized, executed and delivered by
Grantor and constitutes the legal, valid and binding obligation of Grantor,
enforceable against Grantor in
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accordance with its terms, subject to bankruptcy and insolvency laws and general
principles of equity; and
(d) Grantor at its expense will generally warrant and defend the validity
and priority of the liens, security interests and assignments granted and made
by Grantor herein against the claims of any and all persons and parties claiming
by, through or under Grantor.
SECTION 3.02. USE OF THE LAND. Grantor represents, warrants, covenants and
agrees that, without regard to any property other than the Land, the proposed
use of the Land for the Project is permitted as a matter of right as a principal
use and not a nonconforming use under all applicable zoning and subdivision
ordinances and other land use regulations, and the Land and the Project and such
use and all future uses thereof in all other material respects now and will
comply and in all material respects, with all applicable zoning ordinances, land
use regulations, restrictive covenants and all laws, ordinances, orders, rules
and regulations of all governmental and quasigovernmental authorities.
SECTION 3.03. UTILITIES; HAZARDOUS MATERIALS.
(a) Grantor represents, warrants and covenants that all utility services
and facilities necessary for the complete ownership, operation, occupancy and
use of the Land and the Project as described in the Bond Documents, including
without limitation public water, storm and sanitary sewer facilities, and gas,
electric and telephone facilities, are available at the boundaries of the Land,
are adequate for such purposes, and have been properly constructed and
installed, are fully operational and are adequate to serve the Land.
(b) Grantor represents and warrants that, to the best of Grantor's
knowledge based upon due inquiry, no Hazardous Materials are located on the
Security Property.
(c) Grantor agrees to (i) give notice to the Beneficiary immediately upon
the Grantor's acquiring knowledge of the presence of any Hazardous Materials on
the Security Property or of any Hazardous Materials Contamination, with a full
description thereof; (ii) promptly comply with any laws requiring the removal,
treatment or disposal of such Hazardous Materials or Hazardous Materials
Contamination and provide the Beneficiary with satisfactory evidence of such
compliance; (iii) provide the Beneficiary, within thirty (30) days after a
demand by the Beneficiary, with a bond, letter of credit or similar financial
assurance evidencing to the Beneficiary's satisfaction that the necessary funds
are available to pay the cost of removing, treating and disposing of such
Hazardous Materials or Hazardous Materials Contamination and discharging any
encumbrance or lien which may be established on the Security Property as a
result thereof; and (iv) indemnify and hold harmless Beneficiary and the
Trustees from any and all claims which may now or in the future (whether before
or after the release of this Deed of Trust) be asserted as a result of the
presence of any Hazardous Materials on the Security Property or any Hazardous
Materials Contamination.
(d) Grantor shall not place, manufacture or store, or permit to be placed,
manufactured or stored, on the Security Property any Hazardous Materials, except
in accordance with applicable laws, ordinances and regulations.
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SECTION 3.04. SEPARATE LOT. Grantor represents and warrants that (a) each
parcel comprising the Land is a legally subdivided lot; and (b) the Land and the
Improvements are assessed for purposes of taxes as separate and distinct parcels
from any other real property so that the Land and Improvements shall never
become subject to the lien of any taxes levied or assessed against any real
property other than the Land and Improvements.
SECTION 3.05. PAYMENT AND PERFORMANCE OF NOTE AND INDEBTEDNESS. Grantor
agrees that it will: (a) punctually pay the principal of, premium, if any, and
interest on the Bond according to the terms of the Bond and the Loan Agreement,
as and when the same shall become due and payable; (b) punctually pay to
Beneficiary all Indebtedness, including amounts required to be paid to
Beneficiary pursuant to the terms of the Bond Documents, as and when the same
shall become due and payable; and (c) punctually keep and perform each and all
other of the obligations of Grantor under the Bond Documents.
SECTION 3.06. TAXES, LIENS AND OTHER CHARGES.
(a) Grantor shall pay or cause to be paid, before the date on which
penalties attach thereto, all Impositions, and shall submit to Beneficiary such
evidence of the due and punctual payment thereof as Beneficiary may require.
(b) Grantor shall permit no mechanic's, materialman's, laborer's, statutory
or other lien (other than Permitted Encumbrances) to be created, filed of record
or remain outstanding upon all or any part of the Security Property.
(c) Should Grantor fail to pay, or cause to be paid any Imposition at the
time or in the manner provided in this Section, the Beneficiary, may, at its
option (but without being under any obligation to do so), pay such Imposition,
and Grantor shall pay to the Beneficiary the amount of any such amount so paid,
with interest thereon at the Default Rate.
(d) Notwithstanding the foregoing provisions of this Section 3.06, Grantor
shall have the right to contest the validity or amount of any such Impositions
or liens in appropriate proceedings, provided that Grantor shall (i) give
Beneficiary written notice of its intention to contest, (ii) diligently
prosecute such contest, (iii) at all times effectively stay or prevent any
official or judicial sale of the Security Property or any part thereof relating
to such Impositions or liens, and (iv) establish or post such reserves, bonds or
security for the liabilities relating to such Impositions or liens as may be
reasonably required by Beneficiary.
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SECTION 3.07. INSURANCE.
(a) Grantor shall, at its expense, procure for, deliver to and maintain for
the benefit of Beneficiary until the Indebtedness is fully repaid, original,
fully paid insurance policies providing the coverages described below, issued by
such insurance companies, in such amounts, in such form and content, payable at
such times and with expiration dates as are reasonably approved by Beneficiary.
Such policies shall provide that the insurer shall give Beneficiary at least
thirty (30) days' prior written notice of cancellation or termination thereof,
provide that no act or thing done by the insured shall invalidate or diminish
the insurance provided to Beneficiary and, except for liability policies,
contain noncontributing "mortgagee" or "loss payable" clauses satisfactory to
Beneficiary.
(b) Grantor will keep the Improvements and the Equipment insured against
loss or damage from (i) the perils of fire and hazards ordinarily included under
standard extended coverage endorsements in amounts necessary to prevent the
application of any co-insurance provisions of the applicable policies up to the
full replacement cost of the Improvements and Equipment without deduction for
depreciation; and (ii) boiler or pressure vessel explosion (if there are boilers
or pressure vessels located on the Security Property) in an amount customarily
carried in the case of similar operations. The term "full replacement cost" as
used above means the cost of replacing all such Improvements and Equipment. Such
replacement cost shall be determined from time to time at the request of
Beneficiary (but not more frequently than once in every 12 months) by an
architect, engineer or insurer selected by the Grantor and approved by
Beneficiary. Each policy shall contain a "replacement cost endorsement" and an
"agreed amount" endorsement satisfactory to Beneficiary.
(c) Grantor shall maintain or cause to be maintained (i) general public
liability insurance and workmen's compensation insurance in amounts usually
carried by similar operations against claims for bodily injury or death
occurring upon, in or about the Security Property, with such insurance (other
than workmen's compensation insurance) to afford protection to the limit of not
less than $1,000,000 in respect of bodily injury or death for any one occurrence
and to the limit of not less than $3,000,000 for the aggregate of all
occurrences during any given annual policy period, and (ii) property damage
insurance against claims for damage to property (including loss of use)
occurring upon, in or about the Security Property with such insurance to afford
protection to the limit of not less than $500,000 in respect of damage to
property for any one occurrence and $1,000,000 for the aggregate of all
occurrences during any given annual policy period.
(d) If at any time the Land is located in an area that has been identified
by the Federal Insurance Administration as having special flood and mudslide
hazards, and in which the sale of flood insurance has been made available under
the National Flood Insurance Act of 1968, Grantor shall purchase and maintain a
flood insurance policy in the amount of the Stated Amount, or the maximum limit
of coverage available on the Security Property, whichever is less. In the event
that the Security Property is not in an area having special flood and mudslide
hazards, Grantor shall deliver to the Beneficiary on the Closing Date and
thereafter upon request, a certificate or letter issued by Grantor's insurance
company or by a certified land surveyor stating that the Security Property is
not in such a flood or mudslide area.
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(e) Grantor will keep the Security Property insured against any other risk
insured against by persons operating like properties in the locality of the
Land, in such amounts as are insured against by such persons, or as may be from
time to time reasonably required by Beneficiary (until the expiration of the
Loan Agreement). Grantor will obtain and keep in force such other and further
insurance as may be required from time to time by Beneficiary.
(f) Grantor shall promptly notify Beneficiary of any loss covered by such
insurance and agrees that if an Event of Default shall have occurred and be
continuing, Beneficiary is hereby authorized and empowered, at its option, to
adjust, compromise or settle any loss under any insurance policies maintained
pursuant hereto, and to collect and receive the proceeds from any policy or
policies, subject to the provisions set forth herein. Each insurance company is
hereby authorized and directed to make payment for all such losses directly to
Beneficiary, instead of to Grantor and Beneficiary jointly if an Event of
Default shall have occurred and be continuing. In the event any insurance
company fails to disburse directly and solely to Beneficiary but disburses
instead either solely to Grantor or to Grantor and Beneficiary jointly, Grantor
agrees immediately to endorse and transfer such proceeds to Beneficiary to be
applied as set forth herein. Upon any failure of Grantor to so endorse and
transfer such proceeds, Beneficiary may execute such endorsements or transfers
for and in the name of Grantor, and Grantor hereby irrevocably appoints
Beneficiary as its agent and attorney-in-fact to do so.
(g) Prior to the expiration date of each policy maintained pursuant to this
Section, a renewal or replacement thereof reasonably satisfactory to Beneficiary
shall be delivered to Beneficiary. Grantor shall deliver to Beneficiary receipts
evidencing the full payment of premiums when and as due for all such insurance
policies and renewals or replacements. The delivery of any insurance policies
hereunder shall constitute an assignment of all unearned premiums as further
security hereunder. In the event of the foreclosure of this Deed of Trust or any
other transfer of title to all or part of the Security Property in
extinguishment or partial extinguishment of the Indebtedness, all right, title
and interest of Grantor in and to all insurance policies maintained pursuant to
this Section then in force shall belong to the purchaser as its interests may
appear, and Beneficiary is hereby irrevocably appointed by Grantor as
attorney-in-fact for Grantor to assign any such policy to such purchaser, as its
interests may appear, without accounting to Grantor for any unearned premiums
therefor.
(h) So long as an Event of Default has not occurred and is continuing and
Grantor may collect, adjust and compromise any losses or claims under any such
insurance policies arising with respect to the Security Property or the use and
operation thereof; provided, however, Beneficiary must approve any adjustment or
compromise by Grantor in excess of $25,000. If an Event of Default has occurred
and is continuing, Beneficiary shall collect, adjust and compromise any losses
or claims under any such insurance policies arising with respect to the Security
Property or the use or operation thereof. The Net Proceeds of such insurance,
whether collected by Beneficiary or Grantor, shall be held in trust to be
applied only as set forth in Section 3.10 hereof.
SECTION 3.08. MONTHLY DEPOSITS. If any Event of Default shall occur and be
continuing, Grantor shall deposit with Beneficiary, monthly, until the
Indebtedness is fully repaid, such sums determined by Beneficiary in its sole
discretion to be sufficient to pay, at least ten (10) days before the date
penalties attach thereto, all Impositions. Such deposits shall be held
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by Beneficiary free of any liens or claims on the part of creditors of Grantor
to be used by Beneficiary to pay the Impositions as the same accrue and are
payable. Such deposits may be commingled with the general funds of Beneficiary
and no interest shall be payable thereon. If such funds are insufficient to pay
the Impositions in full, as the same become payable, Grantor will deposit with
Beneficiary upon demand such additional sums as may be required. Nothing
contained herein shall obligate Beneficiary to pay any amounts in excess of the
amount of funds deposited with Beneficiary pursuant to this Section. Should
Grantor fail to deposit with Beneficiary sums sufficient to pay in full all
Impositions at least ten (10) days before the date penalties attach thereto,
Beneficiary, at Beneficiary's election, but without any obligation to do so, may
advance any amounts required to make up the deficiency, and any amounts so
advanced shall be deemed to be part of the Indebtedness. Upon the occurrence of
an Event of Default, Beneficiary may, at its option, apply any money in the fund
resulting from such deposits to the payment of the Indebtedness in such manner
as it may elect. In the event of a foreclosure of this Deed of Trust or deed in
lieu thereof or sale under power of sale, the purchaser of the Security Property
shall succeed to all the rights of Grantor in and to such deposits. The
collection of such deposits by Beneficiary shall not relieve Grantor of any of
its obligations under this Section, or any other provision of this Deed of
Trust, and under no circumstances shall Beneficiary be liable for failure to
make any payment on behalf of Grantor for any Impositions.
SECTION 3.09. CONDEMNATION. Promptly upon learning of the institution or
the proposed, contemplated or threatened institution of any condemnation
proceeding (which term when used in this Deed of Trust shall include any damage
or taking by any governmental or quasi-governmental authority and any transfer
by private sale in lieu or under threat thereof), Grantor will notify
Beneficiary and Trustees of the pendency of such proceedings. So long as an
Event of Default has not occurred and is continuing and Grantor shall be
entitled to commence, appear in and prosecute, in its own name, any action or
proceeding relating to any condemnation of the Security Property or any part
thereof, or sale in lieu of condemnation, and to settle or compromise any claim
in connection therewith; provided, however, that, Beneficiary must approve any
such settlement or compromise in excess of $25,000. If an Event of Default has
occurred and is continuing, or if Grantor shall not take any action as described
in the preceding sentence, Beneficiary is hereby authorized, at its option, to
commence, appear in and prosecute, in its own name or in the name of Grantor,
any action or proceeding relating to any condemnation, and to settle or
compromise any claim in connection therewith. All such compensation, awards,
damages, claims, rights of action and proceeds and the right thereto are hereby
assigned by Grantor to Beneficiary, and the Net Proceeds thereof, whether
collected by Beneficiary or Grantor, shall be held in trust to be applied only
as set forth in Section 3.10 hereof. Grantor agrees to execute such further
assignment of any compensation, awards, damages, claims, rights of action and
proceeds as Beneficiary may require. If, prior to the receipt by Beneficiary of
such award or proceeds, the Security Property or any part thereof shall have
been sold by the foreclosure of this Deed of Trust, or as a result of other
legal action relating to this Deed of Trust, Beneficiary shall have the right to
receive such award or proceeds to the extent of any unpaid Indebtedness
following such sale, with legal interest thereon, whether or not a deficiency
judgment on this Deed of Trust shall have been sought or recovered, and to the
extent of attorneys' fees, costs and disbursements incurred by Beneficiary in
connection with the collection of such award or proceeds.
SECTION 3.10. DAMAGE AND DESTRUCTION; CONDEMNATION; APPLICATION OF NET
PROCEEDS.
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(a) If the Security Property or any part thereof is damaged or destroyed by
fire or other casualty in whole or in part, or, if title to, or the use of, the
Security Property or any part thereof, or the interest of Grantor in the
Security Property or any part thereof, shall be taken under the exercise of the
power of eminent domain by any governmental body or by any person, firm or
corporation acting under governmental authority, either temporarily or
permanently, the Net Proceeds resulting from any such event described in this
Section will be deposited in a trust fund with Beneficiary (the "Net Proceeds
Escrow Fund").
(b) The Net Proceeds arising out of any casualty loss or condemnation award
shall, at Beneficiary's option, be released from the Net Proceeds Escrow Fund to
Grantor in whole or in part upon conditions satisfactory to Beneficiary for the
restoration or repair of the Security Property damaged, or applied to the
prepayment of the Bond in accordance with the Bond Documents.
(c) Notwithstanding the provisions of this Section 3.10, in the event the
Net Proceeds are less than $25,000, and if no Default or Event of Default has
occurred and is continuing, such Net Proceeds shall be paid directly to Grantor
to be used solely to repair or restore the Security Property or to prepay the
Bond, whichever Grantor shall elect.
(d) In the event the Net Proceeds are not sufficient to pay in full the
costs of repairing, rebuilding, altering and restoring the Security Property as
provided in this Section, whether such determination shall be made at the time
Grantor and Beneficiary mutually agree to repair, rebuild, restore or alter the
Security Property or at any time thereafter, Grantor will nonetheless complete
the work thereof and pay that portion of the costs thereof in excess of the
amount of such Net Proceeds and Beneficiary may, as a condition precedent to
approving the disbursement of any Net Proceeds, require that Grantor deposit
monies with Beneficiary or furnish to Beneficiary an irrevocable letter of
credit or a surety bond satisfactory to Beneficiary, in either case in an amount
sufficient to pay the costs of repairing, rebuilding, altering and restoring the
Security Property in excess of the Net Proceeds available for such purposes.
Grantor shall not, by reason of the payment of any costs in excess of the amount
of such Net Proceeds (whether by direct payment thereof or payment to the
Beneficiary therefor), be entitled to any reimbursement from Beneficiary or any
abatement or diminution of the payments payable under the Bond Documents.
(e) If any work required to be performed under this Section involves an
estimated expenditure of more than $25,000, no such work will be undertaken
until plans and specifications therefor, prepared by an architect or engineer
satisfactory to Beneficiary, have been submitted to and approved by Beneficiary.
SECTION 3.11 CARE OF PROJECT.
(a) Grantor shall keep the Security Property in good condition and repair
(ordinary wear and tear excepted), shall not commit or suffer any waste and
shall not do or suffer to be done anything which would or could increase the
risk of fire or other hazard to the Security Property or any part thereof or
which would or could result in the cancellation of any insurance policy carried
with respect to the Security Property.
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(b) Grantor shall have the right, without the consent of Beneficiary, to
make alterations, additions or improvements to the Security Property provided
the cost of the work involved does not exceed $100,000.
(c) Except as is otherwise specifically provided in subsection (b) above or
in Section 3.10, Grantor shall not remove, demolish or materially alter, enlarge
or change any of the Improvements without Beneficiary's consent, nor shall any
new Improvements be constructed on the Land without Beneficiary's consent.
Except as otherwise provided herein, Grantor shall not remove or permit to be
removed from the Land any Equipment without the consent of Beneficiary, except
where appropriate replacements are immediately made which are free of any lien,
security interest or claim superior to that of this Deed of Trust and which have
a value and utility at least equal to the value and utility of the items
removed, which shall, without further action, become subject to the lien of this
Deed of Trust.
(d) Beneficiary and its representatives are hereby authorized to enter upon
and inspect the Security Property whenever Beneficiary deems such inspection to
be necessary, at reasonable times and with prior notice; provided, however, that
after the occurrence of an Event of Default, Beneficiary and its representatives
may so enter whenever Beneficiary may deem it necessary or desirable without
prior notice.
(e) Grantor shall promptly comply, in all material respects, with all
present and future laws, ordinances, rules and regulations of any governmental
authority affecting the Security Property or any part thereof.
(f) Grantor shall not initiate, join in or consent to any change in any
private restrictive covenant, zoning ordinance, easement or other public or
private restriction limiting or defining the uses which may be made of the
Security Property or any part thereof without Beneficiary's consent.
SECTION 3.12. FURTHER ASSURANCES: AFTER-ACQUIRED PROPERTY. At any time and
from time to time, upon request by Beneficiary, Grantor shall make, execute and
deliver or cause to be made, executed and delivered, to Beneficiary and, where
appropriate, cause to be recorded or filed in such offices and places as shall
be deemed desirable by Beneficiary, any and all such other and further deeds to
secure debt, mortgages, deeds of trust, security agreements, financing
statements, continuation statements, instruments of further assurance,
certificates and other documents as may, in the reasonable opinion of
Beneficiary, be necessary or desirable in order to effectuate, complete or
perfect, or to continue and preserve, (a) the obligations of Grantor under this
Deed of Trust and (b) the lien of this Deed of Trust as a lien upon, assignment
of and security interest in and to all of the Security Property, whether now
owned or hereafter acquired by Grantor, subject only to Permitted Encumbrances,
and (c) the Indebtedness. Upon any failure by Grantor to do so, Beneficiary may
make, execute, record and file any and all such deeds to secure debt, mortgages,
deeds of trust, security agreements, financing statements, continuation
statements, instruments, certificates and documents for and in the name of
Grantor, and Grantor hereby irrevocably appoints Beneficiary the agent and
attorney-in-fact of Grantor to do so. Unless otherwise agreed by Beneficiary,
the lien hereof shall automatically attach, without further act, to all
improvements, alterations, substitutions, restorations and replacements of, and
all additions and appurtenances to, the Security Property released to or
acquired by Grantor with
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the same effect as if such afteracquired property had been owned by Grantor as
of the date hereof and had been specifically described in the granting clauses
in Article II, to the extent permitted by law.
SECTION 3.13. EXPENSES. Grantor shall pay or reimburse Beneficiary and
Trustees, upon demand therefor, for all reasonable attorneys' fees, costs and
expenses incurred by Beneficiary or Trustees in any suit, action, legal
proceeding or dispute of any kind in which Beneficiary or Trustees, or any one
or more of them, are made a party or appear as a party plaintiff or defendant,
affecting the Indebtedness, this Deed of Trust or the Security Property,
including, without limitation, any foreclosure proceedings, any condemnation
action involving the Security Property or any part thereof, any federal
bankruptcy or state insolvency proceeding involving Grantor, any Guarantor or
the Security Property and any such amounts paid by Beneficiary or Trustees shall
be added to the Indebtedness and shall bear interest from and after the date
when paid at the Default Rate.
SECTION 3.14. SUBROGATION. To the full extent of the Indebtedness,
Beneficiary is hereby subrogated to the liens, claims, demands and other
encumbrances, and to the rights of the owners and holders of each lien, claim,
demand and other encumbrance on the Security Property which is paid or
satisfied, in whole or in part, from proceeds of the Indebtedness, and the
respective liens, claims, demands and other encumbrances shall be, and each of
them is hereby, preserved and shall pass to and be held by Beneficiary as
additional collateral and further security for the Indebtedness, to the same
extent they would have been preserved and would have been passed to and held by
Beneficiary had they been duly and legally assigned, transferred, set over and
delivered unto Beneficiary by assignment, notwithstanding the fact that any
instrument providing public notice of the same may be satisfied and cancelled of
record.
SECTION 3.15. RIGHT TO CURE. Grantor agrees that upon its failure to
perform or observe any provision of any Bond Document, Beneficiary, at its
option and without any obligation to do so, may, perform or observe or cause the
performance or observance of the same, and all payments made or reasonable costs
incurred by Beneficiary in connection therewith shall be secured hereby and
shall be, without demand, immediately repaid by Grantor to Beneficiary with
interest thereon at the Default Rate from the date such payment is made or
expense is incurred by Beneficiary, to the date Beneficiary is reimbursed
therefor. Beneficiary shall be the sole judge of the necessity for any such
actions and of any amounts necessary to be paid in connection therewith.
Beneficiary is hereby empowered to enter and to authorize others to enter upon
the Security Property or any part thereof for the purpose of such performance or
observance without thereby becoming liable to Grantor or any person in
possession of any portion of the Security Property holding under Grantor.
Grantor expressly acknowledges and agrees, however, that notwithstanding
anything contained in this Section 3.15 to the contrary, Beneficiary shall not
be obligated under this Section to incur any expense or to perform any act
whatsoever.
SECTION 3.16. INDEMNIFICATION. Grantor shall at all times protect,
indemnify and save harmless Trustees and Beneficiary from and against all
liabilities, losses, damages, claims, obligations, penalties, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) imposed
upon, incurred by or asserted against Trustees or Beneficiary on account of (a)
any failure of Grantor to comply with any of the terms of this Deed of Trust,
(b) any loss or damage to property or any injury to or death of any person that
may be occasioned by
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any cause whatsoever pertaining to the Security Property or the use thereof, (c)
any breach of any material representation or warranty of Grantor set forth
herein, or (d) any action, suit, claim, demand, administrative proceeding,
enforcement action or governmental or private action contesting or affecting
title to the Security Property, or arising from or in connection with the
financing, acquisition, construction, equipping, ownership, use or operation of
the Security Property; provided, however that the foregoing indemnity shall not
be applicable with respect to the gross negligence or willful misconduct of the
parties to be indemnified. The foregoing shall be equally applicable to the
respective officers, directors, employees and agents of Beneficiary or Trustees.
ARTICLE IV
SECURITY AGREEMENT
SECTION 4.01. SECURITY INTEREST: FINANCING STATEMENTS.
(a) This Deed of Trust constitutes a security agreement from Grantor to
Beneficiary under the UCC. Grantor hereby agrees to execute and deliver on
demand, and hereby irrevocably constitutes and appoints Beneficiary as the
attorney-in-fact of Grantor, to execute, deliver and, if appropriate, to file
with the appropriate filing office or offices, such financing statements or
other instruments as Beneficiary may request or require in order to perfect the
security interest granted hereby or continue the effectiveness of the same.
Beneficiary shall have all of the rights and remedies of a secured party under
the UCC. Beneficiary shall not be liable for any loss to any Security Property
in Beneficiary's possession, nor shall such loss diminish the amount of the
Indebtedness. Grantor shall also execute, deliver and file financing
statements with respect to such purchased Equipment that will constitute
collateral which is to be leased by Grantor to any third party, naming such
third party as the debtor, Grantor as the secured party, and Beneficiary as the
assignee of the secured party.
(b) Grantor represents and warrants that: (i) except as previously
disclosed to Beneficiary no financing statement covering any part of the UCC
Property is on file in any public office except pursuant hereto, (ii) the chief
executive office of Grantor within the meaning of the UCC is located within the
Jurisdiction, (iii) all tangible UCC Property will be located on the Land, (iv)
Grantor has not changed Grantor's name or identity during the five-year period
preceding the date of this Deed of Trust, and (v) the UCC Property is to be used
solely for business purposes. Grantor agrees that it will furnish Beneficiary
with notice of any change in the matters addressed by clauses (i) through (v)
above within thirty (30) days after the effective date of any such change, and
Grantor will promptly execute any financing statements or other instruments
deemed necessary by Beneficiary to prevent any filed financing statement from
becoming misleading or to continue the perfection of the security interest
granted hereby.
(c) Some of the items of UCC Property are goods that are or are to become
fixtures related to the real estate described herein, and it is intended that,
as to those goods, this Deed of Trust shall be effective as a financing
statement filed as a fixture filing from the date of its filing for record in
the real estate records of the Jurisdiction.
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(d) Upon the occurrence of an Event of Default, Beneficiary shall have the
remedies of a secured party under the UCC including, without limitation, the
right to take immediate and exclusive possession of the UCC Property or any part
thereof, and for that purpose may enter upon any place where the UCC Property or
any part thereof may be situated and remove the same therefrom, and Beneficiary
shall be entitled to hold, maintain, preserve and prepare the UCC Property for
sale until disposed of, or may retain such property subject to the right of
redemption of Grantor, if any, in satisfaction of the obligations of Grantor,
all as provided in the UCC. Beneficiary, without removal, may dispose of the UCC
Property at the Land or the Project. Beneficiary may require Grantor to assemble
the UCC Property and make it available to Beneficiary for its possession at a
place to be designated by Beneficiary which is reasonably convenient to the
parties. Beneficiary will give Grantor at least fifteen (15) days' notice of the
time and place of any public sale thereof or of the time after which any private
sale or any other intended disposition thereof is to be made. The requirements
of reasonable notice shall be met if such notice is provided in accordance with
the provisions hereof at least fifteen (15) days before the time of the sale or
disposition. Beneficiary may buy at any public sale and if the collateral is of
a type customarily sold in a recognized market or is of a type which is the
subject of widely distributed standard price quotations, Beneficiary may buy at
private sale. Any such sale may be held as part of and in conjunction with any
judicial foreclosure sale or Trustees' sale of the real estate comprising the
Security Property and the UCC Property and any remaining Security Property may
be sold as one lot if Beneficiary so elects. The net proceeds realized upon any
such disposition after deduction for the expenses of retaking, holding,
preparing for sale, selling and the like and the reasonable attorneys' fees and
legal expenses incurred by Beneficiary shall be applied in satisfaction of the
Indebtedness hereby secured. Beneficiary will account to Grantor for any surplus
realized on such disposition.
(e) The remedies of Beneficiary hereunder are cumulative and the exercise
of any one or more of the remedies provided herein or under the UCC shall not be
construed as a waiver of any other remedies of Beneficiary or Trustees,
including having the UCC Property deemed part of the realty upon any judicial
foreclosure or Trustees' sale thereof so long as any part of the Indebtedness
hereby secured remains unsatisfied.
(f) Grantor agrees that a photographic or other reproduction of this Deed
of Trust may be filed as a financing statement.
(g) The terms and provisions contained in this Section shall, unless the
context otherwise requires, have the meanings and be construed as provided in
the UCC.
ARTICLE V
ASSIGNMENT OF LEASES AND RENTS
SECTION 5.01. LEASES AND RENTS.
(a) Grantor agrees to execute and deliver to Beneficiary such additional
instruments, in form and substance satisfactory to Beneficiary, as may hereafter
be reasonably requested by Beneficiary to further evidence and confirm the
assignment to Beneficiary and Trustees of the Leases and the Income made in
Article II; provided, however, that acceptance of this assignment
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shall not be construed as a consent by Beneficiary to any Lease, or to impose
upon Beneficiary any obligation with respect thereto; and provided further, that
permission is hereby given to Grantor, unless and until an Event of Default
shall have occurred, to collect the Income as it becomes due and payable but not
in advance, except as provided below. Grantor represents and warrants that no
Leases are in existence on the date hereof except the Lease and except as
previously disclosed to Beneficiary. Grantor agrees that it shall not execute or
enter into any other Leases without first obtaining the consent of Beneficiary
to the form, substance and terms of such Lease and the creditworthiness of the
tenant. Without first obtaining on each occasion the approval of Beneficiary,
which approval may be withheld in the sole discretion of Beneficiary, Grantor
shall not (i) cancel or permit the cancellation of any Lease or modify, renew,
surrender or terminate, either orally or in writing, any of the Leases, the
effect of any of which would be to result in (A) the creation of rights in any
tenant greater than those of Beneficiary or (B) the reduction of any of the
rights of Beneficiary under this Deed of Trust, or (ii) accept, or permit to be
made, any prepayment of any installment of rent or other income thereunder
(except for security deposits) more than one (1) month in advance of the date
when due. Grantor shall faithfully perform, or cause to be performed, all of the
obligations contained in each of the Leases, now or hereafter existing, on the
part of Grantor to be performed and shall at all times do all things necessary
to compel performance by each other party to the Leases of all obligations by
such other party to be performed thereunder. Grantor shall also notify
Beneficiary promptly of any default (of which Grantor has knowledge) on the part
of any other party to the Leases in the performance of that party's obligations
under any of the Leases. This Deed of Trust constitutes an absolute, present and
irrevocable assignment of the Income, subject, however, to the conditional
permission given to Grantor to collect the same as provided above. The foregoing
assignment shall be fully operative without any further action on the part of
any party hereto and, specifically, Beneficiary shall be entitled, at its option
upon the occurrence of any Event of Default, without notice or demand of any
kind to Grantor, to collect and retain all the Income, whether or not
Beneficiary takes possession of the Security Property. Exercise by Beneficiary
of its rights under this Section and application of any Income to the
Indebtedness shall not cure or waive any Event of Default hereunder or
invalidate any act done pursuant hereto, but shall be cumulative of all other
rights and remedies.
(b) Except in connection with any approved subordinate financing expressly
permitted by Beneficiary, Grantor shall not, without the prior written consent
of Beneficiary, which consent may be withheld in Beneficiary's sole and absolute
discretion, further assign the Income or any part thereof and any such purported
assignment without the express written consent of Beneficiary shall be void as
against Beneficiary. Beneficiary consents to an assignment by Grantor of any
Income to McLean and Turner for the sole purpose of securing reimbursement
obligations to McLean and Turner in a principal amount not to exceed $800,000,
together with interest thereon pursuant to letters of credit provided by McLean
and Turner in connection with the Agreement, provided that such assignment is at
all times subordinate to the liens, assignments of Income and security interests
provided to Beneficiary under this Deed of Trust or any other document executed
in connection with the Agreement.
(c) Grantor shall furnish to Beneficiary, within ten (10) days after each
request by Beneficiary to do so, a written affidavit sworn to and signed by
Grantor setting forth the names of all tenants under the Leases, the terms of
their respective Leases, the space occupied, and the
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rentals payable thereunder, and stating whether any defaults, offsets or
defenses have been asserted under or in connection with any of the Leases. All
Leases shall provide for the giving by the tenants thereunder of certificates
with respect to the status of the Leases and Grantor shall exercise Grantor's
right to request such certificates within five (5) days after any demand
therefor by Beneficiary.
(d) Each Lease shall provide (or if any Lease does not so provide, shall be
deemed to provide, to the extent permitted by applicable law) that, in the event
of the enforcement by Beneficiary of the remedies provided it by law or by this
Deed of Trust, the tenant thereunder will, upon request of Beneficiary or any
other person or entity succeeding to the interest of Beneficiary as a result of
such enforcement, automatically become the tenant of Beneficiary or said
successor in interest, without change in the terms or other provisions of its
Lease; provided, however, that neither Beneficiary nor any such successor in
interest shall be (i) bound by any payment of rental, additional rental or other
Income for more than one (1) month in advance, (ii) bound by any amendment or
modification of such Lease, the effect of any of which would be to result in (A)
the creation of rights in any tenant greater than those of Beneficiary or (B)
the reduction of any of the rights of Beneficiary under this Deed of Trust, made
without the express written consent of Beneficiary or such successor in
interest, (iii) liable for any act or omission of any prior landlord (including
Grantor), (iv) liable for the return of any security deposit not paid over to
Beneficiary, or (v) subject to any offsets or defenses which the tenant might
have against any prior landlord (including Grantor). Each Lease shall also
provide (or if such Lease does not so provide, shall be deemed to provide, to
the extent permitted by applicable law) that, upon request by such successor in
interest, the tenant thereunder shall deliver an instrument confirming such
attornment.
(e) Notwithstanding any other provisions of this Deed of Trust, Grantor
shall not hereafter enter into any new Lease, or amend or extend any existing
Lease the effect of which amendment would be to result in (i) the creation of
rights in any tenant greater than those of Beneficiary or (ii) the reduction of
any of the rights of Beneficiary under this Deed of Trust, without the prior
written consent of Beneficiary, which consent may be granted or withheld in
Beneficiary's sole discretion.
ARTICLE VI
[RESERVED]
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
SECTION 7.01. EVENTS OF DEFAULT.
Each of the following shall be an Event of Default hereunder:
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(a) Failure by Grantor to pay any installment or other portion of the
Indebtedness or any other sum that may be due and payable under any of the Bond
Documents when due and payable and the expiration of all applicable grace
periods;
(b) Any Event of Default, as that term is defined in Section 9 of the Bond
Purchase Agreement shall occur or any event shall occur which under the terms of
any Bond Document shall give Beneficiary the option to accelerate the maturity
of the Indebtedness;
(c) Failure by Grantor to observe or perform any term, covenant, condition
or agreement of this Deed of Trust (other than any failure resulting in any
other Event of Default described herein) for a period of 30 days after notice
specifying such failure and requesting that it be remedied, given by the
Beneficiary to the Grantor, or in the case of any such default which cannot with
due diligence be cured within such 30-day period, failure of the Grantor to
proceed promptly to cure the same and thereafter prosecute the curing of the
same with due diligence but in no event longer than ninety (90) days after the
date of Beneficiary's notice;
(d) The fact that any material representation or warranty of Grantor
contained in this Deed of Trust or in any other Bond Document proves to be
untrue or misleading in any material respect as of the time made;
(e) An Act of Bankruptcy, as defined in the Bond Purchase Agreement;
(f) The filing by any person or entity of any claim in any legal or
equitable proceeding challenging the priority of the lien of this Deed of Trust,
subject only to the Permitted Encumbrances (other than the Leases), and the
failure of Grantor to have such proceeding dismissed or bonded against within
thirty (30) days thereafter;
(g) Any event of default under any of the instruments and other documents
evidencing and securing any subordinate indebtedness secured by a lien on the
Security Property that is expressly permitted by Beneficiary and remains uncured
beyond any cure period provided for in the applicable instrument or document;
(h) The rezoning of the Land so as to have a material adverse effect on the
security provided by this Deed of Trust;
(i) The dissolution of Grantor;
(j) Any event of default under the Lease that remains uncured beyond any
applicable cure period provided to the Grantor.
SECTION 7.02. ACCELERATION OF MATURITY. If an Event of Default shall have
occurred, then Beneficiary shall have the right to accelerate the maturities of
the Tax-Exempt Bond and the Note, and the entire Indebtedness shall, at the
option of Beneficiary, become immediately due and payable without notice or
demand, which are hereby expressly waived, time being of the essence as to this
Deed of Trust. No delay or omission on the part of Beneficiary to exercise such
option when entitled to do so shall be construed as a waiver of such right.
SECTION 7.03. REMEDIES UPON AN EVENT OF DEFAULT.
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(a) If an Event of Default shall have occurred, Grantor, upon demand of
Beneficiary, shall forthwith surrender to Beneficiary or Trustees, or their
agents or attorneys, the actual possession of the Security Property and if, and
to the extent, permitted by law, Beneficiary itself, Trustees or by such
officers or agents as they may appoint, may enter and take possession of the
Security Property without the appointment of a receiver or an application
therefor, and may exclude Grantor and its agents and employees wholly therefrom,
and may have joint access with Grantor to the books, papers and accounts of
Grantor.
(b) If Grantor shall for any reason fail to surrender or deliver the
Security Property or any part thereof after such demand by Beneficiary,
Beneficiary or Trustees may obtain a judgment or decree conferring upon
Beneficiary or Trustees the right to immediate possession or requiring Grantor
to deliver immediate possession of the Security Property to Beneficiary or
Trustees. Grantor shall pay to Beneficiary and Trustees, upon demand, all
expenses of obtaining such judgment or decree, including reasonable compensation
to Beneficiary, Trustees and their attorneys and agents, and all such expenses
and compensation shall, until paid, be secured by the lien of this Deed of
Trust.
(c) Upon every such entering upon or taking of possession, Beneficiary or
Trustees may hold, store, use, operate, manage and control the Security Property
and, from time to time (i) make all necessary and proper maintenance, repairs,
renewals, replacements, additions, betterments and improvements thereto and
thereon, and purchase or otherwise acquire additional fixtures, personalty and
other property, (ii) insure or keep the Security Property insured, (iii) enter
into any and all agreements with respect to the exercise by others of any of the
powers herein granted Beneficiary and Trustees, and (iv) perform all acts
required of Grantor as landlord under the Lease all as Beneficiary or Trustees
may from time to time determine to be to their best advantage. Beneficiary or
Trustees may collect and receive all the Income, whether past due or thereafter
accruing, and after deducting (i) all expenses of taking, holding, managing and
operating the Security Property (including compensation for the services of all
persons employed for such purposes), (ii) the cost of all such maintenance,
repairs, renewals, replacements, additions, betterments, improvements, purchases
and acquisitions, (iii) the cost of such insurance, (iv) such Impositions as
Beneficiary or Trustees may at their option pay, (v) other proper charges upon
the Security Property or any part thereof, and (vi) the compensation, expenses
and disbursements of the attorneys and agents of Beneficiary and Trustees,
Beneficiary and Trustees shall apply the remainder of the monies and proceeds so
received by Beneficiary and Trustees to the payment of the Indebtedness in
whatever manner Beneficiary may elect, and the balance, if any, shall be turned
over to Grantor or to such other person or entity as may be lawfully entitled
thereto. Anything in this Section to the contrary notwithstanding, Beneficiary
and Trustees shall not be obligated to discharge or perform the duties of a
landlord to any tenant or incur any liability as the result of any exercise by
Beneficiary or Trustees of their rights under this Deed of Trust, and
Beneficiary and Trustees shall be liable to account only for the Income actually
received by Beneficiary or Trustees and shall in no manner be deemed
fiduciaries.
(d) For the purpose of carrying out the provisions of this Section, Grantor
hereby irrevocably constitutes and appoints Beneficiary and Trustees, either of
whom may act, the true and lawful attorneys-in-fact of Grantor to do and
perform, from time to time, any and all actions necessary and incidental to such
purpose, and by these presents ratifies and confirms any and all actions of such
attorney-in-fact.
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(e) In the event that all the Indebtedness and all other amounts due under
the Bond Documents shall have been paid and all Events of Default cured and
satisfied, and as a result thereof, Beneficiary and Trustees surrender
possession of the Security Property to Grantor, the same right to taking
possession shall exist if any subsequent Event of Default shall occur.
SECTION 7.04. RECEIVER. If an Event of Default shall have occurred,
Beneficiary, upon application to a court of competent jurisdiction, shall be
entitled as a matter of strict right without notice and without regard to the
sufficiency or value of any security for the Indebtedness or the solvency of any
party bound for its payment, to the appointment of a receiver to take possession
of and to operate the Security Property and to collect and apply the Income. The
receiver shall have all of the rights and powers permitted under the laws of the
State. Grantor shall pay to Beneficiary or Trustees upon demand all expenses,
including receiver's fees, reasonable attorneys' fees, costs and agent's
compensation incurred pursuant to the provisions of this Section, and all such
expenses shall be secured by the lien of this Deed of Trust.
SECTION 7.05. ENFORCEMENT.
(a) If an Event of Default shall have occurred, Beneficiary, at its option,
may effect the foreclosure of this Deed of Trust by directing Trustees to sell
the Security Property, or any interest therein or any part thereof, at public
sale conducted according to applicable law, at such time and place, and upon
such terms and conditions, as Beneficiary may deem expedient or as may be
required or permitted by applicable law. Trustees shall first give notice prior
to the sale of the Security Property as to the time, place and terms of sale in
a manner required by applicable law, and Grantor agrees that such advertising
shall be inserted in a newspaper published or having a general circulation in
the jurisdiction not less than once a week for two consecutive weeks. Such
advertisement shall set forth a description of the property to be sold and shall
identify the property by street address, if any, or if none, shall give the
general location of the property with reference to streets, routes or known
landmarks. The Trustees shall also give written notice of such sale to Grantor
at its last known address as it appears in the records of Beneficiary. In the
event of any sale under the terms of this Deed of Trust, Grantor shall pay a
reasonable fee to Trustees which shall not exceed the maximum fee allowed by
applicable law, reasonable attorneys' fees and all expenses incurred in
obtaining or continuing abstracts of title for the purpose of any such sale.
(b) Beneficiary shall have the right from time to time to enforce any legal
or equitable remedy against Grantor including, without limitation, suing for any
portion of the Indebtedness, any Impositions or any other sums required to be
paid under the terms of this Deed of Trust, as the same become due, without
regard to whether or not all of the Indebtedness shall then be due, and without
prejudice to the right of Beneficiary thereafter to enforce any other remedy
including, without limitation, an action of foreclosure, whether or not such
other remedy is based upon an Event of Default which existed at the time of
commencement of an earlier or pending action, and whether or not such other
remedy is based upon the same Event of Default upon which an earlier or pending
action is based.
SECTION 7.06. PURCHASE BY BENEFICIARY. Upon any foreclosure sale,
Beneficiary may bid for and purchase the Security Property or any part thereof
and shall be entitled to apply all or any part of the Indebtedness as a credit
to the purchase price.
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SECTION 7.07. APPLICATION OF PROCEEDS OF SALE. In the event of a
foreclosure sale of all or any portion of the Security Property, the proceeds of
said sale shall be applied in the manner prescribed by Beneficiary, subject to
applicable law, with any surplus being paid to Grantor or any other person or
entity who may be lawfully entitled thereto.
SECTION 7.08. TENANT HOLDING OVER. In the event of any such foreclosure
sale by Trustees, Grantor shall be deemed a tenant holding over and shall
forthwith deliver possession to the purchaser or purchasers at such sale or be
summarily dispossessed according to the provisions of law applicable to tenants
holding over.
SECTION 7.09. LEASES. Beneficiary and Trustees, at their option, are
authorized to foreclose this Deed of Trust subject to the rights of any tenants
in the Security Property, if any, and the failure to make any such tenants
parties to any such foreclosure proceedings and to foreclose their rights will
not be, nor be asserted to be by Grantor, a defense to any proceedings
instituted by Beneficiary to collect the Indebtedness.
SECTION 7.10. DISCONTINUANCE OF PROCEEDS. In case Beneficiary or Trustees
shall have proceeded to enforce any right, power or remedy under this Deed of
Trust by foreclosure, entry or otherwise, and such proceeding shall have been
withdrawn, discontinued or abandoned for any reason, or shall have been
determined adverse to Beneficiary or Trustees, then in every such case (a)
Grantor, Beneficiary and Trustees shall be restored to their former positions
and rights, (b) all rights, powers and remedies of Beneficiary and Trustees
shall continue as if no such proceeding had been taken, (c) each and every Event
of Default declared or occurring prior or subsequent to such withdrawal,
discontinuance or abandonment shall be or shall be deemed to be a continuing
Event of Default unless otherwise expressly agreed in writing by the Grantor and
the Beneficiary and (d) neither this Deed of Trust, the Indebtedness nor any
other of the Bond Documents shall be or shall be deemed to have been reinstated
or otherwise affected by such withdrawal, discontinuance or abandonment unless
otherwise expressly agreed in writing by the Grantor and the Beneficiary.
SECTION 7.11. REMEDIES CUMULATIVE. No right, power or remedy conferred upon
or reserved to Beneficiary or Trustees by this Deed of Trust is intended to be
exclusive of any other right, power or remedy, but each and every such right,
power and remedy set forth in this Article VII or elsewhere in this Deed of
Trust shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or now or hereafter existing at law, in
equity or by statute.
SECTION 7.12. SUITS TO PROTECT THE SECURITY PROPERTY. Beneficiary shall
have the power (a) to institute and maintain such suits and proceedings as it
may deem expedient to prevent any impairment of the Security Property by any
acts which may be unlawful or any violation of this Deed of Trust, (b) to
preserve and protect its interest in the Security Property and in the Income
arising therefrom, and (c) to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, rule or order would impair the security hereunder or be
prejudicial to the interest of Beneficiary.
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SECTION 7.13. MARSHALLING. At any foreclosure sale, the Security Property
may, at Beneficiary's option, 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, Grantor hereby waiving the application of any doctrine of marshalling.
In case Beneficiary and Trustees, in the exercise of the power of sale herein
given, elect to sell the Security Property in parts or parcels, such sales may
be held from time to time, and the power shall not be fully executed until all
of the Security Property not previously sold shall have been sold.
SECTION 7.14. SECURITY DEPOSITS. If Grantor shall obtain from any tenant or
subtenant under any Lease, a deposit to secure such tenant's or subtenant's
obligations, such funds, following any Event of Default under this Deed of
Trust, shall be deposited with Beneficiary in accounts maintained by Beneficiary
in its name, but any such deposits shall be returned to Grantor when required by
the terms of any such Lease, to be paid over to the tenant or subtenant. Grantor
represents that the provisions of any applicable laws relating to security
deposits have been satisfied with respect to each existing tenant, subtenant or
occupant of the Security Property and agrees that they will be satisfied with
respect to each new tenant, subtenant, or occupant of the Security Property.
Grantor will furnish details of such satisfaction from time to time upon the
request of Beneficiary in such detail as Beneficiary may require.
SECTION 7.15. WAIVER OF APPRAISEMENT; VALUATION. Unless Grantor or anyone
on its behalf shall have tendered payment of the full amount necessary to
satisfy all sums due hereunder at any time prior to foreclosure, Grantor agrees,
to the fullest extent permitted by law, that in case of an Event of Default,
neither Grantor nor anyone claiming through or under Grantor will set up, claim
or seek to take advantage of any moratorium, reinstatement, forbearance,
appraisement, valuation, stay, extension, homestead, exemption or redemption
laws now or hereafter in force in order to prevent or hinder the enforcement or
foreclosure of this Deed of Trust or any term, condition, covenant or agreement
of any of the other Documents, or the absolute sale of the Security Property or
the delivery of possession thereof immediately after such sale to the purchaser
at such sale Grantor, for itself and all who may at any time claim through or
under it, hereby waives to the full extent that it may lawfully so do, the
benefit of all such laws, and any and all right to have the assets subject to
the lien of this Deed of Trust marshalled upon any foreclosure.
SECTION 7.16. WAIVER OF TRIAL BY JURY. Grantor hereby waives, to the
fullest extent permitted by law, the right to trial by jury in any action,
proceeding or counterclaim, whether in contract, tort or otherwise, relating
directly or indirectly to the loan evidenced by the Note, the application for
the loan evidenced by the Note, the Note, this Deed of Trust or the other
security documents or any acts or omissions of the Beneficiary, its officers,
employees, directors or agents in connection therewith.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
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SECTION 8.01. SUCCESSORS AND ASSIGNS. Subject to the provisions hereof
restricting assignments by the parties hereto, this Deed of Trust shall inure to
the benefit of and be binding upon Grantor, Beneficiary and Trustees, and their
respective legal representatives, successors and assigns.
SECTION 8.02. SEVERABILITY. If any provision of this Deed of Trust or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Deed of Trust and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforceable to the greatest extent permitted by
law.
SECTION 8.03. APPLICABLE LAW. This Deed of Trust shall be interpreted,
construed and enforced according to the laws of the Commonwealth of Virginia,
without reference to conflicts of laws principles.
SECTION 8.04. NOTICES, DEMANDS AND REQUESTS. All notices, demands or
requests provided for or permitted to be given pursuant to this Deed of Trust
shall be in writing and shall be delivered in person or sent by registered or
certified United States mail, postage prepaid, return receipt requested, or by
express courier to Beneficiary, Trustees, and Grantor at their respective
addresses set forth in the Bond Purchase Agreement or this Deed of Trust or to
such other addresses as are specified by no less than ten (10) days' prior
written notice delivered in accordance herewith. All such notices, demands and
requests shall be deemed effectively given and delivered on the postmark date of
mailing, or, if delivered personally, when received. Rejection or other refusal
to accept or the inability to deliver because of a changed address of which no
notice was given shall be deemed to be receipt of the notice, demand or request
sent.
SECTION 8.05. CONSENTS AND APPROVALS. All approvals and consents hereunder
shall be in writing and no approval or consent shall be deemed to have been
given hereunder unless evidenced in a writing signed by the party from whom the
approval or consent is sought.
SECTION 8.06. WAIVER. No delay or omission of Beneficiary to exercise any
right, power or remedy accruing upon any Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to be a waiver of
any such Event of Default or any acquiescence therein, and every right, power
and remedy given by this Deed of Trust to Beneficiary and Trustees may be
exercised from time to time and as often as may be deemed expedient by
Beneficiary and Trustees. No consent or waiver, express or implied, by
Beneficiary to or of any Event of Default by Grantor in the performance of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other Event of Default in the performance of the same or any other
obligations of Grantor hereunder. Failure on the part of Beneficiary to complain
of any act or failure to act or to declare an Event of Default, irrespective of
how long such failure continues, shall not constitute a waiver by Beneficiary of
its rights hereunder or impair any rights, powers or remedies consequent on any
breach or default by Grantor. By accepting payment after the due date of any
amount payable under this Deed of Trust or under any of the other Bond
Documents, Beneficiary or the Trustees shall not be deemed to waive the right
either to require prompt payment when due of all other amounts payable under
this Deed of Trust or under any of the other Bond Documents, or to declare an
Event of Default for failure to effect such prompt payment of any such other
amount. Neither
<Page>
the Grantor nor any other person now or hereafter obligated for the payment of
the whole or any part of the Indebtedness now or hereafter secured by this Deed
of Trust shall be relieved of such obligation by reason of the failure of
Beneficiary to comply with any request of Grantor or of any other person so
obligated to take action to foreclose this Deed of Trust or otherwise enforce
any of the provisions of this Deed of Trust or of any obligations secured by
this Deed of Trust, or by reason of any agreement or stipulation between any
subsequent owner or owners of the Security Property or any part thereof, or by
Beneficiary extending the time of payment or modifying the terms of this Deed of
Trust or the other Bond Documents without first having obtained the consent of
Grantor or such other person, and in the latter event, Grantor and all such
other persons shall continue to be liable to make such payments according to the
terms of any such agreement or extension or modification unless expressly
released and discharged in writing by Beneficiary. Regardless of consideration,
and without the necessity for any notice to or consent by the holder of any
subordinate lien on the Security Property, Beneficiary may release the
obligation of any person at any time liable for any of the Indebtedness secured
by this Deed of Trust or any part of the security held for the Indebtedness and
may extend the time of payment or otherwise modify the terms of this Deed of
Trust or the other Bond Documents without, as to the security or the remainder
thereof, in anyway impairing or affecting the lien or security interest of this
Deed of Trust or the priority of such lien or security interest, as security for
the payment of the Indebtedness as it may be so extended or modified, over any
subordinate lien. The holder of any subordinate lien shall have no right to
terminate any Lease whether or not such Lease be subordinate to this Deed of
Trust. Beneficiary may resort for the payment of the Indebtedness secured hereby
to the Security Property or to any other security or collateral therefor held by
the Beneficiary in such order and manner as the Beneficiary may elect.
SECTION 8.07. EXECUTION COUNTERPARTS. This Deed of Trust may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original and all such counterparts shall together constitute
but one and the same Deed of Trust.
SECTION 8.08. TIME OF THE ESSENCE. TIME IS OF THE ESSENCE with respect to
each and every covenant, agreement and obligation of Grantor under this Deed of
Trust.
SECTION 8.09. ATTORNEYS' FEES. The meaning of the terms "legal fees" or
"attorneys' fees" or any other reference to the fees of attorneys or counsel,
wherever used in this Deed of Trust, shall be deemed to include, without
limitation, all reasonable legal fees relating to litigation or appeals at any
and all levels of courts and administrative tribunals.
SECTION 8.10. NO LIABILITY. No grant, conveyance, assignment, mortgage,
security interest or other right created in the Security Property pursuant to
Article II or any other provision of this Deed of Trust shall in any way impair
or diminish the obligations of Grantor under or with respect to any of the
Security Property or impose any of such obligations on Beneficiary or Trustees.
SECTION 8.11. INCORPORATION OF STATUTORY PROVISIONS. To the extent not
otherwise explicitly stated herein, this Deed of Trust shall be construed to
impose and confer upon the parties hereto, and the beneficiaries hereunder, all
duties, rights and obligations prescribed in Section 55-59 and Sections 55-59.1
through 55-59.4 of the Virginia Code, and to incorporate the following by short
form reference to Sections 55-59.2 and 55-60 of the Virginia Code:
<Page>
Exemptions waived
Advertisement required: once a week for two weeks
Subject to all (call) upon default
Renewal, extension or reinstatement permitted
Any Trustee may act
Substitution of any or all of the Trustees may be made at the discretion of
Beneficiary for any reason whatsoever.
Section 8.12. DEBT SECURED SUBJECT TO CALL. THE DEBT SECURED HEREBY IS
SUBJECT TO CALL IN FULL OR THE TERMS THEREOF BEING MODIFIED IN THE EVENT OF SALE
OR CONVEYANCE OF THE PROPERTY HEREBY CONVEYED.
ARTICLE IX
TRUSTEES
SECTION 9.01. PERFORMANCE OF DUTIES; LIABILITY; COMPENSATION. Trustees, by
their acceptance hereof, covenant to perform and fulfill faithfully the trusts
herein created, being liable, however, only for willful misconduct or gross
negligence, and hereby waive any statutory fee and agree to accept reasonable
compensation in lieu thereof for any services rendered by them in accordance
with the terms hereof.
SECTION 9.02. RESIGNATION. Trustees may resign at any time upon giving
thirty (30) days' prior notice in writing to Grantor and to Beneficiary.
SECTION 9.03. REMOVAL AND SUBSTITUTION. Beneficiary may remove either or
both Trustees at any time or from time to time and select a successor trustee or
trustees. In the event of the death, removal, resignation, refusal to act, or
inability to act of either or both Trustees, or in its sole discretion for any
reason whatsoever, Beneficiary may, without notice, without specifying any
reason therefor and without applying to any court, select and appoint a
successor Trustee or Trustees, and all powers, rights, duties and authority of
Trustees shall thereupon become vested in the successors. The substitute
trustees shall not be required to give bond for the faithful performance of
their duties unless required by Beneficiary.
SECTION 9.04. ANY TRUSTEE MAY ACT. All rights granted to and all powers
conferred upon Trustees hereunder may be exercised by both or either of
Trustees.
SECTION 9.05. TRUSTEES' EXPENSES AND INDEMNITY. Grantor shall pay the fees
and expenses of the Trustees for acting as trustees under this Deed of Trust,
including but not limited to the reasonable fees and expenses of counsel
employed by the Trustees. Before taking any action under this Deed of Trust, the
Trustees may require that satisfactory indemnity be furnished to them for the
reimbursement of all expenses to which they may be put and to protect
<Page>
them against all liability by reason of any action so taken, except liability
which is adjudicated to have resulted from their gross negligence or willful
default.
<Page>
IN WITNESS WHEREOF, Grantor has executed this Deed of Trust, as of the day
and year first written above.
BIOTAGE REAL ESTATE, LLC,
a Virginia limited liability company
By: /s/ David B. Patteson
-------------------------------
David B. Patteson, Manager
<Page>
COMMONWEALTH OF VIRGINIA
CITY OF CHARLOTTESVILLE, VIRGINIA
The foregoing instrument was acknowledged before me this 1st day of April,
2002, in the jurisdiction aforesaid, by David B. Patteson, Manager of Biotage
Real Estate, LLC, on behalf of the company.
/s/ Deanna W. Gregory (commissioned as Deanna
---------------------------------------------
Pruckner)
---------
Notary Public
(SEAL)
My commission expires ________________.
<Page>
EXHIBIT A
ALL that certain lot or parcel of land, situated in Albemarle County, Virginia,
located in the University of Virginia Real Estate Foundation North Fork Business
Park, containing 7.100 acres, more or less, and being more particularly
identified as Parcel F-1A on a plat of Draper Aden Associated, dated February
25, 2001, last revised September 25, 2001, of record in the Clerk's Office,
Circuit Court, Albemarle County, Virginia, in Deed Book 2085, page 709.
BEING the same property conveyed to Biotage, Inc., a Delaware corporation, by
deed from University of Virginia Real Estate Foundation, a Virginia nonstock
corporation dated September 27, 2001, recorded September 28, 2001 in the Clerk's
Office, Circuit Court, Albemarle County, Virginia Deed Book 2065, page 720.
<Page>
VIRGINIA NATIONAL BANK
GUARANTY AGREEMENT
April 1, 2002
Dear Sirs:
As an inducement to VIRGINIA NATIONAL BANK, Charlottesville, Virginia
("Bank") to extend credit to and to otherwise deal with BIOTAGE REAL ESTATE,
LLC, a Virginia limited liability company ("Borrower"), and in consideration
thereof, the undersigned (and each of the undersigned jointly and severally if
more than one) hereby absolutely and unconditionally guarantees to Bank and its
successors and assigns the due and punctual payment of any and all notes,
drafts, debts, obligations and liabilities, primary or secondary (whether by way
of endorsement of otherwise) of Borrower at any time, now or hereafter, incurred
with or held by Bank pursuant to or under the Bond Documents (as such term is
defined by the Loan Agreement, dated as of April 1, 2002, by and among Borrower,
Biotage, Inc., the Industrial Development Authority of Albemarle County,
Virginia (the "Authority"), and the undersigned, and the Bond Purchase
Agreement, dated as of April 1, 2002, by and among Bank, Borrower, Biotage,
Inc., the Authority and the undersigned), together with interest, as and when
the same become due and payable, whether by acceleration or otherwise, in
accordance with the terms of any such notes, drafts, debts, obligations or
liabilities or agreements evidencing any such indebtedness, obligation or
liability including all renewals, extensions and modifications thereof,
including without limitation the promissory note dated as of the Closing Date
(as defined in the Bond Documents). The obligation of the undersigned is a
guarantee of payment and not of collection.
The undersigned is Bank's debtor for all indebtedness, obligations and
liabilities of which this Guaranty is made, and Bank shall also at all times
have a lien on and security interest in all stocks, bonds and other securities
of the undersigned at any time in Bank's possession and the same shall at Bank's
option be held, administered and disposed of as collateral to any such
indebtedness, obligation or liability of the Borrower, and Bank shall also at
all times have the right of set-off against any deposit account of the
undersigned with Bank in the same manner and to the same extent that the right
of set-off may exist against the Borrower.
It is understood that any such notes, drafts, debts, obligations and
liabilities may be accepted or created by or with Bank at any time and from time
to time without notice to the undersigned, and the undersigned hereby expressly
waives presentment, demand, protest, and notice of dishonor of any such notes,
drafts, debts, obligations and liabilities or other evidences of any such
indebtedness, obligation or liability.
Bank may receive and accept from time to time any securities or other
property as a collateral to any such notes, drafts, debts, obligations and
liabilities, and may surrender,
<Page>
compromise, exchange and release absolutely the same or any part thereof at any
time without notice to the undersigned and without in any manner affecting the
obligation and liability of the undersigned hereby created. The undersigned
agrees that Bank shall have no obligation to protest, perfect, secure or insure
any security interests, liens or encumbrances now or hereafter held for the
indebtedness, obligations and liabilities for which this Guaranty is made.
Notwithstanding any other provision of this Guaranty, as a condition of the
Bank's enforcement of this Guaranty the Bank agrees to give the undersigned
notice of the Event of Default (as such term is defined in the Bond Documents)
by Borrower under the Bond Documents for which the Bank seeks enforcement. Such
notice shall be given to the address set forth herein below in the same manner
as provided in the Bond Documents.
This obligation and liability on the part of the undersigned shall be a
primary, and not a secondary, obligation and liability, payable immediately upon
demand without recourse first having been had by Bank against the Borrower or
any other guarantor, person, firm or corporation, and without first resorting to
any property held by Bank as collateral security; and the undersigned hereby
waives the benefits of all provisions of law, including but not limited to the
provisions of Virginia Code Sections 49-25 and 49-26 or their successors, for
stay or delay of execution or sale of property or other satisfaction of the
indebtedness, obligation or liability thereon returned unsatisfied, or until it
is shown that the Borrower has no property available for the satisfaction of the
indebtedness, obligation or liability guaranteed hereby, or until any other
proceedings can be had; and the undersigned hereby agrees to indemnify the Bank
for all costs of collection, including but not limited to the costs of
repossession, foreclosure, reasonable attorneys' fees, and court costs incurred
by the Bank in the event that the Bank should first be required by the
undersigned to resort to any property held by the Bank or in which the Bank has
a security interest or to obtain execution or other satisfaction of a judgment
against the Borrower on account of Borrower's obligation and liability for its
indebtedness guaranteed hereby, and the undersigned further agrees that the
undersigned is responsible for any obligation or debt, or portion thereof, of
the Borrower to the Bank which has been paid by the Borrower to the Bank and
which the Bank is subsequently required to return to the Borrower or a trustee
for the Borrower in any bankruptcy or insolvency proceeding; and the undersigned
further agrees that none of the undersigned shall have any right of subrogation,
reimbursement or indemnity whatsoever, nor any right of recourse to security for
the debts and obligations of the Borrower to Bank unless and until all of the
debts and obligations of the Borrower to Bank have been paid in full. The
undersigned hereby waives, to the extent avoidable under any provision of the
Bankruptcy Code, any right arising upon payment by the undersigned of any
obligation under this Guaranty to assert a claim against the bankruptcy estate
of the Borrower.
This agreement shall inure to the benefit of Bank, its successors and
assigns, and the owners and holders of any of the indebtedness, obligations and
liabilities hereby guaranteed, and shall remain in force until a written notice
revoking it has been received by Bank; but such revocation shall not release the
undersigned from liability to Bank, its successors and assigns, or the owners
and holders of any of the indebtedness, obligations and liabilities hereby
guaranteed, for any indebtedness, obligation or liability of the Borrower which
is hereby guaranteed and then in existence or from any renewals, extensions or
modifications thereof in whole or in part, whether such renewals, extensions or
modifications are made before or after such revocation, with or without notice
to the undersigned. The undersigned waives presentment, demand, protest and
notices of every kind and assents to any one or more extensions, modifications,
renewals or
<Page>
postponements of the time or amount of payment or any other indulgences given to
Borrower. The undersigned shall be responsible for and shall reimburse the Bank
for all costs and expenses (including reasonable attorneys' fees) incurred by
the Bank in connection with the enforcement of this Guaranty or the protection
or preservation of any right or claim of the Bank in connection herewith,
including without limitation costs and expenses incurred by the Bank in
connection with its attempts to collect the indebtedness, obligations, and
liabilities guaranteed hereby.
The undersigned covenants, warrants, and represents to the Bank that: (i)
this guaranty is enforceable against the undersigned in accordance with its
terms; (ii) the execution and delivery of this Guaranty does not violate or
constitute a breach of any agreement to which the undersigned is a party; (iii)
that there is no litigation, claim, action or proceeding pending or, to the best
knowledge of the undersigned, threatened against the undersigned which would
materially adversely affect the financial condition of the undersigned or his
ability to fulfill his obligations hereunder; and (iv) that the undersigned has
knowledge of the Borrower's financial condition and affairs.
This Guaranty is made in and shall be construed in accordance with the laws
and judicial decisions of the State of Virginia. The undersigned agrees that any
dispute arising out of this Guaranty shall be adjudicated in either the state or
federal courts of Virginia and in no other forum. For that purpose, the
undersigned hereby submits to the jurisdiction of the state and/or federal
courts of Virginia. The undersigned waives any defense that venue is not proper
for any action brought in any federal or state court in the State of Virginia.
WITNESS the following signature and seal:
BIOTAGE INC.
A DELAWARE CORPORATION
By: /s/ David B. Patteson
----------------------
Its: President
----------------------
<Page>
STATE OF VIRGINIA
COUNTY OF ALBEMARLE, to-wit:
The foregoing instrument was acknowledged before me this 1st day of April
2002, by David B. Patteson, President of Biotage, Inc.
Given under my hand and seal this 1st day of April 2002.
/s/ Deanna W. Gregory (commissioned as Deanna Gregory Pruckner)
---------------------------------------------------------------
Notary Public
My Commission Expires: _____________________.
<Page>
VIRGINIA NATIONAL BANK
GUARANTY AGREEMENT
April 1, 2002
Dear Sirs:
As an inducement to VIRGINIA NATIONAL BANK, Charlottesville, Virginia
("Bank") to extend credit to and to otherwise deal with BIOTAGE REAL ESTATE,
LLC, a Virginia limited liability company ("Borrower"), and in consideration
thereof, the undersigned (and each of the undersigned jointly and severally if
more than one) hereby absolutely and unconditionally guarantees to Bank and its
successors and assigns the due and punctual payment of any and all notes,
drafts, debts, obligations and liabilities, primary or secondary (whether by way
of endorsement of otherwise) of Borrower at any time, now or hereafter, incurred
with or held by Bank pursuant to or under the Bond Documents (as such term is
defined by the Loan Agreement, dated as of April 1, 2002, by and among Borrower,
Biotage, Inc., the Industrial Development Authority of Albemarle County,
Virginia (the "Authority"), and the undersigned, and the Bond Purchase
Agreement, dated as of April 1, 2002, by and among Bank, Borrower, Biotage,
Inc., the Authority and the undersigned), together with interest, as and when
the same become due and payable, whether by acceleration or otherwise, in
accordance with the terms of any such notes, drafts, debts, obligations or
liabilities or agreements evidencing any such indebtedness, obligation or
liability including all renewals, extensions and modifications thereof,
including without limitation the promissory note dated as of the Closing Date
(as defined in the Bond Documents). The obligation of the undersigned is a
guarantee of payment and not of collection.
The undersigned is Bank's debtor for all indebtedness, obligations and
liabilities of which this Guaranty is made, and Bank shall also at all times
have a lien on and security interest in all stocks, bonds and other securities
of the undersigned at any time in Bank's possession and the same shall at Bank's
option be held, administered and disposed of as collateral to any such
indebtedness, obligation or liability of the Borrower, and Bank shall also at
all times have the right of set-off against any deposit account of the
undersigned with Bank in the same manner and to the same extent that the right
of set-off may exist against the Borrower.
It is understood that any such notes, drafts, debts, obligations and
liabilities may be accepted or created by or with Bank at any time and from time
to time without notice to the undersigned, and the undersigned hereby expressly
waives presentment, demand, protest, and notice of dishonor of any such notes,
drafts, debts, obligations and liabilities or other evidences of any such
indebtedness, obligation or liability.
Bank may receive and accept from time to time any securities or other
property as a collateral to any such notes, drafts, debts, obligations and
liabilities, and may surrender, compromise, exchange and release absolutely the
same or any part thereof at any time without notice to the undersigned and
without in any manner affecting the obligation and liability of the undersigned
hereby created. The undersigned agrees that Bank shall have no obligation to
protest, perfect, secure or insure any security interests, liens or encumbrances
now or hereafter
<Page>
held for the indebtedness, obligations and liabilities for which this Guaranty
is made. Notwithstanding any other provision of this Guaranty, as a condition of
the Bank's enforcement of this Guaranty the Bank agrees to give the undersigned
notice of the Event of Default (as such term is defined in the Bond Documents)
by Borrower under the Bond Documents for which the Bank seeks enforcement. Such
notice shall be given to the address set forth herein below in the same manner
as provided in the Bond Documents.
This obligation and liability on the part of the undersigned shall be a
primary, and not a secondary, obligation and liability, payable immediately upon
demand without recourse first having been had by Bank against the Borrower or
any other guarantor, person, firm or corporation, and without first resorting to
any property held by Bank as collateral security; and the undersigned hereby
waives the benefits of all provisions of law, including but not limited to the
provisions of Virginia Code Sections 49-25 and 49-26 or their successors, for
stay or delay of execution or sale of property or other satisfaction of the
indebtedness, obligation or liability thereon returned unsatisfied, or until it
is shown that the Borrower has no property available for the satisfaction of the
indebtedness, obligation or liability guaranteed hereby, or until any other
proceedings can be had; and the undersigned hereby agrees to indemnify the Bank
for all costs of collection, including but not limited to the costs of
repossession, foreclosure, reasonable attorneys' fees, and court costs incurred
by the Bank in the event that the Bank should first be required by the
undersigned to resort to any property held by the Bank or in which the Bank has
a security interest or to obtain execution or other satisfaction of a judgment
against the Borrower on account of Borrower's obligation and liability for its
indebtedness guaranteed hereby, and the undersigned further agrees that the
undersigned is responsible for any obligation or debt, or portion thereof, of
the Borrower to the Bank which has been paid by the Borrower to the Bank and
which the Bank is subsequently required to return to the Borrower or a trustee
for the Borrower in any bankruptcy or insolvency proceeding; and the undersigned
further agrees that none of the undersigned shall have any right of subrogation,
reimbursement or indemnity whatsoever, nor any right of recourse to security for
the debts and obligations of the Borrower to Bank unless and until all of the
debts and obligations of the Borrower to Bank have been paid in full. The
undersigned hereby waives, to the extent avoidable under any provision of the
Bankruptcy Code, any right arising upon payment by the undersigned of any
obligation under this Guaranty to assert a claim against the bankruptcy estate
of the Borrower.
This agreement shall inure to the benefit of Bank, its successors and
assigns, and the owners and holders of any of the indebtedness, obligations and
liabilities hereby guaranteed, and shall remain in force until a written notice
revoking it has been received by Bank; but such revocation shall not release the
undersigned from liability to Bank, its successors and assigns, or the owners
and holders of any of the indebtedness, obligations and liabilities hereby
guaranteed, for any indebtedness, obligation or liability of the Borrower which
is hereby guaranteed and then in existence or from any renewals, extensions or
modifications thereof in whole or in part, whether such renewals, extensions or
modifications are made before or after such revocation, with or without notice
to the undersigned. The undersigned waives presentment, demand, protest and
notices of every kind and assents to any one or more extensions, modifications,
renewals or postponements of the time or amount of payment or any other
indulgences given to Borrower. The undersigned shall be responsible for and
shall reimburse the Bank for all costs and expenses (including reasonable
attorneys' fees) incurred by the Bank in connection with the enforcement of this
Guaranty or the protection or preservation of any right or claim of the Bank in
connection
<Page>
herewith, including without limitation costs and expenses incurred by the Bank
in connection with its attempts to collect the indebtedness, obligations, and
liabilities guaranteed hereby.
The undersigned covenants, warrants, and represents to the Bank that: (i)
this guaranty is enforceable against the undersigned in accordance with its
terms; (ii) the execution and delivery of this Guaranty does not violate or
constitute a breach of any agreement to which the undersigned is a party; (iii)
that there is no litigation, claim, action or proceeding pending or, to the best
knowledge of the undersigned, threatened against the undersigned which would
materially adversely affect the financial condition of the undersigned or his
ability to fulfill his obligations hereunder; and (iv) that the undersigned has
knowledge of the Borrower's financial condition and affairs.
This Guaranty is made in and shall be construed in accordance with the laws
and judicial decisions of the State of Virginia. The undersigned agrees that any
dispute arising out of this Guaranty shall be adjudicated in either the state or
federal courts of Virginia and in no other forum. For that purpose, the
undersigned hereby submits to the jurisdiction of the state and/or federal
courts of Virginia. The undersigned waives any defense that venue is not proper
for any action brought in any federal or state court in the State of Virginia.
WITNESS the following signature and seal:
DYAX CORP.
A DELAWARE CORPORATION
300 Technology Square
Cambridge, Massachusetts 02139
By: /s/ Henry E. Blair
-------------------------------------
Its: President and Chief Executive Officer
-------------------------------------
<Page>
STATE OF VIRGINIA
COUNTY OF ALBEMARLE, to-wit:
The foregoing instrument was acknowledged before me this 1st day of April
2002, by Henry E. Blair, President and Chief Executive Officer of Dyax Corp.
[Position]
Given under my hand and seal this 1st day of April 2002.
/s/ Deanna W. Gregory (commissioned as Deanna Gregory Pruckner)
---------------------------------------------------------------
Notary Public
My Commission Expires:_____________________.
<Page>
THIS ASSIGNMENT IS EXEMPT FROM RECORDATION TAXES PURSUANT TO CODE OF
VIRGINIA SECTION 58.1-809
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (this "Assignment") is made as of the
1st day of April 2002, by and between BIOTAGE REAL ESTATE, LLC, a Virginia
limited liability company (the "Company" and the "Grantor" for indexing
purposes) and VIRGINIA NATIONAL BANK, a national banking organization (the
"Bank" and the "Grantee" for indexing purposes).
RECITALS
A. Pursuant to a Bond Purchase Agreement, made as of April 1, 2002,
(the "Bond Agreement"), by and among the parties, Biotage, Inc., a Delaware
Corporation (the "Lessee"), and the Industrial Development Authority of
Albemarle County, Virginia, a political subdivision of the Commonwealth of
Virginia (the "Authority"), and a Loan Agreement (the "Loan Agreement"), made as
of April 1, 2002, between the Company, the Lessee and the Authority, the
Authority has agreed, (1) to issue and sell to the Bank its Industrial
Development Revenue Bond (Biotage Project), Series 2002 (the "Bonds"), in the
principal amount of Four Million Two Hundred Fifty Thousand Dollars
($4,250,000.00), (2) to loan the proceeds of the sale of the Bonds to the
Company to finance the acquisition of the Land and the construction of the
Project (the "Loan"), and (3) to assign to the Bank, as security for the Bonds,
certain rights under the Loan Agreement together with the Company's Note.
B. The Company has executed and delivered to the Bank certain
documents (collectively, the "Bond Documents") for the purpose of evidencing and
securing the Company's obligations under the Loan Agreement and the Company's
Note, including, but not limited to, the Bond Agreement, the Loan Agreement, the
Company's Note, and the Credit Line Deed of Trust, Assignment and Security
Agreement (the "Deed of Trust"), each dated as of April 1, 2002, except for the
Company's Note which is dated as of the Closing Date. All capitalized terms not
defined herein shall have the meanings specified in the Loan Agreement, unless
the context otherwise requires.
C. The Bank requires this Assignment to further secure, (a) payment of
all amounts now or hereafter owing to the Bank by the Company under the Bond
Documents, and (b) the performance and discharge of each and every obligation,
covenant and agreement of the Company contained herein or in the other Bond
Documents, and all costs of collection, including reasonable attorney's fees, as
provided in the Assignment and the other Bond Documents (collectively, the
"Obligations").
AGREEMENT
NOW, THEREFORE, for and in consideration of the Loan, as additional
security for the obligations of the Company under the Company's Note and the
other Bond Documents, and
<Page>
for other good and valuable consideration, the receipt and sufficiency of which
is acknowledged, the Company hereby agrees as follows:
1. ASSIGNMENT. The Company hereby absolutely and irrevocably assigns and
transfers to the Bank: (a) the income, rents, receivables, security or similar
deposits, revenues, issues, royalties, profits, earnings, products and proceeds
from any and all of the Land (collectively, the "Rents, Issues and Profits")
together with the right, power and authority to collect the same; (b) all
leases, written or oral, now in existence or hereafter arising, all other
agreements for the use and occupancy of all or any portion of the Land, and any
and all extensions or renewals of any thereof, including without limitation all
leases listed on Exhibit A hereto, (individually "Lease" and collectively, the
"Leases"), together with the right, power and authority of the Company to alter,
modify or change the terms thereof, or surrender, cancel or terminate the same;
and (c) any and all guarantees of any obligations of any lessee under any of the
Leases (a "Lessee"). The Company irrevocably appoints the Bank its true and
lawful attorney-in-fact, at any time and from time to time, at the option of the
Bank to demand, receive and enforce payment of Rents, Issues and Profits, to
give receipts, releases and satisfactions, to sue, in the name of the Company or
the Bank, for all the Rents, Issues and Profits and to apply the same to the
Obligations, save that the Company shall have the right and license to collect
the Rents, Issues and Profits prior to any Event of Default under any of the
Bond Documents. The assignment of the Rents, Issues and Profits in this
Assignment is an absolute assignment from the Company to the Bank and not merely
the passing of a security interest.
2. WARRANTIES OF THE COMPANY. The Company warrants to the Bank that, (a) it
is the sole owner of the fee simple estate in the Land, (b) the Leases are valid
and enforceable and have not been altered, modified or amended in any manner
whatsoever except as previously disclosed in writing to the Bank, (c) no Lessee
is in default under any of the terms, covenants or conditions of any Lease, (d)
except for an assignment of rents to Steven T. McLean and David P. Turner, which
assignment is subordinate to the assignment hereunder to the Bank, no rent
reserved in any Lease has been assigned or anticipated, (e) no rent for any
period subsequent to the date of this Assignment has been collected more than
one month in advance of the time when the same became due under the terms of any
Lease, (f) it has full right and title to assign the Leases and all Rents,
Issues and Profits thereunder, and (g) except for an assignment of rents to
Steven T. McLean and David P. Turner, which assignment is subordinate to the
assignment hereunder to the Bank, no other assignment of any interest in any
Lease has been made except in favor of the Bank.
3. COVENANTS AND OBLIGATIONS OF THE COMPANY. The Company agrees, (a) to
observe and perform all obligations imposed under the Leases, (b) to give prompt
notice to the Bank of any notice of default under any Leases received or given
by the Company, together with a complete copy of any such notice, (c) to send
promptly to the Bank a copy of any notice it receives from any tenant or other
party to any of the Leases seeking to terminate such Lease before its scheduled
expiration date, (d) at the sole cost and expense of the Company, to enforce,
short of termination of any Lease, the performance or observance of each and
every covenant and condition thereof by all parties thereto, (e) not to do or
permit to be done anything to impair the security of any Lease, (f) not to pay
or collect any of the Rents, Issues and Profits arising or accruing under the
Leases or from the Land in advance of the time when the same shall become due,
(g) not to execute any other assignment of interest in the Leases or assignment
of Rents,
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Issues and Profits arising or accruing from the Leases or from the Land, except
for an assignment in favor of Stephen T. McLean and David P. Turner in
accordance with the terms of the Deed of Trust, (h) not to subordinate any Lease
to any other encumbrance or permit, consent, or agree to such subordination
without in each case the Bank's prior written consent, (i) not to alter, modify
or change the terms of any Lease or give any consent or exercise any option
required or permitted by such terms without the prior written consent of the
Bank, which may be withheld in the Bank's sole discretion, (j) without the prior
written consent of the Bank, which the Bank may withhold in its absolute
discretion, not to cancel or terminate any Lease or accept a surrender thereof
or convey or transfer or suffer or permit a conveyance or transfer of the leased
premises thereby or of any interest therein so as to effect, directly or
indirectly, a merger of the estates and rights of, or a termination or
diminution of the obligations of, any party thereunder, (k) not to alter, modify
or change the terms of any guaranty of any Lease or cancel or terminate such
guaranty without the prior written consent of the Bank, which may be withheld in
the Bank's sole discretion, (l) not to consent to any assignment of or
subletting under any Lease, whether or not in accordance with its terms, without
the prior written consent of the Bank, which may be withheld in the Bank's sole
discretion, and (m) at the Bank's request, to assign and transfer to the Bank
any and all subsequent Leases upon all or any part of the Land, and to execute
and deliver at the request of the Bank all such further assurances and
assignments in all or any part of the Land as the Bank shall from time to time
require.
4. BANK'S RIGHTS AND POWERS. At any time prior to an Event of Default, the
Company shall have the right and obligation to collect and receive at the time
of, but not prior to, the date provided for the payment thereof, all Rents,
Issues and Profits arising under the Leases. Upon the occurrence of an Event of
Default, the Bank may, at its option, without notice and without regard to the
adequacy of the security for the Obligations, either in person or by agent, with
or without bringing any action or proceeding, or by a receiver appointed by a
court, take possession of the premises described in any Lease and have, hold,
manage, lease and operate the same on such terms and for such period of time as
the Bank may deem proper and either with or without taking possession of such
premises in its own name, demand, sue for or otherwise collect and receive all
Rents, Issues and Profits of the Land with full power to make from time to time
all alterations, renovations, repairs or replacements thereto or thereof as may
seem proper to the Bank, and to apply any such collected Rents, Issues and
Profits to the payment of: (a) all reasonable expenses of managing the Land,
including, without limitation, the salaries, fees and wages of a managing agent
and such other employees as the Bank may deem necessary or desirable, and all
reasonable expenses of operating and maintaining the Land, including, without
limitation, all taxes, charges, claims, assessments, water rents, sewer rents
and any other liens, and premiums for all insurance which the Bank may deem
necessary or desirable, and the costs of all alterations, renovations, repairs
or replacements, and all expenses incident to taking and retaining possession of
the Land, and (b) the Obligations, together with all costs and attorneys' fees,
in such order of priority as to any of the items mentioned in this paragraph, as
the Bank in its sole discretion may determine, notwithstanding any statute, law,
custom or use to the contrary. The exercise by the Bank of the option granted in
this Section 4 and the collection of the Rents, Issues and Profits and the
application thereof as herein provided shall not be considered a waiver of any
default by the Company under this Assignment, the other Bond Documents or any
Lease.
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5. COMPANY'S INDEMNITY. The Bank shall not be liable for any loss sustained
by the Company resulting from any act or omission of the Bank or from managing
the Land unless such loss is caused by the willful misconduct or gross
negligence of the Bank. The Bank shall not be obligated to perform or discharge,
nor does the Bank hereby undertake to perform or discharge, any obligation, duty
or liability under any Lease or under or by reason of this Assignment, and the
Company shall, and does hereby agree, to the extent permitted by law, to
indemnify the Bank for, and to hold the Bank harmless from, any and all
liability, loss or damage which may or might be incurred under any Lease or
under or by any reason of this Assignment, and from any and all claims and
demands whatsoever which may be asserted against the Bank by reason of any
alleged obligations or undertakings on its part to perform or discharge any of
the terms, covenants or agreements contained in any Lease except as herein
provided. Should the Bank incur any such liability under any Lease or under or
by reason of this Assignment or in defense of any such claims or demands (not
caused by its willful misconduct or gross negligence), the amount thereof,
including costs, expenses, court costs and reasonable attorneys' fees shall be
secured hereby and the Company shall reimburse the Bank therefor immediately
upon demand. Upon the failure of the Company to do so, the Bank may, at its
option, declare the Obligations immediately due and payable. This Assignment
shall not operate to place responsibility for the control, care, management or
repair of the Land or any portion thereof upon the Bank, nor for the carrying
out of any of the terms and conditions of any Lease; nor shall it operate to
make the Bank responsible or liable for any waste committed on the Land by any
parties, or for any dangerous or defective condition of or on the Land or any
portion thereof or for any negligence of the Company or its agents in the
management, upkeep, repair or control of the Land or any portion thereof
resulting in loss or injury or death to any Lessee, tenant, licensee, employee
or stranger.
6. ASSIGNMENT. The Bank shall have the right to assign the Company's right,
title and interest in any Lease to any subsequent holder of the Obligations
subject to the provisions of this Assignment.
7. RELEASE. Upon payment and performance in full of the Obligations, this
Assignment shall become and be void and of no effect, but the affidavit,
certificate, letter or statement of any officer, agent or attorney of the Bank
showing any part of the Obligations to remain unpaid or unperformed shall be and
constitute conclusive evidence of the validity, effectiveness, and continuing
force of this Assignment and any person may, and is hereby authorized to, rely
thereon. The Company, as the lessor under any Lease, hereby authorizes and
directs the Lessee named in any such Lease, upon receipt from the Bank of
written notice that the Bank is then the holder of the Company's Note, to pay
over to the Bank all Rents, Issues, and Profits arising or accruing under such
Lease or from the premises described therein and to continue so to do until
otherwise notified by the Bank. The Bank may take or release other security for
the payment of the Obligations, may release any party primarily or secondarily
liable therefor and may apply any other security held by it to the satisfaction
of the Obligations without prejudice to any of its rights under this Assignment.
8. NO WAIVER. Nothing contained in this Assignment and no act done or
omitted by the Bank pursuant to the powers and rights granted it hereunder shall
be deemed to be a waiver by the Bank of its rights and remedies under the other
Bond Documents. This Assignment is
<Page>
made and accepted without prejudice to any of the rights and remedies possessed
by the Bank under the terms of the other Bond Documents. The right of the Bank
to collect the Obligations and to enforce any other security therefor held by it
may be exercised by the Bank prior to, simultaneously with, or subsequent to any
action taken by it hereunder.
9. CONDEMNATION. The Company hereby assigns to the Bank any award payable
by reason of condemnation action under the right of eminent domain against the
Land, and directs that such award shall be paid directly to the Bank.
10. PERFORMANCE OF OBLIGATIONS. Any guaranty of payment and performance of
any obligation under any Lease shall not be released, modified, or limited in
any manner by the Company without the prior written consent of the Bank.
11. GOVERNING LAW; SEVERABILITY. This Assignment is made, executed and
delivered in the Commonwealth of Virginia and shall be governed by the laws of
the Commonwealth of Virginia. Each provision of this Assignment shall be
interpreted in such a manner as to be effective and valid under the applicable
law, but if any provision hereof shall be prohibited by or invalid under the
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Assignment.
12. INDEPENDENT RIGHTS; CONFLICT. The Assignment and the powers and rights
granted are separate and independent from any obligation contained in the Deed
of Trust and may be enforced without regard to whether Lender institutes
foreclosure proceedings under the Deed of Trust. This Assignment is in addition
to the Deed of Trust and shall not affect, diminish or impair the Deed of Trust.
However, the rights and authority granted in this Assignment may be exercised in
conjunction with the Deed of Trust. In case of any conflict between the terms of
this Assignment and the terms of any of the Bond Documents, the terms of this
Assignment shall control.
13. SUCCESSORS AND ASSIGNS. This Assignment, together with the covenants
and warranties herein contained, shall inure to the benefit of the Bank and any
subsequent holder of the Obligations which may be owing by the Company under the
Bond Documents and shall be binding upon the Company, its successors and assigns
and any subsequent owner of the Land.
14. AMENDMENTS. No amendment to this Assignment shall be effective unless
in writing signed on behalf of the Company and the Bank.
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IN WITNESS WHEREOF, the Company has executed this ASSIGNMENT OF LEASES
AND RENTS by its duly authorized manager.
BIOTAGE REAL ESTATE, LLC
By /s/ David B. Patteson
--------------------------------
Its Manager
--------------------------------
COMMONWEALTH OF VIRGINIA
CITY OF CHARLOTTESVILLE, VIRGINIA
The foregoing instrument was acknowledged before me this 1st day of April,
2002, in the jurisdiction aforesaid, by David B. Patteson, Manager of Biotage
Real Estate, LLC, on behalf of the company.
/s/ Deanna W. Gregory (commissioned as Deanna Gregory Pruckner)
---------------------------------------------------------------
Notary Public
(SEAL)
My commission expires ________________.
<Page>
ASSIGNMENT OF CONTRACTS, PERMITS AND PLANS
THIS ASSIGNMENT OF CONTRACTS, PERMITS AND PLANS (this "Assignment"),
made as of the 1st day of April 2002, is entered into by and between BIOTAGE
REAL ESTATE, LLC, a Virginia limited liability company (the "Company"), and
VIRGINIA NATIONAL BANK, a national banking organization (the "Bank"). Bovis
Lendlease ("Bovis") and nbj Architecture, PLC, (the "Architect") each join
this Assignment for the sole and exclusive purpose of granting consent,
insofar as such consent is required, to all of the assignments and security
interests made and granted by the Company to the Bank pursuant to this
Assignment.
RECITALS
A. Pursuant to a Bond Purchase Agreement, made as of April 1, 2002
(the "Bond Agreement"), by and among the Bank, the Company, Biotage, Inc., a
Delaware corporation (the "Lessee") and the Industrial Development Authority of
Albemarle County, Virginia, a political subdivision of the Commonwealth of
Virginia (the "Authority") and a Loan Agreement (the "Loan Agreement"), made as
of April 1, 2002, by and among the Company, the Lessee, and the Authority, the
Authority has agreed, (1) to issue and sell to the Bank its Industrial
Development Revenue Bond (Biotage Project), Series 2002 (the "Bonds"), in the
principal amount of Four Million Two Hundred Fifty Thousand Dollars
($4,250,000.00), (2) to loan the proceeds of the sale of the Bonds to the
Company to finance the acquisition of the Property and the construction of the
Project (the "Loan"), and (3) to assign to the Bank, as security for the Bonds,
certain rights under the Loan Agreement, together with the Company's Note.
B. The Company has executed and delivered to the Bank certain
documents (collectively, the "Bond Documents") for the purpose of evidencing and
securing the Company's obligations under the Loan Agreement and the Company's
Note, including, but not limited to, the Bond Agreement, the Loan Agreement, the
Company's Note, and the Credit Line Deed of Trust, Assignment and Security
Agreement (the "Deed of Trust"), each dated as of April 1, 2002, except for the
Company's Note which is dated as of the Closing Date. All capitalized terms not
defined herein shall have the meanings specified in the Loan Agreement, unless
the context otherwise requires.
C. The Bank requires this Assignment to further secure, (a) payment of
all amounts now or hereafter owing to the Bank by the Company under the Bond
Documents, and (b) the performance and discharge of each and every obligation,
covenant and agreement of the Company contained herein or in the other Bond
Documents, and all costs of collection, including reasonable attorney's fees, as
provided in the Assignment and the other Bond Documents (collectively, the
"Obligations").
AGREEMENT
NOW, THEREFORE, for and in consideration of the Loan, as additional
security for the obligations of the Company under the Company's Note and the
other Bond
<Page>
Documents, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the Company hereby agrees as follows:
1. DEFINITIONS. For the purposes hereof, unless the context otherwise
requires, the following terms shall have the meanings indicated:
"Contracts" shall mean, collectively, the Construction Contract and
subcontracts, the architect's contract and subcontracts, and all other
contracts and agreements pertaining to the construction, operation and use
of the Project, the Land, the Improvements, or the Security Property (as
defined in the Deed of Trust), or any part thereof, now or hereafter in
effect, as hereafter, if at all, amended, supplemented or modified, from
time to time, including without limitation all documents and instruments
entered into and between the Company and the General Contractor that relate
to the Project, the Land, the Improvements or the Security Property.
"Permits" shall have the meaning specified in the Deed of Trust,
and for the purposes of this Assignment, shall also include, collectively,
all permits, consents, licenses, variances and other approvals required to
be issued by, or obtained from, any Person at any time or times in
connection with the acquisition, construction, operation or use of the
Project, the Land, the Improvements, or the Security Property, as
hereafter, if at all, amended, supplemented or modified from time to time.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, stock company, trust, unincorporated organization,
federal, state, municipal or other governmental department, commission,
board, bureau or agency.
"Plans" shall have the meaning ascribed to the term "Plans and
Specifications" in the Loan Agreement and, for the purposes of this
Assignment, shall also include, collectively, all site, development and
construction plans, drawings and specifications with respect to the
development and construction of the Project, the Land, the Improvements, or
the Security Property, as hereafter, if at all, amended, supplemented or
modified from time to time.
2. ASSIGNMENT. The Company hereby assigns unto the Bank and grants to
the Bank a security interest in, all right, title and interest of the Company,
and all power and authority of the Company to act thereunder and to use the
same, in, to and under the Contracts, Permits and Plans, whether now or
hereafter existing, and all proceeds thereof.
3. COLLATERAL SECURITY. This Assignment secures the payment of all
indebtedness of the Company evidenced by the Company's Note, the performance of
all the obligations of the Company to the Bank under the other Bond Documents,
and the performance by the Company of each and every obligation, covenant and
agreement of the Company contained herein.
4. APPROVAL AND MODIFICATION; LICENSE. The Company agrees that all of
the Contracts, Permits and Plans shall be subject to the Bank's prior written
approval, both as to form and substance, and that upon such approval and
execution or issuance by the parties thereto, as the case may be, the Company
shall not, except with the prior written consent of the
<Page>
Bank, cancel, terminate, revoke or modify the terms of any of the Contracts,
Plans or Permits. So long as there does not exist any Event of Default, or any
event which, with the giving of notice, the passage of time, or both, would
constitute an Event of Default, the Bank grants to the Company a license to use
the Contracts, Permits and Plans for the general purposes thereof; provided,
however, that such license shall terminate automatically and immediately upon
the occurrence of an Event of Default and may, thereafter, be reinstated only in
writing given by the Bank in its sole and absolute discretion.
5. SECURITY AGREEMENT. This Assignment shall serve as a security
agreement as defined in the Virginia Uniform Commercial Code and the Bank shall
also, in addition to the foregoing, have a security interest in all
distributions, profits, income, monies and claims for distributions due or to
come due to the Company under the terms and conditions of any of the Contracts,
Permits or Plans, and all proceeds thereof.
6. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company hereby
represents and warrants (a) that it has not previously assigned, sold, pledged,
hypothecated or otherwise transferred or encumbered any of its right, title or
interest under any of the Contracts, Plans and Specifications, or Permits, (b)
that the Contracts, Permits and Plans are in full force and effect and are valid
and enforceable agreements or approvals, (c) that no party is in default under
the Contracts, Permits and Plans, and (d) that all parties have performed all
their obligations, covenants and agreements as required under the Contracts,
Permits and Plans, except those not due to be performed until after the date
hereof. The Company hereby covenants and agrees to keep the Contracts, Permits
and Plans in full force and effect and diligently to enforce all of its rights
and to perform all of its duties and obligations thereunder. The Company hereby
further covenants and agrees that, notwithstanding anything contained herein to
the contrary, it will not assign, sell, pledge, mortgage, hypothecate or
otherwise transfer or encumber any of its right, title or interest under the
Contracts, Plans and Specifications, or Permits, or any deposits thereunder,
collateral security therefor, guarantees thereof, or proceeds of the foregoing.
7. INDEMNIFICATION. The Bank shall not be obligated to perform or
discharge, nor does the Bank hereby undertake to perform or discharge, any
obligation, duty or liability under any Contract, Permit or Plan, and the
Company shall, and does hereby agree, to the extent permitted by law, to
indemnify the Bank for, and to hold the Bank harmless from, any and all
liability, loss or damage which may or might be incurred under any Contract,
Permit or Plan, or this Assignment, and from any and all claims and demands
whatsoever which may be asserted against the Bank by reason of any alleged
obligations or undertakings on its part to perform or discharge any of the
terms, covenants or agreements contained in any Contract, Permit or Plan except
as herein provided. Should the Bank incur any such liability under any Contract,
Permit or Plan or under or by reason of this Assignment or in defense of any
such claims or demands (not caused by its willful misconduct or gross
negligence), the amount thereof, including costs, expenses and reasonable
attorneys' fees shall be secured hereby and the Company shall reimburse the Bank
therefor immediately upon demand. This Assignment shall not operate to place
responsibility for the control, care, management or repair of the Project, the
Land, the Improvements or the Security Property or any portion thereof upon the
Bank, nor for the carrying out of any of the terms and conditions of any
Contract, Plan or Permit.
8. FURTHER ASSURANCES. The Company agrees to execute and deliver, at
its
<Page>
sole expense, to the Bank, at any time or times during which this Assignment
shall be in effect, such further instruments as the Bank may deem necessary to
confirm, make effective or more effective the assignment of the rights of the
Company assigned to the Bank hereby and the covenants of the Company herein
contained, and to perfect and continue the perfection of the Bank's security
interest in the Contracts, Permits and Plans, and the proceeds thereof, and to
obtain from any Person an undertaking satisfactory in form and substance to the
Bank to perform thereunder, at the Bank's request, for the Company at the
direction of the Bank or, at the Bank's option, directly for the Bank or its
designee and to allow the Bank or its designee to use the same without cost to
the Bank.
9. TERMINATION. Upon payment of all indebtedness of the Company
evidenced by the Company's Note, together with interest thereon, and the
performance of all of the obligations of the Company to the Bank under the other
Bond Documents or contained herein, this Assignment shall terminate and
thereafter be void and of no further force and effect. Upon request of the
Company, the Bank shall, at the Company's cost and expense, execute and deliver
to the Company an instrument evidencing the termination of this Assignment or
the reassignment to the Company of the rights, title and interest granted
hereunder.
10. NO WAIVER. Nothing contained in this Assignment and no act done or
omitted by the Bank pursuant to the powers and rights granted it hereunder shall
be deemed to be a waiver by the Bank of its rights and remedies under this
Assignment or any of the other Bond Documents. This Assignment is made and
accepted without prejudice to any of the rights and remedies possessed by the
Bank under the terms of the other Bond Documents. The right of the Bank to
exercise any right or power under any of the Bond Documents may be exercised by
the Bank prior to, simultaneously with, or subsequent to any action taken by it
under this Assignment.
11. PERFORMANCE OF OBLIGATIONS. Any guaranty of payment and
performance of any obligation under any Contract, Permit or Plan shall not be
released, modified, or limited in any manner by the Company without the prior
written consent of the Bank.
12. GOVERNING LAW; SEVERABILITY. This Assignment is made, executed and
delivered in the Commonwealth of Virginia and shall be governed by the laws of
the Commonwealth of Virginia. Each provision of this Assignment shall be
interpreted in such a manner as to be effective and valid under the applicable
law, but if any provision hereof shall be prohibited by or invalid under the
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Assignment.
13. SUCCESSORS AND ASSIGNS. This Assignment, together with the
covenants and warranties herein contained, shall inure to the benefit of the
Bank and any subsequent holder of the Obligations which may be owing by the
Company under the Bond Documents and shall be binding upon the Company, its
successors and assigns and any subsequent owner of the Land.
14. NOTICES. All demands, notices, approvals, consents, requests and
other communications hereunder shall be given in accordance with the Loan
Agreement.
<Page>
15. AMENDMENTS. No amendment to this Assignment shall be effective
unless in writing signed on behalf of the Company and the Bank.
16. CONSENTS. Insofar as it such consent is necessary, (a) Bovis
consents to the all of the assignments and security interests granted by the
Company to the Bank pursuant to this Assignment, including without limitation,
the assignment of the Construction Contract, and (b) the Architect consents to
the all of the assignments and security interests granted by the Company to the
Bank pursuant to this Assignment, including without limitation, the assignment
of any and all of the Plans.
IN WITNESS WHEREOF, the Company, Bovis and the Architect have executed
this ASSIGNMENT OF CONTRACTS, PERMITS AND PLANS by its duly authorized manager.
/s/ David B. Patteson
---------------------------------
BIOTAGE REAL ESTATE, LLC
By David B. Patteson
-----------------------------
Its Manager
-----------------------------
/s/ G. Wayne Harrell
---------------------------------
BOVIS LENDLEASE
By G. Wayne Harrell
-----------------------------
Its Vice President
-----------------------------
/s/ Neil Bhatt
---------------------------------
NBJ ARCHITECTURE, PLC
By Neil Bhatt
-----------------------------
Its President
-----------------------------