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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission File Number 0-22879
BIORELIANCE CORPORATION
(Exact name of the registrant as specified in its charter)
DELAWARE 52-1541583
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9900 BLACKWELL ROAD
ROCKVILLE, MARYLAND 20850
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(301) 738-1000
- ------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------- -------
As of March 31, 1998, 7,766,114 shares of registrant's Common Stock, par value
$.01 per share, were outstanding.
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BIORELIANCE CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
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<S> <C>
PART I FINANCIAL INFORMATION
Item 1 - Financial Statements:
Consolidated Balance Sheets as of December 31, 1997 and
March 31, 1998.............................................. 3
Consolidated Statements of Income for the Three Months
Ended March 31, 1997 and 1998............................... 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1997 and 1998............................... 5
Notes to Consolidated Financial Statements.................. 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 10
PART II OTHER INFORMATION.............................................. 14
SIGNATURES................................................................. 15
EXHIBIT INDEX.............................................................. 16
</TABLE>
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIORELIANCE CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31,
DECEMBER 31, 1998
1997 (UNAUDITED)
----------------- -----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 6,227 $ 6,800
Marketable securities.................................... 27,554 24,633
Accounts receivable, net................................. 15,923 16,416
Other current assets..................................... 1,827 3,913
----------- -----------
Total current assets............................ 51,531 51,762
Property and equipment, net.................................. 15,601 15,433
Intangible assets, net....................................... 256 214
Deposits and other assets.................................... 286 268
Deferred income taxes........................................ 977 273
----------- -----------
Total assets.................................... $ 68,651 $ 67,950
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt........................ $ 1,574 $ 1,539
Accounts payable......................................... 1,811 1,074
Accrued employee compensation and benefits............... 2,829 2,131
Other accrued liabilities................................ 2,302 2,076
Customer advances........................................ 3,635 3,960
Deferred income taxes.................................... 1,271 1,327
----------- -----------
Total current liabilities....................... 13,422 12,107
Long-term debt............................................... 5,434 5,090
----------- -----------
Total liabilities............................... 18,856 17,197
----------- -----------
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, $.01 par value: 6,900,000 shares
authorized; 6,470,121 and no shares issued and outstanding --- ---
Common stock, $.01 par value: 15,000,000 shares authorized;
7,685,208 and 7,766,114 shares issued and outstanding.. 77 78
Additional paid-in capital............................... 52,457 52,490
Accumulated deficit...................................... (2,145) (1,139)
Equity adjustment from foreign currency translation...... (594) (676)
----------- -----------
Total stockholders' equity...................... 49,795 50,753
----------- -----------
Total liabilities and stockholders' equity...... $ 68,651 $ 67,950
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
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BIORELIANCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------
1997 1998
----------- ------------
<S> <C> <C>
Revenue........................................ $ 11,781 $ 11,971
----------- ------------
Expenses:
Cost of sales............................ 7,442 7,146
Selling, general and administrative...... 2,635 2,894
Research and development................. 303 386
----------- ------------
10,380 10,426
----------- ------------
Income from operations......................... 1,401 1,545
----------- ------------
Other income (expense):
Interest income.......................... 30 486
Interest expense......................... (229) (159)
Other income (expense)................... (1) (132)
----------- ------------
(200) 195
----------- ------------
Income before income taxes..................... 1,201 1,740
Provision for income taxes..................... 511 734
----------- ------------
Net income..................................... $ 690 $ 1,006
=========== ============
Net income per share:
Basic.................................... $ 1.89 $ 0.13
=========== ============
Diluted.................................. $ 0.12 $ 0.12
=========== ============
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
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BIORELIANCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------
1997 1998
----------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income....................................................... $ 690 $ 1,006
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation................................................. 818 703
Amortization of intangibles.................................. 76 53
Amortization of bond premiums and discounts.................. 0 (79)
Deferred income taxes, net................................... 431 760
Changes in current assets and liabilities:
Accounts receivable, net................................. (277) (401)
Other current assets..................................... 451 (2,126)
Accounts payable......................................... 560 (746)
Accrued employee compensation and benefits............... (185) (699)
Other accrued liabilities................................ 131 (273)
Customer advances........................................ 259 289
Deposits and other assets................................ (649) ---
----------- --------------
Net cash provided by (used in) operating activities. 2,305 (1,513)
----------- --------------
Cash flows from investing activities:
Purchases of marketable securities............................. --- (11,500)
Proceeds from the maturities of marketable securities.......... --- 14,500
Purchases of property and equipment............................ (170) (577)
----------- --------------
Net cash provided by (used in) investing activities. (170) 2,423
----------- --------------
Cash flows from financing activities:
Proceeds from exercise of stock options....................... 37 154
Proceeds from debt............................................ 900 ---
Payments on debt.............................................. (179) (180)
Proceeds from (payments on) note payable to stockholder....... (1,900) ---
Payments on capital lease obligations......................... (218) (199)
Repurchase and cancellation of treasury stock................. --- (122)
----------- --------------
Net cash (used in) financing activities............. (1,360) (347)
----------- --------------
Effect of exchange rate changes on cash and cash equivalents....... (169) 10
----------- --------------
Net increase in cash and cash equivalents.......................... 606 573
Cash and cash equivalents, beginning of period..................... 2,965 6,227
----------- --------------
Cash and cash equivalents, end of period........................... $ 3,571 $ 6,800
=========== ==============
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
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BIORELIANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) DESCRIPTION OF THE BUSINESS
BioReliance Corporation (the "Corporation") is a contract research
organization providing nonclinical testing and contract manufacturing
services for biologics to biotechnology and pharmaceutical companies
worldwide.
(2) INTERIM FINANCIAL STATEMENTS PRESENTATION
The accompanying interim financial statements are unaudited and have been
prepared by the Corporation pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC") regarding interim financial
reporting. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements, and therefore these consolidated financial statements
should be read in conjunction with the audited consolidated financial
statements, and the notes thereto, included in the Corporation's Annual
Report on Form 10-K. In the opinion of management, the unaudited
consolidated financial statements for the three-month period ended March 31,
1998 include all normal and recurring adjustments which are necessary for a
fair presentation of the results of the interim period. The results of
operations for the three-month period ended March 31, 1998 are not
necessarily indicative of the results for the entire year ending December 31,
1998.
(3) REVENUE RECOGNITION
Revenue recognized from commercial contracts, which are principally
fixed-price or fixed-rate, is recorded using the percentage-of-completion or
the completed-contract method, depending on the nature and duration of the
contract. The percentage-of-completion method is used for nonclinical testing
services that are completed generally in greater than three days and for
manufacturing contracts that do not provide for delivery of product. The
completed-contract method is used for nonclinical testing services that are
completed generally within three days and for contract manufacturing services
that provide for delivery of product. The percentage of completion is
determined using total project costs as a cost input measure. Revenue
recognized from government contracts, which are principally
cost-plus-fixed-fee, is recognized in an amount equal to reimbursable costs
plus a pro-rata portion of the earned fee. Losses, if any, are provided for
at the time at which they become known.
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(4) FOREIGN CURRENCY TRANSLATION
The accounts of foreign subsidiaries are measured using local currency as
the functional currency. Assets and liabilities of these subsidiaries are
translated into U.S. dollars at period-end exchange rates, and income and
expense accounts are translated at average monthly exchange rates. Net gains
and losses resulting from such translations are included in comprehensive
income and are accumulated in a separate component of stockholders' equity.
(5) NET INCOME PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"). This statement replaces the presentation of primary earnings
per share ("EPS") with a presentation of basic EPS, and requires dual
presentation of basic and diluted EPS on the face of the income statement.
Basic EPS excludes dilution and is computed by dividing income available to
common shareholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity. Dilutive
securities are excluded from the computation in periods in which they have an
anti-dilutive effect, and net income available to common stockholders is
adjusted accordingly for the effect of cumulative dividends on Convertible
Preferred Stock. The Corporation adopted this statement during the fourth
quarter of 1997, as required. Accordingly, all prior period EPS data has
been restated as required by SFAS 128.
In February 1998, the Securities and Exchange Commission issued Staff
Accounting Bulletin 98 ("SAB 98"). SAB 98 rescinded SAB 83, which required
common shares and common share equivalents issued or granted by the
Corporation at prices below the public offering price during the twelve
months immediately preceding the filing of the Corporation's initial
Registration Statement and through the effective date of such Registration
Statement to be calculated using the treasury stock method based upon the
estimated initial public offering price, and to be included for all periods
presented regardless of whether they are dilutive. The Corporation has
adopted SAB 98 and, accordingly, all EPS data has been restated as required.
The following is a reconciliation between net income and net income
available to common stockholders used in the numerator for basic EPS for the
quarters ended March 31:
<TABLE>
<CAPTION>
1997 1998
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(IN THOUSANDS)
<S> <C> <C>
Net income................... $690 $1,006
Assumed dividends paid to
preferred stockholders....... (35) ---
----- ------
Net income available to
common stockholders.......... $ 655 $1,006
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</TABLE>
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The following is a reconciliation between net income available to common
stockholders and net income available per common and common equivalent
stockholders used in the numerator for diluted EPS for the quarters ended
March 31:
<TABLE>
<CAPTION>
1997 1998
---- ----
(IN THOUSANDS)
<S> <C> <C>
Net income available to
common stockholders.......... $655 $1,006
Assumed dividends paid to
preferred stockholders....... 35 ---
---- ------
Net income available to
common and common $690 $1,006
equivalent stockholders...... ==== ======
</TABLE>
The following is a reconciliation between the weighted average common
stock outstanding denominator used in basic EPS and the weighted average
common and common equivalent shares outstanding denominator used in diluted
EPS for the quarters ended March 31:
<TABLE>
<CAPTION>
1997 1998
---- ----
(IN THOUSANDS)
<S> <C> <C>
Weighted average common
stock outstanding............ 346 7,732
Preferred stock, as if
converted.................... 4,783 ---
Stock options, as if
converted.................... 746 617
----- -----
Weighted average common and
common equivalent shares
outstanding.................. 5,875 8,349
===== =====
</TABLE>
(6) INITIAL PUBLIC OFFERING
On August 1, 1997, the Corporation completed its initial public offering
of 2,102,014 shares of its common stock (plus an additional 297,986 shares by
a selling stockholder) at an offering price of $15.00 per share. On August
7, 1997, the underwriters exercised an option to purchase an additional
315,302 shares. The net proceeds to the Corporation from the public offering
and the exercise of the over-allotment option by the underwriters, after
deducting the underwriting discounts and commissions and offering expenses
payable by the Corporation, were approximately $32.5 million. Upon the
closing of the offering, all outstanding shares of the Corporation's
convertible preferred stock were automatically converted into 4,778,072
shares of common stock.
(7) COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS 130"). This statement establishes standards for reporting and display
of comprehensive income and its components in a full set of general-purpose
financial statements. Comprehensive income is defined as the change in
equity of a business enterprise during a period from transactions and other
events and circumstances from nonowner sources. SFAS 130 requires that all
components of comprehensive income be reported in the financial statements in
the period in which they are
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recognized. The statement requires reclassification of earlier statements in
comparative financial statements and is effective for fiscal years beginning
after December 15, 1997.
The Corporation adopted this statement during the first quarter of 1998.
Total comprehensive income amounted to $924,000 for the quarter ended March
31, 1998 and $331,000 for the quarter ended March 31, 1997.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Private Securities Litigation Reform Act provides a "safe harbor"
for forward-looking statements. Certain statements included in this
Quarterly Report on Form 10-Q are forward-looking. Such forward-looking
statements, in addition to information contained in Management's Discussion
and Analysis of Financial Condition and Results of Operations and elsewhere
in this Form 10-Q, are based on the Corporation's current expectations and
are subject to a number of risks and uncertainties that could cause actual
future results to differ significantly from results expressed or implied in
any forward-looking statements contained herein or that may be made from time
to time by, or on behalf of, the Corporation. Information presented in this
Form 10-Q should be read in conjunction with the Corporation's Annual Report
on Form 10-K filed with the Securities and Exchange Commission, including
the risk factors contained therein.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1997
Revenue was $12.0 million in the three months ended March 31, 1998, an
increase of 2% over revenue of $11.8 million in the three months ended March
31, 1997. The increase was attributable primarily to volume growth in U.S.
BioTesting services and revenues from newly established BioTesting services
in Germany, offset in part by a decline due to the timing of shipments at
BIOMEVA GmbH.
Cost of sales was $7.1 million in the three months ended March 31,
1998, a decrease of 4% over cost of sales of $7.4 million in the three months
ended March 31, 1997. The decrease was attributable primarily to mix
variances arising in constituent revenues and a variety of operating
efficiencies as offset by higher costs in establishing U.S. manufacturing.
Selling, general and administrative expense was $2.9 million in the
three months ended March 31, 1998, an increase of 10% over selling, general
and administrative expense of $2.6 million in the three months ended March
31, 1997. This increase was due to infrastructure expansion, investment in
information systems and the additional administrative costs of supporting a
public company.
Research and development expense was $386,000 in the three months ended
March 31, 1998, an increase of 27% over research and development expense of
$303,000 in the three months ended March 31, 1997. The increase primarily
was attributable to an expansion in headcount and project work on new
BioTesting assays.
Operating income was $1.5 million in the three months ended March 31,
1998, an increase of 10% over operating income of $1.4 million in the three
months ended March 31, 1997. The increase primarily was due to the leverage
achieved from the increase in revenue on a high fixed cost structure.
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The Corporation earned net interest income and other net income and
expense of $195,000 in the three months ended March 31, 1998, compared to net
interest expense and other net income and expense of $(200,000) in the three
months ended March 31, 1997. The improvement was due primarily to interest
income earned in 1998 on the investment of the funds received from the
initial public offering in August 1997.
The provision for income taxes was $734,000 in the three months ended
March 31, 1998, compared to a provision of $511,000 in the three months ended
March 31, 1997. The effective tax rate was 42% for the three months ended
March 31, 1998 and 43% for the three months ended March 31, 1997. The tax
rate declined primarily from a lower proportion of high tax rate earnings
sourced from Germany compared to earnings sourced from elsewhere.
Net income was $1.0 million in the three months ended March 31, 1998,
an increase of 46% over net income of $690,000 in the three months ended
March 31, 1997. The improvement primarily was due to increased operating
income.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Corporation had cash, cash equivalents and
marketable securities of $31.4 million, compared to cash, cash equivalents
and marketable securities of $33.8 million at December 31, 1997.
The Corporation used cash flows in operations of $(1.5) million in the
three months ended March 31, 1998, compared to a generation of $2.3 million
in the three months ended March 31, 1997. Net income, as adjusted for
depreciation and amortization and deferred income taxes, provided $2.4
million and $2.0 million in the three months ended March 31, 1998 and 1997,
respectively. The increase in adjusted net income was due primarily to a
higher level of net income. Changes in current assets and liabilities used
cash of $(4.0) million and provided cash of $0.3 million in the three months
ended March 31, 1998 and 1997, respectively.
Working capital increased to $39.7 million at March 31, 1998, compared
to $38.1 million at December 31, 1997. The net increase in working capital
primarily was due to the reinvestment of earnings during the quarter,
reflecting payment of accounts payable and accrued expenses and investment in
accounts receivable, prepayments and advances in other assets as offset by a
reduction in marketable securities.
The Corporation spent $0.8 million for capital expenditures for the
three months ended March 31, 1998, compared to $0.4 million (including $0.2
million and $0.2 million of expenditures financed by leases) in the three
months ended March 31, 1997 and the three months ended March 31, 1998,
respectively. The increase in capital expenditures reflects the
Corporation's investment in information systems and expansion of the
Corporation's laboratory facilities and the related equipment.
In April 1998, the Corporation entered into a lease agreement with a
developer to construct and lease a facility adjacent to the Corporation's
BioTesting Services facility in
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Rockville, Maryland. The new facility will be used to consolidate existing
research and development and administrative activities and to provide
expanded capacity for BioAnalytical Services.
In April 1998, the Corporation entered into certain third-party leasing
and subleasing arrangements relating to the construction of new laboratory
space. These arrangements require the Corporation to make certain net
noncancelable lease payments totaling approximately $8.5 million over the
next twenty years and to guarantee indebtedness of approximately $4.4
million. In addition, the Company intends to incur approximately $20.0
million in leasehold improvements and laboratory equipment relating to the
new laboratory and the new headquarters facilities.
The Corporation financed the acquisition of BIOMEVA in July 1996 and
obtained additional funds for working capital and expansion of its business
through a promissory note with NationsBank, N.A. ("NationsBank") in the
amount of $1.8 million and a subordinated note from Sidney R. Knafel, the
Corporation's largest stockholder, in the amount of $1.9 million, which was
repaid on March 28, 1997. The NationsBank promissory note has a maturity
date of June 30, 1999, requires monthly principal payments of $30,000, and at
March 31, 1998, $1.2 million was outstanding on the note. The note bears
interest at the same rate as the Mortgage Loan. At March 31, 1998, the
interest rate was 6.92%.
In December 1994, the Corporation's existing loan agreement with
NationsBank was modified to provide term loan financing in the amount of
$4,300,000 with a maturity date of November 30, 1999 (the "Mortgage Loan").
In October 1997 and on April 1, 1998, the Mortgage Loan was modified and
restated to release the foreign subsidiaries from joint and several
liability, to include all the U.S. subsidiaries as joint and several makers,
to release the liens created by the first security interest in all of its
tangible and intangible assets, and to modify the interest rate terms. The
Mortgage Loan is secured by a deed of trust on the Company's facility in
Rockville, Maryland. In addition to a principal payment of $30,000 per
month, the note bears interest at the London Inter-Bank Offering Rate
("LIBOR") plus the applicable LIBOR Rate Additional Percentage ("LIBOR Rate
Option"). The LIBOR Rate Option ranged from 0.85% to 2.15% depending on the
Company achieving certain funded debt to EBITDA ratios. At March 31, 1998
the applicable interest rate was 6.92%.
In May 1995, the Company entered into an interest rate swap agreement
whereby the variable interest rate of the Mortgage Loan was effectively
converted into debt with a fixed rate of 9.05% per annum. Amounts to be paid
or received under the interest rate swap agreement are recognized as interest
income or expense in the periods in which they accrue and are recorded in the
same category as that arising from the Mortgage Loan. This agreement expires
on November 30, 1999. The effect of the interest rate swap agreement on
interest expense was not material in the quarters ended March 31, 1997 and
1998.
In addition to the Mortgage Loan, the Company has entered into a
revolving loan agreement with NationsBank with a maximum available balance
not to exceed $1,000,000. Amounts to be paid include interest only on the
unpaid Principal Sum, payable monthly, and
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unless paid sooner, the unpaid Principal Sum, together with unpaid accrued
interest payable in full on May 31, 1998. The note bears interest at the same
rate as the Mortgage Loan. The Company has also agreed to pay a quarterly
commitment fee equaling 0.25% of the average unused portion of the revolving
bank loan. At March 31, 1998, no amounts were outstanding under the facility.
This line of credit expires in May 1998.
The bank agreements are cross collateralized and are secured by a deed
of trust on the Corporation's facility in Rockville, Maryland. The
agreements require the Corporation to meet certain financial and restrictive
covenants, including maintaining certain tangible net worth levels and funded
debt to equity ratios.
At December 31, 1997, the Corporation had formulated capital spending
plans of approximately $25 million, primarily for BioManufacturing
facilities, the consolidation of headquarter and certain BioTesting
facilities and the continuing development of computer information systems.
To the extent these plans are confirmed, if external funds are available on
favorable terms and conditions, a significant proportion of the potential
expenditure may be financed from third parties.
At March 31, 1998, the Corporation had commitments to spend $99,000 for
computer systems, software and integration related to the development of new
information and telecommunication systems and $53,000 for laboratory
equipment.
The Corporation expects to continue expanding its operations through
internal growth, geographic expansion and possible strategic acquisitions.
The Corporation expects that such activities will be funded from existing
cash, cash equivalents and marketable securities; cash flows from operations;
and bank borrowings and lease financing. Although the Corporation has no
agreements or arrangements in place with respect to any future acquisition,
there may be acquisition or other growth opportunities that require
additional external financing, and the Corporation may, from time to time,
seek to obtain funds from public or private issuances of equity or debt
securities. There can be no assurances that such financing will be
available on terms acceptable to the Corporation.
Based on its current operating plan, the Corporation believes that
available liquid resources are sufficient to meet its foreseeable cash needs.
FOREIGN CURRENCY
The accounts of foreign subsidiaries are measured using local currency
as the functional currency. Assets and liabilities of these subsidiaries
are translated into U.S. dollars at period-end exchange rates, and income and
expense accounts are translated at average monthly exchange rates. Net
gains and losses resulting from such translations are included in
comprehensive income and are accumulated in a separate component of
stockholders' equity.
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PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
As of March 31, 1998 the Corporation had used approximately $2.4
million of the net proceeds from the Corporation's initial public offering
toward debt repayment and purchases of laboratory equipment and information
systems hardware and software.
At March 31, 1998, $24,663,000 of the net proceeds were invested in
short-term United States government securities, and the balance was invested
in money market funds pending the purchase of additional United States
government securities or in other operating accounts of the Corporation.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
No matters have been submitted to vote of the stockholders in the
quarter ended March 31, 1998.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The documents required to be filed as exhibits to this report
under Item 601 of Regulation S-K are listed in the Exhibit Index included
elsewhere in this report, which list is incorporated herein by reference.
(b) Reports on Form 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 15, 1998
BioReliance Corporation
(Registrant)
By
-----------------
Capers W. McDonald
President and Chief Executive Officer
By
-----------------
Michael R.N. Thomas
Vice President, Chief Financial Officer and
Treasurer
(Principal Financial and Accounting Officer)
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<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10.21 Lease-Purchase Agreement dated April 1, 1998 between Montgomery
County Maryland and BioReliance Corporation.
10.22 Lease dated April 1, 1998 between BioReliance Corporation and BPG
Industrial Partners II, LLC.
10.23 Project Lease dated April 1, 1998 between BPG Industrial Partners II,
LLC and MAGENTA Corporation.
10.24 Leasehold Deed of Trust dated April 1, 1998 by BioReliance
Corporation and MAGENTA Corporation, to Cynthia Flanders and Eileen
Chow (trustees) and NationsBank, N.A.
10.25 Guaranty Agreement dated April 1, 1998 by BioReliance Corporation in
favor of NationsBank, N.A.
10.26 Loan Agreement dated April 1, 1998 between BPG Industrial Partners
II, LLC, NationsBank, N.A. and, for certain purposes, BioReliance
Corporation.
10.27 First Amendment to Amended and Restated Replacement Loan Agreement
dated April 1, 1998 among BioReliance Corporation, MA BioServices,
Inc., MAGENTA Corporation, MAGENTA Viral Production, Inc. and
NationsBank, N.A.
10.28 Second Note Modification Agreement dated April 1, 1998 among
BioReliance Corporation, MA BioServices, Inc., MAGENTA Corporation,
MAGENTA Viral Production, Inc. and NationsBank, N.A.
10.29 Second Deed of Trust Note Modification dated April 1, 1998 among
BioReliance Corporation, MA BioServices, Inc., MAGENTA Corporation,
MAGENTA Viral Production, Inc. and NationsBank, N.A.
10.30 Second Replacement Revolving Promissory dated April 1, 1998 by
BioReliance Corporation, MA BioServices, Inc., MAGENTA Corporation
and MAGENTA Viral Production, Inc. in favor of NationsBank, N.A. in
the amount of $1 million.
10.31 Third Modification Agreement - Leasehold Deed of Trust and Security
Agreement dated April 1, 1998 among BioReliance Corporation,
Elizabeth Shore (trustee) and NationsBank, N.A.
</TABLE>
16
<PAGE> 1
EXHIBIT 10.21
LEASE-PURCHASE AGREEMENT
BETWEEN
MONTGOMERY COUNTY, MARYLAND
AND
BIORELIANCE CORPORATION
Dated April ___, 1998
<PAGE> 2
TABLE OF CONTENTS
Page
l. INCORPORATION OF RECITALS................................................3
2. GENERAL PURPOSES OF LEASE................................................3
3. DEFINITIONS..............................................................4
4. LEASED PREMISES..........................................................8
5. TERM AND EXTENSION.......................................................8
A. Preliminary and Initial Terms.......................................8
B. Extension Terms.....................................................8
C. Right to Purchase...................................................9
6. RENTAL..................................................................10
A. Amount.............................................................10
B. Rent Commencement Date.............................................11
C. Security Deposit...................................................11
D. Additional Rent....................................................12
7. GUARANTY OF CONSTRUCTION................................................13
8. FEES AND COSTS OF CONSTRUCTION..........................................13
9. LESSEE'S INSURANCE......................................................14
A. Mandatory Insurance Requirements During the Construction Period....14
B. Mandatory Insurance Requirements During the Operations Period......15
10. INDEMNIFICATION.........................................................18
11. LIENS, CLAIMS OR ENCUMBRANCES...........................................19
A. Free of Liens......................................................19
B. Discharge of Lien..................................................20
C. Failure to Discharge Lien..........................................20
12. RIGHT TO CONSTRUCT AND ARCHITECTURAL REVIEW.............................21
A. Submission and Approval of Plans...................................21
B. Plan Approval is not in Lieu of other Approvals/Permits............22
C. No Monetary Liability for Approval of Plans........................22
D. Coordination of Plans..............................................23
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
Page
13. CONSTRAINTS.............................................................23
A. No Nuisance........................................................23
B. Notice of Toxic and Hazardous Materials............................23
C. Indemnification....................................................23
D. Outdoors Activities................................................24
E. Building Sites.....................................................24
14. BUILDING CONSTRUCTION AND ALTERATIONS...................................24
A. Building Codes.....................................................24
B. Cleaning of Premises...............................................25
C. Premises "As Is"...................................................25
15. LANDSCAPING, OUTSIDE STORAGE AND MAINTENANCE............................25
A. Landscaping........................................................25
B. Maintenance of Landscaping.........................................25
C. Screening of Storage Areas.........................................25
D. Storage of Fuel Oil, etc...........................................26
E. Safe Conditions....................................................26
F. Vacant Buildings...................................................26
16. UTILITY CONNECTIONS.....................................................26
17. SIGNS OR MONUMENTS......................................................27
A. Defined............................................................27
B. Approval of Plans..................................................27
C. Construction Signs.................................................27
18. PARKING AREAS AND LOADING ZONES.........................................28
A. Parking Facilities.................................................28
B. Loading and Unloading Areas........................................28
19. TEMPORARY STRUCTURES....................................................28
20. MAINTENANCE OF PROPERTY.................................................29
A. Lessee's Obligation................................................29
B. County's Right, but not Obligation to Repair.......................29
C. County's Maintenance...............................................30
<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
Page
21. COOPERATIVE MAINTENANCE AGREEMENT AND COMMON AREA CHARGES...............30
A. Maintenance Agreement..............................................30
B. Common Area Contribution...........................................30
C. Storm Water Management.............................................31
22. UTILITY SERVICE AND ACCESS..............................................31
23. ACCESS BY COUNTY AND EASEMENT...........................................32
A. Access to Maintain Pipes...........................................32
B. Reservation of Easements...........................................32
C. Accommodation of Lessee............................................33
24. COMMON AREAS............................................................33
A. Lessee's Non-exclusive Right to Use................................33
B. County's Right to Make Changes to Common Areas.....................33
25. ENFORCEMENT.............................................................33
A. Lease for the Benefit of Parties...................................33
B. Remedies...........................................................33
C. Default............................................................34
D. No Subordination...................................................35
E. Bankruptcy.........................................................36
26. EXPIRATION..............................................................36
A. Surrender of Improvements..........................................36
B. Removal of Trade Fixtures..........................................36
27. TENANT HOLDING OVER.....................................................37
28. MORTGAGE OF LESSEE'S LEASEHOLD INTEREST.................................37
A. Notice of Default under Mortgage or Lease..........................37
B. Leasehold Mortgagee Right to Notice and Cure.......................38
C. Leasehold Mortgagee as Holder of Lessee's Interest.................38
D. Certain Restrictions During Leasehold Mortgage.....................39
E. New Financing......................................................39
F. Assignment by Leasehold Mortgagee..................................39
G. Notice of Mortgages................................................40
<PAGE> 5
29. SUCCESSORS AND ASSIGNS; SUBLEASING......................................40
TABLE OF CONTENTS
(CONTINUED)
Page
30. QUIET ENJOYMENT, TITLE TO LAND AND IMPROVEMENTS.........................43
A. Quiet Enjoyment....................................................43
B. Title..............................................................43
31. SURRENDER, WAIVER AND AMENDMENT.........................................44
32. NON-DISCRIMINATION IN EMPLOYMENT AND SERVICES...........................45
33. DISPUTES................................................................45
A. Mediation of Disputes..............................................45
B. Exceptions.........................................................46
34. CONTRACT SOLICITATION...................................................46
35. PUBLIC EMPLOYMENT.......................................................47
36. GOVERNING LAW, SEVERABILITY, CONDEMNATION AND COMPLIANCE................47
A. Governing Law......................................................47
B. Lease not Redeemable...............................................47
C. Casualty Damage....................................................47
D. Condemnation.......................................................48
E. Compliance with Law................................................49
F. No Waiver of Governmental Immunity.................................49
G. Limitation of Liability............................................49
H. Limitation of Lessee's Liability...................................49
37. RECORDING...............................................................50
38. ENTIRE AGREEMENT........................................................50
39. NOTICE..................................................................50
40. NON-MERGER..............................................................52
41. SUBORDINATION OF LEASE..................................................52
<PAGE> 6
42. CAPTIONS, PRONOUNS......................................................52
TABLE OF CONTENTS
(CONTINUED)
Page
43. SURVIVAL ...............................................................53
44. MISCELLANEOUS PROVISIONS................................................53
A. Days...............................................................53
B. Certain Terms......................................................53
C. Authority..........................................................53
D. No Partnership.....................................................53
E. Consequential Damages..............................................53
Exhibit A - Diagram of Leased Premises
Exhibit B - Amended and Restated Declaration of Covenants and Easements
Exhibit C - Development Plan and Development Criteria
Exhibit D - Purchase and Sale Agreement
Exhibit E - Rent/Purchase Price Schedule
Exhibit F - Estoppel Certificate and Consent
<PAGE> 7
LEASE
THIS LEASE, made this ____ day of April, 1998, by and between
MONTGOMERY COUNTY, MARYLAND, a political subdivision of the State of Maryland,
hereinafter called "County" and BIORELIANCE CORPORATION, a Delaware corporation
with its principal offices located at 9900 Blackwell Road, Rockville, Maryland
20850, hereinafter called "Lessee."
WITNESSETH:
Recitals
That for and in consideration of the financial conditions hereinafter
reserved and the covenants and conditions hereinafter contained, County leases
and demises unto Lessee and Lessee rents from County the Premises and
appurtenant rights described more particularly as Parcel N/Q and containing
approximately 8.4 acres as shown on Exhibit A attached hereto and made a part
hereof, all as shown on a plat entitled "Parcel 'N/Q', Shady Grove Life Sciences
Center", recorded among the Land Records of Montgomery County, Maryland, in Plat
Book 175, Plat 19636 (the "Property" or the "Premises") in the Shady Grove Life
Sciences Center located in Montgomery County, Maryland.
Lessee agrees to exercise reasonable efforts to begin construction of a
biopharmaceutical manufacturing facility (the "Facility") consisting of
approximately 58,733 square feet (of which only approximately 30,000 square feet
will be built out initially) on the Property within twelve (12) months following
the Lease Commencement Date (as herein defined). All improvements on the
Property, including the Facility, shall be consistent with the Montgomery County
Zoning Ordinance, as amended from time to time, and the permitted uses set forth
herein and the Development Plan (as herein defined). Lessee's right to construct
improvements on the Property, including the right to construct additional
improvements as may be allowed by the Development
<PAGE> 8
Plan, as the Development Plan may be amended from time to time, shall not exceed
density of one hundred twenty thousand (120,000) square feet on the Property.
Lessee shall exercise reasonable and diligent efforts to: (i) file an
application for the building permit(s) for the Facility within six (6) months
after the Lease Commencement Date; and (ii) obtain a building permit(s) and
begin construction of the Facility within twelve (12) months after the Lease
Commencement Date. In the event Lessee fails to secure all necessary building
permit(s) for the Facility to be constructed on the Property within twelve (12)
months from the Lease Commencement Date, Lessee, at its option, may terminate
this Lease. In the event Lessee fails to (i) file an application for the
building permit(s) for the Facility within six (6) months after the Lease
Commencement Date or (ii) exercise reasonable and diligent efforts to obtain the
building permit(s) for the Facility within twelve (12) months after the Lease
Commencement Date, and either such failure continues beyond thirty (30) days
after written notice from County thereof, County, at its option, may terminate
this Lease, in which event Lessee shall, at its expense and at the option of
County, restore the Premises, to the extent practicable, to a safe condition in
compliance with all laws, ordinary wear and tear and casualty damage excepted.
Once construction of the Facility has begun, Lessee shall exercise reasonable
efforts to continue construction activities until completion.
Now, therefore, for and in consideration of the terms of this Lease,
the parties agree as follows:
1. INCORPORATION OF RECITALS. The recitals are incorporated herein as
if fully set forth.
2
<PAGE> 9
2. GENERAL PURPOSES OF LEASE. County hereby declares and Lessee agrees
that the general purposes of this Lease are to:
A. Fulfill the purpose for which the land covered by the
Development Plan was secured, namely, for the development of the Life Sciences
Center.
B. Protect County, Lessee, and tenants against improper
building upon and use of the Property and Common Areas (as herein defined).
C. Guard against the erection on the Property or the Common
Areas of structures built of improper or unsuitable materials, or with improper
quality and methods of construction.
D. Provide setbacks from streets, property lines, and
easements, and in general provide adequately for a high type and quality of
improvement and for the orderly and efficient maintenance thereof.
E. Encourage development of the Shady Grove Life Sciences
Center:
(1) to enhance advancement in health delivery, education,
research, and development, and related, associated, or supporting entities and
promote an environment conducive to the advancement of health care and life
sciences technology and in general to provide a harmonious development.
(2) to develop strong relationships among facilities
within the Life Sciences Center so they can share the advantages of common
facilities in clinical, administrative, and support services that will result in
more efficient use of capital investment and manpower.
3
<PAGE> 10
(3) to provide flexibility for change to accommodate
unforeseen knowledge, technology, and medical change, and advancement in
biomedical, life science, and medical device technology.
(4) to secure and maintain the desired functional
relationships within the Life Sciences Center for a cohesive development of
health care, research, and related medical uses.
3. DEFINITIONS. When used in this Lease, the following terms have the
meanings set forth below:
A. The "County" means Montgomery County, Maryland, as the owner and
lessor of the Property and grantor of use rights, and any reference in this
Lease to an approval, consent or agreement required to be obtained from County
refers to County in its capacity as the owner and lessor of the Property and
grantor of use rights and, unless otherwise indicated, does not refer to
approvals, consents or agreements required to be obtained from County in its
governmental capacity. County shall not unreasonably withhold, condition or
delay any approval, consent or agreement required under this Lease to be
obtained from County. County as the owner and lessor of the Property and grantor
of use rights shall, at Lessee's expense, cooperate with Lessee in filing any
application for zoning, land use and building permits and any other permits and
approvals necessary to the construction, development, use and operation of the
Property in a timely manner at the earliest possible date. County, in its
governmental capacity, agrees to act promptly in processing and reviewing
applications for all approvals and permits for the construction, development,
use and operation of the Property.
4
<PAGE> 11
B. The "Covenants" means the Amended and Restated Declaration of
Covenants and Easements, dated March 9, 1990, and recorded among the Land
Records of Montgomery County, Maryland, in Liber 9332, folio 591. A copy of the
Covenants is attached hereto as Exhibit B. Lessee hereby acknowledges that it
has received and reviewed the Covenants.
C. "Days" means calendar days, unless specific reference is made to
business days.
D. The "Development Plan" means the Shady Grove Life Sciences Center
Development Plan approved by County, in its governmental capacity, on September
16, 1986, and the amendment dated February 10, 1994, to the Development Plan
which was approved by County, in its governmental capacity, on February 14,
1995, copies of which are attached hereto as Exhibit C, and any amendments to
the Development Plan which may be issued by County, in its governmental
capacity, from time to time.
E. The "Facility" means the biopharmaceutical manufacturing facility
consisting of approximately 58,733 square feet (of which only approximately
30,000 square feet will be built out initially) to be constructed by Lessee on
the Premises, and such other and further improvements as may be allowed on the
Premises consistent with the Development Plan.
F. "Improvements" means any structure, fixture or other improvements
now located or hereinafter erected upon the Premises, including, but in no way
limited to, the Facility and appurtenances to be constructed together with the
building, parking lots, landscaping, etc.
5
<PAGE> 12
G. "Lease Commencement Date" means the effective date of this Lease,
which date is the first day of the month immediately following the date of final
ratification and execution of this Lease by County and Lessee.
H. The "Lessee" means BioReliance Corporation, a Delaware
corporation, its successors and assigns. Lessee's interest in this Lease may be
assigned, and all or any portion of the Premises may be sublet, in accordance
with Section 29 hereof, provided that no such assignment or subletting shall be
deemed to release Lessee from its obligations under this Lease.
I. "Mortgage" means any now or hereafter existing mortgages, deeds
of trust or other similar security agreements covering this Lease, or any
sublease or sub-sublease, and the term "Leasehold Mortgagee" means any mortgagee
or beneficiary under a deed of trust or other similar security agreement
covering this Lease, or any sublease or sub-sublease.
J. "Occupant" includes any person or persons who, by reason of
employment or other status occupy space on or within the Premises and
Improvements.
K. The "Plans and Specifications" means (i) the architectural and
structural plans entitled "Magenta Corporation, Shady Grove Life Sciences
Center, Rockville, Maryland," dated November 17, 1997, prepared by Gaudreau,
Inc. and Faisant Associates, Inc., and (ii) the specifications entitled "Project
Manual for Magenta Corporation, Shady Grove Life Sciences Center, Rockville,
Maryland," dated November 17, 1997, prepared by Gaudreau, Inc. and Faisant
Associates, Inc., as each of the same may be modified.
L. The "Premises" and the "Property" mean that parcel of land more
particularly described as Parcel N/Q on Exhibit A and containing approximately
8.4 acres and shall include all Improvements constructed thereon.
6
<PAGE> 13
M. "Property Value", for purposes of this Lease, means the
discounted value of the Property, in consideration of the economic development
benefits to be generated by the Facility to be constructed by Lessee, based upon
the acreage conveyed for use pursuant to this Lease. The Property Value is SEVEN
HUNDRED TWENTY THOUSAND DOLLARS ($720,000.00).
N. "Shady Grove Life Sciences Center" and "Life Sciences Center"
mean the property and the improvements covered by the Development Plan which at
this time consists of approximately 295 acres bounded by Key West Avenue on the
north, Shady Grove Road on the east, Great Seneca Highway on the west and West
Montgomery Avenue on the south, and including an approximately 6.92 acre parcel
on the west side of Great Seneca Highway adjacent to the Public Service Training
Academy, all of which land is in Montgomery County, Maryland.
O. The "Site Plan" means the "Storm Drain, Paving and Site Plan"
prepared by Loiederman Associates, Inc., dated August 1997, and amended October
17, 1997, October 22, 1997 and January 21, 1998, approved by the Shady Grove
Life Sciences Center Architectural Review Committee for development of the
Improvements, as the same may be amended.
4. LEASED PREMISES.
County hereby leases unto Lessee, for the consideration set forth
below, the Premises, initially for the construction, operation, and use of a
biopharmaceutical manufacturing facility in the Shady Grove Life Sciences
Center, and thereafter for any use permitted by the Covenants.
7
<PAGE> 14
5. TERM AND EXTENSION.
A. Preliminary and Initial Terms. The term of this Lease shall
consist of a Preliminary Term, an Initial Term and any Extension Terms exercised
by Lessee (collectively, the "Term"). The "Preliminary Term" of this Lease shall
commence on the Lease Commencement Date and expire on midnight of the day before
the Rent Commencement Date (as herein defined). The "Initial Term" of this Lease
shall be for a period of thirty-five (35) years commencing upon the Rent
Commencement Date and expiring, unless extended pursuant to the terms of this
Lease, on midnight of the last day of the thirty-fifth (35th) lease year. As
used herein, the term "lease year" means a twelve (12)-month period commencing
on the Rent Commencement Date or any anniversary thereof.
B. Extension Terms. If this Lease has not been terminated sooner as
provided herein, then Lessee shall have the options (the "Extension Options") to
extend this Lease for two (2) additional and consecutive terms of twenty-five
(25) years each and one (1) additional consecutive term of fourteen (14) years
(each an "Extension Term" and, collectively, the "Extension Terms"). Should
Lessee, in Lessee' s sole discretion, elect not to extend this Lease, then
Lessee shall provide County with written notice of such election, together with
the written approval of any subtenant of Lessee, not later than one (1) year
before the date of expiration of the Term, failing which Lessee shall be deemed
to have exercised the Extension Option. For all purposes hereunder, there shall
be no distinction between the terms "extend" and "renew" and their derivatives.
C. Right to Purchase. As additional consideration for the execution
of this Lease, County grants to Lessee an option to purchase the Premises at any
time during the Term
8
<PAGE> 15
(the "Purchase Option"), subject to the terms and conditions set forth herein
and substantially in the form of Purchase and Sale Agreement attached hereto as
Exhibit D and made a part hereof (the "Purchase Agreement"). Lessee may exercise
the Purchase Option by giving County written notice of such exercise, which
notice shall be accompanied by two (2) copies of the Purchase Agreement executed
by Lessee (the "Lessee's Notice"). County shall execute the Purchase Agreement
promptly after receipt of Lessee's Notice.
The purchase price for the Premises shall be the unamortized balance of
the Property Value remaining as of the date of closing of said purchase based on
an equal monthly amortization of the Property Value at an interest rate equal to
the Interest Rate (as herein defined) over the period commencing on the Rent
Commencement Date and ending upon the expiration of the Initial Term. Such
amortization of the Property Value shall be computed within thirty (30) days
after determination of the Interest Rate, as set forth in Section 6.A., and
shall be set forth on a Schedule (the "Rent/Purchase Price Schedule") which
shall specify the exact amount of the monthly amortization, the portion of the
monthly amortization attributed to reduction of the Property Value, the portion
of the monthly amortization attributed to interest on the Property Value, and
the remaining unamortized balance of the Property Value for each month of the
Initial Term. The attached Exhibit E is a prototype of the Rent/Purchase Price
Schedule. The Rent/Purchase Price Schedule to be prepared after the Rent
Commencement Date shall be in substantially the same form as the prototype, and
shall be substituted for the attached Exhibit E. Notwithstanding the foregoing,
if Lessee and County close on the sale of the Premises pursuant to Lessee's
exercise of the Purchase Option prior to the Rent Commencement Date, the
purchase price for the Property shall be an amount equal to the original
Property Value, and if Lessee and
9
<PAGE> 16
County close on the sale of the Premises during an Extension Term, the purchase
price for the Property shall be Ten Dollars ($10.00).
Failure by Lessee to pay the purchase price and close on the Premises
if and when obligated to do so under the Purchase Agreement shall be a default
under this Lease.
6. RENTAL.
A. Amount.
(1) Initial Term. Subject to the terms and conditions of this
Lease, Lessee shall pay to County an annual base rent equal to twelve (12) times
that monthly amount required to amortize the Property Value over the period
commencing on the Rent Commencement Date and ending upon the expiration of the
Initial Term, at an interest rate (the "Interest Rate") equal to the lesser of
Seven Percent (7%) per annum or the 30-year U.S. Treasury Bond Rate as of the
Rent Commencement Date, which amount is payable in equal monthly installments,
in advance, without set off, deduction or demand, except as set forth in Section
36.D, on the first day of each month beginning on the Rent Commencement Date.
Any payment of annual base rent that is not made within fifteen (15) days after
the due date thereof is subject to a five percent (5%) late fee, which late fee
shall be waived by County twice each year.
(2) Extension Terms. During each of the Extension Terms,
provided that Lessee has exercised the applicable Extension Option, Lessee shall
pay to County an annual base rent of One Dollar ($1.00), which amount is payable
in advance, without set off, deduction or demand, on the first day of each year.
B. Rent Commencement Date. The Rent Commencement Date shall be the
earlier to occur of: (a) the second anniversary of the Lease Commencement Date;
or (b) the date
10
<PAGE> 17
on which the applicable governmental authority issues the use and occupancy
certificate for the Facility. Lessee shall diligently pursue issuance of the use
and occupancy certificate for the Facility. In the event that the use and
occupancy certificate is issued before the second anniversary of the Lease
Commencement Date, and upon appeal is revoked before the second anniversary of
the Lease Commencement Date, all annual base rent shall be abated until the
earlier to occur of the second anniversary of the Lease Commencement Date, or
the issuance of a new use and occupancy certificate.
C. Security Deposit. As of the Lease Commencement Date, Lessee shall
pay to County a security deposit in the amount of Ten Thousand Dollars
($10,000.00), which shall promptly be deposited in an interest-bearing account
by County. The security deposit, and all accrued interest thereon, shall be
applied against the first installment of base annual rent or returned to Lessee
upon earlier termination of this Lease, less any amounts properly withheld by
the County to restore the Premises, to the extent practicable, to a safe
condition in compliance with all laws, ordinary wear and tear and casualty
damage excepted.
D. Additional Rent.
(1) As additional rent hereunder, commencing on the Lease
Commencement Date, Lessee shall pay to the party entitled to receive the same
and discharge as they become due, promptly and before delinquency, all taxes,
assessments, rates, charges, license fees, municipal liens, levies, excises, or
imposts, whether general or special, or ordinary or extraordinary, of every
name, nature and kind whatsoever, including all governmental charges of
whatsoever name, nature, or kind, which may be levied, assessed, charged or
imposed, or which
11
<PAGE> 18
may become a lien or charge on or against the leasehold estate of Lessee, or any
Improvements now or hereafter thereon which may be a subject of taxation, or on
or against County by reason of its ownership of the fee underlying this Lease,
during the Term, excepting income taxes and excess profits, estate, single
business, inheritance, succession, franchise or capital taxes upon County. If
Lessee shall desire to contest any tax, assessment or levy, Lessee may do so,
provided that, if required by law, Lessee shall pay any contested tax,
assessment or levy prior to the date upon which the same becomes due or shall
post bond or other security. The final judgment of a court of competent
jurisdiction that determines the validity and/or amount of any such assessment,
tax or levy shall be conclusive.
(2) Specifically and without in any way limiting the generality of
the foregoing, Lessee shall pay all special assessments and levies or charges
made by any State, municipal or political subdivision for local improvements,
and shall pay the same in cash as they fall due and before they become
delinquent. Lessee must make these payments as they may be required by the act
and proceedings under which any assessments or levies or charges are made by any
State, municipal or political subdivision. If the right is given to pay any such
special assessment or levy either in one sum or in installments, then Lessee may
elect either payment method at its option. If Lessee elects to pay such special
assessment or levy in installments, Lessee shall be liable only for any
installment(s) payable prior to the expiration of the Term. All of the taxes and
charges under this Section shall be prorated among Lessee and County at the
commencement of the Term and expiration of the Term.
12
<PAGE> 19
(3) All rebates on account of any such taxes, rates, levies,
charges, or assessments required to be paid and paid by Lessee under the
provisions hereof shall belong to Lessee.
(4) Additional rent not paid by Lessee as due, and actually paid
by County after Lessee's continued failure to pay the same for fifteen (15) days
after receipt of written notice from County that such payment is overdue, is
subject to a five percent (5%) late fee.
7. GUARANTY OF CONSTRUCTION.
Lessee guarantees to County completion of and payment for the full
construction of the Facility in accordance with the Site Plan and the Plans and
Specifications.
8. FEES AND COSTS OF CONSTRUCTION.
Lessee shall pay all appropriate fees and charges imposed by utility
companies associated with the construction and operation of the Facility and
shall pay all costs of construction.
9. LESSEE'S INSURANCE.
A. Mandatory Insurance Requirements During the Construction Period:
(1) During the period of time between the Lease Commencement Date
and the date on which the use and occupancy certificate is issued for the
Facility (the "Construction Period"), and thereafter whenever and for so long as
construction is resumed, Lessee shall obtain, at its own cost and expense, and
keep in force and effect the following
13
<PAGE> 20
insurance coverages with an insurance company(ies) licensed to do business in
the State of Maryland. Lessee shall provide evidence of coverage by submitting a
certificate of insurance and/or certified copies of the insurance policies
within thirty (30) days after the Lease Commencement Date. Lessee's insurance
shall be primary.
(a) Commercial General Liability: Minimum Five Million Dollars
($5,000,000.00) combined single limit (which may be a combination of commercial
general liability and umbrella and/or excess liability policies) for bodily
injury and property damage coverage per occurrence including the following
coverages: Contractual Liability as afforded by Lessee's commercial general
liability policy; Premises and Operations; Independent Contractors; Products and
Completed Operations; Personal Injury; and Broad Form Property Damage.
(b) Worker's Compensation/Employer's Liability: Meeting all
requirements of Maryland law and with the following minimum limits: (1) Bodily
Injury by Accident - $100,000 each accident; (2) Bodily Injury by Disease -
$500,000 policy limits; and (3) Bodily Injury by Disease -$500,000 each
employee.
(c) Automobile Liability Coverage: Minimum One Million Dollars
($1,000,000.00) combined single limit for bodily injury and property damage
coverage per occurrence including the following: (1) owned automobiles; (2)
hired automobiles and (3) non-owned automobiles.
(d) Builder's All Risk Property Insurance: Lessee shall
provide a Builder's All Risk Property Policy including fire and extended
coverage to protect the interest of County, contractor and sub-contractors
against loss caused by the perils insured in the amount
14
<PAGE> 21
of one hundred percent (100%) of the insurable value of the Facility. The
coverage must be written on a completed value form. The policy shall also
endorse a demolition and debris removal clause, extra expense and loss of use
coverages with a sub-limit of $500,000 per occurrence.
(e) Additional Insured: County shall be named as an additional
insured on all liability policies.
(f) Policy Cancellation: Forty-five (45) days prior written
notice must be provided to County of any cancellation, for other than
non-payment of premium, or material change of any of the policies.
(g) Certificate Holder: County, Department of Public Works and
Transportation, Division of Facilities & Services, 110 North Washington Street,
Rockville, Maryland 20850.
B. Mandatory Insurance Requirements During the Operations Period:
(1) From and after the issuance of the use and occupancy
certificate for the Facility (the "Operations Period"), Lessee shall obtain, at
its own cost and expense, and keep in force and effect during the Term, the
following insurance coverages with an insurance company(ies) licensed to do
business in the State of Maryland. Lessee must provide evidence of coverage by
submitting a certificate of insurance and/or certified copies of the insurance
policies to County within thirty (30) days after the issuance of the use and
occupancy certificate. Lessee's insurance shall be primary.
(a) Commercial General Liability: Minimum Five Million Dollars
($5,000,000.00) combined single limit (which may be a combination of commercial
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general liability and umbrella and/or excess liability policies) for bodily
injury and property damage coverage per occurrence including the following
coverages: Contractual Liability as afforded by Lessee's commercial general
liability policy; Premises and Operations; Independent Contractors; Fire Legal
Liability; and Personal Injury Coverage.
(b) Pollution Liability: If Lessee uses any radioactive
material or process at the Premises, it shall obtain, keep in force and effect,
and provide County with evidence of, a Pollution Liability policy with a minimum
limit of One Million Dollars ($1,000,000.00), to cover liability for discharge,
release or spills of radioactive material occurring as a result of Lessee's
operations on the Premises and the resulting clean-up costs for properties
adjoining the Premises. As an alternative to maintaining Pollution Liability
coverage, Lessee may provide County with a mutually acceptable letter of credit,
payable to County, to cover such exposure.
(c) Worker's Compensation/Employer's Liability: Meeting all
requirements of Maryland law and with the following minimum limits: (1) Bodily
Injury by Accident - $100,000 each accident; (2) Bodily Injury by Disease -
$500,000 policy limits; and (3) Bodily Injury by Disease - $500,000 each
employee.
(d) Automobile Liability Coverage: Minimum One Million Dollars
($1,000,000.00) combined single limit for bodily injury and property damage
coverage per occurrence including the following: (1) owned automobiles; (2)
hired automobiles and (3) non-owned automobiles.
(e) Property Insurance: Lessee shall provide property damage
insurance for the Facility.
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(f) Pollution Clean-up: If Lessee uses any radioactive
material or process at the Premises, it shall obtain, keep in force and effect,
and provide County with evidence of, a Pollution Clean-up policy with a minimum
limit of One Million Dollars ($1,000,000.00), to cover, in the event of
discharge, release or spills of radioactive material occurring as a result of
Lessee's operations on the Premises, the costs of extracting such pollutants
from the Premises and restoring the Premises. As an alternative to maintaining
Pollution Liability coverage, Lessee may provide County with a mutually
acceptable letter of credit, payable to Lessor and County, to cover such
exposure.
(2) Additional Insured: County shall be named as an additional
insured on all liability policies.
(3) Policy Cancellation: Forty-five (45) days prior written
notice must be provided to County of any cancellation, for other than
non-payment of premium, or material change of any of the policies.
(4) Certificate Holder: County, Department of Public Works and
Transportation, Division of Facilities & Services, 110 North Washington Street,
Rockville, Maryland 20850.
C. Lessee may carry any additional coverages required by any lender,
and any lender providing financing shall be named as loss payee under any
coverage required thereunder.
10. INDEMNIFICATION.
A. Except as otherwise provided in this Lease, Lessee, as a material
part of the consideration for County's execution of this Lease, covenants with
County that Lessee shall
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hold County harmless from and against any loss, damage, claim of damage,
liability or expense in connection with loss of life, personal injury and/or
damage to property (collectively, "Claims") arising from or out of an occurrence
upon or at the Premises, or the occupancy and use of the Premises or any part
thereof, or occasioned wholly or in part by any act or omission in or related to
the Life Sciences Center of Lessee, its employees, agents, contractors, tenants,
licensees or invitees, excepting Claims arising out of the acts or omissions of
County, County's agents, County's employees, County's contractors, County's
licensees or County's invitees. In case County shall, without fault on its part,
be made party to any litigation commenced by or against Lessee, Lessee shall
hold County harmless and shall pay all costs, expenses and reasonable attorneys'
fees incurred or paid in connection with such litigation. In no event shall the
limits of any insurance policy provided for herein be deemed to limit Lessee's
liability to County as herein set forth.
B. Subject to the provisions of Sections 36.F (No Waiver of
Governmental Immunity) and 36.G (Limitation of Liability) of this Lease, County,
as a material part of the consideration for Lessee's execution of this Lease,
covenants with Lessee that County shall hold Lessee harmless from and against
any Claims occasioned wholly or in part by any act or omission in or related to
the Life Sciences Center of County, its employees, agents, contractors or
invitees, excepting Claims arising out of the acts or omissions of Lessee,
Lessee's agents, Lessee's employees, Lessee's contractors, Lessee's tenants,
Lessee's licensees or Lessee's invitees. In case Lessee shall, without fault on
its part, be made party to any litigation commenced by or against County, County
shall hold Lessee harmless and shall pay all costs, expenses and reasonable
attorneys' fees incurred or paid in connection with such litigation. The duty to
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indemnify, defend and hold harmless Lessee does not extend to actions of County
in its governmental capacity which permits it to enter the Premises to conduct
inspections and to administer or enforce State and County laws, regulations and
ordinances.
11. LIENS, CLAIMS OR ENCUMBRANCES.
A. Free of Liens. Lessee shall at all times keep the Premises
free and clear of mechanics', materialmen's and other monetary liens caused or
created by Lessee or anyone claiming through or under Lessee, other than the
lien, operation, and effect of such Mortgages as may be necessary from time to
time to effectuate the financing of the Improvements, provided, however, that
the lien, operation, and effect of such Mortgages are subordinate to the lien,
operation, and effect of this Lease. Except with respect to the Purchase Option,
in no event will Lessee or any Leasehold Mortgagee have any rights to acquire
County's fee, nor will any Mortgage encumber County's interest in the fee.
B. Discharge of Lien. If any mechanics', materialmen's or other
monetary lien shall at any time be filed against the Premises for work performed
by or for Lessee, Lessee shall either cause the same to be discharged of record
within thirty (30) days after Lessee's receipt of notice of the filing of the
same or, if Lessee shall desire to contest any such lien, Lessee shall, within
thirty (30) days after the date of the filing of the lien, furnish to County
security in one hundred fifty percent (150%) of the amount of the claim, or
shall procure a bond in said amount from a reputable bonding company. The final
judgment of any court of competent jurisdiction determining the validity and/or
amount of any such lien shall be conclusive.
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C. Failure to Discharge Lien. If Lessee shall fail to discharge
any monetary lien not permitted by this Lease or to provide County with security
therefor or procure a bond therefor as hereinabove provided, then County may at
its option, pay or discharge any such monetary lien, and Lessee shall pay County
all amounts spent by County, including costs, expenses and reasonable attorneys'
fees, incurred by County together with interest at the rate provided in
Section 11-107(a) of the Courts and Judicial Proceedings Article, Annotated Code
of Maryland, as amended, or in the event that such Section is repealed and not
re-enacted, then interest shall be at the prime rate set by Citibank of New York
or its successor, plus one percent (1%), which payment shall constitute
additional rent due hereunder and shall be paid within thirty (30) days after
County provides a reasonably detailed written notice of the additional rent to
Lessee. Nothing herein requires County to pay or discharge any lien. County may
exercise the remedies available in Section 25 of this Lease if the lien is not
paid, discharged or secured as required by this Lease.
12. RIGHT TO CONSTRUCT AND ARCHITECTURAL REVIEW.
A. Submission and Approval of Plans. County grants Lessee the
right to construct a building or buildings on the Premises in accordance with
the Development Plan and the Covenants (as determined by County) and subject to
the following conditions. No building, exterior improvement or addition, or
landscaping shall be erected, placed or altered until plans therefor have been
approved by County. Plans will be reviewed promptly when submitted, and approved
or disapproved within ten (10) business days of submission. If County shall fail
to respond to Lessee's request for approval of plans within such ten (10)
business day period, and shall fail to respond to Lessee's second request for
approval of such plans within five (5) business
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days of such second request, then such plans shall be deemed approved by County.
Any disapproval shall be accompanied by a statement explaining the reasons for
the disapproval. If any plans are disapproved, Lessee shall promptly resubmit
revised plans. To the extent permitted by Section 10-617 of the State Government
Article, Annotated Code of Maryland, County shall keep confidential those plans
and related information submitted by Lessee which have been marked specifically
by Lessee as confidential. Lessee shall provide the following information to
County in four copies for its review and approval prior to (or, where
appropriate, approval, during) construction:
(1) All of the plans, specifications and other information
required by Paragraph II.F.3 of the Development Criteria attached to the
Development Plan as Appendix A; and
(2) All of the plans, specifications and other information
required by Paragraph II.B.1 of the Covenants.
B. Plan Approval is not in Lieu of other Approvals/Permits.
The architectural review and approval described in this Section does not alter,
replace, or in any way substitute for or constitute approval in lieu of other
permits, approvals or authorizations required in the normal building or
construction process.
C. No Monetary Liability for Approval of Plans. Neither County
nor any employee or agent thereof shall be liable for monetary damages to any
occupant or lessee or to anyone submitting plans or requests for approval, or to
any other party by reason of mistake in judgment, negligence, or nonfeasance,
arising out of or in connection with the approval, disapproval or failure to
approve any such plans or requests or for any other action in connection
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with its or their duties hereunder. Likewise, anyone so submitting plans to
County for approval, by submitting such plans or requests, and any person when
he becomes an occupant or lessee, agrees that he or it will not bring any action
or suit to recover any monetary damages against County or any employee or agent
of County for such approval or disapproval. Any approval of plans by County
shall not constitute a representation by County that such approved drawings
comply with applicable building codes. Any deficiency in design or construction,
although same had prior approval of County, shall be solely the responsibility
of Lessee. Notwithstanding anything to the contrary in this Lease, the terms of
the foregoing paragraph shall apply to County solely in its capacity as owner
and lessor of the Property and grantor of use rights, and not in its
governmental capacity. The foregoing sentence shall not be construed as a waiver
of any defenses, including immunity, available to the County in its governmental
capacity.
D. Coordination of Plans. Any amendments, supplements or
additions to the approved plans, specifications and construction schedules for
all Life Sciences Center construction (including but not limited to roads and
utilities, but excluding interior alterations) shall be provided to and
coordinated with representatives of County and Lessee's architect (or the
architect of Lessee's subtenant or sub-subtenant), and must be reviewed by the
Architectural Review Committee of the Life Sciences Center and approved by
County.
13. CONSTRAINTS.
During the Operations Period, Lessee's use of the Premises is
subject to the following permitted uses and performance standards:
A. No Nuisance. No activity shall be conducted nor shall
anything be done on the Premises which may be or become a material nuisance to
County, general public, or any
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lessee by reason of unsightliness or the excessive emission of fumes, odors,
glare, vibration, gasses, radiation, dust, waste, smoke or noise.
B. Notice of Toxic and Hazardous Materials. Lessee shall
provide County with a copy of: (a) each notification or other document it is
required to submit to the State Emergency Response Commission under Sections 311
and 312 of the Superfund Amendments and Reauthorization Act of 1986 and any
amendments thereto; and (b) each annual report it is required to submit to the
Maryland Department of the Environment under COMAR 26.13.03.06 and any
amendments thereto. Lessee shall store, manage, and dispose of all toxic,
hazardous and radioactive materials in accordance with applicable laws and
regulations.
C. Indemnification. During the Term, Lessee hereby agrees to
indemnify and hold County harmless, except in the case of the negligence or
intentional misconduct of County or its agents, employees, or contractors, with
regard to any Claims arising from or out of a breach of Lessee's obligations
under Section 13.B concerning toxic and hazardous materials, radioactive
materials, controlled substances and medical waste, including but not limited
to, reasonable counsel fees, court costs, litigation related expenses, expenses
for legally required clean up, enforcement expenses, and consequential damages
to the Premises and/or the remaining portion of the Shady Grove Life Sciences
Center resulting from the use or storage of the referenced materials on the
Premises.
D. Outdoors Activities. All of the operations normally carried
on indoors shall be carried on within fully enclosed buildings. No outside
activities shall be carried on, except for incidental meetings or events held
outside in non-inclement weather and the parking of motor vehicles and the
loading and unloading of motor vehicles and approved recreational
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activities, without the prior approval of County. This paragraph shall not be
deemed to prohibit therapy and types of exercise normally carried on outdoors.
E. Building Sites. Building sites shall be used only as
approved by County in granting this Lease and approved by County through its
Development Plan and its architectural review, and in accordance with applicable
law.
14. BUILDING CONSTRUCTION AND ALTERATIONS.
A. Building Codes. Lessee agrees that construction or
alterations of any building shall be in conformance with the then existing
applicable standards, codes and ordinances.
B. Cleaning of Premises. During the Construction Period,
Lessee agrees that all building sites shall be kept clean on a daily basis and
all trash, rubbish and debris removed therefrom after any construction work is
performed thereon.
C. Premises "As Is". Lessee has leased the Premises in an "as
is" condition after an examination thereof and of the sub-surface conditions
beneath the same and without any representation or warranty on the part of
County.
15. LANDSCAPING. OUTSIDE STORAGE AND MAINTENANCE. Lessee agrees
that it will adhere to the following requirements.
A. Landscaping. Landscaping shall be in accordance with the
plan submitted to and approved in writing by County in accordance with Section
12.A.. Such landscaping shall include sodding, planting of trees, shrubs, and
other customary landscaping treatment for the entire Premises, including
adequate screening of parking areas. The approved plan for
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landscaping may not be materially altered without submitting the revised plan
for written approval of County.
B. Maintenance of Landscaping. Maintenance of existing and
approved landscaping shall include keeping the lawns mowed and the hedges
trimmed, and the watering and removal of weeds from planted areas, all as needed
to maintain the Premises in a neat, clean and safe condition and appearance, as
is customary for other parcels within the Shady Grove Life Sciences Center.
C. Screening of Storage Areas. Except during construction, no
materials, supplies, equipment, vehicles (except in designated areas), finished
products or semi-finished products, furniture, furnishings, raw materials, or
other articles of any nature shall be stored or permitted to remain on the
exterior of any building site without appropriate screening to be approved by
County.
D. Storage of Fuel Oil, etc. Except during construction, or as
approved by County, permanent storage facilities for fuel oil, other bulk fluids
or gasses, such as bulk oxygen systems, must be provided below grade. If below
grade storage is technically infeasible or economically prohibitive, Lessee may
store these materials above grade provided suitable screening is furnished by
Lessee and approved by County. At all times, such materials must be stored in an
environmentally safe manner, pursuant to applicable Federal, State and local
laws and regulations.
E. Safe conditions. Lessee shall keep the Premises,
Improvements, and appurtenances in a safe, clean and neat condition, and shall
comply in all respects with all government health and policy requirements.
Lessee shall remove at its own expense any rubbish,
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garbage or trash of any character which may accumulate from or on the Premises.
Rubbish, trash and garbage shall be kept in a sanitary manner inside buildings.
F. Vacant Buildings. Vacant or unfinished buildings, or parts
thereof, shall be adequately secured against vandalism and intrusion by
trespassers.
16. UTILITY CONNECTIONS.
Lessee agrees that, except for emergency electricity
generators and satellite receiving transmission dishes, all electrical and
telephone connections and installations of wires to buildings shall be made
underground to the extent reasonably possible. Where reasonably possible each
transformer, electric, gas or other meter of any type, or other apparatus, shall
be placed on or below the surface of the land, or in structures, and where
placed on the surface shall be adequately screened and fenced, and all such
installations shall be subject to the prior written approval of County.
Notwithstanding the foregoing, County agrees that Lessee may place exhaust fans,
duct work, package HVAC units, satellite dishes and other equipment on the
screened area of the roof of the Facility. Lessee shall pay the costs of all
necessary utility connections.
17. SIGNS OR MONUMENTS.
A. Defined. For the purpose of this paragraph, a sign or
monument is the display of any words, numerals, figures, devices, designs or
trademarks by which anything is made known and visible to the general public.
B. Approval of Plans. Lessee agrees that all plans and
specifications for signs or monuments to be erected on the exterior of the
building or grounds and visible to the general public shall be subject to the
prior written approval of County. The submitted
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information shall include details of design, materials, location, color and
lighting, if any. Lessee may, subject to prior written approval of County, place
appropriate markers and directional signs on County's property outside of the
Premises, which shall be in keeping with the character and nature of Lessee's
operations.
C. Construction Signs. During any construction or
reconstruction of improvements on the Premises, County agrees to allow any
lender, contractor, developer or other participant in such construction or
reconstruction to place a temporary sign publicizing its participation in the
financing, construction or reconstruction of the Facility, subject to such
reasonable requirements as may be imposed by County, and subject to applicable
ordinances.
18. PARKING AREAS AND LOADING ZONES.
A. Parking Facilities. Lessee shall provide adequate paved
off-street surface parking facilities for visitors, tenants, customers, and
employees as required by zoning regulations unless otherwise legally waived by
the proper authority. The development of common or jointly shared parking
facilities is encouraged and should be undertaken whenever possible. No parking
shall be permitted on any access road, street or driveway, either public or
private, or any place other than a paved parking space provided for and so
designated. Lessee shall be responsible for taking reasonable measures to ensure
compliance with parking regulations by its employees, tenants and visitors.
B. Loading and Unloading Areas. Lessee agrees that loading and
unloading areas shall be designed with adequate maneuvering space to permit
pickups and deliveries. The space for maneuvering of vehicles shall avoid
interference with other traffic flow. Suitable
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screening shall be provided so these operations are not readily visible from
ground-level public thoroughfares. Loading and receiving areas shall not be
located on that side of the building which also contains its main entrance.
19. TEMPORARY STRUCTURES.
Lessee agrees that no structure, covering, garage, barn, or
other outbuilding of a temporary nature shall be situated, erected or maintained
on any part of the Premises except with prior approval of County and in
compliance with applicable zoning ordinances. This paragraph shall not apply to
construction buildings, construction trailers, storage facilities and/or other
structures of a temporary nature used in construction, used during the course of
construction of any permanent building which is now on or is to be located on
the Premises; provided, however, that any such buildings, trailers, facilities
or other structures shall be in compliance with any applicable zoning
ordinances.
County hereby approves Lessee's installation and use of
temporary facilities on the Premises, subject to applicable zoning ordinances
and receipt of any necessary governmental approvals, and provided that any such
temporary facility shall be kept on the Premises only for the period, not to
exceed two (2) years, during which Lessee is constructing or building out space
on the Premises into which the business conducted in such temporary facility
will be moved.
20. MAINTENANCE OF PROPERTY.
A. Lessee's Obligation. Lessee shall at all times maintain and
repair the Premises at Lessee's expense. Lessee must submit, for approval by
County, all maintenance and repair plans and amendments thereto for maintenance
and repairs to building exteriors, landscaping, fences, drives, parking lots,
and the exteriors of other structures located thereon,
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which maintenance or repairs materially alter the condition of the Premises
which existed prior to the need for such maintenance or repair arising.
B. County's Right, but not Obligation to Repair. In the event
of the violation of any of the restrictions set forth in Sections 13 through 20
herein by Lessee, County shall notify Lessee in writing, giving specifics as to
the nature of the alleged violation and any recommended remedial action. In the
event Lessee has not taken steps to remedy the violation in a manner reasonably
acceptable to County within thirty (30) days after Lessee's receipt of such
notice, County shall have the right to enter upon the Premises to put the same
in good order, condition and repair and all costs associated with any such work
shall be charged against Lessee as additional rent payable within thirty (30)
days after invoice, which shall include reasonable details of the costs charged
as additional rent.
C. County's Maintenance. Subject to appropriation of funding,
County shall maintain in good order and condition all parcels within the Shady
Grove Life Sciences Center that have not been leased or that are unoccupied.
County further agrees to be responsible for making all necessary arrangements
for the maintenance and repair of the Common Areas (as defined in Section 24.A).
This provision shall survive the exercise of the Purchase Option and the
conveyance of the Premises to Lessee.
21. COOPERATIVE MAINTENANCE AGREEMENT AND COMMON AREA CHARGES.
A. Maintenance Agreement. A maintenance agreement between
County and Lessee or among lessees of the Shady Grove Life Sciences Center may
be established for the purpose of maintaining the Common Areas. No such
agreement shall discharge or relieve Lessee
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of its responsibilities under the terms and conditions of this Lease. All such
maintenance agreements shall be subject to the approval of County.
B. Common Area Contribution. Within thirty (30) days after
receipt of a reasonably itemized invoice, for each year during the Term, Lessee
agrees to pay as additional rent to County, Lessee's pro rata share, for the
purpose of reimbursing County for the actual costs of its care and maintenance
of the Common Areas within the Shady Grove Life Sciences Center that do not form
a part of the Premises. Such costs shall not include the costs of constructing,
replacing, or installing roads, parking areas, utilities, or related
infrastructure (e.g. the power plant) located within the Shady Grove Life
Sciences Center. Lessee's pro rata share shall be a fraction, the numerator of
which is 8.4 acres and the denominator of which is 220 acres. Based upon this
formula, Lessee's pro rata share, expressed as a percentage, is 3.82%. County
represents and warrants to Lessee that all of the occupants of the Shady Grove
Life Sciences Center, except Shady Grove Adventist Hospital (Parcel 1A),
Ambulatory Care I (Parcel 2A), Ambulatory Care II (Parcel 2B), Charter
Behavioral Health System of Maryland at Potomac Ridge, LLC (Parcels 3A and 3B),
and University of Maryland Systems, are required to pay for Common Area
maintenance and care as described in this Section 21.B.
C. Storm Water Management. Lessee will provide for the safe
conveyance of storm water from the Premises in accordance with County's rules
and regulations regarding storm water management.
22. UTILITY SERVICE AND ACCESS.
A. County has provided for water, sewer, gas, electricity, and
telephone service to the Premises. All meters, connecting charges and all
outlets, risers, wiring, piping,
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duct work or other means of distribution of such services within the Premises of
Lessee shall be supplied by Lessee at Lessee's expense. Lessee covenants and
agrees that at all times its use of any of such services shall never exceed the
capacity of the mains, feeders, ducts and conduits bringing same to the Premises
or of the outlets, risers, wiring, piping, duct work or other means of
distribution of such service within the Premises if such means of distribution
shall have been installed by County. Lessee may increase the capacity of the
mains, feeders, ducts, and conduits if Lessee pays for and performs all
necessary work therefor, and has obtained County's approval in writing. Such
work performed by Lessee shall be at no increased expense or cost to County in
any manner whatsoever. Other than the matters provided above, Lessee shall
furnish and pay for installation and use of all utilities, including but not
limited to fuel, gas, electricity, water, sewer charges, telephone and the
necessary equipment therefor within the Premises. Lessee shall construct, at its
own expense, the water and sanitary sewer lines to connect the Improvements.
23. ACCESS BY COUNTY AND EASEMENT.
A. Access to Maintain Pipes. In the event Lessee fails to do
so within thirty (30) days after written notice from County, Lessee shall permit
County, at Lessee's expense, and subject to the provisions of this paragraph, to
repair and maintain all pipes and conduits in and through the Premises that
Lessee is required to maintain. County or its agent shall have the right to
enter upon the Premises at all reasonable times and upon at least forty-eight
(48) hours' notice except in case of an emergency to examine same and to make
such repairs, alterations, improvements or additions to same as may be required
of County pursuant hereto, and County shall be allowed to take all material into
and upon said Premises that may be required therefor
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without the same constituting an eviction of Lessee, in whole or in part. In
case of an emergency, County shall give such notice to Lessee as is reasonable
under the circumstances.
B. Reservation of Easements. County reserves the right,
consistent with the Development Plan, Covenants and with the Plans and
Specifications, to establish easements and/or rights-of-way, for streets, roads,
underground utilities, and other related purposes, in order to facilitate
development of the Life Science Center. Such easements or rights-of-way shall
not interfere with the use, operations, or maintenance of, or materially
adversely affect the value of, the Property.
C. Accommodation of Lessee. County shall use reasonable
efforts to minimize the interference with business activities on the Premises
when exercising County's rights pursuant to this Section.
24. COMMON AREAS.
A. Lessee's Non-exclusive Right to Use. County hereby grants
to Lessee a non-exclusive right to use: (i) the public conveniences and common
areas, if any, in the Life Sciences Center; and (ii) all other areas in the Life
Sciences Center such as sidewalks, roads and driveways, to be used in common by
lessees of the Life Sciences Center, ((i) and (ii) collectively referred to and
identified for use as "Common Areas").
B. County's Right to Make Changes to Common Areas. County
reserves the right to construct buildings and to make changes, additions,
alterations or improvements on or to the Common Areas; provided, however, that
such activity does not cause an obstruction of the access to the Premises, any
unreasonable interference with the permitted uses of the Premises, or a material
adverse effect on the value of the Premises.
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25. ENFORCEMENT.
A. Lease for the Benefit of Parties. The provisions of this
Lease shall run for the Term of this Lease (including any Extension Terms) and
be binding upon and inure to the benefit of County and Lessee and Lessee's
successors and assigns. These provisions shall be enforced, as provided
hereinafter, by County or by Lessee for their respective benefit or protection.
B. Remedies. A violation of any provision herein contained
shall give to County or Lessee the right to bring proceedings in a court of
competent jurisdiction against the party or parties violating or attempting to
violate any of said covenants, conditions, restrictions and reservations, to
enjoin them from so doing, to cause any violation to be remedied, and/or to
recover damages resulting from such violation. In addition, violation of any
covenants, conditions, restrictions, and reservations shall give to County the
right to enter upon the Premises to remove, at the expense of Lessee, any
structure, thing or condition that may be contrary to the provisions hereof
after providing Lessee's subtenant and sub-subtenant and any Leasehold
Mortgagee, if any, with written notice of the violation and providing not less
than thirty (30) days in which to cure the alleged violation, which cure period
shall be extended for so long as may be reasonably necessary to cure such
violation, so long as Lessee, Lessee's subtenant or sub-subtenant or any
Leasehold Mortgagee proceeds diligently to effect such cure after receipt of
County's notice. In any judicial proceeding to enforce the provisions hereof or
to enjoin their violation, the prevailing party or parties shall be entitled to
reasonable attorneys' fees from the party or parties against whom judgment is
entered in such amount as may be fixed by the court in such proceedings. Such
remedies shall be cumulative and not exclusive.
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C. Default. Lessee's violation of any of the provisions of
Section 6 requiring Lessee to pay annual base rent and additional rent, Section
7 requiring Lessee to complete and pay for the full construction of the
Facility, or Section 9 requiring Lessee to maintain and provide County with
evidence of the insurance coverages set forth therein, or Lessee's use of the
Premises for any use other than those permitted by the Covenants, shall, at
County's option, be deemed to create a default under this Lease and to give rise
to the right of termination or eviction, or any other remedy provided by law,
provided that said violation has not been cured within thirty (30) days after
written notice has been given to Lessee, Lessee's subtenant and sub-subtenant
and any Leasehold Mortgagee, and further provided that Lessee, Lessee's
subtenant or sub-subtenant or any Leasehold Mortgagee has not taken steps to
remedy said violation in a manner reasonably acceptable to County within said
thirty (30) days after the written notice or has not thereafter diligently
proceeded to complete the remedying of such violation, and further provided that
Lessee's subtenant or sub-subtenant has not cured such violation within a
reasonable time after receipt of the second default notice described in Section
29. Lessee's material violation of any of the other provisions set forth herein
shall, at County's option, be deemed to create a default under this Lease but
shall not in any event give rise to the right of termination or eviction;
provided, however, that such default shall give rise to any other remedy
provided by law, provided that said violation has not been cured within thirty
(30) days after written notice has been given to Lessee, Lessee's subtenant and
sub-subtenant and any Leasehold Mortgagee, and further provided that Lessee,
Lessee's subtenant or sub-subtenant or any Leasehold Mortgagee has not taken
steps to remedy said violation in a manner reasonably acceptable to County
within said thirty (30) days after the written notice or has not thereafter
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diligently proceeded to complete the remedying of such violation, and further
provided that Lessee's subtenant or sub-subtenant has not cured such violation
within a reasonable time after receipt of the second default notice described in
Section 29.
D. No Subordination. Notwithstanding any other provision
herein, the parties hereto agree that this Lease shall not be subordinated to
the terms of financing or the financing entity or to any other instrument,
individual or entity.
E. Bankruptcy. Lessee agrees that it shall be a default of
this Lease if Lessee is (i) voluntarily placed into bankruptcy for purposes of
liquidation or (ii) involuntarily placed into bankruptcy for purposes of
liquidation and such bankruptcy proceeding is not dismissed within one hundred
fifty (150) days. In the event that Lessee is placed into bankruptcy for the
purpose of reorganization or rehabilitation, County and Lessee agree that it
shall be a default of this Lease only if such bankruptcy proceeding reduces the
amount of rent to be paid by Lessee; or Lessee has failed to pay the rent in
accordance with Section 6 of this Lease. Upon default of this Lease, County and
Lessee retain their respective remedies and cure rights set forth in this Lease.
26. EXPIRATION.
A. Surrender of Improvements. At the expiration or earlier
termination of the Term, all buildings, alterations, additions or improvements
then upon the Premises shall become the property of County and remain upon and
be surrendered with the Premises as a part thereof.
B. Removal of Trade Fixtures. All trade fixtures, furnishings
and equipment, whether or not they are or may be deemed to constitute part of
the Improvements may be removed by Lessee, at its sole option. Lessee, at its
expense, shall immediately repair any
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damage to the Premises or Improvements by reason of removal of any such trade
fixture, furnishings and equipment. If County elects to enter thereon and take
possession at the termination of this Lease, all repairs not previously made, at
the option of County, may be corrected at the expense of Lessee, normal wear and
tear excepted.
27. TENANT HOLDING OVER.
If Lessee shall not immediately surrender possession of the
Premises at the expiration or termination of this Lease, County shall be
entitled to retake or recover possession of the Premises as hereinbefore
provided in case of expiration or termination on the part of Lessee and have
available to it any and all other remedies available by law. If Lessee shall
fail to surrender possession of the Premises immediately upon the expiration of
the Term, Lessee hereby agrees that all the rights and obligations of Lessee and
County applicable during the Term shall be equally applicable during such period
of subsequent occupancy, except that Lessee shall pay fair market rental during
the holdover tenancy. The determination of the fair market rental shall be
determined by an independent appraisal by an appraiser who is selected jointly
by County and Lessee.
28. MORTGAGE OF LESSEE'S LEASEHOLD INTEREST.
A. Notice of Default under Mortgage or Lease. Lessee shall
have the right at any time and from time to time to mortgage this Lease and/or
assign or hypothecate Lessee's interest in this Lease and/or in the Improvements
as security for a loan, provided that this Lease is not subordinated to the
terms of any assignment or Mortgage. Any subtenant or sub-subtenant (but no
tenant of any sub-subtenant) of Lessee shall have the right at any time and from
time to
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time to mortgage its sublease and/or assign or hypothecate its interest in such
sublease and/or in the Improvements as security for a loan, and Lessee may
subordinate its interest in such sublease to the terms of any such assignment or
mortgage, provided that this Lease is not subordinated to the terms of any
assignment or Mortgage.
B. Leasehold Mortgagee Right to Notice and Cure. Any Leasehold
Mortgagee with respect to which County has received a written notice specifying
the name and address of such Leasehold Mortgagee, shall be given (by personal
delivery or by certified mail, return receipt requested) by County a copy of
each notice of default by Lessee or other notice or demand to or upon Lessee, at
the same time as and whenever such notice of default or other notice or demand
shall thereafter be given by County to Lessee, addressed to such Leasehold
Mortgagee at the address last furnished to County. No notice of a default by
Lessee or demand upon Lessee shall be deemed to have been given by County to
Lessee unless and until a copy thereof shall have been given to each Leasehold
Mortgagee with respect to which County has been notified. County will accept
performance by any such Leasehold Mortgagee of any covenant, condition or
agreement on Lessee's part to be performed hereunder with the same force and
effect as though performed by Lessee, and any Leasehold Mortgagee which performs
any covenant, condition or agreement shall be subrogated to any and all rights
of Lessee with respect thereto. Nothing contained in this Lease shall obligate
any Leasehold Mortgagee to cure any default of Lessee under this Lease or
constitute an assumption by any Leasehold Mortgagee of the obligations of Lessee
under this Lease.
C. Leasehold Mortgagee as Holder of Lessee's Interest. A
Leasehold Mortgagee may become the legal owner and holder of Lessee's interest
under this Lease by
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foreclosure of its Mortgage, or as a result of the assignment of this Lease in
lieu of foreclosure, whereupon (but in no event before becoming such legal owner
or holder) such Leasehold Mortgagee shall immediately become and remain liable
under this Lease, so long as (but no longer than) such Leasehold Mortgagee is
entitled to possession of the Premises.
D. Certain Restrictions During Leasehold Mortgage. So long as
any Mortgage is in existence, and no default exists hereunder which has not been
cured (by Lessee, any Leasehold Mortgagee or any Subtenant, as defined herein)
within the period of time provided herein, County shall not accept a surrender
of the Premises or a termination or modification of this Lease, prior to the
expiration of this Lease, without the prior written consent of all Leasehold
Mortgagees (of whom County has received prior written notice). Any right or
remedy which permits Lessee to terminate this Lease shall be conditioned on the
written consent to such termination by all Leasehold Mortgagees.
E. New Financing. In the event any Leasehold Mortgagee
requires, as a condition of providing financing, that modifications to this
Lease be obtained, and provided that such modifications do not, in County's
reasonable judgment, unreasonably increase County's obligations or reduce
County's rights under this Lease, then Lessee shall submit to County a written
amendment to this Lease incorporating such required modifications, and County
shall execute such amendment and deliver the same to Lessee within thirty (30)
days after receipt of such amendment.
F. Assignment by Leasehold Mortgagee. Any party, including a
Leasehold Mortgagee or the assignee of such Leasehold Mortgagee, that becomes
the owner of or acquires any interest in this Lease pursuant to foreclosure and
sale or by assignment in lieu of foreclosure,
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may sell, assign, transfer or otherwise dispose of this Lease or its interest in
this Lease without the consent of County. All rights and references herein to a
Leasehold Mortgagee, shall be read to include the assignee of such Leasehold
Mortgagee. Notice of any such assignment shall be given to County.
G. Notice of Mortgages. Lessee shall give County notice of any
recorded mortgages or liens upon Lessee's leasehold interest in the Premises in
connection with the financing of the Premises.
29. SUCCESSORS AND ASSIGNS; SUBLEASING.
County acknowledges that Lessee intends to enter into a
sublease with BPG Industrial Partners II, LLC, for a portion of the Premises,
and that BPG Industrial Partners II, LLC intends to sub-sublease such portion of
the Premises to Lessee's wholly-owned subsidiary, MAGENTA Corporation. County
hereby consents to such sublease and such sub-sublease. Lessee shall have the
right, without the consent of the County, to assign this Lease to, or enter into
a sublease with, or permit BPG Industrial Partners II, LLC or any other
subtenant of Lessee to assign its sublease to, or enter into a sub-sublease with
(i) any entity which controls, is controlled by or is under common control with,
Lessee for any use allowed by the Covenants, or (ii) any other party for any
manufacturing and industrial use allowed by the Covenants. Lessee shall not
assign this Lease to, or enter into a sublease with, or permit BPG Industrial
Partners II, LLC or any other subtenant of Lessee to assign its sublease to, or
enter into a sub-sublease with any party other than an entity which controls, is
controlled by or is under common control with, Lessee for any use other than a
manufacturing and industrial use allowed by the Covenants, without the consent
of County, which shall not be unreasonably withheld, conditioned or
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delayed. Any sub-subtenant shall have the right to sublease all or any portion
of its subleased premises without the necessity of obtaining the County's
consent, provided that such sub-sub-sublease is subject to the use restrictions
set forth in this paragraph. No assignment or subletting shall be deemed to
release Lessee from its obligations under this Lease.
Any subtenant or sub-subtenant (each a "Subtenant", which term
does not include any tenant of a sub-subtenant) of Lessee, with respect to which
County has received a written notice specifying the name and address of such
Subtenant, shall be given by County a copy of each notice of default by Lessee
or other notice or demand to or upon Lessee, at the same time and in the same
manner as and whenever such notice of default or other notice or demand shall
thereafter be given by County to Lessee, addressed to such Subtenant at the
address last furnished to County. No notice of a default by Lessee shall be
deemed to have been given by County to Lessee unless and until a copy thereof
shall have been given to each Subtenant with respect to which County has been
notified. In the event that Lessee receives notice from the County of a default
by Lessee and such default is not cured by Lessee pursuant to the provisions of
this Lease, County shall, prior to commencing any judicial proceedings or taking
any other action, including ejectment or dispossession proceedings, to obtain
possession of the Premises, in addition to giving the notice to each Subtenant,
give a second notice of the failure of Lessee to cure such default to each
Subtenant at the expiration of the period within which Lessee may cure as set
forth in this Lease, and the Subtenant may proceed to cure any such failure.
County will accept performance by any such Subtenant of any covenant, condition
or agreement on Lessee's part to be performed hereunder with the same force and
effect as though performed by Lessee, whether or not Lessee is in default under
this Lease at the time of such performance. Any
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Subtenant which performs any covenant, condition or agreement shall be
subrogated to any and all rights of Lessee with respect thereto. Nothing
contained in this Lease shall obligate any Subtenant to cure any default of
Lessee under this Lease or constitute an assumption by any Subtenant of the
obligations of Lessee under this Lease.
County and Lessee agree that all of the terms, covenants and
conditions, agreements, rights, privileges, obligations and duties contained in
this Lease shall be construed to be covenants running with the land, and all
rights and liabilities herein given to, or imposed upon, the respective parties
hereto shall extend to and bind the respective successors and assigns of said
parties; and if Lessee shall be comprised of more than one individual or entity,
they shall all be bound jointly and severally by the terms, covenants and
agreements herein.
So long as any sublease or sub-sublease is in effect, and no
default exists hereunder which has not been cured (by Lessee, any Subtenant or
any Leasehold Mortgagee) within the period of time provided herein, County shall
not accept a surrender of the Premises or a termination or modification of this
Lease, prior to the expiration of this Lease, without the prior written consent
of all Subtenants (of whom County has received prior written notice). Any right
or remedy which is expressly granted in this Lease allowing Lessee to terminate
this Lease shall be conditioned on the written consent to such termination by
all Subtenants.
County agrees that in the event this Lease is terminated,
County will not disturb the rights of any Subtenant, so long as (i) such
Subtenant complies with all of the material terms of its sublease or
sub-sublease, as applicable, and (ii) such sublease or sub-sublease, as
applicable, is expressly subject to this Lease; and County in the exercise of
its rights and remedies under this Lease shall not deprive any such Subtenant of
possession or occupancy of
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the area of the Premises, or portion thereof, covered by its sublease or
sub-sublease, as applicable, during the term thereof or join any such Subtenant
as a party in any action or proceeding to enforce or terminate this Lease or
obtain possession of said area for any reason. The provisions of this paragraph
shall be self-executing but County, upon request by Lessee or any Subtenant,
agrees to execute additional documentation to effectuate the provisions of this
paragraph.
30. QUIET ENJOYMENT, TITLE TO LAND AND IMPROVEMENTS.
A. Quiet Enjoyment. Upon payment by Lessee of the rents herein
provided and upon the observance and performance of all covenants, terms and
conditions on Lessee's part to be observed and performed, Lessee shall peaceably
and quietly hold and enjoy the Premises for the term hereby demised without
hindrance or interruption by County or any other person or persons lawfully or
equitably claiming by, through or under County, subject to the terms and
conditions of this Lease.
B. Title. County represents that it owns the Premises in fee
simple, and that, except for the Covenants and the Development Plan, there is no
encumbrance upon the Premises that is superior to this Lease or that would
adversely affect the use or value of the Premises. County covenants that it
shall not at any time hereafter (except for a sale of the fee simple interest to
Lessee as referred to herein) convey or sell any interest of County in the
Premises unless such conveyance or sale is made subject to this Lease and any
Leasehold Mortgage. County further represents that it has the right to make this
Lease and covenants that it will execute or procure any further necessary
assurances of title that may be reasonably required for the protection of
Lessee. County and Lessee each represent to the other that it has the full
right,
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power, and authority to enter into this Lease for the Term and that the Premises
may be used by Lessee during the Term for the purposes herein set forth provided
Lessee conforms to the provisions of this Lease and all applicable laws and
regulations. Without limiting the generality of the foregoing, County shall
execute and deliver to Lessee (or to any Leasehold Mortgage), within forty-five
(45) days after request therefor, an Estoppel Certificate and Consent in
substantially the form of Exhibit F attached hereto and made a part hereof. As
consideration for the execution of this Lease, County acknowledges that Lessee,
or any subtenant or sub-subtenant of the Lessee, shall hold title to all of the
Improvements as long as this Lease is in effect.
31. SURRENDER - WAIVER AND AMENDMENT.
No agreement to amend or to accept a surrender of this Lease
or a waiver of either party's obligations hereunder shall be valid unless in
writing signed by County and Lessee. No employee of County or its agent shall
have any power to accept the keys of the Premises prior to the termination of
this Lease. The delivery of keys to any employee of County or its agent shall
not operate as a termination of this Lease or a surrender of the Premises. The
failure of any party to seek redress for violation of, or to insist upon the
strict performance of any covenant or condition of this Lease, shall not prevent
a subsequent act, which would have originally constituted a violation of this
Lease from having all the force and effect of an original violation of this
Lease. The receipt and acceptance by County of rent with knowledge of the breach
of any condition or covenant of this Lease shall not be deemed a waiver of such
breach. The right to enforce any such condition or covenant is in the sole
jurisdiction of County. The failure by either party to enforce any of the
conditions or covenants set forth herein or hereinafter
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adopted, against the other or against any other lessee in the Life Sciences
Center, shall not be deemed a waiver of any such conditions or covenants.
32. NON-DISCRIMINATION IN EMPLOYMENT AND SERVICES.
Lessee agrees to comply with the non-discrimination in
employment policies in County contracts as required by Section 11B-33 and
Section 27-19 of the Montgomery County Code 1994, as amended, as well as all
other applicable state and federal laws regarding employment discrimination.
33. DISPUTES.
A. Mediation of Disputes. Except as otherwise set forth in
subparagraph B of this Paragraph 33, any claim or controversy arising out of or
relating to this Lease, or the breach thereof, may, at the option of either
party hereto, be submitted to mediation under mediation rules to be mutually
agreed upon. The party electing mediation shall initiate the mediation by filing
a request for mediation with the other party. The parties agree as follows with
respect to such mediation:
(i) The cost of the mediation, including the cost of the
mediator, shall be borne equally by the parties;
(ii) Mediation shall occur in Montgomery County, Maryland,
at a time and location to be designated by the mediator;
(iii) In the mediation sessions, the parties shall endeavor
in good faith to resolve the claim or controversy at issue;
(iv) Any party or the mediator shall have the right to
terminate the mediation at any time after the first mediation session; and
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(v) Neither party may make any disclosure of the existence
or results of the mediation without the prior written consent of the other
party. The mediator may not make any disclosure of the existence or results of
the mediation without the prior written consent of both parties. No discussions
in the mediation shall be admissible in any litigation between the parties, and
the mediator shall not be subject to subpoena to testify to any communication
between the mediator and either party.
B. Exceptions. County shall not be required to mediate any
default or breach of this Lease which entitles County, under this Lease, to
terminate this Lease. If Lessee desires to mediate the issue of whether it is
responsible for the payment of any rental or other amount or the performance of
any material obligation claimed by County to be then due or overdue under this
Lease, County may require, as a condition of agreeing to mediate such issue,
that Lessee pay such disputed rental or other amount or perform such disputed
obligation prior to the commencement of the mediation. Either party may seek
injunctive relief from a court pending the outcome of any mediation.
34. CONTRACT SOLICITATION.
Lessee represents that Lessee has not retained anyone to
solicit or secure this Lease from Montgomery County, Maryland, upon an agreement
or understanding for a commission, percentage, brokerage or contingent fee,
excepting for bona fide employees or bona fide established commercial, selling
or leasing agencies retained by Lessee for the purpose of securing business or
an attorney rendering professional legal services consistent with applicable
canons of ethics.
35. PUBLIC EMPLOYMENT.
Lessee understands that unless authorized under Section 1lB-52
and Chapter 19A of the Montgomery County Code 1994, as amended, it is unlawful
for any person transacting
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business with County to employ a public employee for employment contemporaneous
with his or her public employment.
36. GOVERNING LAW, SEVERABILITY, CASUALTY, CONDEMNATION AND
COMPLIANCE.
A. Governing Law. This Lease shall be construed and governed
by the laws of the State of Maryland wherein the Premises and the Shady Grove
Life Sciences Center are located. Should any provisions of this Lease and/or of
its conditions be deemed illegal or not enforceable under the laws of the said
jurisdiction, it or they shall be considered severable, and the balance of this
Lease and its conditions shall remain in force and be binding upon the parties
as though such provisions had never been included.
B. Lease not Redeemable. The purpose of this Lease is not
primarily residential and shall not be redeemable as provided in Section 8-110
of the Real Property Article, Annotated Code of Maryland.
C. Casualty Damage. In the event the Facility or other
Improvements shall be damaged or destroyed by fire or other casualty, Lessee, at
its option and at its sole cost and expense, shall either repair, reconstruct or
replace the Improvements or portion thereof so damaged or destroyed (whichever
is reasonably required), or demolish the Facility and other Improvements and
restore the Premises to a safe and orderly condition in compliance with all
laws. This Lease shall remain in full force and effect and there shall be no
abatement of annual base rent or any other amount payable under this Lease.
D. Condemnation. If the entire Premises are condemned for any
public use or purpose by a public authority, unless Lessee exercises the
Purchase Option prior to the date of
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surrender of possession, this Lease shall cease and rent be accounted for as of
the date of surrender of possession. In the event of a partial taking, unless
Lessee exercises the Purchase Option prior to the date of surrender of
possession, a pro rata reduction in the rent and the purchase price under the
Purchase Option shall be provided in the proportion which the property so taken
or condemned bears to the entire Property originally devised. Further, in the
event of any taking or condemnation, unless Lessee exercises the Purchase Option
prior to the date of surrender of possession, Lessee shall not be entitled to
claim any value for the underlying fee interest or the Purchase Option, but may
claim the value of the leasehold interest and Improvements from the condemning
authority, and both County and Lessee shall be entitled to claim, prove and
receive in the condemnation proceeding such awards as may be allowed for their
respective interests in fixtures, equipment and other property. If the entire
Premises are condemned for any public use or purpose by a public authority, and
Lessee exercises the Purchase Option prior to the date of surrender of
possession, then the purchase price payable by Lessee for the Property shall be
the entire price set forth on the Rent/Purchase Price Schedule for the date of
closing on such purchase, and Lessee shall be entitled to claim, prove and
receive in the condemnation proceeding such awards as may be allowed for the fee
interest in the Property and for the Improvements and all fixtures, equipment
and other property therein or thereon. County shall give Lessee prompt written
notice of any condemnation or threatened condemnation of the Premises.
E. Compliance with Law. It is understood, agreed and
covenanted by Lessee that it shall promptly comply with, observe and perform all
of the requirements of all the statutes, ordinances, rules, orders and
regulations now in effect or hereinafter promulgated whether
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required by the Federal Government, the State of Maryland, County, in its
governmental capacity or the Montgomery County Fire Marshal.
F. No Waiver of Governmental Immunity. The responsibilities
and obligations of County as set forth in this Lease shall not constitute a
waiver by County of any provision of the Local Government Tort Claims Act,
Section 5-401, et seq., of the Courts and Judicial Proceedings Article,
Annotated Code of Maryland.
G. Limitation of Liability. County's liability to Lessee, its
employees, agents, visitors, tenants, licensees or concessionaires for recovery
of any loss, expense or judgment under this Lease shall be limited as set forth
herein and as set forth in the Local Government Tort Claims Act, Section 5-401,
et seq., of the Courts and Judicial Proceedings Article, Annotated Code of
Maryland.
H. Limitation of Lessee's Liability. Notwithstanding any
contrary provision contained in this Lease, County agrees that the obligations
of Lessee hereunder shall not constitute personal obligations of the officers,
directors, shareholders, partners or members of Lessee.
37. RECORDING.
Lessee and County shall have the right to record this entire
Lease or to execute a Memorandum of Lease and have it properly acknowledged for
the purpose of recording. Such Memorandum of Lease shall have included therein
such of the provisions hereof as may be requested by either of the parties. The
cost of recording this entire Lease or such Memorandum
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of Lease (including all stamps, conveyance, recordation and other taxes incident
thereto) shall be borne solely by Lessee.
38. ENTIRE AGREEMENT.
This Lease, Exhibits, and Addenda, if any, attached hereto and
forming a part hereof, sets forth all the covenants, promises, agreements,
conditions and understandings between County and Lessee concerning the Premises
and there are no covenants, promises, agreements, conditions or understandings,
either oral or written, between them other than as herein set forth. Except as
herein otherwise provided, no subsequent alteration, amendment, change or
addition to this Lease shall be binding upon County or Lessee unless reduced to
writing and signed by them.
39. NOTICE. All notices required or permitted hereunder shall be
deemed to have been given if delivered by a reputable messenger, overnight
delivery service, facsimile or mailed in any United States Post Office by
certified mail, return receipt requested, postage prepaid, addressed to County
or Lessee, respectively, at the following addresses or to such other addresses
as the parties may designate in writing from time to time. All notices shall be
deemed to be received on the date of delivery by messenger or overnight delivery
service, the date indicated by a facsimile confirmation receipt signed by the
recipient, or three (3) business days after depositing them with the United
States Post Office.
Notice of the identity and address of any Leasehold Mortgagee and
any Subtenant shall be in the form of a written notice sent to County in
accordance with this Section.
COUNTY: LESSEE:
Montgomery County, Maryland BioReliance Corporation
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Department of Public Works and 9900 Blackwell Road
Transportation Rockville, Maryland 20850
Division of Facilities and Services Attention: Capers W. McDonald, President
Office of Real Estate Management Facsimile: (301) 738-1033
110 North Washington Street
Rockville, Maryland 20850
Facsimile: (301) 217-6080
With a copy to: With a copy to:
County Attorney The Buccini/Pollin Group, Inc.
101 Monroe Street, Third Floor 250 Park Avenue, 17th Floor
Rockville, Maryland 20850 New York, New York 10177
Facsimile: (301) 217-2662 Facsimile: (212) 949-5995
And a copy to:
Shulman,Rogers,Gandal,Pordy & Ecker,P.A.
11921 Rockville Pike, Suite 300
Rockville, Maryland 20852
Attention: Lawrence A. Shulman, Esquire
Facsimile: (301) 230-2891
And a copy to:
Arent Fox
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
Attention: Richard L. Brand, Esquire
Facsimile: (202) 857-6395
40. NON-MERGER.
The fee title of County and the leasehold estate of Lessee
shall, at all times during the period of this Lease, be separate and apart and
shall in no event be merged, notwithstanding the fact that this Lease or the
leasehold estate created hereby, or any interest in either thereof, may be held
directly or indirectly by or for the account of any person who shall own the fee
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estate in the Premises or any portion thereof; and no provisions contained in
this Lease shall survive the execution of any deed conveying the fee simple
title to any entity owning the leasehold estate but shall be merged by operation
of law upon the execution of such deed.
41. SUBORDINATION OF LEASE. County will not subordinate this Lease
to any deed of trust or similar security interest which may hereafter be
placed on Lessee's leasehold interest in the Premises.
42. CAPTIONS. PRONOUNS. The captions and paragraph numbers appearing
in this Lease are inserted only as a matter of convenience and in no way
define, limit, construe, or describe the scope or intent of this Lease,
nor in any way affect this Lease.
The use of the neuter singular pronoun to refer to County or Lessee
shall be deemed a proper reference even though County or Lessee may be an
individual, a partnership, a joint venture, a corporation, or a group of two or
more individuals, partnerships, joint ventures or corporations. The necessary
grammatical changes required to make the provisions of this Lease apply in the
plural sense shall in all instances be assumed as though in each case fully
expressed.
43. SURVIVAL. The following obligations shall survive the expiration
or termination of this Lease: (a) any obligation herein permitted to be
performed after the expiration or termination of this Lease; (b) any obligation
not reasonably susceptible to performance prior to the expiration or termination
of this Lease; and (c) any obligation, required hereunder to be performed at or
before the expiration or termination of this Lease, not so performed.
44. MISCELLANEOUS PROVISIONS.
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A. Days. If the date on which either County or Lessee is
required to take or complete an action hereunder is not a business day (as
defined below), the action shall be taken or completed on the next succeeding
business day. For purposes hereof, "business day" means any day other than a
Saturday, Sunday or federal holiday.
B. Certain Terms. For purposes of this Lease, there shall be
no distinction between the terms "breach" and "default."
C. Authority. County and Lessee hereby covenant each for
itself, that each has full right, power and authority to enter into this Lease
upon the terms and conditions herein set forth.
D. No Partnership. Nothing contained in this Lease shall be
deemed or construed to create a partnership or joint venture of or between
County and Lessee, or to create any other relationship between the parties other
than that of lessor and lessee.
E. Consequential Damages. Notwithstanding anything to the
contrary in this Lease, in no event shall either County or Lessee be liable to
the other for consequential damages, except as set forth in Section 13.C.
IN WITNESS WHEREOF, the parties hereto do hereby execute this Lease as
of the day and year first above written.
WITNESS OR ATTEST: MONTGOMERY COUNTY, MARYLAND
By:
- ---------------------------- -----------------------------------------
Douglas M. Duncan
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County Executive
WITNESS OR ATTEST: BIORELIANCE CORPORATION
By:
- ---------------------------- -----------------------------------------
Capers W. McDonald
President
APPROVED AS TO FORM AND LEGALITY
OFFICE OF THE COUNTY ATTORNEY
By:
---------------------------
Dated:
------------------------
STATE OF MARYLAND, , to wit:
--------------------------
ON THIS day of , 1998, before me, the
--- -------------------
undersigned officer, personally appeared Douglas M. Duncan, County Executive for
Montgomery County Maryland, known to me to be the person whose name is
subscribed to the foregoing, who did fully acknowledge that he executed the same
as his voluntary act and deed for the purposes therein contained.
WITNESS my hand and official seal the same day and year first above
written.
-----------------------------------
53
<PAGE> 60
Notary Public
My Commission Expires:
-------------------------
STATE OF MARYLAND, , to wit:
--------------------
ON THIS day of , 1998, before me, the undersigned
---- -----------------
officer, personally appeared Capers W. McDonald, President of BioReliance
Corporation, known to me to be the person whose name is subscribed to the
foregoing, who did fully acknowledge that he executed the same as his voluntary
act and deed for the purposes therein contained.
WITNESS my hand and official seal the same day and year first above
written.
-----------------------------------
Notary Public
My Commission Expires
------------------
54
<PAGE> 1
EXHIBIT 10.22
LEASE
BETWEEN
BIORELIANCE CORPORATION
AND
BPG INDUSTRIAL PARTNERS II, LLC
Dated April ___, 1998
<PAGE> 2
TABLE OF CONTENTS
Page
1. INCORPORATION OF RECITALS.............................................. 3
2. DEFINITIONS............................................................ 3
3. LEASED PREMISES; SUBORDINATION TO PRIME LEASE.......................... 7
4. TERM AND EXTENSION..................................................... 8
A. Preliminary and Initial Terms...................................... 8
B. Extension Terms.................................................... 8
5. RENTAL................................................................. 9
A. Amount............................................................. 9
B. Rent Commencement Date............................................. 15
C. Additional Rent.................................................... 15
6. GUARANTY OF CONSTRUCTION............................................... 18
7. FEES AND COSTS OF CONSTRUCTION......................................... 18
8. LESSEE'S INSURANCE..................................................... 18
A. Mandatory Insurance Requirements During the Construction Period.... 18
B. Mandatory Insurance Requirements During the Operations Period...... 20
9. INDEMNIFICATION........................................................ 23
10. LIENS, CLAIMS OR ENCUMBRANCES.......................................... 25
A. Free of Liens...................................................... 25
B. Discharge of Lien.................................................. 25
C. Failure to Discharge Lien.......................................... 25
11. RIGHT TO CONSTRUCT AND ARCHITECTURAL REVIEW............................ 26
A. Submission and Approval of Plans................................... 26
B. Plan Approval is not in Lieu of other Approvals/Permits............ 27
C. No Monetary Liability for Approval of Plans........................ 27
D. Coordination of Plans.............................................. 28
12. CONSTRAINTS............................................................ 28
A. No Nuisance........................................................ 28
B. Notice of Toxic and Hazardous Materials............................ 28
C. Indemnification.................................................... 29
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
PAGE
D. Outdoors Activities................................................ 30
E. Building Sites..................................................... 30
F. Compliance with Mortgages.......................................... 30
13. BUILDING CONSTRUCTION AND ALTERATIONS.................................. 31
A. Building Codes..................................................... 31
B. Cleaning of Premises............................................... 31
C. Premises "As Is"................................................... 31
14. LANDSCAPING. OUTSIDE STORAGE AND MAINTENANCE........................... 31
A. Landscaping........................................................ 31
B. Maintenance of Landscaping......................................... 32
C. Screening of Storage Areas......................................... 32
D. Storage of Fuel Oil, etc........................................... 32
E. Safe conditions.................................................... 32
F. Vacant Buildings................................................... 33
15. UTILITY CONNECTIONS.................................................... 33
16. SIGNS OR MONUMENTS..................................................... 33
A. Defined............................................................ 33
B. Approval of Plans.................................................. 33
C. Construction Signs................................................. 34
17. PARKING AREAS AND LOADING ZONES........................................ 34
A. Parking Facilities................................................. 34
B. Loading and Unloading Areas........................................ 35
18. TEMPORARY STRUCTURES................................................... 35
19. MAINTENANCE OF PROPERTY................................................ 36
A. Lessee's Obligation................................................ 36
B. Lessor's Right, but not Obligation to Repair....................... 36
C. County's Maintenance............................................... 36
20. COOPERATIVE MAINTENANCE AGREEMENT AND COMMON AREA CHARGES.............. 37
A. Maintenance Agreement.............................................. 37
B. Common Area Contribution........................................... 37
<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
PAGE
C. Storm Water Management............................................. 37
21. UTILITY SERVICE AND ACCESS............................................. 38
22. ACCESS BY LESSOR AND EASEMENT.......................................... 38
A. Access to Maintain Pipes........................................... 38
B. Reservation of Easements........................................... 39
C. Accommodation of Lessee............................................ 39
23. COMMON AREAS........................................................... 39
A. Lessee's Non-exclusive Right to Use................................ 39
B. County's Right to Make Changes to Common Areas..................... 40
24. ENFORCEMENT............................................................ 40
A. Lease for the Benefit of Parties................................... 40
B. Remedies........................................................... 40
C. Default............................................................ 41
D. Bankruptcy......................................................... 42
E. No Default Arising From Acts or Omissions of Lessor's Affiliates... 42
F. Limitation on Lessor's Right to Termination........................ 43
25. EXPIRATION............................................................. 43
A. Surrender of Improvements.......................................... 43
B. Removal of Trade Fixtures.......................................... 44
26. TENANT HOLDING OVER.................................................... 44
27. MORTGAGE OF LESSEE'S LEASEHOLD INTEREST................................ 44
A. Notice of Default under Mortgage or Lease.......................... 44
B. Leasehold Mortgagee Right to Notice and Cure....................... 45
C. Leasehold Mortgagee as Holder of Lessee's Interest................. 46
D. Certain Restrictions During Leasehold Mortgage..................... 46
E. New Financing...................................................... 46
F. Assignment by Leasehold Mortgagee.................................. 47
G. Notice of Mortgages................................................ 47
28. MORTGAGE OF LESSOR'S INTEREST.......................................... 47
29. ASSIGNMENT AND SUBLEASING; LESSOR'S RIGHT OF FIRST REFUSAL............. 49
<PAGE> 5
TABLE OF CONTENTS
(CONTINUED)
PAGE
A. Right of First Refusal............................................. 49
B. Assignment or Subletting to Competitors............................ 50
C. Other Assignments and Sublettings.................................. 51
D. Successors and Assigns............................................. 52
E. Rights of Subtenants............................................... 53
30. QUIET ENJOYMENT, TITLE TO LAND AND IMPROVEMENTS........................ 53
A. Quiet Enjoyment.................................................... 53
B. Title.............................................................. 54
31. SURRENDER - WAIVER AND AMENDMENT....................................... 54
32. NON-DISCRIMINATION IN EMPLOYMENT AND SERVICES.......................... 55
33. DISPUTES............................................................... 55
A. Arbitration........................................................ 55
B. Exceptions......................................................... 56
34. GOVERNING LAW, SEVERABILITY, CASUALTY, CONDEMNATION AND COMPLIANCE..... 56
A. Governing Law...................................................... 56
B. Lease not Redeemable............................................... 57
C. Casualty Damage.................................................... 57
D. Condemnation....................................................... 58
E. Compliance with Law................................................ 59
F. Limitation of Lessor's Liability................................... 59
G. Limitation of Lessee's Liability................................... 59
35. RECORDING.............................................................. 59
36. ENTIRE AGREEMENT....................................................... 60
37. NOTICE................................................................. 60
38. CAPTIONS. PRONOUNS..................................................... 61
39. SURVIVAL............................................................... 62
<PAGE> 6
TABLE OF CONTENTS
(CONTINUED)
PAGE
40. MISCELLANEOUS PROVISIONS............................................... 62
A. Time of the Essence................................................ 62
B. Days............................................................... 62
C. Certain Terms...................................................... 62
D. Waiver of Trial by Jury............................................ 62
E. No Representations by Lessor....................................... 63
F. Authority.......................................................... 63
G. No Partnership..................................................... 63
H. Lessor Approvals................................................... 63
I. Consequential Damages.............................................. 63
41. CONTINGENT PURCHASE OPTION............................................. 63
A. Upon Expiration of Project Lease................................... 63
B. Upon Termination of Project Lease for Default...................... 68
C. Terms and Conditions of Purchase................................... 69
42. LESSEE'S RIGHT OF FIRST REFUSAL........................................ 73
EXHIBITS
Exhibit A - Diagram of Leased Premises [Recitals]
Exhibit B - Declaration of Covenants and Easements
Exhibit C - Development Plan [Section 2.D]
Exhibit D - Rent/Purchase Price Schedule [Section 5.A]
Exhibit E - Personal Guaranty of Construction
<PAGE> 7
LEASE
THIS LEASE, made this ____ day of April, 1998, by and between
BIORELIANCE CORPORATION, a Delaware corporation with its principal offices
located at 9900 Blackwell Road, Rockville, Maryland 20850, hereinafter called
"Lessor", and BPG INDUSTRIAL PARTNERS II, LLC, a Maryland limited liability
company with its principal office at 110 N. Royal Street, Suite 305, Alexandria,
Virginia 22314, hereinafter called "Lessee".
WITNESSETH:
Recitals
That for and in consideration of the financial conditions hereinafter
reserved and the covenants and conditions hereinafter contained, Lessor leases
and demises unto Lessee and Lessee rents from Lessor the land and appurtenant
rights described more particularly as a portion, containing approximately 4.35
acres, of Parcel N/Q of the Shady Grove Life Sciences Center, Rockville,
Maryland, as shown on Exhibit A attached hereto and made a part hereof (such
land, together with all Improvements constructed thereon, being hereinafter
referred to as the "Property" or the "Premises"). Parcel N/Q of the Shady Grove
Life Sciences Center ("Parcel N/Q") is shown on a plat entitled "Parcel 'N/Q',
Shady Grove Life Sciences Center", recorded among the Land Records of Montgomery
County, Maryland, in Plat Book 175, Plat 19634 in the Shady Grove Life Sciences
Center located in Montgomery County, Maryland. Lessor has leased all of Parcel
N/Q from Montgomery County, Maryland, pursuant to the Prime Lease (as herein
defined).
<PAGE> 8
Lessee agrees to exercise reasonable efforts to begin construction of
the Lessee's Work within twelve (12) months following the Lease Commencement
Date (as herein defined). The "Lessee's Work" shall mean the shell of the
Facility (as herein defined), the Facility mezzanine, the other systems of the
Facility which Lessee is responsible to construct or install pursuant to the
Project Lease (as herein defined) and the parking lot, driveways, sidewalks and
landscaping on the Premises in accordance with the Site Plan (as herein
defined). The Lessee's Work shall be consistent with the all applicable laws,
codes, regulations and ordinances and the permitted uses set forth herein and
the Development Plan (as herein defined), and shall be performed substantially
in accordance with the Plans and Specifications (as herein defined). Lessee's
right to construct improvements on the Property, including the right to
construct additional improvements as may be allowed by the Development Plan, as
the Development Plan may be amended from time to time, shall not exceed density
of 58,733 square feet on the Property. Lessor acknowledges that a Lessor's
Affiliate (as herein defined) shall be responsible for constructing all
improvements on the Premises, other than the Lessee's Work, pursuant to the
Project Lease. Lessee shall exercise reasonable and diligent efforts to: (i)
file an application for the building permit(s) for the Lessee's Work within
three (3) months after the Lease Commencement Date; and (ii) obtain a building
permit(s) and begin construction of the Lessee's Work within six (6) months
after the Lease Commencement Date. In the event Lessee fails to secure all
necessary building permit(s) for the Lessee's Work to be constructed on the
Property within six (6) months from the Lease Commencement Date, either Lessor
or Lessee, at its option, may terminate this Lease. Once construction of the
Lessee's Work has begun, Lessee shall
2
<PAGE> 9
exercise reasonable efforts to continue construction activities until completion
of the Lessee's Work. Lessor shall cooperate with Lessee in filing any
application for zoning, land use and building permits and any other permits and
approvals necessary to the construction, development, use and operation of the
Property in a timely manner.
Now, therefore, for and in consideration of the terms of this Lease,
the parties agree as follows:
1. INCORPORATION OF RECITALS. The recitals are incorporated herein as
if fully set forth.
2. DEFINITIONS. When used in this Lease, the following terms have the
meanings set forth below:
A. The "County" means Montgomery County, Maryland, as the owner
of Parcel N/Q and lessor thereof to Lessor. Any reference in this Lease to an
approval, consent or agreement required to be obtained from County refers to
County in its capacity as the owner and lessor of Parcel N/Q, and unless
otherwise indicated, does not refer to approvals, consents or agreements
required to be obtained from County in its governmental capacity.
B. The "Covenants" means the Amended and Restated Declaration of
Covenants and Easements, dated March 9, 1990, and recorded among the Land
Records of Montgomery County, Maryland, in Liber 9332, folio 591. A copy of the
Covenants is attached hereto as Exhibit B. Lessee hereby acknowledges that it
has received and reviewed the Covenants.
3
<PAGE> 10
C. "Days" means calendar days unless specific reference is made
to business days.
D. The "Development Plan" means the Shady Grove Life Sciences
Center Development Plan approved by County, in its governmental capacity, on
September 16, 1986, and the amendment dated February 10, 1994, to the
Development Plan which was approved by County, in its governmental capacity, on
February 14, 1995, copies of which are attached hereto as Exhibit C, and any
amendments to the Development Plan which may be issued by County, in its
governmental capacity, from time to time.
E. The "Facility" means the biopharmaceutical manufacturing
facility consisting of approximately 58,733 square feet to be constructed on the
Premises, and such other and further improvements as may be allowed on the
Premises consistent with the Development Plan.
F. "Improvements" means any structure, fixture or other
improvements now located or hereinafter erected upon the Premises, including,
but in no way limited to, the Facility, the Lessee's Work and appurtenances to
be constructed thereon.
G. The "Land" means the Premises exclusive of the Improvements.
H. "Lease Commencement Date" means the effective date of this
Lease, which date is the date of final ratification and execution of this Lease
by Lessor and Lessee.
I. The "Lessee" means BPG Industrial Partners II, LLC, a
Maryland limited liability company, its successors and assigns.
J. The "Lessee's Work" shall have the meaning set forth in the
recitals.
4
<PAGE> 11
K. The "Lessor" means BioReliance Corporation, a Delaware
corporation, its successors and assigns.
L. A "Lessor's Affiliate" means an entity which controls, is
controlled by or is under common control with, Lessor. For purposes of this
definition, the term "Lessor" shall solely refer to the entity which is the
then-current holder of the lessor's leasehold interest under this Lease and
shall not include any party which previously held the lessor's leasehold
interest under this Lease. As used herein, "control" means the right to vote or
direct more than fifty percent (50%) of the voting stock, general partnership
interests, membership interests or other ownership interests in an entity.
M. "Mortgage" means any now or hereafter existing mortgages,
deeds of trust or other similar security agreements covering this Lease, or any
sublease, and the term "Leasehold Mortgagee" means any mortgagee or beneficiary
under a deed of trust or other similar security agreement covering this Lease,
or any sublease, and unless context requires otherwise, shall include the
mortgagee or beneficiary under any deed of trust or other similar security
agreement to which Lessor's interest in the Premises is subordinated pursuant to
Section 28 hereof.
N. "Occupant" includes any person or persons who, by reason of
employment or other status, occupy space on or within the Premises and
Improvements.
O. "Parcel N/Q" shall have the meaning set forth in the
recitals.
P. The "Plans and Specifications" means (i) the architectural
and structural plans entitled "Magenta Corporation, Shady Grove Life Sciences
Center, Rockville, Maryland,"
5
<PAGE> 12
dated November 17, 1997, prepared by Gaudreau, Inc. and Faisant Associates,
Inc., and supplemented by Schedule A to Plans and Specifications, dated even
date herewith, and (ii) the specifications entitled "Project Manual for Magenta
Corporation, Shady Grove Life Sciences Center, Rockville, Maryland," dated
November 17, 1997, prepared by Gaudreau, Inc. and Faisant Associates, Inc., as
each of the same may be modified.
Q. The "Premises" and the "Property" shall have the meaning set
forth in the recitals.
R. The "Prime Lease" means that certain Lease-Purchase
Agreement, dated even date herewith, between County, as lessor, and Lessor, as
lessee, for Parcel N/Q.
S. The "Project Lease" means that certain sublease, dated even
date herewith, between Lessee, as lessor, and MAGENTA Corporation, a Lessor's
Affiliate as of the date of this Lease, as lessee, for the Premises. Lessor has
executed a Guaranty of MAGENTA Corporation's obligations thereunder.
T. "Property Value", for purposes of this Lease, means THREE
HUNDRED FIFTY-TWO THOUSAND THREE HUNDRED SIXTY-EIGHT AND NO/100 DOLLARS
($352,368.00), being forty-eight and ninety-four one hundredths percent (48.94%)
(a proportionate share, based upon the ratio of the F.A.R. square feet allocated
to the Premises to the total F.A.R. square feet allocated to Parcel N/Q) of the
discounted value of Parcel N/Q under the Prime Lease. If the discounted value of
Parcel N/Q under the Prime Lease is reduced or increased, then the Property
Value shall be proportionately reduced or increased.
6
<PAGE> 13
U. "Shady Grove Life Sciences Center" and "Life Sciences Center"
mean the property and the improvements covered by the Development Plan which at
this time consists of approximately 295 acres bounded by Key West Avenue on the
north, Shady Grove Road on the east, Great Seneca Highway on the west and West
Montgomery Avenue on the south, and including an approximately 6.92 acre parcel
on the west side of Great Seneca Highway adjacent to the Public Service Training
Academy, all of which land is in Montgomery County, Maryland.
V. The "Site Plan" means the "Storm Drain, Paving and Site Plan"
prepared by Loiederman Associates, Inc., dated August 1997, and amended October
17, 1997, October 22, 1997 and January 21, 1998, approved by the Shady Grove
Life Sciences Center Architectural Review Committee for development of the
Improvements, as the same may be amended.
3. LEASED PREMISES; SUBORDINATION TO PRIME LEASE.
Lessor hereby leases unto Lessee, for the consideration set forth
below, the Premises, initially for the construction, operation, and use of a
biopharmaceutical manufacturing facility in the Shady Grove Life Sciences
Center, and thereafter for any use permitted by the Covenants. For so long as
the Prime Lease remains in effect, this Lease shall be subject and subordinate,
in all respects, to the Prime Lease. Lessee hereby acknowledges and covenants
that it has received and reviewed the Prime Lease. The Prime Lease includes a
purchase option. If and when Lessor exercises such option and becomes fee simple
owner of the Premises, all rights of County, in its capacity as the owner and
lessor of the Premises, set forth in this Lease (including without limitation
County's approval rights and right to be named as an additional insured on
insurance policies) shall cease. Lessor shall give Lessee prompt written notice
of its
7
<PAGE> 14
exercise of the purchase option in the Prime Lease. Whenever Lessor, as lessee
under the Prime Lease, shall have the right to enforce any rights against the
County as lessor under the Prime Lease because of the default or breach of the
County under the Prime Lease, and if within ten (10) days after Lessee's written
request, Lessor fails to either (i) take reasonable action to enforce such
rights, or (ii) give Lessee written notice of its refusal to take action to
enforce such rights, and the reasons therefor, then Lessee shall have the right,
in the name of Lessee or, if necessary, in the name of Lessor, to enforce any
such rights of Lessor. If Lessor gives Lessee written notice of Lessor's refusal
to take action to enforce any such rights, then Lessee may take action to
enforce such rights only if it first posts a bond or other security with Lessor,
in such amount as may be reasonably required by Lessor to protect Lessor against
the possibility of material monetary damage arising from such action by Lessee.
4. TERM AND EXTENSION.
A. Preliminary and Initial Terms. The term of this Lease shall
consist of a Preliminary Term, an Initial Term and any Extension Terms exercised
by Lessee (collectively, the "Term"). The "Preliminary Term" of this Lease shall
commence on the Lease Commencement Date and expire on midnight of the day before
the Rent Commencement Date (as herein defined). The "Initial Term" of this Lease
shall be for a period of thirty-five (35) years commencing upon the Rent
Commencement Date and expiring, unless extended pursuant to the terms of this
Lease, on midnight of the last day of the thirty-fifth (35th) lease year. As
used herein, the term "lease year" means a twelve (12)-month period commencing
on the Rent Commencement Date or any anniversary thereof.
8
<PAGE> 15
B. Extension Terms. If this Lease has not been terminated sooner
as provided herein, then Lessee shall have the options (the "Extension Options")
to extend this Lease for two (2) additional and consecutive terms of twenty-five
(25) years each and one (1) additional consecutive term of fourteen (14) years
(each an "Extension Term" and, collectively, the "Extension Terms"). Should
Lessee, in Lessee's sole discretion, elect not to extend this Lease, then Lessee
shall provide Lessor with written notice of such election not later than
thirteen (13) months before the date of expiration of the Term, failing which
Lessee shall be deemed to have exercised the Extension Option. For all purposes
hereunder, there shall be no distinction between the terms "extend" and "renew"
and their derivatives.
5. RENTAL.
A. Amount.
(1) During the Project Lease Maximum Term. Subject to the
terms and conditions of this Lease, during the Project Lease Maximum Term
(hereinafter defined), Lessee shall pay to Lessor an annual base rent equal to
the sum of One Dollar ($1.00) plus twelve (12) times that monthly amount
required to amortize the Property Value over the Initial Term, at an interest
rate (the "Interest Rate") equal to the lesser of Seven Percent (7%) per annum
or the 30-year U.S. Treasury Bond Rate as of the Rent Commencement Date, which
amount is payable in equal monthly installments, in advance, without set off,
deduction or demand except as set forth in Sections 5.A(3) and 34.D, on the
first day of each month beginning on the Rent Commencement Date. Such
amortization of the Property Value shall be computed within thirty (30) days
after determination of the Interest Rate, and shall be set forth on a Schedule
(the
9
<PAGE> 16
"Rent/Purchase Price Schedule") which shall specify the exact amount of the
monthly amortization, the portion of the monthly amortization attributed to
reduction of the Property Value, the portion of the monthly amortization
attributed to interest on the Property Value, and the remaining unamortized
balance of the Property Value for each month of the Initial Term. Such
Rent/Purchase Price Schedule shall be attached hereto as Exhibit D. The "Project
Lease Maximum Term" means the actual term of the Project Lease (including any
exercised extension terms), unless the Project Lease is terminated due to the
default of the tenant thereunder, in which event the "Project Lease Maximum
Term" shall be the twenty (20) year period commencing on the Rent Commencement
Date, and thereafter one (1) successive five (5) year period for each extension
option exercised under the Project Lease, notwithstanding such earlier
termination due to the tenant's default. Any payment of annual base rent that is
not made within fifteen (15) days after the due date thereof is subject to a
five percent (5%) late fee, which late fee shall be waived by Lessor twice each
year.
(2) After the Project Lease Maximum Term. Commencing upon
the first day following the expiration or termination of the Project Lease
Maximum Term and thereafter throughout the remaining Term, subject to the terms
and conditions of this Lease, Lessee shall pay to Lessor an annual base rent
equal to the fair market rent for the Land, which amount shall be payable in
equal monthly installments in advance, without set off, deduction or demand
except as set forth in Sections 5.A(2)(e), 5.A(3) and 34.D, on the first day of
each and every month during such period. Before the expiration date of the
Project Lease Maximum Term or immediately after an earlier termination of the
Project Lease Maximum Term, and every ten
10
<PAGE> 17
(10) years thereafter, Lessor and Lessee shall employ the procedure and
timetable described below for the purpose of computing the fair market rent for
the Land during the forthcoming ten (10) year period:
(a) Not later than the one hundred eightieth (180th)
day prior to the expiration of the Project Lease Maximum Term, and of the tenth
(10th), twentieth (20th), thirtieth (30th), fortieth (40th), fiftieth (50th),
sixtieth (60th) and seventieth (70th) years (if any) after the expiration of the
Project Lease Maximum Term (each, an "Expiration"), or in the event the Project
Lease Maximum Term is terminated (for reasons other than the default of the
tenant under the Project Lease) prior to the expiration thereof, then not later
than thirty (30) days after the effective date of termination of the Project
Lease Maximum Term (the "Termination") and not later than one hundred eighty
(180) days prior to the expiration of the tenth (10th), twentieth (20th),
thirtieth (30th), fortieth (40th), fiftieth (50th), sixtieth (60th), seventieth
(70th) and eightieth (80th) years (if any) after the Termination (each, an
"Expiration"), Lessor shall deliver to Lessee notice of Lessor's determination
of the fair market rent and fair market annual rental escalation rate for the
Land. If Lessee disagrees with Lessor's determination of the fair market rent
and/or the fair market annual rental escalation rate for the Land, the fair
market rent and/or the fair market annual rental escalation rate for the Land
shall be determined in accordance with the provisions of subsection (b) below.
(b) Within thirty (30) days after receipt of Lessor's
determination of the fair market rent and the fair market annual rental
escalation rate for the
11
<PAGE> 18
Land, Lessee shall send Lessor a written notice of Lessee's acceptance or
challenge of Lessor's determination of the fair market rent and the fair market
annual rental escalation rate for the Land; provided, however, that in the event
that Lessee fails to respond within such thirty (30) day period, Lessee shall be
deemed to have accepted Lessor's determination of the fair market rent and the
fair market annual rental escalation rate for the Land. In the event Lessee
challenges Lessor's determination of the fair market rent and/or the fair market
annual rental escalation rate for the Land and Lessor and Lessee are not able to
agree on such fair market rent and/or fair market annual rental escalation rate
within thirty (30) days after Lessee notifies Lessor of Lessee's challenge of
Lessor's determination of such fair market rent and/or fair market annual rental
escalation rate (the "Negotiation Period"), then Lessor and Lessee shall each,
within fifteen (15) days after the expiration of the Negotiation Period, appoint
an appraiser, each of which shall be an MAI-certified real estate appraiser with
at least ten (10) years' experience in the Montgomery County, Maryland real
estate market, and each appraiser shall determine the fair market value rent
and/or the fair market annual rental escalation rate for the Land in accordance
with subsection (c) below. The appraisers shall be instructed to complete the
appraisal procedure and to submit their written determinations to Lessor and
Lessee within thirty (30) days after their appointment. In the event that the
two appraisers so appointed do not agree on the fair market rent for the Land,
but the difference between the fair market rents determined by the appraisers is
not more than ten percent (10%) of the lower of the two appraisals, the fair
market rent for the Land shall be the average of such determinations. In the
event that the two appraisers so appointed do not agree on the fair market
annual rental escalation rate for the Land, but the
12
<PAGE> 19
difference between the fair market annual rental escalation rates determined by
the appraisers is not more than ten percent (10%) of the lower of the two
appraisals, the fair market annual rental escalation rate for the Land shall be
the average of such determinations. If the difference between the fair market
rents and/or fair market annual rental escalation rates determined by the
appraisers is more than ten percent (10%) of the lower of the two appraisals,
the appraisers shall, within ten (10) days, appoint a third appraiser with
similar qualifications to make such determination of the fair market rent and/or
fair market annual rental escalation rate. In the event that the two appraisers
cannot agree as to the selection of the third appraiser within fifteen (15) days
after Lessor and Lessee are notified of the determination of the appraisers,
either party may request that the then-President of the Montgomery County
Association of Realtors (or any successor organization) appoint the third
appraiser. The third appraiser shall be instructed to complete the appraisal
procedure and to submit a written determination of the fair market rent and/or
fair market annual rental escalation rate for the Land to Lessor and Lessee
within thirty (30) days after such appraiser's appointment. The determination
which is neither the highest nor the lowest of the three determinations shall be
binding upon Lessor and Lessee as the fair market rent and/or fair market annual
rental escalation rate for the Land. Lessor and Lessee shall each bear the costs
of their respective appraisers. The expenses of the third appraiser shall be
borne one-half (1/2) by Lessor and one-half (1/2) by Lessee.
(c) Each appraiser shall determine the fair market rent
and fair market annual rental escalation rate for the Land as then used, based
on the then-current improvements thereto (but without including the rental value
of such improvements in the
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calculation of the fair market rent or the fair market annual rental escalation
rate), taking into account all of the relevant provisions of this Lease and the
market rents and annual rental escalation rates then being charged for
comparable properties in comparable locations in Montgomery County, Maryland,
and assuming the following: (i) the lessor and lessee are typically motivated;
(ii) the lessor and lessee are well informed and well advised and each is acting
in what it considers its own best interest; (iii) the lessor will not be
providing any concessions, special financing amounts and/or terms, unusual
services, fees, costs or credits in connection with the leasing transaction; and
(iv) the Land is to be let with vacant possession and subject to the provisions
of this Lease.
(d) At the commencement of each of the second, third,
fourth, fifth, sixth, seventh, eighth, ninth and tenth years after the
Expiration (or the Termination), the annual base rent (then in effect) shall be
increased by the annual rental escalation rate determined pursuant to this
Section 5.A(2).
(e) In the event of termination of the Project Lease
Maximum Term prior to the expiration thereof, during the period from the
Termination until the annual base rent for the year following the Termination is
determined pursuant to this Section 5.A(2), Lessee shall pay as annual base rent
the annual base rent in effect immediately prior to the Termination. With the
first monthly installment of annual base rent paid after determination of the
annual base rent for the year following the Termination, Lessee shall pay Lessor
any excess of the annual base rent (as so determined) for the preceding months
following the Termination over the annual base rent theretofore paid for such
period. If the annual base rent theretofore paid for such
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months exceeds the annual base rent (as so determined) for such months, then
Lessor shall refund the amount of such excess to Lessee or offset the same
against the next payments of annual base rent becoming due under this Lease.
(3) Excused Non-Payment. Notwithstanding anything to the contrary
in this Section 5.A, for so long as the Project Lease is in effect and the
then-current holder of the tenant's leasehold interest under the Project Lease
is a Lessor's Affiliate, no monthly installment of annual base rent shall be due
hereunder for any month for which Lessee has not received the monthly
installment of annual base rent due under the Project Lease.
B. Rent Commencement Date. The Rent Commencement Date shall be the
earlier to occur of: (a) the second anniversary of the Lease Commencement Date;
or (b) the date on which the applicable governmental authority issues the use
and occupancy certificate for the Facility. Lessee shall diligently pursue
issuance of the use and occupancy certificate for the Facility. In the event
that the use and occupancy certificate is issued before the second anniversary
of the Lease Commencement Date, and upon appeal is revoked before the second
anniversary of the Lease Commencement Date, all annual base rent shall be abated
until the earlier to occur of the second anniversary of the Lease Commencement
Date, or the issuance of a new use and occupancy certificate.
C. Additional Rent.
(1) As additional rent hereunder, commencing on the Lease
Commencement Date, Lessee shall pay and discharge as they become due, promptly
and before delinquency, all taxes, assessments, rates, charges, license fees,
municipal liens, levies, excises,
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or imposts, whether general or special, or ordinary or extraordinary, of every
name, nature and kind whatsoever, including all governmental charges of
whatsoever name, nature, or kind, which may be levied, assessed, charged or
imposed, or which may become a lien or charge on or against the leasehold estate
of Lessee, or any Improvements now or hereafter thereon which may be a subject
of taxation, or on or against County or Lessor by reason of its ownership of the
fee or leasehold interest underlying this Lease, during the Term, excepting
income taxes and excess profits, estate, single business, inheritance,
succession, franchise or capital taxes upon Lessor or County. If the Premises is
separately assessed from the remainder of Parcel N/Q, then Lessee shall pay
directly to the taxing authority all such taxes assessed against or with respect
to the Premises, and shall furnish Lessor with a copy of the tax bill, marked
"paid" by the taxing authority, at least five (5) days before the due date of
such taxes. If the Premises is not separately assessed from the remainder of
Parcel N/Q, then Lessee shall pay to Lessor, by the later to occur of (i) thirty
(30) days after receipt of an invoice therefor accompanied by a copy of the bill
from the taxing authority, or (ii) thirty (30) days prior to the due date
thereof, fifty-one and eight tenths percent (51.8%) (being the ratio of the
square foot area of the Land to the total square foot area of Parcel N/Q) of the
total amount of such taxes assessed against or with respect to the Land, and the
full amount of such taxes assessed against or with respect to the Facility and
other Improvements.
(2) Specifically and without in any way limiting the generality
of the foregoing, Lessee shall pay all special assessments and levies or charges
made by any State, municipal or political subdivision for local improvements,
and shall pay the same in cash as they
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fall due and before they become delinquent. Lessee must make these payments as
they may be required by the act and proceedings under which any assessments or
levies or charges are made by any State, municipal or political subdivision. If
the right is given to pay any such special assessment or levy either in one sum
or in installments, then Lessee may elect either payment method at its option.
If Lessee elects to pay such special assessment or levy in installments, Lessee
shall be liable only for any installment(s) payable prior to the expiration of
the Term. All of the taxes and charges under this Section shall be prorated
among Lessee and Lessor at the commencement of the Term and expiration of the
Term.
(3) Lessor shall promptly contest any tax assessment which
Lessor, in its reasonable business judgment, deems prudent to contest. If Lessor
fails to contest any tax assessment on the Premises within twenty (20) days
after receipt of notice thereof from Lessee, then Lessee shall have the right to
do so, provided that (i) Lessee gives Lessor prompt written notice of such
contest, (ii) to the extent required by law, Lessee pays such contested tax
assessment prior to the date on which the same becomes due or posts bond or
other security in the amount of such contested tax assessment, and (iii) if the
Project Lease is then in effect and the then-current holder of the tenant's
leasehold interest under the Project Lease is a Lessor's Affiliate, then Lessee
shall permit such tenant to prosecute such contest.
(4) All rebates on account of any such taxes, rates, levies,
charges, or assessments required to be paid and paid by Lessee under the
provisions hereof shall belong to Lessee.
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(5) Additional rent not paid by Lessee as due, and actually paid
by Lessor after Lessee's continued failure to pay the same for fifteen (15) days
after receipt of written notice from Lessor that such payment is overdue, is
subject to a five percent (5%) late fee.
(6) Notwithstanding anything to the contrary in this Section 5.C,
for so long as the Project Lease is in effect and the then-current holder of the
tenant's leasehold interest under the Project Lease is a Lessor's Affiliate, no
taxes shall be due hereunder for any period for which Lessee has not received
the taxes due under the Project Lease.
6. GUARANTY OF CONSTRUCTION.
Lessee guarantees to Lessor completion of the Lessee's Work,
substantially in accordance with the Site Plan and the Plans and Specifications,
on or before July 31, 1998, unless such construction is delayed by lack of
funding therefor not caused by Lessee's acts, omissions or condition, or other
causes beyond Lessee's control. If Lessee fails to complete Lessee's Work by
such date (unless delayed by causes beyond Lessee's control), and such failure
continues for a period of thirty (30) days, then Lessor shall have the right to
complete Lessee's Work and Lessee shall reimburse Lessor for any costs in excess
of those budgeted for Lessee's Work which Lessor incurs in completing Lessee's
Work.
7. FEES AND COSTS OF CONSTRUCTION.
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Lessee shall pay all appropriate fees and charges imposed by
utility companies associated with, and shall pay all costs of, Lessee's Work.
8. LESSEE'S INSURANCE.
A. Mandatory Insurance Requirements During the Construction
Period:
(1) During the period of time between the Lease Commencement
Date and the date on which the use and occupancy certificate is issued for the
Facility (the "Construction Period"), Lessee shall obtain, at its own cost and
expense, and keep in force and effect the following insurance coverages with an
insurance company(ies) licensed to do business in the State of Maryland and
reasonably acceptable to Lessor. Lessee shall provide evidence of coverage by
submitting a certificate of insurance and/or certified copies of the insurance
policies to Lessor and County on or before the Lease Commencement Date. Lessee's
insurance shall be primary.
(a) Commercial General Liability: Minimum Five Million
Dollars ($5,000,000.00) combined single limit (which may be a combination of
commercial general liability and umbrella and/or excess liability policies) for
bodily injury and property damage coverage per occurrence including the
following coverages: Contractual Liability as afforded by Lessee's commercial
general liability policy; Premises and Operations; Independent Contractors;
Products and Completed Operations; Personal Injury; and Broad Form Property
Damage.
(b) Worker's Compensation/Employer's Liability: Meeting
all requirements of Maryland law and with the following minimum limits: (1)
Bodily Injury by
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Accident - $100,000 each accident; (2) Bodily Injury by Disease - $500,000
policy limits; and (3) Bodily Injury by Disease - $500,000 each employee.
(c) Automobile Liability Coverage: Minimum One Million
Dollars ($1,000,000.00) combined single limit for bodily injury and property
damage coverage per occurrence including the following: (1) owned automobiles;
(2) hired automobiles and (3) non-owned automobiles.
(d) Builder's All Risk Property Insurance: Lessee shall
provide a Builder's All Risk Property Policy including fire and extended
coverage to protect the interest of County, Lessor, contractor and
sub-contractors against loss caused by the perils insured in the amount of 100%
of the insurable value of the Facility. The coverage must be written on a
completed value form. The policy shall also endorse a demolition and debris
removal clause, extra expense and loss of use coverages with a sub-limit of
$500,000 per occurrence.
(e) Additional Insured: County and Lessor shall each be
named as an additional insured on all liability policies.
(f) Policy Cancellation: Forty-five (45) days prior
written notice must be provided to County and Lessor of any cancellation, for
other than non-payment of premium, or material change of any of the policies.
(g) Certificate Holders: Lessor, 9900 Blackwell Road,
Rockville, Maryland 20850, and County, Department of Public Works and
Transportation, Division of Facilities & Services, 110 North Washington Street,
Rockville, Maryland 20850.
B. Mandatory Insurance Requirements During the Operations
Period:
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(1) From and after the issuance of the use and occupancy
certificate for the Facility (the "Operations Period"), Lessee shall obtain, at
its own cost and expense, and keep in force and effect during the Term, the
following insurance coverages with an insurance company(ies) licensed to do
business in the State of Maryland and reasonably acceptable to Lessor. Lessee
must provide evidence of coverage by submitting a certificate of insurance
and/or certified copies of the insurance policies to Lessor and County within
thirty (30) days after the issuance of the use and occupancy certificate.
Lessee's insurance shall be primary.
(a) Commercial General Liability: Minimum Five Million
Dollars ($5,000,000.00) combined single limit (which may be a combination of
commercial general liability and umbrella and/or excess liability policies) for
bodily injury and property damage coverage per occurrence including the
following coverages: Contractual Liability as afforded by Lessee's commercial
general liability policy; Premises and Operations; Independent Contractors; Fire
Legal Liability; and Personal Injury Coverage.
(b) Pollution Liability: If Lessee uses any radioactive
material or process at the Premises, it shall obtain, keep in force and effect,
and provide Lessor and County with evidence of, a Pollution Liability policy
with a minimum limit of One Million Dollars ($1,000,000.00), to cover liability
for discharge, release or spills of radioactive material occurring as a result
of Lessee's operations on the Premises and the resulting clean-up costs for
properties adjoining the Premises. As an alternative to maintaining Pollution
Liability coverage, Lessee may provide Lessor and County with a mutually
acceptable letter of credit, payable to Lessor and County, to cover such
exposure.
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(c) Worker's Compensation/Employer's Liability: Meeting
all requirements of Maryland law and with the following minimum limits: (1)
Bodily Injury by Accident - $100,000 each accident; (2) Bodily Injury by Disease
- - $500,000 policy limits; and (3) Bodily Injury by Disease - $500,000 each
employee.
(d) Automobile Liability Coverage: Minimum One Million
Dollars ($1,000,000.00) combined single limit for bodily injury and property
damage coverage per occurrence including the following: (1) owned automobiles;
(2) hired automobiles and (3) non-owned automobiles.
(e) Property Insurance: Lessee shall also provide
all-risk property damage insurance for 100% of the value of the Facility
(exclusive of foundations and footings) and other Improvements against all risks
of direct physical loss or damage including expense of removal of debris of such
property damage by an insured peril. Property policy shall provide 100%
replacement cost endorsement, demolition and debris removal clause, and extra
expense coverage. Loss Payee: Lessor, 9900 Blackwell Road, Rockville, Maryland
20850.
(f) Pollution Clean-up: If Lessee uses any radioactive
material or process at the Premises, it shall obtain, keep in force and effect,
and provide Lessor and County with evidence of, a Pollution Clean-up policy with
a minimum limit of One Million Dollars ($1,000,000.00), to cover, in the event
of discharge, release or spills of radioactive material occurring as a result of
Lessee's operations on the Premises, the costs of extracting such pollutants
from the Premises and restoring the Premises. As an alternative to maintaining
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Pollution Liability coverage, Lessee may provide Lessor and County with a
mutually acceptable letter of credit, payable to Lessor and County, to cover
such exposure.
(g) Boiler and Machinery Insurance: The limit of
coverage: 100% value of the Facility.
(2) Lessee shall provide the above coverage for all the
objects on the Premises in the form of repair or replacement blanket and
comprehensive coverage. The repair/replacement cost provision will include the
following: (a) to pay for repair/replacement valued at the time of replacement;
(b) to permit reconstruction of another site; and (c) to pay replacement cost
when the insured commences replacement within two (2) years from the date of
loss or damage.
(3) The Boiler and Machinery policy must provide Boiler &
Machinery Surveys and Inspection required by applicable law.
(4) Additional Insured: County and Lessor shall each be
named as an additional insured on all liability policies.
(5) Policy Cancellation: Forty-five (45) days prior written
notice must be provided to County and Lessor of any cancellation, for other than
non-payment of premium, or material change of any of the policies.
(6) Certificate Holders: Lessor, 9900 Blackwell Road,
Rockville, Maryland 20850, and County, Department of Public Works and
Transportation, Division of Facilities & Services, 110 North Washington Street,
Rockville, Maryland 20850.
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C. Lessee shall carry any additional or increased coverages
which may be reasonably required by Lessor, consistent with current practices of
lessors of similar properties. Deductibles under all of Lessee's insurance
policies shall be approved by Lessor, in its prudent business judgment.
D. Lessee may carry any additional coverages required by any
lender, and any lender providing financing shall be named as loss payee under
any coverage required thereunder.
9. INDEMNIFICATION.
A. Except as otherwise provided in this Lease, Lessee, as a
material part of the consideration for Lessor's execution of this Lease,
covenants with Lessor that Lessee shall hold Lessor harmless from and against
any loss, damage, claim of damage, liability or expense in connection with loss
of life, personal injury and/or damage to property (collectively, "Claims")
arising from or out of an occurrence upon or at the Premises, or the occupancy
and use of the Premises or any part thereof, or occasioned wholly or in part by
any act or omission in or related to the Life Sciences Center of Lessee, its
employees, agents, contractors, tenants, licensees or invitees, excepting Claims
arising out of the acts or omissions of Lessor, Lessor's agents, Lessor's
employees, Lessor's contractors, Lessor's licensees or Lessor's invitees. In
case Lessor shall, without fault on its part, be made party to any litigation
commenced by or against Lessee, Lessee shall hold Lessor harmless and shall pay
all costs, expenses and reasonable attorneys' fees incurred or paid in
connection with such litigation. In no event shall the limits of any insurance
policy provided for herein be deemed to limit Lessee's liability to Lessor as
herein set forth.
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Notwithstanding the foregoing, the indemnity set forth in this Section 9.A shall
not apply to any Claims arising (i) during any period of time, after the
Construction Period, in which the Project Lease is in effect and the
then-current holder of the tenant's leasehold interest under the Project Lease
is a Lessor's Affiliate, except for Claims arising from the acts and omissions
of Lessee, its agents, employees, contractors, licensees or invitees, or (ii)
during the Construction Period from the acts and omissions of the tenant under
the Project Lease, if the then-current holder of the tenant's leasehold interest
under the Project Lease is a Lessor's Affiliate.
B. Lessor, as a material part of the consideration for Lessee's
execution of this Lease, covenants with Lessee that Lessor shall hold Lessee
harmless from and against any Claims occasioned wholly or in part by any act or
omission in or related to the Life Sciences Center of Lessor, its employees,
agents, contractors or invitees, excepting Claims arising out of the acts or
omissions of Lessee, Lessee's agents, Lessee's employees, Lessee's contractors,
Lessee's tenants, Lessee's licensees or Lessee's invitees. In case Lessee shall,
without fault on its part, be made party to any litigation commenced by or
against Lessor, Lessor shall hold Lessee harmless and shall pay all costs,
expenses and reasonable attorneys' fees incurred or paid in connection with such
litigation.
10. LIENS, CLAIMS OR ENCUMBRANCES.
A. Free of Liens. Lessee shall at all times keep the Premises
free and clear of mechanics', materialmen's and other monetary liens caused or
created by Lessee or anyone claiming through or under Lessee, other than the
lien, operation, and effect of such Mortgages as may be necessary from time to
time to effectuate the financing of the Improvements.
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B. Discharge of Lien. If any mechanics', materialmen's or other
monetary lien shall at any time be filed against the Premises or Parcel N/Q for
work performed by or for Lessee, Lessee shall either cause the same to be
discharged of record within twenty (20) days after Lessee's receipt of notice of
the filing of the same or, if Lessee shall desire to contest any such lien,
Lessee shall, within twenty (20) days after the date of the filing of the lien,
furnish to Lessor security in one hundred fifty percent (150%) of the amount of
the claim, or shall procure a bond in said amount from a reputable bonding
company. The final judgment of any court of competent jurisdiction determining
the validity and/or amount of any such lien shall be conclusive.
C. Failure to Discharge Lien. If Lessee shall fail to discharge
any monetary lien not permitted by this Lease or to provide Lessor with security
therefor or procure a bond therefor as hereinabove provided, then Lessor may at
its option, pay or discharge any such monetary lien, and Lessee shall pay Lessor
all amounts spent by Lessor, including costs, expenses and reasonable attorneys'
fees, incurred by Lessor, together with interest at the rate provided in
Section 11-107(a) of the Courts and Judicial Proceedings Article, Annotated Code
of Maryland, as amended, or in the event that such Section is repealed and not
re-enacted, then interest shall be at the prime rate set by Citibank of New York
or its successor, plus one percent (1%), which payment shall constitute
additional rent due hereunder and shall be paid within thirty (30) days after
Lessor provides a reasonably detailed written notice of the additional rent to
Lessee. Nothing herein requires Lessor to pay or discharge any lien. Lessor may
exercise the
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remedies available in Section 24 of this Lease if the lien is not paid,
discharged or secured as required by this Lease.
11. RIGHT TO CONSTRUCT AND ARCHITECTURAL REVIEW.
A. Submission and Approval of Plans. Lessor grants Lessee the
right to construct a building or buildings on the Premises in accordance with
the Development Plan and the Covenants (as determined by County) and subject to
the following conditions. No building, exterior improvement or addition, or
landscaping shall be erected, placed or altered until plans therefor have been
approved by Lessor and County. Plans will be reviewed promptly when submitted,
and approved or disapproved within ten (10) business days of submission. Lessor
shall not unreasonably withhold, condition or delay such approval. If Lessor or
County shall fail to respond to Lessee's request for approval of plans within
such ten (10) business day period, and shall fail to respond to Lessee's second
request for approval of such plans within five (5) business days of such second
request, then such plans shall be deemed approved by such party. Any disapproval
shall be accompanied by a statement explaining the reasons for the disapproval.
If any plans are disapproved, Lessee shall promptly resubmit revised plans.
Lessor shall keep confidential those plans and related information submitted by
Lessee which have been marked specifically by Lessee as confidential. Lessee
shall provide the following information to County in four copies, and to Lessor,
for their review and approval prior to (or, where appropriate, approval, during)
construction:
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(1) All of the plans, specifications and other information
required by Paragraph II.F.3 of the Development Criteria attached to the
Development Plan as Appendix A; and
(2) All of the plans, specifications and other information
required by Paragraph II.B.1 of the Covenants.
B. Plan Approval is not in Lieu of other Approvals/Permits. The
architectural review and approval described in this Section does not alter,
replace, or in any way substitute for or constitute approval in lieu of other
permits, approvals or authorizations required in the normal building or
construction process.
C. No Monetary Liability for Approval of Plans. Neither County
nor any employee or agent thereof shall be liable for monetary damages to any
occupant or lessee or to anyone submitting plans or requests for approval, or to
any other party by reason of mistake in judgment, negligence, or nonfeasance,
arising out of or in connection with the approval, disapproval or failure to
approve any such plans or requests or for any other action in connection with
its or their duties hereunder. Likewise, anyone so submitting plans to County
for approval, by submitting such plans or requests, and any person when he
becomes an occupant or lessee, agrees that he or it will not bring any action or
suit to recover any monetary damages against County or any employee or agent of
County for such approval or disapproval. Any approval of plans by County shall
not constitute a representation by such party that such approved drawings comply
with applicable building codes. Any deficiency in design or construction,
although same had prior approval of County and Lessor, shall be solely the
responsibility of Lessee.
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Notwithstanding anything to the contrary in this Lease, the terms of the
foregoing paragraph shall apply to County solely in its capacity as owner and
lessor of the Property and grantor of use rights, and not in its governmental
capacity.
D. Coordination of Plans. Any amendments, supplements or
additions to the Plans and Specifications and approved construction schedules
for the Improvements (including but not limited to roads and utilities, but
excluding interior alterations) shall be provided to and coordinated with
representatives of County, representatives of Lessor and Lessee's architect (or
the architect of Lessee's subtenant), and must be reviewed by the Architectural
Review Committee of the Life Sciences Center and approved by County.
12. CONSTRAINTS.
During the Operations Period, Lessee's use of the Premises is
subject to the following permitted uses and performance standards:
A. No Nuisance. No activity shall be conducted nor shall
anything be done on the Premises which may be or become a material nuisance to
Lessor, County, general public, or any lessee by reason of unsightliness or the
excessive emission of fumes, odors, glare, vibration, gasses, radiation, dust,
waste, smoke or noise.
B. Notice of Toxic and Hazardous Materials. Lessee shall provide
Lessor with a copy of: (a) each notification or other document it is required to
submit to the State Emergency Response Commission under Sections 311 and 312 of
the Superfund Amendments and Reauthorization Act of 1986 and any amendments
thereto; and (b) each annual report it is required to submit to the Maryland
Department of the Environment under COMAR 26.13.03.06
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and any amendments thereto; and (c) each report regarding its use, storage,
management or disposal of toxic, hazardous or radioactive materials which it is
required to submit to any other governmental authority under any other law or
regulation enacted by the federal government, the State of Maryland, or the
County in its governmental capacity. Lessee shall, and shall cause all Occupants
of the Premises to, store, manage, and dispose of all toxic, hazardous and
radioactive materials in accordance with applicable laws and regulations.
Notwithstanding the foregoing, Lessee shall not have the obligations set forth
in this Section 12.B during any period of time, after the Construction Period,
in which the Project Lease is in effect and the then-current holder of the
tenant's leasehold interest under the Project Lease is a Lessor's Affiliate,
except with respect to toxic, hazardous or radioactive materials used, stored,
managed or disposed of at the Premises by Lessee, its agents, employees or
contractors.
C. Indemnification. During the Term, Lessee hereby agrees to
indemnify and hold Lessor and any Leasehold Mortgagee harmless, except, with
respect to Lessor, in the case of the negligence or intentional misconduct of
Lessor or its agents, employees, or contractors, with regard to any Claims
arising from or out of a breach of Lessee's obligations under Section 12.B
concerning toxic and hazardous materials, radioactive materials, controlled
substances and medical waste, including but not limited to, reasonable counsel
fees, court costs, litigation related expenses, expenses for legally required
clean up, enforcement expenses, and any consequential damages payable by Lessor
to the County under the Prime Lease or to the Leasehold Mortgagee resulting from
the use or storage of the referenced materials on the Premises. Notwithstanding
the foregoing, the indemnity set forth in this Section 12.C shall not apply, (i)
except to the acts
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and omissions of Lessee, its agents, employees or contractors, with respect to
any period of time, after the Construction Period, during which the Project
Lease is in effect and the then-current holder of the tenant's leasehold
interest under the Project Lease is a Lessor's Affiliate, or (ii) during the
Construction Period, with respect to any Claims arising from the acts or
omissions of the tenant under the Project Lease, if the then-current holder of
the tenant's leasehold interest under the Project Lease is a Lessor's Affiliate.
D. Outdoors Activities. All of the operations normally carried
on indoors shall be carried on within fully enclosed buildings. No outside
activities shall be carried on, except for incidental meetings or events held
outside in non-inclement weather and the parking of motor vehicles and the
loading and unloading of motor vehicles and approved recreational activities,
without the prior written approval of Lessor. This paragraph shall not be deemed
to prohibit therapy and types of exercise normally carried on outdoors.
E. Building Sites. Building sites shall be used only as approved
by Lessor in granting this Lease and approved by County through its Development
Plan and its architectural review, and in accordance with applicable law.
F. Compliance with Mortgages. Lessee will use and occupy the
Premises in accordance with all applicable provisions of any Mortgage then
encumbering Lessee's interest in this Lease.
13. BUILDING CONSTRUCTION AND ALTERATIONS.
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A. Building Codes. Lessee agrees that construction or
alterations of any building shall be in conformance with the then existing
applicable standards, codes and ordinances. Lessee shall not make any structural
or exterior alterations to any building or other Improvement, or demolish any
building or other Improvement, without the prior written consent of Lessor.
During the Construction Period, Lessor's consent shall not be unreasonably
withheld, conditioned or delayed. During the balance of the Term, Lessor's
consent may be granted or withheld in Lessor's sole discretion, except that
Lessor's consent shall not be required for any alteration or demolition required
by any applicable law, code, ordinance or regulation so long as Lessee gives
Lessor written notice of such requirement prior to performing such alteration or
demolition.
B. Cleaning of Premises. During the Construction Period, Lessee
agrees that all building sites shall be kept clean on a daily basis and all
trash, rubbish and debris removed therefrom after any construction work is
performed thereon.
C. Premises "As Is". Lessee has leased the Premises in an "as
is" condition after an examination thereof and of the sub-surface conditions
beneath the same and without any representation or warranty on the part of
Lessor.
14. LANDSCAPING. OUTSIDE STORAGE AND MAINTENANCE. Lessee agrees that
it will adhere to the following requirements.
A. Landscaping. Landscaping shall be in accordance with the plan
submitted to and approved in writing by Lessor and County in accordance with
Section 11.A.. Such landscaping shall include sodding, planting of trees,
shrubs, and other customary landscaping
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treatment for the entire Premises, including adequate screening of parking
areas. The approved plan for landscaping may not be materially altered without
submitting the revised plan for written approval of Lessor and County.
B. Maintenance of Landscaping. Maintenance of existing and
approved landscaping shall include keeping the lawns mowed and the hedges
trimmed, and the watering and removal of weeds from planted areas, all as needed
to maintain the Premises in a neat, clean and safe condition and appearance, as
is customary for other parcels within the Shady Grove Life Sciences Center.
C. Screening of Storage Areas. Except during construction, no
materials, supplies, equipment, vehicles (except in designated areas), finished
products or semi-finished products, furniture, furnishings, raw materials, or
other articles of any nature shall be stored or permitted to remain on the
exterior of any building site without appropriate screening to be approved by
Lessor and County.
D. Storage of Fuel Oil, etc. Except during construction, or as
approved by Lessor and County, permanent storage facilities for fuel oil, other
bulk fluids or gasses, such as bulk oxygen systems, must be provided below
grade. If below grade storage is technically infeasible or economically
prohibitive, Lessee may store these materials above grade provided suitable
screening is furnished by Lessee and approved by Lessor and County. At all
times, such materials must be stored in an environmentally safe manner, pursuant
to applicable Federal, State and local laws and regulations.
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E. Safe conditions. Lessee shall keep the Premises,
Improvements, and appurtenances in a safe, clean and neat condition, and shall
comply in all respects with all government health and policy requirements.
Lessee shall remove at its own expense any rubbish, garbage or trash of any
character which may accumulate from or on the Premises. Rubbish, trash and
garbage shall be kept in a sanitary manner inside buildings.
F. Vacant Buildings. Vacant or unfinished buildings, or parts
thereof, shall be adequately secured against vandalism and intrusion by
trespassers.
15. UTILITY CONNECTIONS.
Lessee agrees that, except for emergency electricity generators
and satellite receiving transmission dishes, all electrical and telephone
connections and installations of wires to buildings shall be made underground to
the extent reasonably possible. Where reasonably possible each transformer,
electric, gas or other meter of any type, or other apparatus, shall be placed on
or below the surface of the land, or in structures, and where placed on the
surface shall be adequately screened and fenced, and all such installations
shall be subject to the prior written approval of Lessor and County.
Notwithstanding the foregoing, Lessee may place exhaust fans, duct work, package
HVAC units, satellite dishes and other equipment on the screened area of the
roof of the Facility. Lessee shall pay the costs of all necessary utility
connections.
16. SIGNS OR MONUMENTS.
A. Defined. For the purpose of this paragraph, a sign or
monument is the display of any words, numerals, figures, devices, designs or
trademarks by which anything is made known and visible to the general public.
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B. Approval of Plans. Lessee agrees that all plans and
specifications for signs or monuments to be erected on the exterior of the
building or grounds and visible to the general public shall be subject to the
prior written approval of Lessor and County. The submitted information shall
include details of design, materials, location, color and lighting, if any.
Lessee may, subject to prior written approval of Lessor and County, place
appropriate markers and directional signs on County's property outside of the
Premises (including the remainder of Parcel N/Q), which shall be in keeping with
the character and nature of Lessee's operations.
C. Construction Signs. During any construction or reconstruction
of improvements on the Premises, Lessor agrees to allow any lender, contractor,
developer or other participant in such construction or reconstruction to place a
temporary sign publicizing its participation in the financing, construction or
reconstruction of the Facility, subject to such reasonable requirements as may
be imposed by Lessor and County, and subject to applicable ordinances.
17. PARKING AREAS AND LOADING ZONES.
A. Parking Facilities. Lessee shall provide adequate paved
off-street surface parking facilities for visitors, tenants, customers, and
employees as required by zoning regulations unless otherwise legally waived by
the proper authority. The development of common or jointly shared parking
facilities is encouraged and should be undertaken whenever possible. No parking
shall be permitted on any access road, street or driveway, either public or
private, or any place other than a paved parking space provided for and so
designated. Lessee
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shall be responsible for taking reasonable measures to ensure compliance with
parking regulations by its employees, tenants and visitors.
B. Loading and Unloading Areas. Lessee agrees that loading and
unloading areas shall be designed with adequate maneuvering space to permit
pickups and deliveries. The space for maneuvering of vehicles shall avoid
interference with other traffic flow. Suitable screening shall be provided so
these operations are not readily visible from ground-level public thoroughfares.
Loading and receiving areas shall not be located on that side of the building
which also contains its main entrance.
18. TEMPORARY STRUCTURES.
Lessee agrees that no structure, covering, garage, barn, or other
outbuilding of a temporary nature shall be situated, erected or maintained on
any part of the Premises except with prior approval of Lessor and County and in
compliance with applicable zoning ordinances. This paragraph shall not apply to
construction buildings, construction trailers, storage facilities and/or other
structures of a temporary nature used in construction, used during the course of
construction of any permanent building which is now on or is to be located on
the Premises; provided, however, that any such buildings, trailers, facilities
or other structures shall be in compliance with any applicable zoning
ordinances.
Lessor hereby approves, and warrants that County approves,
Lessee's installation and use of temporary facilities on the Premises, subject
to applicable zoning ordinances and receipt of any necessary governmental
approvals, and provided that any such temporary facility shall be kept on the
Premises only for the period, not to exceed two (2) years, during which
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Lessee is constructing or building out space on the Premises into which the
business conducted in such temporary facility will be moved.
19. MAINTENANCE OF PROPERTY.
A. Lessee's Obligation. Lessee, at Lessee's expense, shall at
all times maintain the Premises (including, without limitation, the Facility and
the fixtures and equipment therein) in good condition and repair. Lessee must
submit, for approval by Lessor and County, all maintenance and repair plans and
amendments thereto for maintenance and repairs to building exteriors,
landscaping, fences, drives, parking lots, and the exteriors of other structures
located thereon, which maintenance or repairs materially alter the condition of
the Premises which existed prior to the need for such maintenance or repair
arising.
B. Lessor's Right, but not Obligation to Repair. In the event of
the violation of any of the restrictions set forth in Sections 12 through 19
herein by Lessee, Lessor shall notify Lessee in writing, giving specifics as to
the nature of the alleged violation and any recommended remedial action. In the
event Lessee has not taken steps to remedy the violation in a manner reasonably
acceptable to Lessor within thirty (30) days after Lessee's receipt of such
notice, subject to Section 24.E, Lessor shall have the right to enter upon the
Premises to put the same in good order, condition and repair and all costs
associated with any such work shall be charged against Lessee as additional rent
payable within thirty (30) days after invoice, which shall include reasonable
details of the costs charged as additional rent.
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C. County's Maintenance. Subject to appropriation of funding,
County is responsible for maintaining all parcels within the Shady Grove Life
Sciences Center that have not been leased or that are unoccupied, and for making
all necessary arrangements for the maintenance and repair of the Common Areas
(as defined in Section 23.A).
20. COOPERATIVE MAINTENANCE AGREEMENT AND COMMON AREA CHARGES.
A. Maintenance Agreement. A maintenance agreement between County
and Lessor or among lessees of the Shady Grove Life Sciences Center may be
established for the purpose of maintaining the Common Areas. No such agreement
shall discharge or relieve Lessee of its responsibilities under the terms and
conditions of this Lease.
B. Common Area Contribution. Within thirty (30) days after
receipt of a reasonably itemized invoice, for each year during the Term, Lessee
agrees to pay as additional rent to Lessor, fifty-one and eight tenths percent
(51.8%) (being the ratio of the square foot area of the Land to the total square
foot area of Lot N/Q) of all amounts billed by County to Lessor for the purpose
of reimbursing County for the actual costs of its care and maintenance of the
Common Areas within the Shady Grove Life Sciences Center that do not form a part
of Parcel N/Q ("Common Area Expenses"). Such Common Area Expenses shall not
include the costs of constructing, replacing, or installing roads, parking
areas, utilities, or related infrastructure (e.g. the power plant) located
within the Shady Grove Life Sciences Center. Notwithstanding anything to the
contrary in this Section 20.B, for so long as the Project Lease is in effect and
the then-current holder of the tenant's leasehold interest under the Project
Lease is a Lessor's
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Affiliate, no Common Area Expenses shall be due hereunder for any period for
which Lessee has not received the Common Area Expenses due under the Project
Lease.
C. Storm Water Management. Lessee will provide for the safe
conveyance of storm water from the Premises in accordance with County's rules
and regulations regarding storm water management.
21. UTILITY SERVICE AND ACCESS.
A. County has provided for water, sewer, gas, electricity, and
telephone service to the Premises. All meters, connecting charges and all
outlets, risers, wiring, piping, duct work or other means of distribution of
such services within the Premises of Lessee shall be supplied by Lessee at
Lessee's expense. Lessee covenants and agrees that at all times its use of any
of such services shall never exceed the capacity of the mains, feeders, ducts
and conduits bringing same to the Premises or of the outlets, risers, wiring,
piping, duct work or other means of distribution of such service within the
Premises. Lessee may increase the capacity of the mains, feeders, ducts, and
conduits if Lessee pays for and performs all necessary work therefor, and has
obtained Lessor's and County's approval in writing. Such work performed by
Lessee shall be at no increased expense or cost to County in any manner
whatsoever. Other than the matters provided above, Lessee shall furnish and pay
for installation and use of all utilities, including but not limited to fuel,
gas, electricity, water, sewer charges, telephone and the necessary equipment
therefor within the Premises. Lessee shall construct, at its own expense, the
water and sanitary sewer lines to connect the Improvements.
22. ACCESS BY LESSOR AND EASEMENT.
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A. Access to Maintain Pipes. In the event Lessee fails to do so
within thirty (30) days after written notice from Lessor, subject to Section
24.E, Lessee shall permit Lessor or County, at Lessee's expense, and subject to
the provisions of this paragraph, to repair and maintain all pipes and conduits
in and through the Premises that Lessee is required to maintain. Lessor, County
or their respective agents shall have the right, subject to Section 24.E, to
enter upon the Premises at all reasonable times and upon at least forty-eight
(48) hours' notice except in case of an emergency to examine same and to make
such repairs, alterations, improvements or additions to same as may be required
of such party pursuant hereto, and Lessor or County shall be allowed to take all
material into and upon said Premises that may be required therefor without the
same constituting an eviction of Lessee, in whole or in part. In case of an
emergency, Lessor or County shall give such notice to Lessee as is reasonable
under the circumstances.
B. Reservation of Easements. In the Prime Lease, County has
reserved the right, consistent with the Development Plan, the Covenants and with
the Plans and Specifications, to establish easements and/or rights-of-way, for
streets, roads, underground utilities, and other related purposes, in order to
facilitate development of the Life Science Center, provided that such easements
or rights-of-way shall not interfere with the use, operations, or maintenance
of, or materially adversely affect the value of, the Property.
C. Accommodation of Lessee. Lessor shall use reasonable efforts
to minimize the interference with business activities on the Premises when
exercising Lessor's rights pursuant to this Section.
23. COMMON AREAS.
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A. Lessee's Non-exclusive Right to Use. Lessee shall have a
non-exclusive right to use: (i) the public conveniences and common areas, if
any, in the Life Sciences Center; and (ii) all other areas in the Life Sciences
Center such as sidewalks, roads and driveways, to be used in common by lessees
of the Life Sciences Center, ((i) and (ii) collectively referred to and
identified for use as "Common Areas").
B. County's Right to Make Changes to Common Areas. In the Prime
Lease, County has reserved the right to construct buildings and to make changes,
additions, alterations or improvements on or to the Common Areas; provided,
however, that such activity does not cause an obstruction of the access to the
Premises, any unreasonable interference with the permitted uses of the Premises,
or a material adverse effect on the value of the Premises.
24. ENFORCEMENT.
A. Lease for the Benefit of Parties. The provisions of this
Lease shall run for the Term of this Lease (including any Extension Terms) and
be binding upon and inure to the benefit of Lessor and Lessee and their
respective successors and assigns. These provisions shall be enforced, as
provided hereinafter, by Lessor or by Lessee for their respective benefit or
protection.
B. Remedies. A violation of any provision herein contained
shall, subject to Section 24.E, give to Lessor or Lessee the right to bring
proceedings in a court of competent jurisdiction against the party or parties
violating or attempting to violate any of said covenants, conditions,
restrictions and reservations, to enjoin them from so doing, to cause any
violation to be remedied, and/or to recover damages resulting from such
violation. In addition, violation of
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any covenants, conditions, restrictions, and reservations shall, subject to
Section 24.E, give to Lessor the right to enter upon the Premises to remove, at
the expense of Lessee, any structure, thing or condition that may be contrary to
the provisions hereof after providing Lessee's subtenant and any Leasehold
Mortgagee, if any, with written notice of the violation and providing not less
than thirty (30) days in which to cure the alleged violation, which cure period
shall be extended for so long as may be reasonably necessary to cure such
violation, so long as Lessee, Lessee's subtenant or any Leasehold Mortgagee
proceeds diligently to effect such cure after receipt of Lessor's notice. In any
judicial proceeding to enforce the provisions hereof or to enjoin their
violation, the prevailing party or parties shall be entitled to reasonable
attorneys' fees from the party or parties against whom judgment is entered in
such amount as may be fixed by the court in such proceedings. Such remedies
shall be cumulative and not exclusive.
C. Default. Lessee's violation of any of the provisions of
Section 5 requiring Lessee to pay annual base rent and additional rent, Section
6 requiring Lessee to complete construction of the Lessee's Work, Section 8
requiring Lessee to maintain and provide Lessor and County with evidence of the
insurance coverages set forth therein, or Lessee's use of the Premises for any
use other than those permitted by the Covenants, shall, at Lessor's option and
subject to Section 24.E, be deemed to create a default under this Lease and to
give rise to the right of termination or eviction, or any other remedy provided
by law, provided that said violation has not been cured within twenty-five (25)
days after written notice has been given to Lessee, Lessee's subtenant and any
Leasehold Mortgagee, and further provided that Lessee, Lessee's subtenant or any
Leasehold Mortgagee has not taken steps to remedy said violation in a
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manner reasonably acceptable to Lessor within said twenty-five (25) days after
the written notice, or has not thereafter diligently proceeded to complete the
remedying of such violation, and further provided that Lessee's subtenant has
not cured such violation within a reasonable time after receipt of the second
default notice described in Section 29. Lessee's material violation of any of
the other provisions set forth herein shall, at Lessor's option and subject to
Sections 24.E and 24.F, be deemed to create a default under this Lease but shall
not in any event give rise to the right of termination or eviction; provided,
however, that such default shall give rise to any other remedy provided by law,
provided that said violation has not been cured within twenty-five (25) days
after written notice has been given to Lessee, Lessee's subtenant and any
Leasehold Mortgagee, and further provided that Lessee, Lessee's subtenant or any
Leasehold Mortgagee has not taken steps to remedy said violation in a manner
reasonably acceptable to Lessor within said twenty-five (25) days after the
written notice or has not thereafter diligently proceeded to complete the
remedying of such violation, and further provided that Lessee's subtenant has
not cured such violation within a reasonable time after receipt of the second
default notice described in Section 29.
D. Bankruptcy. Lessee agrees that it shall be a default of this
Lease if Lessee is (i) voluntarily placed into bankruptcy for purposes of
liquidation or (ii) involuntarily placed into bankruptcy for purposes of
liquidation and such bankruptcy proceeding is not dismissed within one hundred
fifty (150) days. In the event that Lessee is placed into bankruptcy for the
purpose of reorganization or rehabilitation, Lessor and Lessee agree that it
shall be a default of this Lease only if such bankruptcy proceeding reduces the
amount of rent to be paid by Lessee;
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or Lessee has failed to pay the rent in accordance with Section 5 of this Lease.
Upon default of this Lease, Lessor and Lessee retain their respective remedies
and cure rights set forth in this Lease.
E. No Default Arising From Acts or Omissions of Lessor's
Affiliates. Notwithstanding anything in this Lease to the contrary, Lessee shall
not be in default of this Lease and Lessor shall have no rights or remedies as a
result of a violation of any provision of this Lease (including, without
limitation, Sections 8, 10, 12, 14-19 inclusive, 21, 25 and 26) if such
violation is caused during any period in which the then-current holder of the
tenant's leasehold interest under the Project Lease is a Lessor's Affiliate, by
a failure to perform the comparable provision of the Project Lease by such
Lessor's Affiliate.
F. Limitation on Lessor's Right to Terminate. Notwithstanding
anything to the contrary in Section 24.C, Lessor shall not have the right to
terminate this Lease or evict Lessee from the Premises for Lessee's violation of
the provisions of Section 8 requiring Lessee to maintain and provide Lessor and
County with evidence of the insurance coverages set forth therein, or for
Lessee's use of the Premises for any use other than those permitted by the
Covenants, if (i) such violation is caused during any period in which the
then-current holder of the tenant's leasehold interest under the Project Lease
is the assignee of a Lessor's Affiliate or of any assignee in a chain of title
originating with a Lessor's Affiliate, by a violation of the comparable
provision of the Project Lease by such assignee, and (ii) Lessee is using
reasonable and diligent efforts to enforce such provision of the Project Lease
against such assignee.
25. EXPIRATION.
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A. Surrender of Improvements. At the expiration or earlier
termination of the Term, all buildings, alterations, additions or improvements
then upon the Premises shall become the property of Lessor and remain upon and
be surrendered with the Premises as a part thereof. At the expiration or earlier
termination of the Term, the Premises and all such buildings, alterations,
additions or improvements shall be surrendered to Lessor broom clean and in as
good condition as they were in on the Rent Commencement Date, ordinary wear and
tear excepted, subject to the provisions of Section 34.C.
B. Removal of Trade Fixtures. All trade fixtures, furnishings
and equipment, whether or not they are or may be deemed to constitute part of
the Improvements may be removed by Lessee, at its sole option. Lessee, at its
expense, shall immediately repair any damage to the Premises or Improvements by
reason of removal of any such trade fixture, furnishings and equipment. If
Lessor elects to enter thereon and take possession at the termination of this
Lease, all repairs not previously made, at the option of Lessor, may be
corrected at the expense of Lessee, normal wear and tear excepted.
26. TENANT HOLDING OVER.
If Lessee shall not immediately surrender possession of the
Premises at the expiration or termination of this Lease, Lessor shall be
entitled to retake or recover possession of the Premises as hereinbefore
provided in case of expiration or termination on the part of Lessee and have
available to it any and all other remedies available by law. If Lessee shall
fail to surrender possession of the Premises immediately upon the expiration of
the Term, Lessee hereby agrees that all the rights and obligations of Lessee and
Lessor applicable during the Term
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shall be equally applicable during such period of subsequent occupancy, except
that during the holdover tenancy, Lessee shall pay one hundred twenty-five
percent (125%) of the annual base rent payable during the last year of the Term.
27. MORTGAGE OF LESSEE'S LEASEHOLD INTEREST.
A. Notice of Default under Mortgage or Lease. Lessee shall have
the right at any time and from time to time to mortgage this Lease and/or assign
or hypothecate Lessee's interest in this Lease and/or in the Improvements as
security for a loan, provided that this Lease is not subordinated to the terms
of any assignment or Mortgage except as provided in Section 28 hereof. Any
subtenant (but no tenant of any subtenant) of Lessee shall have the right at any
time and from time to time to mortgage its sublease and/or assign or hypothecate
its interest in such sublease and/or in the Improvements as security for a loan,
and Lessee may subordinate its interest in such sublease to the terms of any
such assignment or mortgage, provided that this Lease is not subordinated to the
terms of any assignment or Mortgage except as provided in Section 28 hereof.
B. Leasehold Mortgagee Right to Notice and Cure. Any Leasehold
Mortgagee with respect to which Lessor has received a written notice specifying
the name and address of such Leasehold Mortgagee, shall be given (by personal
delivery or by certified mail, return receipt requested) by Lessor a copy of
each notice of default by Lessee or other notice or demand to or upon Lessee, at
the same time as and whenever such notice of default or other notice or demand
shall thereafter be given by Lessor to Lessee, addressed to such Leasehold
Mortgagee at the address last furnished to Lessor. No notice of a default by
Lessee or demand
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upon Lessee shall be deemed to have been given by Lessor to Lessee unless and
until a copy thereof shall have been given to each Leasehold Mortgagee with
respect to which Lessor has been notified. Lessor will accept performance by any
such Leasehold Mortgagee of any covenant, condition or agreement on Lessee's
part to be performed hereunder with the same force and effect as though
performed by Lessee, and any Leasehold Mortgagee which performs any covenant,
condition or agreement shall be subrogated to any and all rights of Lessee with
respect thereto. Nothing contained in this Lease shall obligate any Leasehold
Mortgagee to cure any default of Lessee under this Lease or constitute an
assumption by any Leasehold Mortgagee of the obligations of Lessee under this
Lease.
C. Leasehold Mortgagee as Holder of Lessee's Interest. A
Leasehold Mortgagee may become the legal owner and holder of Lessee's interest
under this Lease by foreclosure of its Mortgage, or as a result of the
assignment of this Lease in lieu of foreclosure, whereupon (but in no event
before becoming such legal owner or holder) such Leasehold Mortgagee shall
immediately become and remain liable under this Lease, so long as (but no longer
than) such Leasehold Mortgagee is entitled to possession of the Premises.
D. Certain Restrictions During Leasehold Mortgage. So long as
any Mortgage is in existence, and no default exists hereunder which has not been
cured (by Lessee, any Leasehold Mortgagee or any Subtenant, as defined herein)
within the period of time provided herein, Lessor shall not accept a surrender
of the Premises or a termination or modification of this Lease, prior to the
expiration of this Lease, without the prior written consent of all Leasehold
Mortgagees (of whom Lessor has received prior written notice). Any right or
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remedy which permits Lessee to terminate this Lease shall be conditioned on the
written consent to such termination by all Leasehold Mortgagees.
E. New Financing. In the event any Leasehold Mortgagee requires,
as a condition of providing financing, that modifications to this Lease be
obtained, and provided that such modifications do not, in Lessor's reasonable
judgment, unreasonably increase Lessor's obligations or reduce Lessor's rights
under this Lease, then Lessee shall submit to Lessor a written amendment to this
Lease incorporating such required modifications, and Lessor shall execute such
amendment and deliver the same to Lessee within thirty (30) days after receipt
of such amendment.
F. Assignment by Leasehold Mortgagee. Any party, including a
Leasehold Mortgagee or the assignee of such Leasehold Mortgagee, that becomes
the owner of or acquires any interest in this Lease pursuant to foreclosure and
sale or by assignment in lieu of foreclosure, may sell, assign, transfer or
otherwise dispose of this Lease or its interest in this Lease without the
consent of Lessor; provided, however, that for so long as the Prime Lease is in
effect, no such Leasehold Mortgagee or assignee shall occupy or sublease the
Premises for any use other than a manufacturing and industrial use allowed by
the Covenants without the consent of Lessor and County, which consent shall not
be unreasonably withheld, conditioned or delayed. All rights and references
herein to a Leasehold Mortgagee, shall be read to include the assignee of such
Leasehold Mortgagee. Notice of any such assignment shall be given to Lessor and
County.
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G. Notice of Mortgages. Lessee shall give Lessor notice of any
recorded mortgages or liens upon Lessee's leasehold interest in the Premises in
connection with the financing of the Premises.
28. MORTGAGE OF LESSOR'S INTEREST.
For so long as the Project Lease is in effect and any Lessor's
Affiliate is the then-current holder of the tenant's leasehold interest under
the Project Lease, Lessee and such Lessor's Affiliate shall each have the right
to subject Lessor's leasehold or fee simple interest in the Premises to
construction and permanent loans (or refinancings of such loans), the proceeds
of which shall be applied toward payment for the costs of acquisition, leasing,
development, financing and construction of the Premises and the Improvements
thereon (including but not limited to, site preparation and development costs,
fees of architects, engineers, site planners and other consultants, attorneys'
fees, lender's counsel fees, loan commitment fees, title costs, survey costs,
all fees and costs in connection with applying for and obtaining any permits and
approvals, a development fee payable for construction of the Improvements, the
price payable to The Buccini/Pollin Group, Inc. for its option to lease or
purchase Parcel N/Q, the rent payable under this Lease, and the net annual base
rent payable under the Project Lease). For this purpose, each of Lessee and such
Lessor's Affiliate may subject Lessor's interest in the Premises to a single
Mortgage, and may require Lessor and Lessor's Affiliate to join with it in the
execution and delivery of such Mortgage, which Mortgage shall constitute a lien
on Lessor's and Lessee's interest in the Premises as well as the buildings and
improvements to be erected thereon by such party, subject, however, to the
following:
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A. The loans secured by such Mortgage shall be made by a
commercial or savings bank, trust company, savings and loan institution or other
financial institution authorized to do business in the State of Maryland and
acceptable to Lessor, in its reasonable discretion;
B. The amount and terms of the loans secured by such Mortgage,
and the terms and conditions of such Mortgage and all instruments collateral
thereto shall be acceptable to Lessor, in its reasonable discretion; and
C. Such Mortgage shall expressly provide that the Leasehold
Mortgagee will give Lessor copies of all written notices of any default sent
thereunder, the failure to cure which might result in acceleration of the debt
secured by said Mortgage, and that after receipt of such notice, Lessor will
have the cure period for such default provided to the debtor in such Mortgage.
29. ASSIGNMENT AND SUBLEASING; LESSOR'S RIGHT OF FIRST REFUSAL.
A. Right of First Refusal. If Lessee, at any time during the
Term, receives an offer to purchase Lessee's leasehold interest in the Premises,
and Lessee desires to accept said offer, or if Lessee, at any time during the
Term, makes an offer to sell its leasehold interest in the Premises, then Lessee
shall give Lessor thirty (30) days notice in writing of such offer setting forth
the name and address of the proposed purchaser with executed copies of all
relevant documents, the amount of the proposed purchase price, and all other
terms and conditions of such offer, and Lessor shall have the first option to
purchase Lessee's leasehold interest in the Premises by giving written notice to
Lessee of its intention to purchase within said thirty (30) day period. In the
event Lessor exercises its option to purchase Lessee's leasehold interest in the
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Premises, Lessee shall sell and Lessor shall purchase Lessee's leasehold
interest in the Premises on the terms set forth in the offer. If Lessor shall
not elect to purchase Lessee's leasehold interest in the Premises in accordance
with the terms and conditions of the offer, (i) Lessee shall have the right to
sell and convey Lessee's leasehold interest in the Premises to another party but
only in accordance with all of the provisions of the offer and (ii) this Lease
and all of its terms and conditions shall nevertheless remain in full force and
effect and Lessor and any purchaser or purchasers of Lessee's leasehold interest
in the Premises shall be bound thereby. If Lessor shall not elect to purchase
Lessee's leasehold interest in the Premises in accordance with the terms and
conditions of the offer and Lessee's leasehold interest in the Premises is not
sold in accordance with the offer, Lessor shall have, upon the same conditions
and notice, the continuing first option to purchase Lessee's leasehold interest
in the Premises, upon the terms of any subsequent offer or offers to purchase.
If Lessor defaults in its obligation to purchase Lessee's leasehold interest in
the Premises when Lessor is obligated to make settlement of such purchase
pursuant to this Section 29, Lessee shall have the right to avail itself of any
and all remedies available to it under applicable law and this Lease shall
continue in full force and effect but Lessor's option rights under this Section
29 shall cease and terminate and the provisions of this Section 29 shall have no
further force or effect. Lessor's option rights under this Section 29 shall be
assignable by Lessor (separate and apart from this Lease) and, in such event,
Lessee's leasehold interest in the Premises shall be acquired in such name as
may be designated by Lessor or Lessor's assignee. Notwithstanding anything to
the contrary herein, Lessor's rights under this Section 29 shall be subordinate
to the option, held by MAGENTA Corporation, its successors or assigns under the
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Project Lease, to purchase the Lessee's leasehold interest in the Premises at
the expiration of the initial term or any extension term of the Project Lease.
B. Assignment or Subletting to Competitors. Lessee shall not
assign this Lease to, or enter into a sublease with, a competitor of Lessor,
without the prior written consent of Lessor, which may be granted or withheld in
Lessor's sole discretion. For purposes of this Lease, a "competitor of Lessor"
shall mean any person, corporation, limited liability company, partnership,
trust or other business entity which is or is about to become engaged in the
development, manufacture or sale of any product, or the sale or performance of
any service, which competes with: (i) biosafety testing of raw material,
in-process products and/or final products; analytical characterization of
products; toxicology testing of products; or manufacturing of biological
products intended for therapeutic use; or (ii) any product then being
manufactured or sold, or any services then being sold or performed, by Lessor or
any of its affiliates, which is directly or indirectly related to biological or
chemical processes, services or products.
C. Other Assignments and Sublettings. Except as otherwise set
forth in Sections 29.A and 29.B, Lessee shall have the right to assign this
Lease or enter into a sublease with any other party without the necessity of
obtaining Lessor's consent; provided, however, that no assignee or subtenant
shall occupy the Premises, or any part thereof, without the prior written
consent of Lessor, which consent may be granted or withheld in Lessor's sole
discretion. Lessee shall give Lessor prompt written notice of any assignment or
subletting. No assignment or subletting shall be deemed to release Lessee from
its obligations under this Lease. Lessor
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acknowledges that Lessee intends to enter into a sublease with MAGENTA
Corporation (a Lessor's Affiliate as of the date of this Lease) for the
Premises. Any subtenant (each a "Subtenant", which term does not include any
tenant of a subtenant) of Lessee, with respect to which Lessor has received a
written notice specifying the name and address of such Subtenant, shall be given
by Lessor a copy of each notice of default by Lessee or other notice or demand
to or upon Lessee, at the same time and in the same manner as and whenever such
notice of default or other notice or demand shall thereafter be given by Lessor
to Lessee, addressed to such Subtenant at the address last furnished to Lessor.
No notice of a default by Lessee shall be deemed to have been given by Lessor to
Lessee unless and until a copy thereof shall have been given to each Subtenant
with respect to which Lessor has been notified. In the event that Lessee
receives notice from the Lessor of a default by Lessee and such default is not
cured by Lessee pursuant to the provisions of this Lease, Lessor shall, prior to
commencing any judicial proceedings or taking any other action, including
ejectment or dispossession proceedings, to obtain possession of the Premises, in
addition to giving the notice to each Subtenant, give a second notice of the
failure of Lessee to cure such default to each Subtenant at the expiration of
the period within which Lessee may cure as set forth in this Lease, and the
Subtenant may proceed to cure any such failure. Lessor will accept performance
by any such Subtenant of any covenant, condition or agreement on Lessee's part
to be performed hereunder with the same force and effect as though performed by
Lessee, whether or not Lessee is in default under this Lease at the time of such
performance. Any Subtenant which performs any covenant, condition or agreement
shall be subrogated to any and all rights of Lessee with respect thereto.
Nothing
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contained in this Lease shall obligate any Subtenant to cure any default of
Lessee under this Lease or constitute an assumption by any Subtenant of the
obligations of Lessee under this Lease.
D. Successors and Assigns. Lessor and Lessee agree that all of
the terms, covenants and conditions, agreements, rights, privileges, obligations
and duties contained in this Lease shall be construed to be covenants running
with the land, and all rights and liabilities herein given to, or imposed upon,
the respective parties hereto shall extend to and bind the respective successors
and assigns of said parties; and if Lessee shall be comprised of more than one
individual or entity, they shall all be bound jointly and severally by the
terms, covenants and agreements herein.
E. Rights of Subtenants. So long as any sublease is in effect,
and no default exists hereunder which has not been cured (by Lessee, any
Subtenant or any Leasehold Mortgagee) within the period of time provided herein,
Lessor shall not accept a surrender of the Premises or a termination or
modification of this Lease, prior to the expiration of this Lease, without the
prior written consent of all Subtenants (of whom Lessor has received prior
written notice). Any right or remedy which is expressly granted in this Lease
allowing Lessee to terminate this Lease shall be conditioned on the written
consent to such termination by all Subtenants.
Lessor agrees that in the event this Lease is terminated, Lessor
will not disturb the rights of any Subtenant, so long as (i) such Subtenant
complies with all of the material terms of its sublease, and (ii) such sublease
is expressly subject to this Lease; and Lessor in the exercise of
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its rights and remedies under this Lease shall not deprive any such Subtenant of
possession or occupancy of the area of the Premises, or portion thereof, covered
by its sublease during the term thereof or join any such Subtenant as a party in
any action or proceeding to enforce or terminate this Lease or obtain possession
of said area for any reason. The provisions of this paragraph shall be
self-executing but Lessor, upon request by Lessee or any Subtenant, agrees to
execute additional documentation to effectuate the provisions of this paragraph.
30. QUIET ENJOYMENT, TITLE TO LAND AND IMPROVEMENTS.
A. Quiet Enjoyment. Upon payment by Lessee of the rents herein
provided and upon the observance and performance of all covenants, terms and
conditions on Lessee's part to be observed and performed, Lessee shall peaceably
and quietly hold and enjoy the Premises for the term hereby demised without
hindrance or interruption by Lessor or any other person or persons lawfully or
equitably claiming by, through or under Lessor, subject to the terms and
conditions of this Lease.
B. Title. Lessor covenants that it shall not at any time
hereafter (except for a sale of its leasehold interest or fee simple interest to
Lessee as referred to herein) convey or sell any interest of Lessor in the
Premises unless such conveyance or sale is made subject to this Lease. Lessor
further represents that it has the right to make this Lease. Lessor and Lessee
each represent to the other that it has the full right, power, and authority to
enter into this Lease for the Term and that the Premises may be used by Lessee
during the Term for the purposes herein set forth provided Lessee conforms to
the provisions of this Lease and all applicable laws and regulations. Without
limiting the generality of the foregoing, Lessor and Lessee each agree to
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execute and deliver to the other party (or to any Leasehold Mortgagee), within
forty-five (45) days after request therefor, an estoppel certificate, certifying
such matters as may be reasonably requested by the other party. As consideration
for the execution of this Lease, Lessor acknowledges that Lessee, or any
subtenant of the Lessee, shall hold title to all of the Improvements as long as
this Lease is in effect.
31. SURRENDER - WAIVER AND AMENDMENT.
No agreement to amend or to accept a surrender of this Lease or a
waiver of either party's obligations hereunder shall be valid unless in writing
signed by Lessor and Lessee. No employee of Lessor or its agent shall have any
power to accept the keys of the Premises prior to the termination of this Lease.
The delivery of keys to any employee of Lessor or its agent shall not operate as
a termination of this Lease or a surrender of the Premises. The failure of any
party to seek redress for violation of, or to insist upon the strict performance
of any covenant or condition of this Lease, shall not prevent a subsequent act,
which would have originally constituted a violation of this Lease from having
all the force and effect of an original violation of this Lease. The receipt and
acceptance by Lessor of rent with knowledge of the breach of any condition or
covenant of this Lease shall not be deemed a waiver of such breach. The right to
enforce any such condition or covenant is in the sole jurisdiction of Lessor.
The failure by either party to enforce any of the conditions or covenants set
forth herein or hereinafter adopted against the other shall not be deemed a
waiver of any such conditions or covenants.
32. NON-DISCRIMINATION IN EMPLOYMENT AND SERVICES.
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Lessee agrees to comply with the non-discrimination in employment
policies in County contracts as required by Section 11B-33 and Section 27-19 of
the Montgomery County Code 1994, as amended, as well as all other applicable
state and federal laws regarding employment discrimination.
33. DISPUTES.
A. Arbitration. Notwithstanding anything to the contrary in this
Lease, any controversy or claim arising out of or relating to this Lease, or the
breach thereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA"),
and judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Any arbitration hearing shall be conducted in
Montgomery County, Maryland, before a single arbitrator, if the amount in
controversy is less than Fifty Thousand Dollars ($50,000.00), or before a panel
of three (3) arbitrators, if the amount in controversy is Fifty Thousand Dollars
($50,000.00) or more. The arbitrator(s) are hereby given authority to determine
and limit discovery in any such arbitration proceeding.
B. Exceptions.
(1) Certain Defaults. If Lessee desires to arbitrate the
issue of whether it is responsible for the payment of any rental or other amount
claimed by Lessor to be then due or overdue under this Lease, Lessor may
require, as a condition of agreeing to arbitrate such issue, that Lessee pay
such disputed rental or other amount into escrow with a mutually acceptable
escrow agent prior to the commencement of the arbitration. Either party may seek
injunctive relief from a court pending the outcome of any arbitration.
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(2) Disputes with County. Any dispute among Lessor, Lessee
and County shall be settled by mediation or litigation in accordance with the
terms of the Prime Lease.
34. GOVERNING LAW, SEVERABILITY, CASUALTY, CONDEMNATION AND
COMPLIANCE.
A. Governing Law. This Lease shall be construed and governed by
the laws of the State of Maryland wherein the Premises and the Shady Grove Life
Sciences Center are located. Should any provisions of this Lease and/or of its
conditions be deemed illegal or not enforceable under the laws of the said
jurisdiction, it or they shall be considered severable, and the balance of this
Lease and its conditions shall remain in force and be binding upon the parties
as though such provisions had never been included.
B. Lease not Redeemable. The purpose of this Lease is not
primarily residential and shall not be redeemable as provided in Section 8-110
of the Real Property Article, Annotated Code of Maryland.
C. Casualty Damage.
(1) Repairs. In the event the Facility or other Improvements
shall be damaged or destroyed by fire or other casualty, Lessee shall give
Lessor prompt written notice thereof and, subject to the provisions of Section
34.C(2) below, Lessee, at its expense, shall repair, reconstruct or replace the
Lessee's Work or portion thereof so damaged or destroyed (whichever is
reasonably required), and shall cause the tenant under the Project Lease, at its
expense, to repair, reconstruct or replace the remainder of the Facility and
other Improvements or portion thereof so damaged or destroyed (whichever is
reasonably required), at least to the extent
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of the value thereof existing immediately prior to such occurrence; provided,
however, that neither Lessee nor the tenant under the Project Lease shall be
required to pay the costs of such repair, reconstruction or replacement in
excess of insurance proceeds available to such party for such purposes. There
shall be no abatement of annual base rent or any other amount payable under this
Lease.
(2) Termination. Notwithstanding anything in this Lease to
the contrary, (i) if the Facility shall be totally destroyed or so damaged as to
render it totally or substantially unusable, and Lessee, in its reasonable
business judgment, shall decide to demolish the Facility and other Improvements
rather than repair and rebuild the same, or (ii) if any Leasehold Mortgagee
elects to retain the insurance proceeds, then, in either such event, Lessee may
terminate this Lease by written notice to that effect given to Lessor no later
than ninety (90) days after the occurrence of the casualty, in which event this
Lease shall terminate immediately upon Lessee's vacating the Premises and
surrendering the same to Lessor, after having completed demolition of the
Facility and other Improvements and restoration of the Premises to a safe and
orderly condition in compliance with all laws. In such event, Lessee's liability
for annual base rent and the other amounts payable under this Lease shall cease
on the termination date. In the event that this Lease is terminated pursuant to
this Section 34.C(2), then the proceeds of the property insurance carried by
Lessee pursuant to Section 8.B(1)(e) shall be applied first to payment of the
principal balance and all accrued interest under all Mortgages, and second to
the cost of demolition of the Facility and other Improvements and restoration of
the Premises to a
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safe and orderly condition in compliance with all laws. Any remaining proceeds
shall be the property of Lessee.
D. Condemnation. If the entire Premises, or such portion thereof
as will make them, in the exercise of Lessee's reasonable business judgment,
unsuitable for the purposes herein leased, are condemned for any public use or
purpose by a public authority, this Lease shall cease and rent be accounted for
as of the date of surrender of possession. In the event of a partial taking, a
pro rata reduction in the rent shall be provided in the proportion which the
property so taken or condemned bears to the entire Premises originally devised.
Further, in the event of any taking or condemnation of the Premises, Lessee
shall not be entitled to claim any value for any leasehold or fee interest in
the land, but both Lessor and Lessee shall be entitled to claim, prove and
receive in the condemnation proceeding such awards as may be allowed for their
respective interests in the Facility and other Improvements.
E. Compliance with Law. It is understood, agreed and covenanted
by Lessee that it shall promptly comply with, observe and perform all of the
requirements of all the statutes, ordinances, rules, orders and regulations now
in effect or hereinafter promulgated whether required by the Federal Government,
the State of Maryland, County, in its governmental capacity, or the Montgomery
County Fire Marshal.
F. Limitation of Lessor's Liability. Notwithstanding any
contrary provision contained in this Lease, Lessee agrees that (i) the
obligations of Lessor hereunder shall not constitute personal obligations of the
officers, directors, shareholders, partners or members of Lessor, and the
officers, directors, shareholders, partners and members of Lessor shall have no
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personal liability with respect to any claim arising out of or related to this
Lease, and (ii) Lessor's liability with respect to any claim arising out of or
related to this Lease shall be limited to the greater of (a) Two Million Five
Hundred Thousand Dollars ($2,500,000) or (b) the interest of Lessor in the
Premises.
G. Limitation of Lessee's Liability. Notwithstanding any
contrary provision contained in this Lease, Lessor agrees that the obligations
of Lessee hereunder shall not constitute personal obligations of the officers,
directors, shareholders, partners or members of Lessee.
35. RECORDING.
Lessee and Lessor shall have the right to record this entire Lease
or to execute a Memorandum of Lease and have it properly acknowledged for the
purpose of recording. Such Memorandum of Lease shall have included therein such
of the provisions hereof as may be requested by either of the parties. The cost
of recording this entire Lease or such Memorandum of Lease (including all
stamps, conveyance, recordation and other taxes incident thereto) shall be borne
solely by Lessor.
36. ENTIRE AGREEMENT.
This Lease, Exhibits, and Addenda, if any, attached hereto and
forming a part hereof, sets forth all the covenants, promises, agreements,
conditions and understandings between Lessor and Lessee concerning the Premises
and there are no covenants, promises, agreements, conditions or understandings,
either oral or written, between them other than as herein set forth. Except as
herein otherwise provided, no subsequent alteration, amendment,
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change or addition to this Lease shall be binding upon Lessor or Lessee unless
reduced to writing and signed by them. For so long as that certain acquisition,
development and construction/permanent loan obtained by Lessee from NationsBank,
N.A. to fund the costs of acquiring the Property, performing the Lessee's Work,
leasing the Facility and all related activities, or any extension, modification
or refinancing thereof, is outstanding, and NationsBank, N.A. or its successor
or assignee is the lender, no alteration, amendment, change or addition to this
Lease may be made without the prior written consent of NationsBank, N.A. or its
successor or assignee.
37. NOTICE.
All notices required or permitted hereunder shall be deemed to
have been given if delivered by a reputable messenger, overnight delivery
service, facsimile or mailed in any United States Post Office by certified mail,
return receipt requested, postage prepaid, addressed to Lessor or Lessee,
respectively, at the following addresses or to such other addresses as the
parties may designate in writing from time to time. All notices shall be deemed
to be received on the date of delivery by messenger or overnight delivery
service, the date indicated by a facsimile confirmation receipt signed by the
recipient, or three (3) business days after depositing them with the United
States Post Office.
Notice of the identity and address of any Leasehold Mortgagee and any
Subtenant shall be in the form of a written notice sent to Lessor in accordance
with this Section.
<TABLE>
<CAPTION>
LESSOR: LESSEE:
- ------- -------
<S> <C>
BioReliance Corporation The Buccini/Pollin Group, Inc
9900 Blackwell Road 110 N. Royal Street, Suite 305
</TABLE>
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<TABLE>
<S> <C>
Rockville, Maryland 20850 Alexandria, Virginia 22314
Attention: Sherry Rhodes, Esquire Facsimile: (703) 548-4257
Vice President and General Counsel
Facsimile: (301) 738-1033
With a copy to: With a copy to:
Shulman, Rogers, Gandal, Pordy & Arent Fox
Ecker, P.A. 1050 Connecticut Avenue, N.W.
11921 Rockville Pike, Suite 300 Washington, D.C. 20036
Rockville, Maryland 20852 Attention: Richard L. Brand, Esquire
Attention: Lawrence A. Shulman, Esquire Facsimile: (202) 857-6395
Facsimile: (301) 230-2891
</TABLE>
38. CAPTIONS. PRONOUNS.
The captions and paragraph numbers appearing in this Lease are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or intent of this Lease, nor in any way affect this Lease.
The use of the neuter singular pronoun to refer to Lessor or
Lessee shall be deemed a proper reference even though Lessor or Lessee may be an
individual, a partnership, a joint venture, a corporation, or a group of two or
more individuals, partnerships, joint ventures or corporations. The necessary
grammatical changes required to make the provisions of this Lease apply in the
plural sense shall in all instances be assumed as though in each case fully
expressed.
39. SURVIVAL.
The following obligations shall survive the expiration or
termination of this Lease: (a) any obligation herein permitted to be performed
after the expiration or termination of this Lease; (b) any obligation not
reasonably susceptible to performance prior to the expiration or
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termination of this Lease; and (c) any obligation, required hereunder to be
performed at or before the expiration or termination of this Lease, not so
performed.
40. MISCELLANEOUS PROVISIONS.
A. Time of the Essence. Lessor and Lessee acknowledge that time
is of the essence in the performance of any and all obligations, terms and
provisions of this Lease, including without limitation, the purchase option in
Section 41 hereof.
B. Days. If the date on which either Lessor or Lessee is
required to take or complete an action hereunder is not a business day (as
defined below), the action shall be taken or completed on the next succeeding
business day. For purposes hereof, "business day" means any day other than a
Saturday, Sunday or federal holiday.
C. Certain Terms. For purposes of this Lease, there shall be no
distinction between the terms "breach" and "default."
D. Waiver of Trial by Jury. Lessor and Lessee waive their right
to trial by jury in any action, proceeding or counterclaim brought by either of
the parties hereto against the other (except for personal injury or property
damage) on any matters whatsoever arising out of or in any way connected with
this Lease, the relationship of Lessor and Lessee, Lessee's use of or occupancy
of the Premises, and any emergency statutory or any other statutory remedy.
E. No Representations by Lessor. Neither Lessor nor any agent of
Lessor has made any representations or promises with respect to the Premises
except as herein expressly set forth, and no rights, privileges, easements or
licenses are granted to Lessee except as herein expressly set forth.
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F. Authority. Lessor and Lessee hereby covenant each for itself,
that each has full right, power and authority to enter into this Lease upon the
terms and conditions herein set forth.
G. No Partnership. Nothing contained in this Lease shall be
deemed or construed to create a partnership or joint venture of or between
Lessor and Lessee, or to create any other relationship between the parties other
than that of Lessor and Lessee.
H. Lessor Approvals. Except as otherwise set forth herein,
Lessor shall not unreasonably withhold, condition or delay any approval, consent
or agreement required under this Lease to be obtained from Lessor.
I. Consequential Damages. Notwithstanding anything to the
contrary in this Lease, in no event shall either Lessor or Lessee be liable to
the other for consequential damages, except as set forth in Section 12.C.
41. CONTINGENT PURCHASE OPTION.
A. Upon Expiration of Project Lease. In the event that the
tenant under the Project Lease does not exercise its option (set forth in the
Project Lease) to purchase the Facility and other Improvements from Lessee,
Lessee shall have the right, at its sole option, to purchase the Premises from
Lessor at the expiration of the term (including any exercised renewal or
extension terms) of the Project Lease, for the then fair market value of the
Land, as determined pursuant to subparagraph (2) of this Section 41.A, and upon
the terms and conditions set forth in this Section 41.A and Section 41.C.
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(1) Exercise of Option. Lessee shall exercise its option to
purchase the Premises by delivering to Lessor, in the manner set forth in
Section 37 of this Lease, notice of its exercise of such option (the "Exercise
Notice") not earlier than one (1) year, nor later than the date (the "Exercise
Notice Deadline") which is six (6) months prior to the expiration of the term
(including any exercised renewal or extension terms) of the Project Lease;
provided, however, that if Lessor shall not have received the Exercise Notice by
the date which is seven (7) months prior to the expiration of the term
(including any exercised renewal or extension terms) of the Project Lease and
the contingency set forth in Section 41.A is satisfied, Lessor shall provide
Lessee with a written reminder of the deadline for Lessee's exercise of the
option (the "Reminder Notice"), and if Lessee does not receive the Reminder
Notice at least ten (10) days before the Exercise Notice Deadline set forth
above, then the Exercise Notice Deadline shall be extended to ten (10) days
after Lessee's receipt of the Reminder Notice. Upon delivery of the Exercise
Notice, Lessee shall be obligated to purchase, and Lessor shall be obligated to
sell, the Premises in accordance with the terms and conditions set forth herein,
subject only to the condition set forth in subparagraph (1) of Section 41.C. If
Lessor does not own the Premises at the time it receives the Exercise Notice,
then immediately upon receipt thereof, Lessor shall exercise its option (under
the Prime Lease) to purchase Lot N/Q from the County.
(2) Purchase Price. Lessor and Lessee shall employ the
procedure and timetable described below for the purpose of computing the fair
market value of the Land:
(a) Within ten (10) business days after receipt of the
Exercise Notice, Lessor shall notify Lessee of Lessor's determination of the
fair market value of the Land
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(the "Market Value Notice"). Lessee shall notify Lessor within ten (10) business
days after Lessee's receipt of the Market Value Notice either that (i) Lessee
accepts Lessor's determination of the fair market value of the Land or (ii)
Lessee rejects Lessor's determination. If Lessee rejects Lessor's determination,
the fair market value of the Land shall be determined in accordance with the
provisions of subsection (b) below.
(b) If Lessee rejects Lessor's determination of the
fair market value of the Land, Lessee and Lessor shall, for a period of twenty
(20) days, negotiate in an effort to determine the fair market value. If Lessee
and Lessor are unable mutually to agree on the fair market value within such
twenty (20) day period, Lessee and Lessor shall each within twenty (20) days
thereafter appoint an appraiser. Each appraiser, within thirty (30) days of
their appointment, shall make an independent determination of the fair market
value of the Land. If the two appraisers so appointed agree on the fair market
value of the Land, the fair market value shall be the amount determined by them.
If the two appraisers so appointed do not agree on the fair market value of the
Land, but if the difference between the fair market values determined by such
appraisers is not more than five percent (5%) of the lower of the two
appraisals, the fair market value of the Land shall be an amount equal to the
quotient obtained by dividing the sum of the fair market values determined by
such appraisers by two (2). If the two appraisers so appointed do not agree on
the fair market value of the Land, and if the difference between the fair market
value determined by such appraisers is more than five percent (5%) of the lower
of the two appraisals, the two appraisers shall jointly appoint a third
appraiser having the qualifications described below. If the two appraisers so
appointed shall be unable, within thirty (30) days after
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their appointment, either to agree on the fair market value of the Land (or to
disagree on such value with a difference of five percent (5%) or less of the
lower of the two appraisals) or to agree on the appointment of a third
appraiser, they shall give written notice of such failure to agree to the
parties, and, if the parties fail to agree upon the selection of a third
appraiser within fifteen (15) days after the appraisers appointed by the parties
give such notice, then within ten (10) days thereafter either of the parties
upon notice to the other party may request such appointment by the
then-President of the Montgomery County Association of Realtors (or any
organization successor thereto). If a third appraiser is appointed, such
appraiser shall make the valuation within thirty (30) days after such
appraiser's appointment and the fair market value of the Land shall be an amount
equal to the quotient obtained by dividing the sum of the fair market values
determined by the two appraisers who were closest in amount to each other by two
(2). If the mean average of the lowest fair market value determined by any of
the three appraisers and the highest fair market value determined by any of the
three appraisers is equal to the fair market value determination which is
neither the highest nor the lowest of the three fair market value
determinations, then the fair market value of the Land shall be such mean
average.
(c) Each appraiser appointed pursuant to subsection (b)
shall be a disinterested person of recognized competence who has had a minimum
of ten (10) years experience as a real estate appraiser in Montgomery County,
Maryland, and is a member of the American Institute of Appraisers. All
valuations of the fair market value shall be in writing. Each appraiser shall
determine the fair market value as a whole, as of the date of his or her
appraisal, on the basis of all relevant factors affecting fair market value,
including the prices for
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comparable properties in comparable locations in Montgomery County, Maryland,
and assuming the following: (i) the seller and purchaser are typically
motivated; (ii) the seller and purchaser are well informed and well advised and
each is acting in what it considers its own best interest; and (iii) the Land is
to be sold with vacant possession. The party appointing such appraiser shall be
obligated, promptly after receipt of the valuation report prepared by the
appraiser appointed by such party, to deliver a copy of such valuation report to
the other party. If a third appraiser is appointed, the third appraiser shall be
directed, at the time of the appointment, to deliver copies of his valuation
report, promptly after its completion, to Lessee and Lessor. The expenses of the
first two appraisers appointed pursuant to subsection (b) shall be borne by the
party appointing such appraiser, and the expenses of the third appraiser
appointed pursuant to subsection (b) shall be paid one-half by Lessee and
one-half by Lessor.
(d) Notwithstanding the foregoing, Lessee, at its
option, may have the fair market value of the Land determined from time to time
(but not more often than once every five (5) years during the Term), pursuant to
the procedure hereinabove set forth, by written notice to Lessor requesting such
a determination. In such event, the date of Lessor's receipt of such notice
shall be deemed the "Exercise Notice" for purposes of the aforesaid procedure.
The fair market value of the Land as so determined, escalated at the rate of
three percent (3%) per year, on a cumulative basis, commencing one (1) year
after the date of such determination, shall then be binding on the parties as
the purchase price for the Premises for a period of five (5) years after the
date of such determination.
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B. Upon Termination of Project Lease for Default. In the event
of a default by the tenant under the Project Lease, which continues after the
expiration of any applicable notice or cure periods (a "Default"), Lessee shall
have the right, at its sole option, to purchase the Premises from Lessor after
termination of the Project Lease (or repossession by Lessee of the Premises
without termination) because of such Default, for a purchase price determined
pursuant to subparagraph (2) of this Section 41.B, and upon the terms and
conditions set forth in this Section 41.B and Section 41.C.
(1) Exercise of Option. Lessee shall exercise its option to
purchase the Premises by delivering to Lessor, in the manner set forth in
Section 37 of this Lease, notice of its exercise of such option within
forty-five (45) days after termination of the Project Lease (or repossession by
Lessee of the Premises without termination) because of the Default. Upon
delivery of such notice, Lessee shall be obligated to purchase, and Lessor shall
be obligated to sell, the Premises in accordance with the terms and conditions
set forth herein, subject only to the condition set forth in subparagraph (1) of
Section 41.C. If Lessor does not own the Premises at the time it receives
Lessee's notice of exercise of such option, then immediately upon receipt of
such notice, Lessor shall exercise its option (under the Prime Lease) to
purchase Lot N/Q from the County.
(2) Purchase Price. The purchase price for the Premises
shall be determined as follows:
(a) If the Default has occurred during the first three
(3) years of the term of the Project Lease, (i) if Lessor then owns the
Premises, the purchase price shall be
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forty-eight and ninety-four one hundredths percent (48.94%) of the purchase
price paid by Lessor to County for Lot N/Q, or (ii) if Lessor does not then own
the Premises, the purchase price shall be the price shown on the Rent/Purchase
Price Schedule to be attached hereto as Exhibit D.
(b) If the Default has occurred during the fourth (4th)
through the tenth (10th) years of the term of the Project Lease, the purchase
price shall be the sum of Nine Hundred Ten Thousand Three Hundred Sixty-one and
50/100 Dollars ($910,361.50), escalated by three percent (3%) per year, on a
cumulative basis, commencing at the beginning of the fourth (4th) year of the
term of the Project Lease.
(c) If the Default has occurred during the eleventh
(11th) through the twentieth (20th) years of the term of the Project Lease, the
purchase price shall be ninety-five percent (95%) of the fair market value of
the Land (determined in accordance with Section 41.A(2)).
(d) If the Default has occurred during any extension
term of the Project Lease, the purchase price shall be one hundred percent
(100%) of the fair market value of the Land (determined in accordance with
Section 41.A(2)).
C. Terms and Conditions of Purchase.
(1) Subdivision. From and after its receipt of Lessee's
notice of exercise of its option to purchase the Premises, Lessor shall use
commercially reasonable, diligent efforts to subdivide the Premises from the
remainder of Lot N/Q. Lessor shall provide to Lessee, for Lessee's approval,
copies of all plats and applications for such subdivision prior to submitting
such plats and applications to the appropriate governmental agencies. Lessee
shall
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approve or disapprove such plats and applications within five (5) business days
and any disapproval shall be accompanied by Lessee's reasons therefor in
reasonable specificity. If, after the exercise of commercially reasonable,
diligent efforts, Lessor is unable to so subdivide Lot N/Q, then Lessor shall,
at Lessee's sole option (to be exercised by written notice to Lessor), either
(i) convey the Premises to Lessee by metes and bounds description at Closing
(hereinafter defined) and thereafter join and cooperate with Lessee in all
building permits and other permits and authorizations as may be reasonably
requested by Lessee in connection with the Premises and the Facility and other
Improvements, or (ii) continue to lease the Premises to Lessee under the terms
of this Lease, in which event the option set forth in this Section 41, and
Lessee's exercise thereof, shall become null and void. From and after the date
Lessor conveys the Premises to Lessee by metes and bounds description, Lessor
shall reasonably cooperate with Lessor on subdividing the Premises from the
remainder of Lot N/Q.
(2) Closing. The closing of the purchase and sale of the
Premises ("Closing") will take place within ninety (90) days after the later to
occur of (i) Lessor's receipt of Lessee's notice of exercise of the purchase
option, or (ii) settlement on Lessor's purchase of Lot N/Q from County;
provided, however, that if the subdivision of the Premises from the remainder of
Lot N/Q has not occurred by such date, then Lessee may defer the Closing until
the earlier to occur of (i) one (1) year after such date, or (ii) thirty (30)
days after the date of subdivision of the Premises from the remainder of Lot
N/Q, or (iii) thirty (30) days after the date County, in its governmental
capacity, issues an unappealable denial of subdivision of the Premises from the
remainder of Lot N/Q. Lessor shall give Lessee prompt written notice of the
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date of such settlement. Closing will occur by mail or at the offices of
Lessee's settlement attorney. Lessee shall give Lessor at least ten (10)
business days prior written notice of the date, time and place of Closing. At
Closing, Lessor shall convey title to the Premises to Lessee by special warranty
deed (subject to all covenants, conditions, rights of way, easements,
encumbrances and other matters of record as of the date of this Lease and those
matters effected by Lessee, or effected by County pursuant to the Prime Lease,
or approved in writing by Lessee, which approval shall not be unreasonably
withheld, conditioned or delayed, and those matters, other than monetary liens,
permitted to be effected by the terms of this Lease), and such assignments,
bills of sale and other instruments of conveyance reasonably necessary, which
shall be in form and substance reasonably acceptable to Lessee, duly executed
and acknowledged, and Lessee shall pay the purchase price for the Premises
(determined as hereinabove set forth) to Lessor in cash, by certified check or
by wire transfer. At Closing, Lessor and Lessee shall share equally all state,
county and local transfer and recordation taxes due in connection with the
transfer of the Premises from Lessor to Lessee, and Lessee shall pay any
transfer and recordation taxes in excess thereof which are a result of any
financing acquired by Lessee in connection with its acquisition of the Premises.
All other costs and expenses attendant to Closing (including, without
limitation, title company charges, title insurance premiums, survey costs and
notary fees) shall be at the cost of Lessee, except that Lessor shall pay the
fees and expenses of its own counsel.
(3) Condition of Premises. From and after the Lease
Commencement Date, Lessee may perform reasonable studies of the Premises to
determine the condition thereof.
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By its exercise of the purchase option, Lessee shall be deemed to have certified
to Lessor that it has familiarized itself fully with the Premises, and that it
has had the opportunity to perform, and has performed, such inspections,
examinations, investigations and studies thereof as it deemed appropriate in
order to determine whether to purchase the Premises in its then current
condition. Lessee agrees that it shall rely solely upon its inspections,
examinations, investigations and studies in electing whether or not to purchase
the Premises. It is expressly understood and agreed that Lessee shall purchase
the Premises "as is" and "where is," and with all faults and defects, latent or
otherwise, and that Lessor is making no representations or warranties, either
express or implied, by operation of law or otherwise, with respect to the
quality, physical condition or value of the Premises, the zoning classification
of the Premises or the compliance of the Premises with applicable law, except
that Lessor warrants that the Premises shall be free of hazardous materials or
substances as of the date of expiration or termination of the Project Lease, or
repossession by Lessee of the Premises without termination of the Project Lease
due to a Default. Without limiting the foregoing, it is understood and agreed
that Lessor makes no warranty to Lessee regarding the Premises or its
habitability, suitability, merchantability, fitness for a particular purpose or
fitness for any purpose.
(4) Termination of Lease. Upon the completion of any
conveyance of the Premises to Lessee pursuant to the terms of this Section 41,
this Lease shall terminate, and neither Lessor nor Lessee shall have any further
rights or obligations to the other hereunder, except for those rights and
obligations which survive the expiration or earlier termination of this Lease.
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(5) Default. If Closing fails to occur on the date and in
the manner required herein, due to any cause other than a default by Lessor of
its obligations under this Section 41, Lessor shall be released from all of its
obligations under this Section 41 to provide Lessee with an option to purchase
the Premises, and this Lease shall, except for the provisions of this Section
41, remain in full force and effect for the remainder of the Term.
(6) Assignment. The Purchase Option shall be assignable by
Lessee separate and apart from this Lease; provided, however, that the Purchase
Option shall not be assignable to any competitor of Lessor (as defined in
Section 29.B), except as a part of an assignment of Lessee's other rights and
obligations under this Lease in accordance with Section 29.B.
42. LESSEE'S RIGHT OF FIRST REFUSAL. If Lessor, at any time during
the Term, receives an offer to purchase Lessor's leasehold or fee interest in
the Premises, and Lessor desires to accept said offer, or if Lessor, at any time
during the Term, makes an offer to sell its leasehold or fee interest in the
Premises, then Lessor shall give Lessee thirty (30) days notice in writing of
such offer setting forth the name and address of the proposed purchaser with
executed copies of all relevant documents, the amount of the proposed purchase
price, and all other terms and conditions of such offer, and Lessee shall have
the first option to purchase Lessor's leasehold or fee interest in the Premises
by giving written notice to Lessor of its intention to purchase within said
thirty (30) day period. In the event Lessee exercises its option to purchase
Lessor's leasehold or fee interest in the Premises, Lessor shall sell and Lessee
shall purchase Lessor's
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leasehold or fee interest in the Premises on the terms set forth in the offer.
If the offer to purchase or sell Lessor's leasehold or fee interest in the
Premises includes other property of Lessor, then Lessee may exercise its right
of first refusal only by agreeing to purchase all such property for the price
and in accordance with the terms of such offer. If Lessee shall not elect to
purchase Lessor's leasehold or fee interest in the Premises in accordance with
the terms and conditions of the offer, (i) Lessor shall have the right to sell
and convey Lessor's leasehold or fee interest in the Premises to another party
but only in accordance with all of the provisions of the offer, and (ii) this
Lease and all of its terms and conditions shall nevertheless remain in full
force and effect and Lessee and any purchaser or purchasers of Lessor's
leasehold or fee interest in the Premises shall be bound thereby. If Lessee
shall not elect to purchase Lessor's leasehold or fee interest in the Premises
in accordance with the terms and conditions of the offer and Lessor's leasehold
or fee interest in the Premises is not sold in accordance with the offer, Lessee
shall have, upon the same conditions and notice, the continuing first option to
purchase Lessor's leasehold or fee interest in the Premises, upon the terms of
any subsequent offer or offers to purchase. If Lessee defaults in its obligation
to purchase Lessor's leasehold or fee interest in the Premises when Lessee is
obligated to make settlement of such purchase pursuant to this Section 42,
Lessor shall have the right to avail itself of any and all remedies available to
it under applicable law and this Lease shall continue in full force and effect
but Lessee's option rights under this Section 42 shall cease and terminate and
the provisions of this Section 42 shall have no further force or effect.
Lessee's option rights under this Section 42 shall be assignable by Lessee
(separate and apart from this Lease) and, in such event, Lessor's leasehold or
fee interest
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in the Premises shall be acquired in such name as may be designated by Lessee or
Lessee's assignee.
IN WITNESS WHEREOF, the parties hereto do hereby execute this Lease as
of the day and year first above written.
WITNESS OR ATTEST: BIORELIANCE CORPORATION
______________________________ By:________________________________(SEAL)
Capers W. McDonald
President and Chief Executive Officer
WITNESS OR ATTEST: BPG INDUSTRIAL PARTNERS II, LLC
______________________________ By:________________________________(SEAL)
Robert E. Buccini
Member
STATE OF MARYLAND, __________________________, to wit:
ON THIS ___ day of ___________________, 1998, before me, the
undersigned officer, personally appeared Capers W. McDonald, President and Chief
Executive Officer of BioReliance Corporation, known to me to be the person whose
name is subscribed to the foregoing, who did fully acknowledge that he executed
the same as his voluntary act and deed for the purposes therein contained.
WITNESS my hand and official seal the same day and year first above
written.
___________________________________
Notary Public
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My Commission Expires:__________________
STATE OF MARYLAND, ______________, to wit:
ON THIS ___ day of ________________, 1998, before me, the undersigned
officer, personally appeared Robert E. Buccini, Member of BPG Industrial
Partners II, LLC, known to me to be the person whose name is subscribed to the
foregoing, who did fully acknowledge that he executed the same as his voluntary
act and deed for the purposes therein contained.
WITNESS my hand and official seal the same day and year first above
written.
___________________________________
Notary Public
My Commission Expires_____________________
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EXHIBIT D
RENT/PURCHASE PRICE SCHEDULE
[To be inserted within thirty (30) days after the Rent Commencement Date]
<PAGE> 1
EXHIBIT 10.23
PROJECT LEASE
BETWEEN
BPG INDUSTRIAL PARTNERS II, LLC
as Lessor
AND
MAGENTA CORPORATION
as Lessee
Dated April ___, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. INTENTIONALLY DELETED...........................................................................2
2. INCORPORATION OF RECITALS; DEFINITIONS..........................................................2
3. LEASED PREMISES; SUBORDINATION TO PRIME LEASE...................................................6
4. TERM AND EXTENSION..............................................................................7
A. Preliminary and Initial Terms.................................................7
B. Extension Terms...............................................................7
5. RENTAL..........................................................................................8
A. Amount........................................................................8
B. Rent Commencement Date.......................................................10
6. LESSOR'S WORK..................................................................................10
A. Construction.................................................................10
B. Construction Loan............................................................11
C. Guaranty of Completion.......................................................12
D. Permits......................................................................13
E. Punch List...................................................................13
F. As-Built Drawings............................................................13
7. LESSOR'S INSURANCE. ..........................................................................14
8. LESSEE'S INSURANCE.............................................................................15
A. Mandatory Insurance Requirements During the Construction Period..............15
B. Mandatory Insurance Requirements During the Leasehold Improvement Period.....16
C. Mandatory Insurance Requirements During the Operations Period................18
9. INDEMNIFICATION................................................................................21
10. LIENS, CLAIMS OR ENCUMBRANCES..................................................................22
A. Free of Liens................................................................22
B. Discharge of Lien............................................................22
C. Failure to Discharge Lien....................................................23
11. LESSEE'S LEASEHOLD IMPROVEMENTS................................................................23
A. Submission and Approval of Plans.............................................23
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
B. Plan Approval is not in Lieu of other Approvals/Permits......................25
C. No Monetary Liability for Approval of Plans..................................25
D. Coordination of Plans........................................................25
E. Coordination of Work.........................................................26
F. As-Built Drawings............................................................26
12. CONSTRAINTS....................................................................................27
A. No Nuisance..................................................................27
B. Notice of Toxic and Hazardous Materials......................................27
C. Indemnification..............................................................27
D. Outdoors Activities..........................................................28
E. Building Sites...............................................................28
F. Compliance with Loan Documents...............................................28
13. BUILDING CONSTRUCTION AND ALTERATIONS..........................................................28
A. Building Codes...............................................................28
B. Cleaning of Premises.........................................................29
C. Premises "As Is..............................................................29
14. LANDSCAPING. OUTSIDE STORAGE AND MAINTENANCE...................................................29
A. Landscaping..................................................................29
B. Maintenance of Landscaping...................................................29
C. Screening of Storage Areas...................................................30
D. Storage of Fuel Oil, etc.....................................................30
E. Safe conditions..............................................................30
F. Vacant Buildings.............................................................30
15. UTILITY CONNECTIONS............................................................................30
16. SIGNS OR MONUMENTS.............................................................................31
A. Defined......................................................................31
B. Approval of Plans............................................................31
C. Construction Signs...........................................................31
17. PARKING AREAS AND LOADING ZONES................................................................32
A. Parking Facilities...........................................................32
B. Loading and Unloading Areas..................................................32
18. TEMPORARY STRUCTURES...........................................................................32
19. MAINTENANCE OF PROPERTY........................................................................33
A. Lessee's Obligation..........................................................33
B. Lessor's Right, but not Obligation to Repair.................................33
C. County's Maintenance.........................................................34
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
20. COOPERATIVE MAINTENANCE AGREEMENT..............................................................34
21. UTILITY SERVICE AND ACCESS.....................................................................34
22. ACCESS BY LESSOR AND EASEMENT..................................................................35
A. Access to Maintain Pipes.....................................................35
B. Reservation of Easements.....................................................35
C. Accommodation of Lessee......................................................36
23. COMMON AREAS...................................................................................36
A. Lessee's Non-exclusive Right to Use..........................................36
B. County's Right to Make Changes to Common Areas...............................36
24. ENFORCEMENT....................................................................................36
A. Lease for the Benefit of Parties.............................................36
B. Remedies.....................................................................37
C. Default......................................................................37
D. Bankruptcy...................................................................39
25. EXPIRATION.....................................................................................39
A. Surrender of Improvements....................................................39
B. Removal of Trade Fixtures....................................................39
26. TENANT HOLDING OVER............................................................................40
27. MORTGAGE OF LESSEE'S LEASEHOLD INTEREST........................................................40
A. Notice of Default under Mortgage or Lease....................................40
B. Leasehold Mortgagee Right to Notice and Cure.................................40
C. Leasehold Mortgagee as Holder of Lessee's Interest...........................41
D. Certain Restrictions During Leasehold Mortgage...............................41
E. New Financing................................................................42
F. Assignment by Leasehold Mortgagee............................................42
G. Notice of Mortgages..........................................................43
28. MORTGAGE OF LESSOR'S INTEREST..................................................................43
29. ASSIGNMENT AND SUBLEASING......................................................................44
A. Assignments and Sublettings..................................................44
B. Successors and Assigns.......................................................44
30. QUIET ENJOYMENT, TITLE TO LAND AND IMPROVEMENTS................................................45
A. Quiet Enjoyment..............................................................45
B. Title........................................................................45
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
31. SURRENDER - WAIVER AND AMENDMENT...............................................................46
32. NON-DISCRIMINATION IN EMPLOYMENT AND SERVICES..................................................46
33. DISPUTES.......................................................................................47
A. Arbitration..................................................................47
B. Exceptions...................................................................47
34. GOVERNING LAW, SEVERABILITY, CASUALTY, CONDEMNATION AND COMPLIANCE.............................48
A. Governing Law................................................................48
B. Lease not Redeemable.........................................................48
C. Casualty Damage..............................................................48
D. Condemnation.................................................................49
E. Compliance with Law..........................................................50
F. Limitation of Lessor's Liability.............................................50
G. Limitation of Lessee's Liability.............................................50
35. RECORDING......................................................................................51
36. ENTIRE AGREEMENT...............................................................................51
37. NOTICE.........................................................................................52
38. CAPTIONS. PRONOUNS.............................................................................53
39. SURVIVAL.......................................................................................53
40. MISCELLANEOUS PROVISIONS.......................................................................53
A. Time of the Essence..........................................................53
B. Days.........................................................................53
C. Certain Terms................................................................54
D. Waiver of Trial by Jury......................................................54
E. No Representations by Lessor.................................................54
F. Authority....................................................................54
G. No Partnership...............................................................54
H. Lessor Approvals.............................................................54
I. Consequential Damages........................................................55
41. LESSEE'S OPTION TO PURCHASE THE FACILITY.......................................................55
A. Exercise of Option...........................................................55
B. Purchase Price Determination.................................................56
C. Terms and Conditions of Purchase.............................................59
</TABLE>
<PAGE> 6
TABLE OF CONTENTS
(CONTINUED)
PAGE
<PAGE> 7
TABLE OF CONTENTS
(CONTINUED)
PAGE
<PAGE> 8
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
EXHIBITS
<S> <C>
Exhibit A - Diagram of Leased Premises [Recitals]
Exhibit B - Declaration of Covenants and Easements [Section 2.B]
Exhibit C - Development Plan [Section 2.D]
Exhibit D - Personal Guaranty of Construction
Exhibit E - Guaranty/Entry/Indemnity Agreement
</TABLE>
<PAGE> 9
PROJECT LEASE
THIS PROJECT LEASE (this "Lease"), made this ____ day of April, 1998,
by and between BPG INDUSTRIAL PARTNERS II, LLC, a Maryland limited liability
company with its principal office at 110 N. Royal Street, Suite 305, Alexandria,
Virginia 22314, hereinafter called "Lessor", and MAGENTA CORPORATION, a Delaware
corporation with its principal offices located at 9900 Blackwell Road,
Rockville, Maryland 20850, hereinafter called "Lessee".
WITNESSETH:
Recitals
That for and in consideration of the financial conditions hereinafter
reserved and the covenants and conditions hereinafter contained, Lessor leases
and demises unto Lessee and Lessee rents from Lessor the land and appurtenant
rights described more particularly as a portion, containing approximately 4.35
acres, of Parcel N/Q of the Shady Grove Life Sciences Center, Rockville,
Maryland, as shown on Exhibit A attached hereto and made a part hereof (such
land, together with all Improvements constructed thereon, being hereinafter
referred to as the "Property" or the "Premises"). Parcel N/Q of the Shady Grove
Life Sciences Center ("Parcel N/Q") is shown on a plat entitled "Parcel 'N/Q',
Shady Grove Life Sciences Center", recorded among the Land Records of Montgomery
County, Maryland, in Plat Book 175, Plat 19634 in the Shady Grove Life Sciences
Center located in Montgomery County, Maryland. Lessor has leased the Premises
from BioReliance (as herein defined) pursuant to the Ground Sublease (as herein
defined) and BioReliance has leased all of Parcel N/Q from Montgomery County,
Maryland pursuant to the Prime Lease (as herein defined).
<PAGE> 10
Now, therefore, for and in consideration of the terms of this Lease,
the parties agree as follows:
1. INTENTIONALLY DELETED
2. INCORPORATION OF RECITALS; DEFINITIONS. The recitals are
incorporated herein as if fully set forth. When used in this
Lease, the following terms have the meanings set forth below:
1. The "County" means Montgomery County, Maryland, as
the owner of Parcel N/Q and lessor thereof to BioReliance. Any reference in this
Lease to an approval, consent or agreement required to be obtained from County
refers to County in its capacity as the owner and lessor of Parcel N/Q, and
unless otherwise indicated, does not refer to approvals, consents or agreements
required to be obtained from County in its governmental capacity.
2. "BioReliance" means BioReliance Corporation, a
Delaware corporation, its successors and assigns, as lessor under the Ground
Sublease, lessee under the Prime Lease and, in the event it should become the
fee simple owner of Parcel N/Q, as owner of Parcel N/Q and the Property.
3. The "Covenants" means the Amended and Restated
Declaration of Covenants and Easements, dated March 9, 1990, and recorded among
the Land Records of Montgomery County, Maryland, in Liber 9332, folio 591. A
copy of the Covenants is attached hereto as Exhibit B. Lessee hereby
acknowledges that it has received and reviewed the Covenants.
2
<PAGE> 11
4. "Days" means calendar days unless specific reference
is made to business days.
5. The "Development Plan" means the Shady Grove Life
Sciences Center Development Plan approved by County, in its governmental
capacity, on September 16, 1986, and the amendment dated February 10, 1994, to
the Development Plan which was approved by County, in its governmental capacity,
on February 14, 1995, copies of which are attached hereto as Exhibit C, and any
amendments to the Development Plan which may be issued by County, in its
governmental capacity, from time to time.
6. The "Facility" means the biopharmaceutical
manufacturing facility consisting of approximately 58,733 square feet to be
constructed on the Premises, and such other and further improvements as may be
allowed on the Premises consistent with the Development Plan.
7. The "Ground Sublease" means that certain Lease, dated
even date herewith, between BioReliance as lessor, and Lessor as lessee, for the
Premises.
8. A "Ground Sublessor's Affiliate" means an entity
which controls, is controlled by or is under common control with, the lessor
under the Ground Sublease. For purposes of this definition, the term "lessor"
shall solely refer to the entity which is the then-current holder of the
lessor's interest under the Ground Sublease and shall not include any party
which previously held the lessor's interest under the Ground Sublease. As used
herein, "control" means the right to vote or direct more than fifty percent
(50%) of the voting stock, general partnership interests, membership interests
or other ownership interests in an entity.
3
<PAGE> 12
9. "Improvements" means any structure, fixture or other
improvements now located or hereinafter erected upon the Premises, including,
but in no way limited to, the Facility, the Lessor's Work, the Leasehold
Improvements and appurtenances to be constructed thereon.
10. The "Land" means the Premises exclusive of the
Improvements.
11. "Lease Commencement Date" means the effective date of
this Lease, which date is the date of final ratification and execution of this
Lease by Lessor and Lessee.
12. The Lender shall have the meaning set forth in
Section 6.B.
13. The "Lessee" means MAGENTA Corporation, a Delaware
corporation, its successors and assigns.
14. The "Lessee's Leasehold Improvements" means the
improvements to be constructed by Lessee within the Facility.
15. The "Lessor" means BPG Industrial Partners II, LLC, a
Maryland limited liability company, its successors and assigns.
16. The "Lessor's Work" means the construction work shown
on the Plans and Specifications, as the same may be amended.
17. The "Loan" shall have the meaning set forth in
Section 6.B.
18. "Mortgage" means any now or hereafter existing
mortgages, deeds of trust or other similar security agreements covering this
Lease, and the term "Leasehold Mortgagee" means any mortgagee or beneficiary
under a deed of trust or other similar security agreement covering this Lease
and, unless context requires otherwise, shall include the mortgagee or
4
<PAGE> 13
beneficiary under any deed of trust or other similar security agreement to which
Lessor's interest in the Premises is subordinated pursuant to Section 28 hereof.
19. "Occupant" includes any person or persons who, by
reason of employment or other status, occupy space on or within the Premises and
Improvements.
20. "Parcel N/Q" shall have the meaning set forth in the
recitals.
21. The "Plans and Specifications" means (i) the
architectural and structural plans entitled "Magenta Corporation, Shady Grove
Life Sciences Center, Rockville, Maryland," dated November 17, 1997, prepared by
Gaudreau, Inc. and Faisant Associates, Inc., and supplemented by Schedule A to
Plans and Specifications, dated even date herewith, and (ii) the specifications
entitled "Project Manual for Magenta Corporation, Shady Grove Life Sciences
Center, Rockville, Maryland," dated November 17, 1997, prepared by Gaudreau,
Inc. and Faisant Associates, Inc., as each of the same may be modified in
accordance with Section 6.
22. The "Premises" and the "Property" shall have the
meaning set forth in the recitals.
23. The "Prime Lease" means that certain Lease-Purchase
Agreement, dated even date herewith, between County, as lessor, and BioReliance,
as lessee, for Parcel N/Q.
24. "Shady Grove Life Sciences Center" and "Life Sciences
Center" mean the property and the improvements covered by the Development Plan
which at this time consists of approximately 295 acres bounded by Key West
Avenue on the north, Shady Grove Road on the east, Great Seneca Highway on the
west and West Montgomery Avenue on the south, and
5
<PAGE> 14
including an approximately 6.92 acre parcel on the west side of Great Seneca
Highway adjacent to the Public Service Training Academy, all of which land is in
Montgomery County, Maryland.
25. The "Site Plan" means the "Storm Drain, Paving and
Site Plan" prepared by Loiederman Associates, Inc., dated August 1997, and
amended October 17, 1997, October 22, 1997 and January 21, 1998, approved by the
Shady Grove Life Sciences Center Architectural Review Committee for development
of the Improvements, as the same may be amended.
3. EASED PREMISES; SUBORDINATION TO PRIME LEASE 1.
Lessor hereby leases unto Lessee, for the consideration set
forth below, the Premises, initially for the construction, operation, and use of
a biopharmaceutical manufacturing facility in the Shady Grove Life Sciences
Center, and thereafter for any use permitted by the Covenants. For so long as
the Prime Lease remains in effect, this Lease shall be subject and subordinate,
in all respects, to the Prime Lease and the Ground Sublease. Lessee hereby
acknowledges and covenants that it has received and reviewed the Prime Lease and
the Ground Sublease. Whenever Lessor, as lessee under the Ground Sublease, shall
have the right to enforce any rights against BioReliance as lessor under the
Ground Sublease because of the default or breach of BioReliance under the Ground
Sublease, and if within ten (10) days after Lessee's written request, Lessor
fails to either (i) take reasonable action to enforce such rights; or (ii) give
Lessee written notice of its refusal to take action to enforce such rights, and
the reasons therefor, then Lessee shall have the right, in the name of Lessee
or, if necessary, in the name of Lessor, to enforce any such rights of Lessor.
If Lessor gives Lessee written notice of Lessor's refusal to take action to
enforce any such rights, then Lessee may take action to enforce such rights only
if
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it first posts a bond or other security with Lessor, in such amount as may be
reasonably required by Lessor to protect Lessor against the possibility of
material monetary damage arising from such action by Lessee.
4. TERM AND EXTENSION
1. Preliminary and Initial Terms. The term of this Lease
shall consist of a Preliminary Term, an Initial Term and any Extension Terms
exercised by Lessee (collectively, the "Term"). The "Preliminary Term" of this
Lease shall commence on the Lease Commencement Date and expire on midnight of
the day before the Rent Commencement Date (as herein defined). The "Initial
Term" of this Lease shall be for a period of twenty (20) years commencing upon
the Rent Commencement Date and expiring, unless extended pursuant to the terms
of this Lease, on midnight of the last day of the twentieth (20th) lease year.
As used herein, the term "lease year" means a twelve (12)-month period
commencing on the Rent Commencement Date or any anniversary thereof.
2. Extension Terms. If this Lease has not been
terminated sooner as provided herein, then Lessee shall have the options (the
"Extension Options") to extend this Lease for three (3) additional and
consecutive terms of five (5) years each (each an "Extension Term" and,
collectively, the "Extension Terms"). Should Lessee, in Lessee's sole
discretion, elect not to extend this Lease, then Lessee shall provide Lessor
with written notice of such election not later than fifteen (15) months before
the date of expiration of the Term, failing which Lessee shall be deemed to have
exercised the Extension Option; provided, however, that Lessee may override any
such automatic exercise of an Extension Option by exercising the Option to
purchase the
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Facility described in Section 41 hereof. For all purposes hereunder, there shall
be no distinction between the terms "extend" and "renew" and their derivatives.
5. RENTAL
1. Amount. Subject to the terms and conditions of this
Lease, during the Term (including any Extension Terms), Lessee shall pay to
Lessor annual base rent in the following amounts:
(1) One Hundred Sixty-Four Thousand Three
Hundred Sixty-Eight and 75/100 Dollars ($164, 368.75) per year commencing on the
Rent Commencement Date, payable in advance without set off, deduction or demand
in equal monthly installments of Thirteen Thousand Six Hundred Ninety-Seven and
40/100 Dollars ($13,697.40) five (5) business days prior to the first day of
each month during the Term; plus
(2) All rent, additional rent, and other charges
payable by Lessor under the Ground Sublease (the "Ground Sublease Rent")
commencing when the Ground Sublease Rent commences under the Ground Sublease,
payable in advance without set off, deduction or demand five (5) business days
prior to the first day of each month during the Term or, in the case of charges
which are not regularly due under the Ground Sublease, within ten (10) days
after demand therefor; provided, however, that if the Ground Sublease is no
longer in effect, Lessee shall pay the Ground Sublease Rent that would have been
payable had the Ground Sublease remained in effect during the entire Term,
including, without limitation, all taxes, assessments, rates, charges, license
fees, municipal liens, levies, excises and imposts levied, assessed, charged
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or imposed against the Property and all amounts billed by the County for costs
of care and maintenance of common areas within the Shady Grove Life Sciences
Center; plus
(3) (a) An amount equal to the annual regularly
scheduled principal and interest payments under the Loan plus (b) all other
charges due under the Loan, including, without limitation, required escrows,
required reserves, default interest (if and to the extent the default results
from any act, omission or condition of Lessee) and any costs or other charges
recoverable by the Lender and all amounts due upon the expiration of the term of
the Loan or the earlier acceleration of the Loan, commencing when payments
commence under the Loan, payable in advance without set off, deduction or
demand, in monthly installments equal to the monthly payments required under the
Loan, five (5) business days prior to the first day of each month during the
Term or, in the case of payments or charges which are not regularly due under
the Loan, within ten (10) days after demand therefor; provided, however, that
from and after the date the Loan is fully repaid and discharged, (x) Lessee's
obligation to pay the annual base rent described in this subparagraph (3) shall
be waived and abated during the remainder (if any) of the Initial Term and (y)
thereafter, during any Extension Term, Lessee shall pay an amount equal to the
annual amortization of the original principal amount of the Loan based on a
twenty (20) year amortization at a rate equal to the initial interest rate under
the Loan for the remainder of the Term. For example, if the original principal
amount of the Loan is $4,200,000, the monthly payment under the Loan based on a
20 year amortization at the initial interest rate under the Loan is $30,000, and
the Loan is fully paid and discharged during the 10th lease year, then (i) from
the date of repayment of the Loan until the expiration of the Initial Term,
Lessee would pay the
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annual base rent described in subparagraphs (1) and (2) above but no annual
base rent under subparagraph (3) above, and (ii) during any Extension Terms,
Lessee would pay the annual base rent described in subparagraphs (1) and (2)
above plus $360,000 per year in equal monthly installments of $30,000. At
Lessor's option, Lessee shall make the payments of annual base rent described in
this subparagraph (3), or any portion thereof, directly to the Lender.
2. Rent Commencement Date. The Rent Commencement Date
shall be the date on which the Lessor's Work is substantially complete, as
mutually agreed, in writing, by Lessor and Lessee, or if the parties are unable
to agree within five (5) days after Lessee's receipt of written notice from
Lessor that Lessor believes Lessor's Work to be substantially complete, then as
determined, and certified in writing to the parties, by Nancy Beaver or any
other employee of Whiting-Turner Construction Company mutually agreed upon by
Lessor and Lessee. As used herein, "substantially complete" means complete
except for defects or incomplete items requiring additional work by Lessor's
contractor, which are not so significant as to materially interfere with
Lessee's construction of the Lessee's Leasehold Improvements.
6. LESSOR'S WORK
1. Construction. Subject to Lessor obtaining the funds
described in Section 6.B below, Lessor shall construct the shell of the Facility
(as herein defined) and the Facility mezzanine, install the other systems of the
Facility which Lessor is responsible to construct or install in accordance with
the Plans and Specifications and construct the parking lot, driveways, sidewalks
and landscaping on the Premises in accordance with the Site Plan (as herein
defined) and the Plans and Specifications. All of the Lessor's Work shall be
performed in accordance
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with a budget prepared by Lessor and approved by Lessee, which approval may be
granted or withheld in Lessee's sole discretion (the "Budget"). Lessor may
modify the Plans and Specifications from time to time (i) to comply with
applicable laws, with Lessee's consent, which consent shall not be unreasonably
withheld, conditioned or delayed, or (ii) with Lessee's consent, which consent
may be granted or withheld in Lessee's sole discretion. Lessor shall construct
the Lessor's Work in a good and workmanlike manner in compliance with all
applicable laws. All materials and equipment to be incorporated into the
Lessor's Work shall be new and of good quality and in good operating condition.
Construction not conforming to these requirements shall be corrected. Lessor
shall assign to Lessee all warranties (if assignable) from the general
contractor and all subcontractors, architects, engineers, other consultants and
material suppliers for Lessor's Work. If any such warranties are not assignable,
Lessor shall, at Lessee's request, use its best efforts to enforce for the
benefit of Lessee such non-assignable warranties. Lessor shall receive a
development fee (the "Development Fee") in an amount equal to four percent (4%)
of all Development Costs (as defined below), which shall be paid to Lessor as
and when Development Costs are paid.
2. Construction Loan. All costs and expenses of
acquiring the Property, performing the Lessor's Work, obtaining the Loan (as
defined below), leasing the Facility (including in connection with the Prime
Lease, the Ground Sublease and this Project Lease) and all related activities
(collectively, "Development Costs"), including, without limitation, costs of all
inspections, studies and investigations of the Property, title reports and
surveys, construction costs, site preparation and development costs, fees of
architects, engineers, site planners and
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other consultants, attorneys' fees (including those of Lender's counsel) and all
fees and costs in connection with applying for and obtaining any permits and
approvals, together with the Development Fee and the Site Plan Reimbursement (as
herein defined), shall be funded by an acquisition, development and
construction/permanent loan (together with any extensions, modifications or
refinancings thereof, the "Loan") from NationsBank, N.A. or such other financial
institution acceptable to the parties (the "Lender"). The Loan shall be (i) in
an amount sufficient to fund all Development Costs, the Development Fee and the
Site Plan Reimbursement, (ii) payable over a ten (10) year term based on a
twenty (20) year amortization, and (iii) on terms and conditions acceptable to
Lessor. Lessee shall have the right to review and approve the terms of the Loan,
which approval may be granted or withheld in Lessee's sole discretion. The Loan
shall be fully repaid by Lessee, through rent paid pursuant to Section 5.A(3),
on or before the last day of the Initial Term (whether or not the Loan has
matured on such date). The "Site Plan Reimbursement" is a Three Hundred
Seventy-five Thousand Dollar ($375,000.00) payment which BioReliance shall make
to Lessor's affiliate, The Buccini/Pollin Group, Inc., in consideration for The
Buccini/Pollin Group, Inc.'s assignment to BioReliance of its option contract
for the purchase of Parcel N/Q.
3. Guaranty of Completion. Lessor shall complete the
Lessor's Work, in accordance with the Site Plan, the Plans and Specifications
and the Budget, on or before July 31, 1998 (the "Final Completion Date"), as
such Final Completion Date may be extended pursuant to this paragraph. If Lessor
is delayed in completing Lessor's Work by a Lessee Delay or an Unavoidable Delay
(both as herein defined), the Final Completion Date shall be extended by the
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<PAGE> 21
number of days Lessor is actually delayed thereby. Lessor shall give Lessee
prompt written notice of any Lessee Delays and Unavoidable Delays, and the delay
in the Final Completion Date caused thereby. The term "Lessee Delays" means
delays caused by any act, neglect, failure or omission of Lessee, its employees
or agents (including, without limitation, any contractors, subcontractors or
materialmen employed by Lessee performing work at the Premises). The term
"Unavoidable Delays" means delays caused by lack of funding not resulting from
Lessor's acts or omissions, strikes, Acts of God, lockouts, labor difficulties,
riots, explosions, sabotage, accidents, shortages or inability to obtain labor
or materials, governmental restrictions, civil commotion, severe weather, fire
or other casualty or similar causes beyond the reasonable control of Lessor.
4. Permits. Lessee shall cooperate with Lessor in
filing any application for zoning, land use and building permits and any other
permits and approvals necessary to the construction, development, use and
operation of the Property in a timely manner.
5. Punch List. Before or within fifteen (15) days after
the Rent Commencement Date, Lessee shall make an inspection of Lessor's Work to
determine that the same has been completed in accordance with the Plans and
Specifications, and to prepare a punch list of work requiring correction or
completion by Lessor's contractor. Subject to Unavoidable Delays and Lessee
Delays, Lessor shall promptly commence and use good faith efforts to cause
Lessor's contractor to complete all items on Lessee's punch list within thirty
(30) days after Lessor's receipt of such punch list.
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6. As-Built Drawings. Within six (6) months after
completion of Lessor's Work, Lessor shall deliver to Lessee a set of as-built
drawings for Lessor's Work.
7. LESSOR'S INSURANCE.
During the period of time between the Lease Commencement Date
and the Rent Commencement Date (the "Lessor's Work Period"), Lessor shall
obtain, or cause its general contractor to obtain, at its own cost and expense,
and keep in force and effect the following insurance coverages with an insurance
company(ies) licensed to do business in the State of Maryland. Lessor's
insurance shall be primary.
(1) Commercial General Liability: Minimum Five
Million Dollars ($5,000,000.00) combined single limit (which may be a
combination of commercial general liability and umbrella and/or excess liability
policies) for bodily injury and property damage coverage per occurrence
including the following coverages: Contractual Liability as afforded by Lessor's
commercial general liability policy; Premises and Operations; Independent
Contractors; Products and Completed Operations; Personal Injury; and Broad Form
Property Damage.
(2) Worker's Compensation/Employer's Liability:
Meeting all requirements of Maryland law and with the following minimum limits:
(1) Bodily Injury by Accident - $100,000 each accident; (2) Bodily Injury by
Disease - $500,000 policy limits; and (3) Bodily Injury by Disease - $500,000
each employee.
(3) Automobile Liability Coverage: Minimum One
Million Dollars ($1,000,000.00) combined single limit for bodily injury and
property damage coverage per
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occurrence including the following: (1) owned automobiles; (2) hired automobiles
and (3) non-owned automobiles.
(4) Additional Insured: County and BioReliance
shall each be named as an additional insured on all liability policies.
(5) Policy Cancellation: Forty-five (45) days
prior written notice must be provided to County and BioReliance of any
cancellation, for other than non-payment of premium, or material change of any
of the policies.
(6) Certificate Holders: BioReliance, 9900
Blackwell Road, Rockville, Maryland 20850; and County, Department of Public
Works and Transportation, Division of Facilities & Services, 110 North
Washington Street, Rockville, Maryland 20850.
8. LESSEE'S INSURANCE
1. Mandatory Insurance Requirements During the
Construction Period: During the period of time between the Lease Commencement
Date until the use and occupancy certificate is issued for the Facility (the
"Construction Period"), and thereafter whenever and for so long as construction
is resumed, Lessee shall obtain, or cause its general contractor to obtain, at
its own cost and expense, and keep in force and effect the following insurance
coverages with an insurance company(ies) licensed to do business in the State of
Maryland and reasonably acceptable to Lessor and BioReliance. Lessee shall
provide evidence of coverage by submitting a certificate of insurance and/or
certified copies of the insurance policies to Lessor, BioReliance and County on
or before the Lease Commencement Date. Lessee's insurance shall be primary.
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(1) Builder's All Risk Property Insurance:
Lessee shall provide a Builder's All Risk Property Policy including fire and
extended coverage to protect the interest of County, Lessor, contractor and
sub-contractors against loss caused by the perils insured in the amount of one
hundred percent (100%) of the insurable value of the Facility. The coverage must
be written on a completed value form. The policy shall also endorse a demolition
and debris removal clause, extra expense and loss of use coverages with a
sub-limit of $500,000 per occurrence.
(2) Policy Cancellation: Forty-five (45) days
prior written notice must be provided to County, BioReliance and Lessor of any
cancellation, for other than non-payment of premium, or material change of any
of the policies.
(3) Certificate Holders: Lessor, 110 N. Royal
Street, Suite 305 Alexandria, Virginia 22314; BioReliance, 9900 Blackwell Road,
Rockville, Maryland 20850; and County, Department of Public Works and
Transportation, Division of Facilities & Services, 110 North Washington Street,
Rockville, Maryland 20850.
2. Mandatory Insurance Requirements During the Leasehold
Improvement Period: During the period of time between the date Lessee commences
construction of Lessee's Leasehold Improvements (the "Leasehold Improvement
Commencement Date") until the use and occupancy certificate is issued for the
Facility (the "Leasehold Improvement Period"), Lessee shall obtain, or cause its
general contractor to obtain, at its own cost and expense, and keep in force and
effect the following insurance coverages with an insurance company(ies) licensed
to do business in the State of Maryland and reasonably acceptable to Lessor and
BioReliance. Lessee
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shall provide evidence of coverage by submitting a certificate of insurance
and/or certified copies of the insurance policies to Lessor, BioReliance and
County on or before the Leasehold Improvement Commencement Date. Lessee's
insurance shall be primary.
(1) Commercial General Liability: Minimum Five
Million Dollars ($5,000,000.00) combined single limit (which may be a
combination of commercial general liability and umbrella and/or excess liability
policies) for bodily injury and property damage coverage per occurrence
including the following coverages: Contractual Liability as afforded by Lessee's
commercial general liability policy; Premises and Operations; Independent
Contractors; Products and Completed Operations; Personal Injury; and Broad Form
Property Damage.
(2) Worker's Compensation/Employer's Liability:
Meeting all requirements of Maryland law and with the following minimum limits:
(1) Bodily Injury by Accident - $100,000 each accident; (2) Bodily Injury by
Disease - $500,000 policy limits; and (3) Bodily Injury by Disease - $500,000
each employee.
(3) Automobile Liability Coverage: Minimum One
Million Dollars ($1,000,000.00) combined single limit for bodily injury and
property damage coverage per occurrence including the following: (1) owned
automobiles; (2) hired automobiles and (3) non-owned automobiles.
(4) Additional Insured: County, BioReliance, and
Lessor shall each be named as an additional insured on all liability policies.
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(5) Policy Cancellation: Forty-five (45) days
prior written notice must be provided to County, BioReliance and Lessor of any
cancellation, for other than non-payment of premium, or material change of any
of the policies.
(6) Certificate Holders: Lessor, 110 N. Royal
Street, Suite 305 Alexandria, Virginia 22314; BioReliance, 9900 Blackwell Road,
Rockville, Maryland 20850; and County, Department of Public Works and
Transportation, Division of Facilities & Services, 110 North Washington Street,
Rockville, Maryland 20850.
3. Mandatory Insurance Requirements During the
Operations Period: From and after the issuance of the use and occupancy
certificate for the Facility (the "Operations Period"), Lessee shall obtain, at
its own cost and expense, and keep in force and effect during the Term, the
following insurance coverages with an insurance company(ies) licensed to do
business in the State of Maryland and reasonably acceptable to Lessor and
BioReliance. Lessee must provide evidence of coverage by submitting a
certificate of insurance and/or certified copies of the insurance policies to
Lessor, BioReliance and County within thirty (30) days after the issuance of the
use and occupancy certificate. Lessee's insurance shall be primary.
(1) Commercial General Liability: Minimum Five
Million Dollars ($5,000,000.00) combined single limit (which may be a
combination of commercial general liability and umbrella and/or excess liability
policies) for bodily injury and property damage coverage per occurrence
including the following coverages: Contractual Liability as afforded by Lessee's
commercial general liability policy; Premises and Operations; Independent
Contractors; Fire Legal Liability; and Personal Injury Coverage.
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(2) Pollution Liability: If Lessee uses any
radioactive material or process at the Premises, it shall obtain, keep in force
and effect, and provide Lessor, BioReliance and County with evidence of, a
Pollution Liability policy with a minimum limit of One Million Dollars
($1,000,000.00), to cover liability for discharge, release or spills of
radioactive material occurring as a result of Lessee's operations on the
Premises and the resulting clean-up costs for properties adjoining the Premises.
As an alternative to maintaining Pollution Liability coverage, Lessee may
provide Lessor, BioReliance and County with a mutually acceptable letter of
credit, payable to Lessor, BioReliance and County, to cover such exposure.
(3) Worker's Compensation/Employer's Liability:
Meeting all requirements of Maryland law and with the following minimum limits:
(1) Bodily Injury by Accident - $100,000 each accident; (2) Bodily Injury by
Disease - $500,000 policy limits; and (3) Bodily Injury by Disease - $500,000
each employee.
(4) Automobile Liability Coverage: Minimum One
Million Dollars ($1,000,000.00) combined single limit for bodily injury and
property damage coverage per occurrence including the following: (1) owned
automobiles; (2) hired automobiles and (3) non-owned automobiles.
(5) Property Insurance: Lessee shall also
provide all-risk property damage insurance for 100% of the value of the Facility
(exclusive of foundations and footings) and other Improvements against all risks
of direct physical loss or damage including expense of removal of debris of such
property damage by an insured peril. Property policy shall
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provide 100% replacement cost endorsement, demolition and debris removal clause,
and extra expense coverage. Loss Payee: BioReliance, 9900 Blackwell Road,
Rockville, Maryland 20850.
(6) Pollution Clean-up: If Lessee uses any
radioactive material or process at the Premises, it shall obtain, keep in force
and effect, and provide Lessor, BioReliance and County with evidence of, a
Pollution Clean-up policy with a minimum limit of One Million Dollars
($1,000,000.00), to cover, in the event of discharge, release or spills of
radioactive material occurring as a result of Lessee's operations on the
Premises, the costs of extracting such pollutants from the Premises and
restoring the Premises. As an alternative to maintaining Pollution Liability
coverage, Lessee may provide Lessor, BioReliance and County with a mutually
acceptable letter of credit, payable to Lessor, BioReliance and County, to cover
such exposure.
(7) Boiler and Machinery Insurance: The limit of
coverage: 100% value of the Facility.
(2) Lessee shall provide the above coverage for all the
objects on the Premises in the form of repair or replacement blanket and
comprehensive coverage. The repair/replacement cost provision will include the
following: (a) to pay for repair/replacement valued at the time of replacement;
(b) to permit reconstruction of another site; and (c) to pay replacement cost
when the insured commences replacement within two (2) years from the date of
loss or damage.
(3) The Boiler and Machinery policy must provide Boiler &
Machinery Surveys and Inspection required by applicable law.
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(4) Additional Insured: County, BioReliance and Lessor
shall each be named as an additional insured on all liability policies.
(5) Policy Cancellation: Forty-five (45) days prior
written notice must be provided to County and Lessor of any cancellation, for
other than non-payment of premium, or material change of any of the policies.
(6) Certificate Holders: Lessor, 110 N. Royal Street,
Suite 305, Alexandria, Virginia 22314; BioReliance, 9900 Blackwell Road,
Rockville, Maryland 20850; and County, Department of Public Works and
Transportation, Division of Facilities & Services, 110 North Washington Street,
Rockville, Maryland 20850.
4. Lessee shall carry any additional or increased coverages which
may be reasonably required by Lessor, consistent with current practices of
lessors of similar properties. Deductibles under all of Lessee's insurance
policies shall be approved by Lessor, in its prudent business judgment.
5. Lessee may carry any additional coverages required by any
lender, and any lender providing financing shall be named as loss payee under
any coverage required thereunder.
9. INDEMNIFICATION
1. Except as otherwise provided in this Lease, Lessee, as a
material part of the consideration for Lessor's execution of this Lease,
covenants with Lessor that Lessee shall hold Lessor harmless from and against
any loss, damage, claim of damage, liability or expense in connection with loss
of life, personal injury and/or damage to property (collectively, "Claims")
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arising from or out of an occurrence upon or at the Premises, or the occupancy
and use of the Premises or any part thereof, or occasioned wholly or in part by
any act or omission in or related to the Life Sciences Center of Lessee, its
employees, agents, contractors, tenants, licensees or invitees, excepting Claims
arising out of the acts or omissions of Lessor, Lessor's agents, Lessor's
employees, Lessor's contractors, Lessor's licensees or Lessor's invitees. In
case Lessor shall, without fault on its part, be made party to any litigation
commenced by or against Lessee, Lessee shall hold Lessor harmless and shall pay
all costs, expenses and reasonable attorneys' fees incurred or paid in
connection with such litigation. In no event shall the limits of any insurance
policy provided for herein be deemed to limit Lessee's liability to Lessor as
herein set forth.
2. Lessor, as a material part of the consideration for
Lessee's execution of this Lease, covenants with Lessee that Lessor shall hold
Lessee harmless from and against any Claims occasioned wholly or in part by any
act or omission in or related to the Life Sciences Center of Lessor, its
employees, agents, contractors or invitees, excepting Claims arising out of the
acts or omissions of Lessee, Lessee's agents, Lessee's employees, Lessee's
contractors, Lessee's tenants, Lessee's licensees or Lessee's invitees. In case
Lessee shall, without fault on its part, be made party to any litigation
commenced by or against Lessor, Lessor shall hold Lessee harmless and shall pay
all costs, expenses and reasonable attorneys' fees incurred or paid in
connection with such litigation.
10. LIENS, CLAIMS OR ENCUMBRANCES
1. Free of Liens. Lessee shall at all times keep the
Premises free and clear of mechanics', materialmen's and other monetary liens
caused or created by Lessee or anyone
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claiming through or under Lessee, other than the lien, operation, and effect of
such Mortgages as may be necessary from time to time to effectuate the financing
of the Lessee's Leasehold Improvements.
2. Discharge of Lien. If any mechanics', materialmen's
or other monetary lien shall at any time be filed against the Premises or Parcel
N/Q for work performed by or for Lessee (other than the Lessor's Work), Lessee
shall either cause the same to be discharged of record within twenty (20) days
after Lessee's receipt of notice of the filing of the same or, if Lessee shall
desire to contest any such lien, Lessee shall, within twenty (20) days after the
date of the filing of the lien, furnish to Lessor security in one hundred fifty
percent (150%) of the amount of the claim, or shall procure a bond in said
amount from a reputable bonding company. The final judgment of any court of
competent jurisdiction determining the validity and/or amount of any such lien
shall be conclusive.
3. Failure to Discharge Lien. If Lessee shall fail to
discharge any monetary lien not permitted by this Lease or to provide Lessor
with security therefor or procure a bond therefor as hereinabove provided, then
Lessor may at its option, pay or discharge any such monetary lien, and Lessee
shall pay Lessor all amounts spent by Lessor, including costs, expenses and
reasonable attorneys' fees, incurred by Lessor, together with interest at the
rate provided in Section 11-107(a) of the Courts and Judicial Proceedings
Article, Annotated Code of Maryland, as amended, or in the event that such
Section is repealed and not re-enacted, then interest shall be at the prime rate
set by Citibank of New York or its successor, plus one percent (1%), which
payment shall constitute additional rent due hereunder and shall be paid within
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thirty (30) days after Lessor provides a reasonably detailed written notice of
the additional rent to Lessee. Nothing herein requires Lessor to pay or
discharge any lien. Lessor may exercise the remedies available in Section 24 of
this Lease if the lien is not paid, discharged or secured as required by this
Lease.
11. LESSEE'S LEASEHOLD IMPROVEMENTS
1. Submission and Approval of Plans. Lessee shall
construct and install the initial Lessee's Leasehold Improvements in the
Premises in a good and workmanlike manner, in accordance with all applicable
laws, covenants and restrictions and all requirements of the Lender and the
Shady Grove Life Sciences Center Architectural Review Committee, without damage
to the structural integrity of the Facility and subject to the following
conditions. No building, exterior improvement or addition, or landscaping shall
be erected, placed or altered until plans therefor have been approved by
BioReliance and County in accordance with the Ground Sublease and the Prime
Lease. If any plans are disapproved, Lessee shall promptly resubmit revised
plans. Lessee shall provide the following information to County in four copies,
and to BioReliance, for their review and approval prior to (or, where
appropriate, approval, during) construction:
(1) All of the plans, specifications and other
information required by Paragraph II.F.3 of the Development Criteria attached to
the Development Plan as Appendix A; and
(2) All of the plans, specifications and other
information required by Paragraph II.B.1 of the Covenants.
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Lessee shall not construct or install any Lessee's Leasehold Improvements, or
make any subsequent alterations to the Premises, which have a material effect on
the (i) exterior of the Facility, (ii) the structural components of the
Facility, or (iii) the parking lot, driveways, sidewalks or landscaping without
Lessor's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed and any such Lessee's Leasehold Improvements
shall be constructed in accordance with plans and specifications reasonably
approved by Lessor.
2. Plan Approval is not in Lieu of other
Approvals/Permits. The architectural review and approval described in this
Section does not alter, replace, or in any way substitute for or constitute
approval in lieu of other permits, approvals or authorizations required in the
normal building or construction process.
3. No Monetary Liability for Approval of Plans. Neither
County nor any employee or agent thereof shall be liable for monetary damages to
any occupant or lessee or to anyone submitting plans or requests for approval,
or to any other party by reason of mistake in judgment, negligence, or
nonfeasance, arising out of or in connection with the approval, disapproval or
failure to approve any such plans or requests or for any other action in
connection with its or their duties hereunder. Likewise, anyone so submitting
plans to County for approval, by submitting such plans or requests, and any
person when he becomes an occupant or lessee, agrees that he or it will not
bring any action or suit to recover any monetary damages against County or any
employee or agent of County for such approval or disapproval. Any approval of
plans by County shall not constitute a representation by such party that such
approved drawings comply with applicable building codes. Any deficiency in
design or construction, although same
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had prior approval of County and Lessor, shall be solely the responsibility of
Lessee. Notwithstanding anything to the contrary in this Lease, the terms of the
foregoing paragraph shall apply to County solely in its capacity as owner and
lessor of the Property and grantor of use rights, and not in its governmental
capacity.
4. Coordination of Plans. Any amendments, supplements or
additions to the Plans and Specifications and approved construction schedules
for the Improvements (including but not limited to roads and utilities, but
excluding interior alterations) shall be provided to and coordinated with
representatives of County, representatives of BioReliance and Lessor's
architect, and must be reviewed by the Architectural Review Committee of the
Life Sciences Center and approved by County.
5. Coordination of Work. Lessee acknowledges and agrees
that Lessor's Work in or about the Facility shall take precedence over the
construction of the Lessee's Leasehold Improvements. Lessee shall coordinate its
construction activities with the construction activities of Lessor so as not to
interfere with or delay the completion of Lessor's Work in or about the
Facility. Lessor or Lessor's contractor shall notify Lessee in writing whenever
Lessor or Lessor's contractor believes Lessee is or in the near future may be
interfering with or delaying Lessor's Work in or about the Facility and, upon
such notice, Lessee shall cease the activities which cause such interference. If
Lessor determines from time to time, in its reasonable discretion, that the
construction of the Lessee's Leasehold Improvements is or in the near future may
be interfering with or delaying Lessor's Work in or about the Facility, Lessor,
with twenty-four (24) hours advance notice, may limit or prevent Lessee's access
to the freight
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elevators, loading docks, the Land and/or the Facility for such length of time
as Lessor, in its reasonable discretion, shall determine.
6. As-Built Drawings. Within six (6) months after
completion of any Lessee's Leasehold Improvements, or any alterations or
additions thereto, Lessee shall deliver to Lessor a set of as-built drawings of
such Lessee's Leasehold Improvements, alterations or additions.
12. CONSTRAINTS
During the Operations Period, Lessee's use of the Premises is
subject to the following permitted uses and performance standards:
1. No Nuisance. No activity shall be conducted nor shall
anything be done on the Premises which may be or become a material nuisance to
Lessor, BioReliance, County, general public, or any lessee by reason of
unsightliness or the excessive emission of fumes, odors, glare, vibration,
gasses, radiation, dust, waste, smoke or noise.
2. Notice of Toxic and Hazardous Materials. Lessee shall
provide Lessor, BioReliance and County with a copy of: (a) each notification or
other document it is required to submit to the State Emergency Response
Commission under Sections 311 and 312 of the Superfund Amendments and
Reauthorization Act of 1986 and any amendments thereto; and (b) each annual
report it is required to submit to the Maryland Department of the Environment
under COMAR 26.13.03.06 and any amendments thereto; and (c) each report
regarding its use, storage,
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management or disposal of toxic, hazardous or radioactive materials which it is
required to submit to any other governmental authority under any other law or
regulation enacted by the federal government, the State of Maryland, or the
County in its governmental capacity. Lessee shall, and shall cause all Occupants
of the Premises to, store, manage, and dispose of all toxic, hazardous and
radioactive materials in accordance with applicable laws and regulations.
3. Indemnification. During the Term, Lessee hereby
agrees to indemnify and hold Lessor harmless, except in the case of the
negligence or intentional misconduct of Lessor or its agents, employees, or
contractors, with regard to any Claims arising from or out of a breach of
Lessee's obligations under Section 12.B concerning toxic and hazardous
materials, radioactive materials, controlled substances and medical waste,
including but not limited to, reasonable counsel fees, court costs, litigation
related expenses, expenses for legally required clean up, enforcement expenses,
and any consequential damages payable by Lessor to BioReliance under the Ground
Sublease resulting from the use or storage of the referenced materials on the
Premises.
4. Outdoors Activities. All of the operations normally
carried on indoors shall be carried on within fully enclosed buildings. No
outside activities shall be carried on, except for incidental meetings or events
held outside in non-inclement weather and the parking of motor vehicles and the
loading and unloading of motor vehicles and approved recreational activities,
without the prior written approval of Lessor. This paragraph shall not be deemed
to prohibit therapy and types of exercise normally carried on outdoors.
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5. Building Sites. Building sites shall be used only as
approved by Lessor in granting this Lease and approved by County through its
Development Plan and its architectural review, and in accordance with applicable
law.
6. Compliance with Loan Documents. Until the Loan has
been fully repaid, Lessee shall use and occupy the Premises in accordance with
all applicable provisions of the documents evidencing and securing the Loan.
13. BUILDING CONSTRUCTION AND ALTERATIONS.
1. Building Codes. Lessee agrees that construction or
alterations of any building shall be in conformance with the then existing
applicable standards, codes and ordinances. Lessee shall not make any structural
or exterior alterations to any building or other Improvement, or demolish any
building or other Improvement, except in accordance with the second paragraph of
Section 11.A, Section 11.D, and until the end of the Lessor's Work Period (but
not thereafter) Section 11.E.
2. Cleaning of Premises. During the Leasehold
Improvement Period, Lessee agrees that all building sites shall be kept clean on
a daily basis and all trash, rubbish and debris removed therefrom after any
construction work is performed thereon.
3. Premises "As Is". Lessee has leased the Premises in
an "as is" condition after an examination thereof and of the sub-surface
conditions beneath the same and without any representation or warranty on the
part of Lessor.
14. LANDSCAPING, OUTSIDE STORAGE AND MAINTENANCE. Lessee agrees
that it will adhere to the following requirements.
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1. Landscaping. Landscaping shall be in accordance with
the plan submitted to and approved in writing by Lessor, BioReliance and County
in accordance with Section 11.A.. Such landscaping shall include sodding,
planting of trees, shrubs, and other customary landscaping treatment for the
entire Premises, including adequate screening of parking areas. The approved
plan for landscaping may not be materially altered without submitting the
revised plan for written approval of Lessor, BioReliance and County.
2. Maintenance of Landscaping. Maintenance of existing
and approved landscaping shall include keeping the lawns mowed and the hedges
trimmed, and the watering and removal of weeds from planted areas, all as needed
to maintain the Premises in a neat, clean and safe condition and appearance, as
is customary for other parcels within the Shady Grove Life Sciences Center.
3. Screening of Storage Areas. Except during
construction, no materials, supplies, equipment, vehicles (except in designated
areas), finished products or semi-finished products, furniture, furnishings, raw
materials, or other articles of any nature shall be stored or permitted to
remain on the exterior of any building site without appropriate screening to be
approved by Lessor, BioReliance and County.
4. Storage of Fuel Oil, etc. Except during construction,
or as approved by Lessor, BioReliance and County, permanent storage facilities
for fuel oil, other bulk fluids or gasses, such as bulk oxygen systems, must be
provided below grade. If below grade storage is technically infeasible or
economically prohibitive, Lessee may store these materials above grade provided
suitable screening is furnished by Lessee and approved by Lessor, BioReliance
and
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County. At all times, such materials must be stored in an environmentally
safe manner, pursuant to applicable Federal, State and local laws and
regulations.
5. Safe conditions. Lessee shall keep the Premises,
Improvements, and appurtenances in a safe, clean and neat condition, and shall
comply in all respects with all government health and policy requirements.
Lessee shall remove at its own expense any rubbish, garbage or trash of any
character which may accumulate from or on the Premises. Rubbish, trash and
garbage shall be kept in a sanitary manner inside buildings.
6. Vacant Buildings. Vacant or unfinished buildings, or
parts thereof, shall be adequately secured against vandalism and intrusion by
trespassers.
15. UTILITY CONNECTIONS
Lessee agrees that, except for emergency electricity
generators and satellite receiving transmission dishes, all electrical and
telephone connections and installations of wires to buildings shall be made
underground to the extent reasonably possible. Where reasonably possible each
transformer, electric, gas or other meter of any type, or other apparatus, shall
be placed on or below the surface of the land, or in structures, and where
placed on the surface shall be adequately screened and fenced, and all such
installations shall be subject to the prior written approval of Lessor,
BioReliance and County. Notwithstanding the foregoing, Lessee may place exhaust
fans, duct work, package HVAC units, satellite dishes and other equipment on the
screened area of the roof of the Facility. Lessee shall pay the costs of all
necessary utility connections.
16. SIGNS OR MONUMENTS
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1. Defined. For the purpose of this paragraph, a sign or
monument is the display of any words, numerals, figures, devices, designs or
trademarks by which anything is made known and visible to the general public.
2. Approval of Plans. Lessee agrees that all plans and
specifications for signs or monuments to be erected on the exterior of the
building or grounds and visible to the general public shall be subject to the
prior written approval of Lessor, BioReliance and County. The submitted
information shall include details of design, materials, location, color and
lighting, if any. Lessee may, subject to prior written approval of Lessor,
BioReliance and County, place appropriate markers and directional signs on
County's property outside of the Premises (including the remainder of Parcel
N/Q), which shall be in keeping with the character and nature of Lessee's
operations.
3. Construction Signs. During any construction or
reconstruction of improvements on the Premises, Lessor agrees to allow any
lender, contractor, developer or other participant in such construction or
reconstruction to place a temporary sign publicizing its participation in the
financing, construction or reconstruction of the Facility, subject to such
reasonable requirements as may be imposed by Lessor, BioReliance and County, and
subject to applicable ordinances.
17. PARKING AREAS AND LOADING ZONES
1. Parking Facilities. No parking shall be permitted on
any access road, street or driveway, either public or private, or any place
other than a paved parking space
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provided for and so designated. Lessee shall be responsible for taking
reasonable measures to ensure compliance with parking regulations by its
employees, tenants and visitors.
2. Loading and Unloading Areas. Lessee agrees that
loading and unloading areas shall be designed with adequate maneuvering space to
permit pickups and deliveries. The space for maneuvering of vehicles shall avoid
interference with other traffic flow. Suitable screening shall be provided so
these operations are not readily visible from ground-level public thoroughfares.
Loading and receiving areas shall not be located on that side of the building
which also contains its main entrance.
18. TEMPORARY STRUCTURES
Lessee agrees that no structure, covering, garage, barn, or
other outbuilding of a temporary nature shall be situated, erected or maintained
on any part of the Premises except with prior approval of Lessor, BioReliance
and County and in compliance with applicable zoning ordinances. This paragraph
shall not apply to construction buildings, construction trailers, storage
facilities and/or other structures of a temporary nature used in construction,
used during the course of construction of any permanent building which is now on
or is to be located on the Premises; provided, however, that any such buildings,
trailers, facilities or other structures shall be in compliance with any
applicable zoning ordinances.
Lessor hereby approves Lessee's installation and use of
temporary facilities on the Premises, subject to applicable zoning ordinances
and receipt of any necessary governmental approvals, and provided that any such
temporary facility shall be kept on the Premises only for
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the period, not to exceed two (2) years, during which Lessee is constructing or
building out space on the Premises into which the business conducted in such
temporary facility will be moved.
19. MAINTENANCE OF PROPERTY.
1. Lessee's Obligation. Lessee, at Lessee's expense,
shall at all times maintain the Premises (including, without limitation, the
Facility and the fixtures and equipment therein) in good condition and repair.
Lessee must submit, for approval by Lessor, BioReliance and County, all
maintenance and repair plans and amendments thereto for maintenance and repairs
to building exteriors, landscaping, fences, drives, parking lots, and the
exteriors of other structures located thereon, which maintenance or repairs
materially alter the condition of the Premises which existed prior to the need
for such maintenance or repair arising.
2. Lessor's Right, but not Obligation to Repair. In the
event of the violation of any of the restrictions set forth in Sections 12
through 19 herein by Lessee, Lessor shall notify Lessee in writing, giving
specifics as to the nature of the alleged violation and any recommended remedial
action. In the event Lessee has not taken steps to remedy the violation in a
manner reasonably acceptable to Lessor within thirty (30) days after Lessee's
receipt of such notice, Lessor shall have the right to enter upon the Premises
to put the same in good order, condition and repair and all costs associated
with any such work shall be charged against Lessee as additional rent payable
within thirty (30) days after invoice, which shall include reasonable details of
the costs charged as additional rent.
3. County's Maintenance. Subject to appropriation of
funding, County is responsible for maintaining all parcels within the Shady
Grove Life Sciences Center that have
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not been leased or that are unoccupied, and for making all necessary
arrangements for the maintenance and repair of the Common Areas (as defined in
Section 23.A).
20. COOPERATIVE MAINTENANCE AGREEMENT
A maintenance agreement between County and BioReliance or
among lessees of the Shady Grove Life Sciences Center may be established for the
purpose of maintaining the Common Areas. No such agreement shall discharge or
relieve Lessee of its responsibilities under the terms and conditions of this
Lease.
21. UTILITY SERVICE AND ACCESS.
County has provided for water, sewer, gas, electricity, and
telephone service to the Premises. All meters, connecting charges and all
outlets, risers, wiring, piping, duct work or other means of distribution of
such services within the Premises of Lessee shall be supplied by Lessee at
Lessee's expense. Lessee covenants and agrees that at all times its use of any
of such services shall never exceed the capacity of the mains, feeders, ducts
and conduits bringing same to the Premises or of the outlets, risers, wiring,
piping, duct work or other means of distribution of such service within the
Premises. Lessee may increase the capacity of the mains, feeders, ducts, and
conduits if Lessee pays for and performs all necessary work therefor, and has
obtained Lessor's, BioReliance's and County's approval in writing. Such work
performed by Lessee shall be at no increased expense or cost to County in any
manner whatsoever. Other than the matters provided above, Lessee shall furnish
and pay for installation and use of all utilities, including but not limited to
fuel, gas, electricity, water, sewer charges, telephone and the necessary
equipment
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therefor within the Premises. Lessee shall construct, at its own
expense, the water and sanitary sewer lines to connect the Improvements.
22. ACCESS BY LESSOR AND EASEMENT
1. Access to Maintain Pipes. In the event Lessee fails
to do so within thirty (30) days after written notice from Lessor, Lessee shall
permit Lessor, BioReliance or County, at Lessee's expense, and subject to the
provisions of this paragraph, to repair and maintain all pipes and conduits in
and through the Premises that Lessee is required to maintain. Lessor,
BioReliance, County or their respective agents shall have the right, to enter
upon the Premises at all reasonable times and upon at least forty-eight (48)
hours' notice except in case of an emergency to examine same and to make such
repairs, alterations, improvements or additions to same as may be required of
such party pursuant hereto, and Lessor, BioReliance or County shall be allowed
to take all material into and upon said Premises that may be required therefor
without the same constituting an eviction of Lessee, in whole or in part. In
case of an emergency, Lessor, BioReliance or County shall give such notice to
Lessee as is reasonable under the circumstances.
2. Reservation of Easements. In the Prime Lease, County
has reserved the right, consistent with the Development Plan, the Covenants and
with the Plans and Specifications, to establish easements and/or rights-of-way,
for streets, roads, underground utilities, and other related purposes, in order
to facilitate development of the Life Science Center, provided that such
easements or rights-of-way shall not interfere with the use, operations, or
maintenance of, or materially adversely affect the value of, the Property.
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3. Accommodation of Lessee. Lessor shall use reasonable
efforts to minimize the interference with business activities on the Premises
when exercising Lessor's rights pursuant to this Section.
23. COMMON AREAS
1. Lessee's Non-exclusive Right to use. Lessee shall
have a non-exclusive right to use: (i) the public conveniences and common areas,
if any, in the Life Sciences Center; and (ii) all other areas in the Life
Sciences Center such as sidewalks, roads and driveways, to be used in common by
lessees of the Life Sciences Center, ((i) and (ii) collectively referred to and
identified for use as "Common Areas").
2. County's Right to Make Changes to Common Areas. In
the Prime Lease, County has reserved the right to construct buildings and to
make changes, additions, alterations or improvements on or to the Common Areas;
provided, however, that such activity does not cause an obstruction of the
access to the Premises, any unreasonable interference with the permitted uses of
the Premises, or a material adverse effect on the value of the Premises.
24. ENFORCEMENT
1. Lease for the Benefit of Parties. The provisions of
this Lease shall run for the Term of this Lease (including any Extension Terms)
and be binding upon and inure to the benefit of Lessor and Lessee and their
respective successors and assigns. These provisions shall be enforced, as
provided hereinafter, by Lessor or by Lessee for their respective benefit or
protection.
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2. Remedies. A violation of any provision herein
contained shall give to Lessor or Lessee the right to bring proceedings in a
court of competent jurisdiction against the party or parties violating or
attempting to violate any of said covenants, conditions, restrictions and
reservations, to enjoin them from so doing, to cause any violation to be
remedied, and/or to recover damages resulting from such violation. In addition,
violation of any covenants, conditions, restrictions, and reservations shall
give to Lessor the right to enter upon the Premises to remove, at the expense of
Lessee, any structure, thing or condition that may be contrary to the provisions
hereof after providing any Leasehold Mortgagee with written notice of the
violation and providing not less than thirty (30) days in which to cure the
alleged violation, which cure period shall be extended for so long as may be
reasonably necessary to cure such violation, so long as Lessee or any Leasehold
Mortgagee proceeds diligently to effect such cure after receipt of Lessor's
notice. In any judicial proceeding to enforce the provisions hereof or to enjoin
their violation, the prevailing party or parties shall be entitled to reasonable
attorneys' fees from the party or parties against whom judgment is entered in
such amount as may be fixed by the court in such proceedings. Such remedies
shall be cumulative and not exclusive.
3. Default
(1) When Lessee is a Ground Sublessor's
Affiliate. During any period when the then-current holder of the Lessee's
leasehold interest under this Lease is a Ground Sublessor's Affiliate, Lessee's
violation of any of the provisions of Section 5 requiring Lessee to pay annual
base rent and additional rent, Section 8 requiring Lessee to maintain and
provide Lessor with evidence of the insurance coverages set forth therein,
Section 12, Section 14 or 19,
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shall, at Lessor's option, be deemed to create a default under this Lease and to
give rise to the right of termination or eviction, or any other remedy provided
by law, provided that said violation has not been cured within twenty (20) days
after written notice has been given to Lessee, and further provided that Lessee
has not taken steps to remedy said violation in a manner reasonably acceptable
to Lessor within said twenty (20) days after the written notice. Lessee's
material violation of any of the other provisions set forth herein shall, at
Lessor's option, be deemed to create a default but shall not in any event give
rise to the right of termination or eviction; provided, however, that said
violation has not been cured within twenty (20) days after written notice has
been given to Lessee, and further provided that Lessee has not taken steps to
remedy said violation in a manner reasonably acceptable to Lessor within said
twenty (20) days after the written notice or has not thereafter diligently
proceeded to complete the remedying of such violation.
(2) When Lessee is Not a Ground Sublessor's
Affiliate. During any period when the then-current holder of the Lessee's
leasehold interest under this Lease is not a Ground Sublessor's Affiliate,
Lessee's violation of any of the provisions of this Lease shall, at Lessor's
option, be deemed to create a default under this Lease and to give rise to the
right of termination or eviction, or any other remedy provided by law, provided
that said violation has not been cured within twenty (20) days after written
notice has been given to Lessee, and further provided that Lessee has not taken
steps to remedy said violation in a manner reasonably acceptable to Lessor
within said twenty (20) days after the written notice.
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4. Bankruptcy. Lessee agrees that it shall be a default
of this Lease if Lessee is (i) voluntarily placed into bankruptcy for purposes
of liquidation or (ii) involuntarily placed into bankruptcy for purposes of
liquidation and such bankruptcy proceeding is not dismissed within one hundred
fifty (150) days. In the event that Lessee is placed into bankruptcy for the
purpose of reorganization or rehabilitation, Lessor and Lessee agree that it
shall be a default of this Lease only if such bankruptcy proceeding reduces the
amount of rent to be paid by Lessee; or Lessee has failed to pay the rent in
accordance with Section 5 of this Lease. Upon default of this Lease, Lessor and
Lessee retain their respective remedies and cure rights set forth in this Lease.
25. EXPIRATION
1. Surrender of Improvements. At the expiration or
earlier termination of the Term, all buildings, alterations, additions or
improvements then upon the Premises shall become the property of Lessor and
remain upon and be surrendered with the Premises as a part thereof. At the
expiration or earlier termination of the Term, the Premises and all such
buildings, alterations, additions or improvements shall be surrendered to Lessor
broom clean and in as good condition as they were in on the Rent Commencement
Date, ordinary wear and tear excepted, subject to the provisions of Section
34.C.
2. Removal of Trade Fixtures. All trade fixtures,
furnishings and equipment, whether or not they are or may be deemed to
constitute part of the Improvements may be removed by Lessee, at its sole
option. Lessee, at its expense, shall immediately repair any damage to the
Premises or Improvements by reason of removal of any such trade fixture,
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furnishings and equipment. If Lessor elects to enter thereon and take possession
at the termination of this Lease, all repairs not previously made, at the option
of Lessor, may be corrected at the expense of Lessee, normal wear and tear
excepted.
26. TENANT HOLDING OVER
If Lessee shall not immediately surrender possession of the
Premises at the expiration or termination of this Lease, Lessor shall be
entitled to retake or recover possession of the Premises as hereinbefore
provided in case of expiration or termination on the part of Lessee and have
available to it any and all other remedies available by law. If Lessee shall
fail to surrender possession of the Premises immediately upon the expiration of
the Term, Lessee hereby agrees that all the rights and obligations of Lessee and
Lessor applicable during the Term shall be equally applicable during such period
of subsequent occupancy, except that during the holdover tenancy, Lessee shall
pay one hundred twenty-five percent (125%) of the annual base rent payable
during the last year of the Term.
27. MORTGAGE OF LESSEE'S LEASEHOLD INTEREST
1. Notice of Default under Mortgage or Lease. Lessee
shall have the right at any time and from time to time to mortgage this Lease
and/or assign or hypothecate Lessee's interest in this Lease and/or in the
Lessee's Leasehold Improvements as security for a loan, provided that this Lease
is not subordinated to the terms of any assignment or Mortgage except as
provided in Section 28 hereof.
2. Leasehold Mortgage Right to Notice and Cure. Any
Leasehold Mortgagee with respect to which Lessor has received a written notice
specifying the name and
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address of such Leasehold Mortgagee, shall be given (by personal delivery or by
certified mail, return receipt requested) by Lessor a copy of each notice of
default by Lessee or other notice or demand to or upon Lessee, at the same time
as and whenever such notice of default or other notice or demand shall
thereafter be given by Lessor to Lessee, addressed to such Leasehold Mortgagee
at the address last furnished to Lessor. No notice of a default by Lessee or
demand upon Lessee shall be deemed to have been given by Lessor to Lessee unless
and until a copy thereof shall have been given to each Leasehold Mortgagee with
respect to which Lessor has been notified. Lessor will accept performance by any
such Leasehold Mortgagee of any covenant, condition or agreement on Lessee's
part to be performed hereunder with the same force and effect as though
performed by Lessee, and any Leasehold Mortgagee which performs any covenant,
condition or agreement shall be subrogated to any and all rights of Lessee with
respect thereto. Nothing contained in this Lease shall obligate any Leasehold
Mortgagee to cure any default of Lessee under this Lease or constitute an
assumption by any Leasehold Mortgagee of the obligations of Lessee under this
Lease.
3. Leasehold Mortgagee as Holder of Lessee's Interest. A
Leasehold Mortgagee may become the legal owner and holder of Lessee's interest
under this Lease by foreclosure of its Mortgage, or as a result of the
assignment of this Lease in lieu of foreclosure, whereupon (but in no event
before becoming such legal owner or holder) such Leasehold Mortgagee shall
immediately become and remain liable under this Lease, so long as (but no longer
than) such Leasehold Mortgagee is entitled to possession of the Premises.
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4. Certain Restrictions During Leasehold Mortgage. So
long as any Mortgage is in existence, and no default exists hereunder which has
not been cured (by Lessee or any Leasehold Mortgagee) within the period of time
provided herein, Lessor shall not accept a surrender of the Premises or a
termination or modification of this Lease, prior to the expiration of this
Lease, without the prior written consent of all Leasehold Mortgagees (of whom
Lessor has received prior written notice). Any right or remedy which permits
Lessee to terminate this Lease shall be conditioned on the written consent to
such termination by all Leasehold Mortgagees.
5. New Financing. In the event any Leasehold Mortgagee
requires, as a condition of providing financing, that modifications to this
Lease be obtained, and provided that such modifications do not, in Lessor's
reasonable judgment, unreasonably increase Lessor's obligations or reduce
Lessor's rights under this Lease, then Lessee shall submit to Lessor a written
amendment to this Lease incorporating such required modifications, and Lessor
shall execute such amendment and deliver the same to Lessee within thirty (30)
days after receipt of such amendment.
6. Assignment by Leasehold Mortgagee. Any party,
including a Leasehold Mortgagee or the assignee of such Leasehold Mortgagee,
that becomes the owner of or acquires any interest in this Lease pursuant to
foreclosure and sale or by assignment in lieu of foreclosure, may sell, assign,
transfer or otherwise dispose of this Lease or its interest in this Lease
without the consent of Lessor; provided, however, that for so long as the Prime
Lease or the Ground Sublease is in effect, no such Leasehold Mortgagee or
assignee shall occupy or sublease the Premises for any use other than a
manufacturing and industrial use allowed by the Covenants
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without the consent of Lessor, BioReliance and County, which consent shall not
be unreasonably withheld, conditioned or delayed. All rights and references
herein to a Leasehold Mortgagee, shall be read to include the assignee of such
Leasehold Mortgagee. Notice of any such assignment shall be given to Lessor,
BioReliance and County.
7. Notice of Mortgages. Lessee shall give Lessor notice
of any recorded mortgages or liens upon Lessee's leasehold interest in the
Premises in connection with the financing of the Premises.
28. MORTGAGE OF LESSOR'S INTEREST
Lessee shall have the right to subject Lessor's leasehold
interest in the Premises to construction and permanent loans (or refinancings of
such loans) for the purpose of paying the costs of financing and construction of
the initial Lessee's Leasehold Improvements (including but not limited to, fees
of architects, engineers, site planners and other consultants, attorneys' fees,
lender's counsel fees, loan commitment fees, title costs, survey costs, and all
fees and costs in connection with applying for and obtaining any permits and
approvals), provided that the same is permitted by the Lender. For this purpose,
Lessee may subject Lessor's interest in the Premises to a single Mortgage, and
may require Lessor to join with it in the execution and delivery of such
Mortgage, which Mortgage shall constitute a lien on Lessor's interest in the
Premises subject, however, to the following:
1. The loans secured by such Mortgage shall be made by a
commercial or savings bank, trust company, savings and loan institution or other
financial institution authorized to do business in the State of Maryland and
acceptable to Lessor, in its reasonable discretion;
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2. The amount and terms of the loans secured by such
Mortgage, and the terms and conditions of such Mortgage and all instruments
collateral thereto shall be acceptable to Lessor, in its reasonable discretion;
and
3. Such Mortgage shall expressly provide that the
Leasehold Mortgagee will give Lessor notice of any default thereunder, the
failure to cure which might result in acceleration of the debt secured by said
Mortgage, and that after receipt of such notice, Lessor will have the cure
period for such default provided to the debtor in such Mortgage.
29. ASSIGNMENT AND SUBLEASING
1. Assignments and Sublettings. Lessee shall have the
right to assign this Lease or enter into a sublease with any other party without
the necessity of obtaining Lessor's consent. Lessee shall give Lessor prompt
written notice of any assignment or subletting. No assignment or subletting
shall be deemed to release Lessee from its obligations under this Lease.
2. Successor and Assigns. Lessor and Lessee agree that
all of the terms, covenants and conditions, agreements, rights, privileges,
obligations and duties contained in this Lease shall be construed to be
covenants running with the land, and all rights and liabilities herein given to,
or imposed upon, the respective parties hereto shall extend to and bind the
respective successors and assigns of said parties; and if Lessee shall be
comprised of more than one individual or entity, they shall all be bound jointly
and severally by the terms, covenants and agreements herein.
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30. QUIET ENJOYMENT, TITLE TO LAND AND IMPROVEMENTS
1. Quiet Enjoyment. Upon payment by Lessee of the rents
herein provided and upon the observance and performance of all covenants, terms
and conditions on Lessee's part to be observed and performed, Lessee shall
peaceably and quietly hold and enjoy the Premises for the term hereby demised
without hindrance or interruption by Lessor or any other person or persons
lawfully or equitably claiming by, through or under Lessor, subject to the terms
and conditions of this Lease.
2. Title. Lessor covenants that it shall not at any
time hereafter (except for a sale of its leasehold interest or fee simple
interest to Lessee as referred to herein) convey or sell any interest of Lessor
in the Premises unless such conveyance or sale is made subject to this Lease.
Lessor further represents that it has the right to make this Lease. Lessor and
Lessee each represent to the other that it has the full right, power, and
authority to enter into this Lease for the Term and that the Premises may be
used by Lessee during the Term for the purposes herein set forth provided Lessee
conforms to the provisions of this Lease and all applicable laws and
regulations. Without limiting the generality of the foregoing, Lessor and Lessee
each agree to execute and deliver to the other party (or to any Leasehold
Mortgagee), within forty-five (45) days after request therefor, an estoppel
certificate, certifying such matters as may be reasonably requested by the other
party. As consideration for the execution of this Lease, Lessor acknowledges
that Lessee shall hold title to all of the Lessee's Leasehold Improvements as
long as this Lease is in effect.
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31. SURRENDER - WAIVER AND AMENDMENT
No agreement to amend or to accept a surrender of this Lease
or a waiver of either party's obligations hereunder shall be valid unless in
writing signed by Lessor and Lessee. No employee of Lessor or its agent shall
have any power to accept the keys of the Premises prior to the termination of
this Lease. The delivery of keys to any employee of Lessor or its agent shall
not operate as a termination of this Lease or a surrender of the Premises. The
failure of any party to seek redress for violation of, or to insist upon the
strict performance of any covenant or condition of this Lease, shall not prevent
a subsequent act, which would have originally constituted a violation of this
Lease from having all the force and effect of an original violation of this
Lease. The receipt and acceptance by Lessor of rent with knowledge of the breach
of any condition or covenant of this Lease shall not be deemed a waiver of such
breach. The right to enforce any such condition or covenant is in the sole
jurisdiction of Lessor. The failure by either party to enforce any of the
conditions or covenants set forth herein or hereinafter adopted against the
other shall not be deemed a waiver of any such conditions or covenants.
32. NON-DISCRIMINATION IN EMPLOYMENT AND SERVICES
Lessee agrees to comply with the non-discrimination in
employment policies in County contracts as required by Section 11B-33 and
Section 27-19 of the Montgomery County Code 1994, as amended, as well as all
other applicable state and federal laws regarding employment discrimination.
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33. DISPUTES
1. Arbitration. Notwithstanding anything to the contrary
in this Lease, any controversy or claim arising out of or relating to this
Lease, or the breach thereof, shall be settled by arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association
("AAA"), and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Any arbitration hearing shall
be conducted in Montgomery County, Maryland, before a single arbitrator, if the
amount in controversy is less than Fifty Thousand Dollars ($50,000.00), or
before a panel of three (3) arbitrators, if the amount in controversy is Fifty
Thousand Dollars ($50,000.00) or more. The arbitrator(s) are hereby given
authority to determine and limit discovery in any such arbitration proceeding.
2. Exception.
(1) Certain Defaults. If Lessee desires to
arbitrate the issue of whether it is responsible for the payment of any rental
or other amount claimed by Lessor to be then due or overdue under this Lease,
Lessor may require, as a condition of agreeing to arbitrate such issue, that
Lessee pay such disputed rental or other amount into escrow with a mutually
acceptable escrow agent prior to the commencement of the arbitration. Either
party may seek injunctive relief from a court pending the outcome of any
arbitration.
(2) Disputes with County. Any dispute in which
County is a party shall be settled by mediation or litigation in accordance with
the terms of the Prime Lease.
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34. GOVERNING LAW, SEVERABILITY, CASUALTY, CONDEMNATION AND
COMPLIANCE.
1. Governing Law. This Lease shall be construed and
governed by the laws of the State of Maryland wherein the Premises and the Shady
Grove Life Sciences Center are located. Should any provisions of this Lease
and/or of its conditions be deemed illegal or not enforceable under the laws of
the said jurisdiction, it or they shall be considered severable, and the balance
of this Lease and its conditions shall remain in force and be binding upon the
parties as though such provisions had never been included.
2. Lease not Redeemable. The purpose of this Lease is
not primarily residential and shall not be redeemable as provided in
Section 8-110 of the Real Property Article, Annotated Code of Maryland.
3. Casualty Damage.
(1) Repairs. In the event the Facility or other
Improvements shall be damaged or destroyed by fire or other casualty, Lessee
shall give Lessor prompt written notice thereof and, subject to the provisions
of Section 34.C(2) below, Lessee shall, at its expense, repair, reconstruct or
replace the Facility and other Improvements or portion thereof so damaged or
destroyed (whichever is reasonably required), at least to the extent of the
value thereof existing immediately prior to such occurrence; provided, however,
that Lessee shall not be required to pay the costs of such repair,
reconstruction or replacement in excess of insurance
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proceeds available to Lessee for such purposes. There shall be no abatement of
annual base rent or any other amount payable under this Lease.
(2) Termination. Notwithstanding anything in
this Lease to the contrary, (i) if the Facility shall be totally destroyed or so
damaged as to render it totally or substantially unusable, and Lessee, in its
reasonable business judgment, shall decide to demolish the Facility and other
Improvements rather than repair and rebuild the same, or (ii) if any Leasehold
Mortgagee elects to retain the insurance proceeds, then, in either such event,
Lessor or Lessee may terminate this Lease by written notice to that effect given
to the other party no later than ninety (90) days after the occurrence of the
casualty, in which event this Lease shall terminate immediately upon Lessee's
vacating the Premises and surrendering the same to Lessor, after having
completed demolition of the Facility and other Improvements and restoration of
the Premises to a safe and orderly condition in compliance with all laws. In
such event, Lessee's liability for annual base rent and the other amounts
payable under this Lease shall cease on the termination date. In the event that
this Lease is terminated pursuant to this Section 34.C(2), then the proceeds of
the property insurance carried by Lessee pursuant to Section 8.B(1)(e) shall be
applied first to payment of the principal balance and all accrued interest under
all Mortgages, and second to the cost of demolition of the Facility and other
Improvements and restoration of the Premises to a safe and orderly condition in
compliance with all laws. Any remaining proceeds shall be divided between Lessor
and Lessee in the proportions that the values of the Lessor's Work and the
Lessee's Leasehold Improvements, respectively, bear to the sum of such values.
Such values shall be determined by appraisals based upon as-built plans and
specifications;
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provided, however, that in no event shall the portion of such remaining proceeds
paid to Lessor exceed the value of Lessor's Work as shown by such appraisals.
4. Condemnation. If the entire Premises, or such portion
thereof as will make them, in the exercise of Lessee's reasonable business
judgment, unsuitable for the purposes herein leased, are condemned for any
public use or purpose by a public authority, this Lease shall cease and rent be
accounted for as of the date of surrender of possession. In the event of a
partial taking, a pro rata reduction in the rent shall be provided in the
proportion which the property so taken or condemned bears to the entire Premises
originally devised. Further, in the event of any taking or condemnation of the
Premises, Lessee shall not be entitled to claim any value for any leasehold or
fee interest in the land, but both Lessor and Lessee shall be entitled to claim,
prove and receive in the condemnation proceeding such awards as may be allowed
for their respective interests in the Facility and other Improvements.
5. Compliance with Law. It is understood, agreed and
covenanted by Lessee that it shall promptly comply with, observe and perform all
of the requirements of all the statutes, ordinances, rules, orders and
regulations now in effect or hereinafter promulgated whether required by the
Federal Government, the State of Maryland, County, in its governmental capacity,
or the Montgomery County Fire Marshal.
6. Limitation of Lessor's Liability. Notwithstanding any
contrary provision contained in this Lease, Lessee agrees that the obligations
of Lessor hereunder shall not constitute personal obligations of the officers,
directors, shareholders, partners or members of
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Lessor, except that this limitation shall not affect the obligations under the
Personal Guaranty of Construction of even date herewith executed by Robert E.
Buccini and David B. Pollin.
7. Limitation of Lessee's Liability. Notwithstanding any
contrary provision contained in this Lease, Lessor agrees that the obligations
of Lessee hereunder shall not constitute personal obligations of the officers,
directors, shareholders, partners or members of Lessee, except that this
limitation shall not affect the obligations under any guaranty of this Lease,
including the Guaranty of Lease of even date herewith executed by BioReliance.
35. RECORDING.
Lessee and Lessor shall have the right to record this entire
Lease or to execute a Memorandum of Lease and have it properly acknowledged for
the purpose of recording. Such Memorandum of Lease shall have included therein
such of the provisions hereof as may be requested by either of the parties. The
cost of recording this entire Lease or such Memorandum of Lease (including all
stamps, conveyance, recordation and other taxes incident thereto) shall be borne
solely by Lessee.
36. ENTIRE AGREEMENT.
This Lease, Exhibits, and Addenda, if any, attached hereto and
forming a part hereof, sets forth all the covenants, promises, agreements,
conditions and understandings between Lessor and Lessee concerning the Premises
and there are no covenants, promises, agreements, conditions or understandings,
either oral or written, between them other than as herein set forth. Except as
herein otherwise provided, no subsequent alteration, amendment, change or
addition to this Lease shall be binding upon Lessor or Lessee unless reduced to
writing
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and signed by them. For so long as the Loan remains outstanding, and
NationsBank, its successor or assignee is the Lender, no alteration, amendment,
change or addition to this Lease may be made without the prior written consent
of the Lender.
37. NOTICE.
All notices required or permitted hereunder shall be deemed to
have been given if delivered by a reputable messenger, overnight delivery
service, facsimile or mailed in any United States Post Office by certified mail,
return receipt requested, postage prepaid, addressed to Lessor or Lessee,
respectively, at the following addresses or to such other addresses as the
parties may designate in writing from time to time. All notices shall be deemed
to be received on the date of delivery by messenger or overnight delivery
service, the date indicated by a facsimile confirmation receipt signed by the
recipient, or three (3) business days after depositing them with the United
States Post Office.
Notice of the identity and address of any Leasehold Mortgagee
shall be in the form of a written notice sent to Lessor in accordance with this
Section.
LESSEE: LESSOR:
MAGENTA Corporation BPG Industrial Partners II, LLC
9900 Blackwell Road c/o The Buccini/Pollin Group, Inc
Rockville, Maryland 20850 110 N. Royal Street, Suite 305
Attention: Sherry Rhodes, Esquire, Alexandria, Virginia 22314
Vice President and General Counsel Facsimile: (703) 548-4257
Facsimile: (301) 738-1033
With a copy to:
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With a copy to:
Arent Fox
Shulman, Rogers, Gandal, Pordy & 1050 Connecticut Avenue, N.W.
Ecker, P.A. Washington, D.C. 20036
11921 Rockville Pike, Suite 300 Attention: Richard L. Brand, Esquire
Rockville, Maryland 20852 Facsimile: (202) 857-6395
Attention: Lawrence A. Shulman, Esquire
Facsimile: (301) 230-2891
38. CAPTIONS. PRONOUNS.
The captions and paragraph numbers appearing in this Lease are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or intent of this Lease, nor in any way affect this Lease.
The use of the neuter singular pronoun to refer to Lessor or
Lessee shall be deemed a proper reference even though Lessor or Lessee may be an
individual, a partnership, a joint venture, a corporation, or a group of two or
more individuals, partnerships, joint ventures or corporations. The necessary
grammatical changes required to make the provisions of this Lease apply in the
plural sense shall in all instances be assumed as though in each case fully
expressed.
39. SURVIVAL.
The following obligations shall survive the expiration or
termination of this Lease: (a) any obligation herein permitted to be performed
after the expiration or termination of this Lease; (b) any obligation not
reasonably susceptible to performance prior to the expiration or termination of
this Lease; and (c) any obligation, required hereunder to be performed at or
before the expiration or termination of this Lease, not so performed.
40. MISCELLANEOUS PROVISIONS.
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1. Time of the Essence. Lessor and Lessee acknowledge
that time is of the essence in the performance of any and all obligations, terms
and provisions of this Lease, including without limitation, the purchase option
in Section 41 hereof.
2. Days. If the date on which either Lessor or Lessee is
required to take or complete an action hereunder is not a business day (as
defined below), the action shall be taken or completed on the next succeeding
business day. For purposes hereof, "business day" means any day other than a
Saturday, Sunday or federal holiday.
3. Certain Terms. For purposes of this Lease, there
shall be no distinction between the terms "breach" and "default."
4. Waiver of Trail by Jury. Lessor and Lessee waive
their right to trial by jury in any action, proceeding or counterclaim brought
by either of the parties hereto against the other (except for personal injury or
property damage) on any matters whatsoever arising out of or in any way
connected with this Lease, the relationship of Lessor and Lessee, Lessee's use
of or occupancy of the Premises, and any emergency statutory or any other
statutory remedy.
5. No Representations by Lessor. Neither Lessor nor any
agent of Lessor has made any representations or promises with respect to the
Premises except as herein expressly set forth, and no rights, privileges,
easements or licenses are granted to Lessee except as herein expressly set
forth.
6. Authority. Lessor and Lessee hereby covenant each for
itself, that each has full right, power and authority to enter into this Lease
upon the terms and conditions herein set forth.
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7. No Partnership. Nothing contained in this Lease shall
be deemed or construed to create a partnership or joint venture of or between
Lessor and Lessee, or to create any other relationship between the parties other
than that of Lessor and Lessee.
8. Lessor Approvals. Except as otherwise set forth
herein, Lessor shall not unreasonably withhold, condition or delay any approval,
consent or agreement required under this Lease to be obtained from Lessor;
provided, however, that Lessor shall not be deemed to have unreasonably
withheld, conditioned or delayed any approval, consent or agreement if the
reason for the same is BioReliance's or the County's withholding, conditioning
or delaying of such approval, consent or agreement.
9. Consequential Damages. Notwithstanding anything to
the contrary in this Lease, in no event shall either Lessor or Lessee be liable
to the other for consequential damages, except as set forth in Section 12.C.
41. LESSEE'S OPTION TO PURCHASE THE FACILITY.
Upon the expiration of the Initial Term or any Extension Term,
Lessee shall have the right, at its sole option, to purchase all of Lessor's
right, title and interest in the Premises for a purchase price equal to the fair
market value (as described below) of the Facility Shell (as defined below). The
"Facility Shell" means the Lessor's Work, as shown on the as-built plans
delivered by Lessor to Lessee pursuant to Section 6.F. The option granted to
Lessee to purchase all of Lessor's right, title and interest in the Premises
pursuant to this Section 41 is hereinafter referred to as the "Option."
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1. Exercise of Options. Lessee shall exercise the Option
by delivering to Lessor, in the manner set forth in Section 37 of this Lease,
notice of its exercise of the Option (the "Offer Notice") not earlier than
eighteen (18) months, nor later than the date (the "Offer Notice Deadline")
which is one (1) year, prior to the expiration of the Initial Term or the
then-current Extension Term, as the case may be; provided, however, that if
Lessor shall not have received an Offer Notice by the date which is thirteen
(13) months prior to the expiration of the Initial Term or the then-current
Extension Term, Lessor shall provide Lessee with a written reminder of the
deadline for Lessee's exercise of the Option (the "Reminder Notice"), and if
Lessee does not receive the Reminder Notice at least ten (10) days before the
Offer Notice Deadline set forth above, then the Offer Notice Deadline shall be
extended to ten (10) days after Lessee's receipt of the Reminder Notice. Upon
delivery of the Offer Notice, Lessee shall be obligated to purchase, and Lessor
shall be obligated to sell, all of Lessor's right, title and interest in the
Premises in accordance with the terms and conditions set forth herein. If (i)
Lessee does not exercise the Option on or before the Offer Notice Deadline, and
(ii) Lessee also has not exercised its then-current Extension Option, or Lessee
has no remaining Extension Options under this Lease, then Lessee's option rights
under this Section 41 shall cease and terminate and Lessor's option rights to
purchase the Property pursuant to Section 41 of the Ground Sublease shall
immediately and automatically vest.
2. Purchase Price Determination. (i) The Offer Notice
shall include Lessee's fair market value offer price. Lessor shall notify Lessee
within ten (10) business days after Lessor's receipt of the Offer Notice either
that (i) Lessor accepts Lessee's offer price as the fair
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market value of the Facility Shell or (ii) Lessor rejects Lessee's offer price.
If Lessor rejects Lessee's offer price, the fair market value of the Facility
Shell shall be determined in accordance with the provisions of subsection (ii)
below.
(ii) If Lessor rejects Lessee's determination of the fair
market value of the Facility Shell, Lessor and Lessee shall, for a period of
twenty (20) days, negotiate in an effort to determine the fair market value of
the Facility Shell. If Lessee and Lessor are unable mutually to agree on the
fair market value within such twenty (20) day period, Lessee and Lessor shall
each within twenty (20) days thereafter appoint an appraiser. Each appraiser,
within thirty (30) days of their appointment, shall make an independent
determination of the fair market value of the Facility Shell. If the two
appraisers so appointed agree on the fair market value of the Facility Shell,
the fair market value shall be the amount determined by them. If the two
appraisers so appointed do not agree on the fair market value of the Facility
Shell, but if the difference between the fair market values determined by such
appraisers is not more than five percent (5%) of the lower of the two
appraisals, the fair market value of the Facility Shell shall be an amount equal
to the quotient obtained by dividing the sum of the fair market values
determined by such appraisers by two (2). If the two appraisers so appointed do
not agree on the fair market value of the Facility Shell, and if the difference
between the fair market value determined by such appraisers is more than five
percent (5%) of the lower of the two appraisals, the two appraisers shall
jointly appoint a third appraiser having the qualifications described below. If
the two appraisers so appointed shall be unable, within thirty (30) days after
their appointment, either to
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agree on the fair market value of the Facility Shell (or to disagree on such
value with a difference of five percent (5%) or less of the lower of the two
appraisals) or to agree on the appointment of a third appraiser, they shall give
written notice of such failure to agree to the parties, and, if the parties fail
to agree upon the selection of a third appraiser within fifteen (15) days after
the appraisers appointed by the parties give such notice, then within ten (10)
days thereafter either of the parties upon notice to the other party may request
such appointment by the then-President of the Montgomery County Association of
Realtors (or any organization successor thereto). If a third appraiser is
appointed, such appraiser shall make the valuation within thirty (30) days after
such appraiser's appointment and the fair market value of the Facility Shell
shall be an amount equal to the quotient obtained by dividing the sum of the
fair market values determined by the two appraisers who were closest in amount
to each other by two (2). If the mean average of the lowest fair market value
determined by any of the three appraisers and the highest fair market value
determined by any of the three appraisers is equal to the fair market value
determination which is neither the highest nor the lowest of the three fair
market value determinations, then the fair market value of the Facility Shell
shall be such mean average.
(iii) Each appraiser appointed pursuant to subsection (b)
shall be a disinterested person of recognized competence who has had a minimum
of ten (10) years experience as a real estate appraiser in Montgomery County,
Maryland, and is a member of the American Institute of Appraisers. All
valuations of the fair market value shall be in writing. Each appraiser shall
determine the fair market value as a whole, as of the date of his or her
appraisal, on the basis of all relevant factors affecting fair market value,
including the prices for comparable properties in
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comparable locations in Montgomery County, Maryland, and assuming the following:
(1) the seller and purchaser are typically motivated, (2) the seller and
purchaser are well informed and well advised and each is acting in what it
considers its own best interest, and (3) the Facility is to be sold with vacant
possession. The party appointing such appraiser shall be obligated, promptly
after receipt of the valuation report prepared by the appraiser appointed by
such party, to deliver a copy of such valuation report to the other party. If a
third appraiser is appointed, the third appraiser shall be directed, at the time
of the appointment to deliver copies of his valuation report, promptly after its
completion, to Lessee and Lessor. The expenses of the first two appraisers
appointed pursuant to subsection (ii) shall be borne by the party appointing
such appraiser, and the expenses of the third appraiser appointed pursuant to
subsection (ii) shall be paid one-half by Lessee and one-half by Lessor.
3. Terms and Conditions of Purchase.
(1) Closing. The closing of the purchase and
sale of the Lessor's right, title and interest in the Premises ("Closing") will
take place within ninety (90) calendar days after the later to occur of (i)
determination of the fair market value of the Facility Shell in accordance with
Section 41.B, or (ii) the last day of the Initial Term or the then-current
Extension Term, as the case may be. Closing will occur by mail or at the offices
of Lessee's settlement attorney. Lessee shall give Lessor at least ten (10)
business days prior written notice of the date, time and place of Closing. At
Closing, Lessor shall convey Lessor's right, title and interest in the Premises
to Lessee by an assignment of the Lessor's leasehold interest in the Premises
(subject to all covenants, conditions, rights of way, easements, encumbrances
and other matters of record as
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of the date of this Lease, those matters effected by Lessee or effected by
County pursuant to the Prime Lease or approved in writing by Lessee, and those
matters, other than monetary liens [with the exception of the Loan, or any
replacement or successor loan, if not repaid as required by Section 6.B],
permitted to be effected by the terms of this Lease) and such bills of sale and
other instruments of conveyance reasonably necessary, which shall be in form and
substance reasonably acceptable to Lessee, duly executed and acknowledged, and
Lessee shall pay the purchase price (determined as hereinabove set forth) to
Lessor in cash, by certified check or by wire transfer. At Closing, Lessor and
Lessee shall share equally all state, county and local transfer and recordation
taxes due in connection with the transfer of Lessor's right, title and interest
in the Premises from Lessor to Lessee, and Lessee shall pay any transfer and
recordation taxes in excess thereof which are a result of any financing acquired
by Lessee in connection with its acquisition of Lessor's right, title and
interest in the Premises. All other costs and expenses attendant to Closing
(including, without limitation, title company charges, title insurance premiums,
survey costs and notary fees) shall be at the cost of Lessee, except that Lessor
shall pay the fees and expenses of its own counsel.
(2) Condition of Premises. From and after the Rent
Commencement Date, Lessee may perform reasonable studies of the Premises to
determine the condition thereof. By its exercise of the Option, Lessee shall be
deemed to have certified to Lessor that it has familiarized itself fully with
the Premises, and that it has had the opportunity to perform, and has performed,
such inspections, examinations, investigations and studies thereof as it deemed
appropriate in order to determine whether to purchase Lessor's right, title and
interest in the
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Premises in its then-current condition. Lessee agrees that it
shall rely solely upon its inspections, examinations, investigations and studies
in electing whether or not to purchase Lessor's right, title and interest in the
Premises. It is expressly understood and agreed that Lessee shall purchase
Lessor's right, title and interest in the Premises "as is" and "where is," and
with all faults and defects, latent or otherwise, and that Lessor is making no
representations or warranties, either express or implied, by operation of law or
otherwise, with respect to the quality, physical condition or value of the
Premises, the zoning classification of the Premises or the compliance of the
Premises with applicable law. Without limiting the foregoing, it is understood
and agreed that Lessor makes no warranty to Lessee regarding the Premises or its
habitability, suitability, merchantability, fitness for a particular purpose or
fitness for any purpose.
(3) Termination of Lease. Upon the completion of any
conveyance of Lessor's right, title and interest in the Premises to Lessee
pursuant to the terms of this Section 41, this Lease shall terminate, and
neither Lessor nor Lessee shall have any further rights or obligations to the
other hereunder, except for those rights and obligations which survive the
expiration or earlier termination of this Lease.
(4) Default. If Lessee defaults in its obligation to
purchase Lessor's right, title and interest in the Premises when Lessee is
obligated to make settlement of such purchase pursuant to this Section 41,
Lessor shall have the right to avail itself of any and all remedies available to
it under applicable law.
(5) Assignment. The Option shall be assignable by Lessee
separate and apart from this Lease.
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IN WITNESS WHEREOF, the parties hereto do hereby execute this Lease as
of the day and year first above written.
WITNESS OR ATTEST: BPG INDUSTRIAL PARTNERS II, LLC
______________________________ By:_______________________________________
Robert E. Buccini
Member
WITNESS OR ATTEST: MAGENTA CORPORATION
______________________________ By:_______________________________________
Capers W. McDonald
President
STATE OF MARYLAND, ______________, to wit:
ON THIS ___ day of ________________, 1998, before me, the undersigned
officer, personally appeared Robert E. Buccini, Member of BPG INDUSTRIAL
PARTNERS II, LLC, known to me to be the person whose name is subscribed to the
foregoing, who did fully acknowledge that he executed the same as his voluntary
act and deed for the purposes therein contained.
WITNESS my hand and official seal the same day and year first above
written.
______________________________________
Notary Public
My Commission Expires_____________________
STATE OF MARYLAND, __________________________, to wit:
ON THIS ___ day of ___________________, 1998, before me, the
undersigned officer, personally appeared Capers W. McDonald, President of
MAGENTA CORPORATION, known
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to me to be the person whose name is subscribed to the foregoing, who did fully
acknowledge that he executed the same as his voluntary act and deed for the
purposes therein contained.
WITNESS my hand and official seal the same day and year first above
written.
_____________________________________
Notary Public
My Commission Expires:__________________
64
<PAGE> 1
EXHIBIT 10.24
LEASEHOLD DEED OF TRUST, ASSIGNMENT AND SECURITY AGREEMENT
THIS LEASEHOLD DEED OF TRUST, ASSIGNMENT AND SECURITY AGREEMENT is made
this 1st day of April , 1998, by BPG INDUSTRIAL PARTNERS II, LLC, a Maryland
limited liability company (herein referred to as the "Borrower") and BIORELIANCE
CORPORATION, a Delaware corporation (herein referred to as the "Corporate
Guarantor"; together with the Borrower and the Corporate Guarantor collectively,
the "Grantors" and each a "Grantor") MAGENTA CORPORATION, a Delaware corporation
(herein referred to as the "Affiliate"), to CYNTHIA FLANDERS and EILEEN CHOW, as
Trustees (herein referred to as the "Individual Trustees"), and NATIONSBANK,
N.A., a national banking association, its successors and assigns (herein
referred to as the "Lender" or the "Beneficiary"). The Affiliate joins in this
Deed of Trust solely to convey its leasehold interest in the Leasehold Real
Property (hereinafter defined) to the Beneficiary.
RECITALS
1. The Borrower has requested that the Lender make a loan (herein referred
to as the "Loan") to the Borrower in the principal amount of $4,650,000. The
Loan will be evidenced by the Borrower's Deed of Trust Note of even date hereof
(herein referred to as the "Note").
2. The Corporate Guarantor has guaranteed repayment of the Loan pursuant
to that certain Guaranty Agreement of even date herewith from the Corporate
Guarantor in favor of the Lender (as amended from time to time, the "Guaranty").
3. The Corporate Guarantor is the holder of a leasehold interest in the
Property (as hereinafter defined) pursuant to that certain Lease Purchase
Agreement of even date herewith, by and between Montgomery County, Maryland, as
landlord (the "County") and the Corporate Guarantor, as tenant, which Lease
Purchase Agreement, or memorandum thereof, is being recorded among the Land
Records of Montgomery County, Maryland immediately prior to this Deed of Trust
(as the same may from time to time, with the Beneficiary's prior written
consent, be extended, amended, restated, supplemented or otherwise modified, the
"Ground Lease").
4. The Corporate Guarantor has subleased a portion of its leasehold
interest in the Property (the "Leasehold Parcel") to the Borrower pursuant to
that certain Lease Agreement of even date herewith, by and between the Corporate
Guarantor, as landlord and the Borrower, as tenant, which Lease Agreement, or
memorandum thereof, is being recorded among the Land Records of Montgomery
County, Maryland immediately prior to this Deed of Trust (as the same may from
time to time, with the Beneficiary's prior written consent, be extended,
amended, restated, supplemented or otherwise modified, the "Sub-Lease").
<PAGE> 2
5. The Borrower has further subleased its leasehold interest in the
Leasehold Parcel to the Affiliate, pursuant to a Lease Agreement of even date
herewith, by and between the Borrower, as landlord, and the Affiliate, as
tenant, which Lease Agreement, or memorandum thereof, is being recorded among
the Land Records of Montgomery County, Maryland immediately prior to this Deed
of Trust (as the same may from time to time, with the Beneficiary's prior
written consent, be extended, amended, restated, supplemented or otherwise
modified as the same may be amended from time to time, the "Facility Lease").
6. As a condition precedent to making the Loan to the Borrower, the Lender
required that the Grantors secure the payment and performance of all obligations
of the Grantors arising out of, or in connection with, the Loan, including all
of the Corporate Guarantor's obligations under the Guaranty by the execution of
this Leasehold Deed of Trust, Assignment and Security Agreement.
NOW THEREFORE, in order to induce the Lender to make the Loan to the
Borrower, the Grantors agree as follows:
Article I. Definitions, Rules of Construction.
Section I.1. Definitions. As used in this Leasehold Deed of Trust,
Assignment and Security Agreement, the terms defined in the Preamble and
Recitals hereto shall have the respective meanings specified therein, and the
following terms shall have the meanings indicated:
"Accounts" means all accounts of each Grantor within the
meaning of the Uniform Commercial Code of the State derived from or arising out
of the use, occupancy or enjoyment of the Property or for services rendered
therein or thereon.
"Additions" means any and all alterations, additions,
accessions and improvements to property, substitutions therefor, and renewals
and replacements thereof.
"Beneficiary" means the Lender and its successors and assigns.
"BioReliance Loan" means any loan now or hereafter made by the
Lender to the Affiliate and/or the Corporate Guarantor the proceeds of which
will be used to finance the costs of construction of certain improvements to the
Leasehold Real Property.
"Casualty" means any act or occurrence of any kind or nature
that results in damage, loss or destruction to the Leasehold Real Property.
"Claim" means any liability, suit, action, claim, demand,
loss, expense, penalty, fine, judgment or other cost of any kind or nature
whatsoever, including without limitation, fees, costs and expenses of attorneys,
consultants, contractors and experts.
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<PAGE> 3
"Completion Guarantors" means Robert E. Buccini and David B.
Pollin and their respective successors and assigns.
"Condemnation" means any taking of title, of use, or of any
other property interest under the exercise of the power of eminent domain,
whether temporarily or permanently, by any Governmental Authority or by any
Person acting under Governmental Authority.
"Condemnation Awards" means any and all judgments, awards of
damages (including, but not limited to, severance and consequential damages),
payments, proceeds, settlements, amounts paid for a taking in lieu of
Condemnation, or other compensation heretofore or hereafter made, including
interest thereon, and the right to receive the same, as a result of, or in
connection with, any Condemnation or threatened Condemnation.
"Contracts of Sale" means any contracts for the sale of all or
any part of the Property or any interest therein, whether now or hereafter
executed, including, without limitation, all of the Proceeds thereof, any funds
deposited thereunder to secure performance by the purchasers of their
obligations and the right, after the occurrence of an Event of Default to
receive and collect all payments due under any contracts of sale.
"Corporate Guarantor" means BioReliance Corporation and its
successors and assigns.
"Deed of Trust" means this Leasehold Deed of Trust, Assignment
and Security Agreement executed by the Grantors and the Affiliate for the
benefit of the Beneficiary, as the same may from time to time be extended,
amended, restated, supplemented or otherwise modified.
"Default" means an event which, with the giving of Notice or
lapse of time, or both, could or would constitute an Event of Default under the
provisions of this Deed of Trust.
"Encumbrance" means any Lien, easement, right of way, roadway
(public or private), common area, condominium regime, cooperative housing
regime, restrictive covenant, Lease or other matter of any nature that would
affect title to the Property.
"Environmental Assessment" means a report of an environmental
assessment of the Property of such scope (including but not limited to the
taking of soil borings and air and groundwater samples and other above and below
ground testing) as the Beneficiary may request, prepared by a recognized
environmental consulting firm acceptable to the Beneficiary in all respects and
sufficient in detail to comply with the Beneficiary's established guidelines and
the guidelines of any appropriate Governmental Authority.
3
<PAGE> 4
"Environmental Report" means that certain Phase I
Environmental Site Assessment Narrative prepared for The Buccini/Pollin Group
by Loiederman Associates, Inc., dated November 1997.
"Environmental Requirement" means any Law or other agreement
or restriction, whether public or private (including but not limited to any
condition or requirement imposed by any insurer or surety company), now existing
or hereafter created, issued or enacted and all amendments thereto,
modifications thereof and substitutions therefor, which in any way pertains to
human health, safety or welfare, Hazardous Materials, Hazardous Materials
Contamination or the environment (including but not limited to ground, air,
water or noise pollution or contamination, and underground or above ground
tanks) and shall include without limitation, the Resource Conservation and
Recovery Act (the Solid Waste Disposal Act), 42 U.S.C. Section 6901 et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601 et seq. ("CERCLA"), as amended by the Superfund Amendments
and Reauthorization Act of 1986 ("SARA"); the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801 et seq.; the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; and the Safe
Drinking Water Act, 42 U.S.C. Section 300f et seq.
"Equipment" means all building materials, fixtures, equipment
and other tangible personal property of every kind and nature whatsoever [other
than consumable goods, and trade fixtures or other personal property owned by
tenants (other than the Grantors and the Affiliate) occupying the Improvements],
now or hereafter located or contained in or upon, or attached to, the Leasehold
Real Property, whether now owned or hereafter acquired by any Grantor; together
with all Additions to the Equipment and Proceeds thereof.
"Event of Default" means the occurrence of any one or more of
the events specified in Article VI of this Deed of Trust and the continuance of
such event beyond the applicable cure periods, if any, set forth in Article VI.
"Expenses" means all costs and expenses of any nature
whatsoever incurred at any time and from time to time (whether before or after
an Event of Default) by the Beneficiary or the Trustees in exercising or
enforcing any rights, powers and remedies provided in this Deed of Trust or any
of the other Loan Documents, including, without limitation, reasonable
attorney's fees, court costs, receiver's fees, management fees and costs
incurred in the repair, maintenance and operation of, or taking possession of,
or selling, the Property.
"Facility Lease" has the meaning set forth in the Recitals
to this Deed of Trust.
"Governmental Authority" means any governmental or
quasi-governmental entity, including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of any governmental entity.
4
<PAGE> 5
"Ground Lease Payments" means any and all sums payable at any
time or from time to time by the Corporate Guarantor pursuant to the Ground
Lease.
"Guarantors" means the Completion Guarantors and the Corporate
Guarantor, and its, his, her, their respective heirs, personal representatives,
successors and assigns.
"Guaranty" means the Guaranty of Payment of even date hereof
executed by the Corporate Guarantor for the benefit of the Lender, as the same
may from time to time be extended, amended, restated, supplemented or otherwise
modified.
"Guaranty of Completion" means the Guaranty of Completion of
even date hereof executed by the Completion Guarantors for the benefit of the
Lender, as the same may from time to time be extended, amended, restated,
supplemented or otherwise modified.
"Hazardous Materials" means any and all hazardous or toxic
substances, wastes or materials which, because of their quantity, concentration,
or physical, chemical or infectious characteristics, may cause or pose a present
or potential hazard or nuisance to human health, safety or welfare or to the
environment when used, treated, stored, disposed of, generated, manufactured,
transported or otherwise handled, including without limitation, any substance,
waste or material which is or contains asbestos, radon, polychlorinated
biphenyls, urea formaldehyde, explosives, radioactive materials or petroleum
products.
"Hazardous Materials Contamination" means the use, treatment,
storage, disposal, generation of, manufacturing, transportation or handling of
any Hazardous Materials in violation of any Laws, including, but not limited to
any Environmental Requirements, governing the use, treatment, storage, disposal,
generation of, manufacturing, transportation or handling of Hazardous Materials.
"Improvements" means all buildings, structures and other
improvements now or hereafter existing, erected or placed on the Leasehold
Parcel, or in any way used in connection with the use, enjoyment, occupancy or
operation of the Leasehold Parcel.
"Land" means the land described in Exhibit "A" attached
hereto, including the Leasehold Parcel, together with (a) all estates, title
interests, title reversion rights, increases, issues, profits, rights of way or
uses, additions, accretions, servitudes, gaps, gores, liberties, privileges,
water rights, water courses, alleys, streets, passages, ways, vaults, licenses,
tenements, franchises, hereditaments, appurtenances, easements and other rights,
now or hereafter owned by any Grantor and belonging or appertaining to the Land
or the Leasehold Parcel, as the case may be, (b) all Claims whatsoever of any
Grantor with respect to the Land or the Leasehold Parcel, as the case may be,
either in law or in equity, in possession or in expectancy, and (c) all estate,
right, title and interest of any Grantor in and to all streets, roads and public
places, opened or proposed, now or hereafter adjoining or appertaining to, the
Land or the Leasehold Parcel, as the case may be.
5
<PAGE> 6
"Laws" means federal, state and local laws, statutes, rules,
ordinances, regulations, codes, licenses, authorizations, decisions,
injunctions, interpretations, orders or decrees of any court or other
Governmental Authority having jurisdiction as may be in effect from time to
time.
"Leasehold Parcel" has the meaning set forth in the
Recitals.
"Leasehold Real Property" means the Leasehold Parcel, together
with all Improvements, and all Additions to, and Proceeds of the foregoing.
"Leases" means all leases, license agreements and other
occupancy or use agreements (whether oral or written), now or hereafter
existing, which cover or relate to the Real Property, together with all options
therefor, amendments thereto and renewals, modifications and guarantees thereof,
including, without limitation, the Related Leases, any cash or securities
deposited under the Leases to secure performance by the tenants of their
obligations under the Leases, whether such cash or securities are to be held
until the expiration of the terms of the Leases or applied to one or more of the
installments of rent coming due.
"Lien" means any mortgage, deed of trust, pledge, security
interest, assignment, judgment, lien or charge of any kind, including, without
limitation, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code of any jurisdiction.
"Loan Agreement" means the Loan Agreement of even date hereof
between the Borrower and the Lender and acknowledged by the Corporate Guarantor,
which sets forth, among other things, the terms and conditions upon which the
Loan proceeds will be disbursed, as the same may from time to time be extended,
amended, restated, supplemented or otherwise modified.
"Loan Documents" means this Deed of Trust, the Note, the Loan
Agreement, the Guaranty, the Guaranty of Completion, and any and all other
documents which any Grantor, any Guarantor or any other party or parties have
executed and delivered, or may hereafter execute and deliver, to evidence,
secure or guarantee the Obligations, or any part thereof, all as the same may
from time to time be extended, amended, restated, supplemented or otherwise
modified.
"Loan to Value Ratio" has the meaning set forth in Section
9.08 of this Deed of Trust.
"Net Proceeds", when used with respect to any Condemnation
Awards or insurance proceeds allocable to the Real Property, means the gross
proceeds from any Casualty or Condemnation remaining after payment of all
expenses (including reasonable attorneys' fees) incurred in the collection of
such gross proceeds.
6
<PAGE> 7
"Notice" means a written communication delivered by hand, or
sent by overnight courier, or by certified or registered mail, postage prepaid,
return receipt requested, to the Person to whom such communication is to be
given, at the following addresses:
Lender: NationsBank, N.A.
Commercial Banking
6610 Rockledge Drive
Bethesda, Maryland 20817
Attn: Elizabeth F. Shore
with a copy to Ober, Kaler, Grimes & Shriver, P.C.
1401 H Street, N.W., Suite 500
Washington, D.C. 20005
Attn: Richard M. Pollak, Esq.
if to the Grantors: BioReliance Corporation
9900 Blackwell Road
Rockville, Maryland 20850
Attn: General Counsel
BPG Industrial Partners II, LLC
Tavern Square, Suite 305
110 North Royal Street
Alexandria, Virginia 22314
Attn: Robert E. Buccini
with a copy to Arent, Fox, Kintner, Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
Attn: Richard L. Brand, Esq.
and
Shulman, Rogers, Gandal, Pordy & Ecker,
P.A.
11921 Rockville Pike, 3rd Floor
Rockville, Maryland 20852
Attn: Rebecca Oshoway, Esquire
Trustees: c/o NationsBank, N.A.
Commercial Banking
6610 Rockledge Drive
Bethesda, Maryland 20817
7
<PAGE> 8
or at such other address as any party shall have notified the others of in the
manner set forth in this definition.
"Obligations" means all present and future debts, obligations
and liabilities of any of the Grantors to the Beneficiary and the Trustees
arising pursuant to, and/or on account of, the provisions of this Deed of Trust,
the Note, the BioReliance Loan and any of the other Loan Documents, including,
without limitation, the obligations to (a) pay all principal (including, again
without limitation, any principal advanced after the date of this Deed of Trust
and any principal that is repaid and readvanced), interest, late charges and
prepayment premiums (if any) due at any time under the Note, and (b) pay all
Expenses, indemnification payments and other sums due at any time under this
Deed of Trust together with interest thereon as provided in Section 4.17, and
(c) perform, observe and comply with all of the terms, covenants and conditions,
expressed or implied, which any Grantor is required by this Deed of Trust and
any of the other Loan Documents, to perform, observe or comply with.
"Permitted Encumbrances" means (a) the Encumbrances set forth
in the Commitment for Title Insurance No. 50-178-026 issued on October 31, 1997
by Lawyers Title Insurance Company, as updated to the date of this Deed of
Trust, (b) this Deed of Trust, (c) any Leases (including, but not limited to the
Sub-Lease and the Facility Lease) so long as such Leases are subject and
subordinate to this Deed of Trust, (d) liens for Property Assessments which are
either (i) not delinquent, or (ii) being contested in accordance with the
provisions of Section 4.18, and (e) any liens in favor of the Lender in
connection with the BioReliance Loan.
"Person" means an individual, a corporation, a partnership, a
joint venture, a trust, a limited liability company, an unincorporated
association, any Governmental Authority or any other entity.
"Personalty" means all of each Grantor's interest in personal
property of any kind or nature whatsoever, whether tangible or intangible and
whether now owned or hereafter acquired, which is used in the construction of,
or is placed upon, or is derived from or used in connection with the
maintenance, use, occupancy or enjoyment of, the Real Property, including,
without limitation, (a) the Equipment, (b) the Accounts, (c) any franchise or
license agreements and management agreements entered into with respect to the
Real Property or the business conducted therein (provided all of such agreements
shall be subordinate to this Deed of Trust, and the Beneficiary shall have no
responsibility for the performance of any Grantor's obligations thereunder), and
(d) all plans and specifications, contracts and subcontracts for the
construction or repair of the Improvements, sewer and water taps, allocations
and agreements for utilities, bonds, permits, licenses, guarantees, warranties,
causes of action, judgments, Claims, profits, security deposits, utility
deposits, refunds of fees or deposits paid to any Governmental Authority,
letters of credit and policies of insurance; together with all Additions to the
Personalty and Proceeds thereof.
8
<PAGE> 9
"Proceeds", when used with respect to any of the collateral
described in this Deed of Trust, means all proceeds within the meaning of the
Uniform Commercial Code of the State and shall also include the proceeds of any
and all insurance policies.
"Property" when used herein with respect to the Borrower
and/or the Affiliate, means the Leasehold Real Property, and when used herein
with respect to the Corporate Guarantor means the Real Property.
"Property Assessments" means all taxes, payments in lieu of
taxes, water rents, sewer rents, assessments, condominium charges, maintenance
charges and other governmental or municipal or public or private dues, charges
and levies and any Liens (including federal tax liens) which are or may be
levied, imposed or assessed upon the Real Property or any part thereof, or upon
any Leases or any Rents, whether levied directly or indirectly or as excise
taxes, as income taxes, or otherwise.
"Real Property" means the Land and the Improvements,
including, the Leasehold Real Property, and all Additions to, and Proceeds of
the foregoing.
"Related Leases" means the Ground Lease, the Sub-Lease and the
Facility Lease.
"Reimbursement Rate" means the Default Rate set forth in the
Note.
"Rents" means all of the rents, royalties, issues, profits,
revenues, earnings, income and other benefits of the Real Property, or arising
from the use or enjoyment of the Real Property, or from any Lease or other use
or occupancy agreement pertaining to the Real Property.
"State" means the State of Maryland.
"Sub-Lease" has the meaning set forth in the Recitals to this
Deed of Trust.
"Sub-Lease Payments" means any and all sums payable at any
time or from time to time by the Borrower pursuant to the Sub-Lease.
"Taxes" means all taxes and assessments whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, which at any time
may be assessed, levied, confirmed or imposed on any Grantor or on any of its
properties or assets or any part thereof or in respect of any of its franchises,
businesses, income or profits.
"Transfer" means any direct or indirect sale, assignment,
conveyance or transfer, including, without limitation, any contract or agreement
to sell, assign, convey or transfer, whether made with or without consideration.
9
<PAGE> 10
"Trustees" means the Individual Trustees or their successors
in trust who may be acting under and pursuant to this Deed of Trust from time to
time.
Section I.2. Rules of Construction. The words "hereof", "herein",
"hereunder", "hereto", and other words of similar import refer to this Deed of
Trust in its entirety. The terms "agree" and "agreements" mean and include
"covenant" and "covenants". The headings of this Deed of Trust are for
convenience only and shall not define or limit the provisions hereof. All
references (a) made in the neuter, masculine or feminine gender shall be deemed
to have been made in all such genders, (b) made in the singular or plural number
shall be deemed to have been made, respectively, in the plural or singular
number as well, (c) to the Land, the Leasehold Parcel, the Improvements, the
Personalty, the Real Property, the Leasehold Real Property or Property shall
mean all or any portion of each of the foregoing, respectively, and (d) to
Section numbers are to the respective Sections contained in this Deed of Trust
unless expressly indicated otherwise. The term "Grantor" shall also refer to all
of the Persons signing this Deed of Trust as a Grantor, and to each of them, and
all of them are jointly and severally bound, obligated and liable hereunder. The
Trustees or the Beneficiary may release, compromise, modify or settle with any
of the Grantors, in whole or in part, without impairing, lessening or affecting
the obligations and liabilities of the others of the Grantors hereunder or under
the Note. Any of the acts mentioned aforesaid may be done without the approval
or consent of, or notice to, any of the Grantors.
Article II. Granting Clauses; Condition of Grant. In order to secure the
prompt payment and performance of the Obligations, the Grantors and the
Affiliates (a) grant, bargain, sell and convey the Property unto the Trustees in
trust for the benefit of the Beneficiary, to have and to hold the Property unto
the Trustees for the unexpired term of years remaining under the Ground Lease,
the Sub-Lease, and the Facility Lease and any renewals or extensions thereof,
together with all of the Grantors' rights, title and interest as tenant under
the Ground Lease, and the Sub-Lease, as the case may be, including, without
limitation, its rights (if any) to terminate, disaffirm, surrender, supplement,
alter or amend the Ground Lease or the Sub-Lease, to renew or extend the Ground
Lease or the Sub-Lease, and to purchase the fee simple interest in the Land;
provided that, the Grantors may retain possession of the Property until the
occurrence of an Event of Default and further provided, that with respect to the
Sub-Lease and the Facility Lease, it being understood and agreed that the
Borrower and the Affiliate only grant, bargain, sell and convey their interest
in the Leasehold Real Property; and (b) grants the Beneficiary a lien on, and
security interest in, the Personalty; and (c) unconditionally and absolutely
assigns the Leases and Rents to the Beneficiary (but subject to the license for
collection of Rents described in Section 4.12 (b)); and (d) assigns to, and
grants the Beneficiary a security interest in, any Contracts of Sale; and (e)
assigns to the Beneficiary all Condemnation Awards and any insurance proceeds
payable with respect to any Casualty. If and when Grantors have paid and
performed all of the Obligations, no further advances are to be made under the
Loan Agreement and the BioReliance Loan has been indefeasibly repaid in full,
the Trustees, upon request by the Beneficiary, will provide a release of this
Deed of Trust to the Grantors. The Grantors shall be responsible for the
recordation of such release and payment of any recording costs.
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<PAGE> 11
Article III. Representations and Warranties. Each of the Grantors make the
following representations and warranties as to itself, to the Beneficiary:
Section III.1. Organization, Power and Authority of the Grantors;
Loan Documents. The Borrower (a) is a limited liability company duly organized
and existing under the laws of the state in which it is organized, and in any
other state in which the Borrower conducts business, and (b) has the power,
authority and legal right to own its property and carry on the business now
being conducted by it and to engage in the transactions contemplated by the Loan
Documents. The Corporate Guarantor (a) is a corporation duly organized, existing
and in good standing under the laws of the state in which it is organized, and
is duly qualified to do business and in good standing in the state in which the
Property is located and in any other state in which the Borrower conducts
business, and (b) has the power, authority and legal right to own its property
and carry on the business now being conducted by it and to engage in the
transactions contemplated by the Loan Documents. The execution and delivery of,
and the carrying out of the transactions contemplated by, the Loan Documents
executed by the Grantors, and the performance and observance of the terms and
conditions of such Loan Documents, have been duly authorized by all necessary
action of each Grantor. The Loan Documents to which each Grantor is a party
constitute the valid and legally binding obligations of such Grantor and are
fully enforceable against such Grantor in accordance with their respective
terms.
Section III.2. Other Documents; Laws. The execution and performance
of the Loan Documents executed by the Grantors and the consummation of the
transactions contemplated thereby will not conflict with, result in any breach
of, or constitute a default under, the corporate charter, bylaws, operating
agreement of any Grantor, as the case may be, or any contract, agreement,
document or other instrument to which any Grantor is a party or by which any
Grantor may be bound or affected, and do not and will not violate or contravene
any Law to which any Grantor is subject.
Section III.3. Taxes. The Grantors have filed all federal, state,
county and municipal Tax returns required to have been filed by the Grantors
with respect to the Property and have paid all Taxes with respect to the
Property which have become due pursuant to such returns or pursuant to any Tax
assessments received by any Grantor.
Section III.4. Legal Actions. To the best of each Grantor's
knowledge or belief, there are no (a) Claims pending or, to the best of each
Grantor's knowledge and belief, threatened, against or affecting the Property,
or (b) investigations at law or in equity, before or by any court or
Governmental Authority, pending or, to the best of each Grantor's knowledge and
belief, threatened, against or affecting the Property. The Grantors are not in
default with respect to any order, writ, injunction, decree or demand of any
court or any Governmental Authority affecting the Property.
Section III.5. Nature of Loan; Usury; Disclosures. Each Grantor is a
business or commercial organization, and the Loan is being made solely for the
purpose of carrying on or acquiring a business or commercial enterprise. The
rate of interest charged on the Loan does not, and will not, violate any usury
Law or interest rate limitation.
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<PAGE> 12
Section III.6. Trade Names. Each Grantor conducts its business
solely under the name set forth in the Preamble to this Deed of Trust and makes
use of no trade names in connection therewith (other than MA BioServices, Inc.),
unless such trade names have been previously disclosed to the Beneficiary in
writing.
Section III.7. Warranty of Title. The (a) Corporate Guarantor is the
owner of the leasehold legal title to the Real Property, (b) the Grantors and
the Affiliate, except for the Permitted Encumbrances, are the owners of all of
the beneficial and/or equitable leasehold interests in and to the Property, and
(c) the Corporate Guarantor is lawfully seized and possessed of the leasehold
interest in the Real Property and the Borrower is lawfully seized and possessed
of the Leasehold Real Property. Each Grantor and the Affiliate has the right and
authority to convey its leasehold interest in the Property and each Grantor does
hereby warrant specially, and agrees to defend its leasehold interest in the
Property and the title thereto, whether now owned or hereafter acquired, against
all Claims by any Person claiming by, through, or under any Grantor. The
Property is subject to no Encumbrances other than the Permitted Encumbrances.
Section III.8. Property Assessments. The Real Property is assessed
for purposes of Real Property Assessments as a separate and distinct parcel from
any other property, such that the Property shall never become subject to the
Lien of any Property Assessments levied or assessed against any property other
than the Real Property.
Section III.9. Independence of the Real Property. To the best of
each Grantor's knowledge and belief, no building or other improvements on
property not covered by this Deed of Trust rely on the Real Property or any
interest therein to fulfill any requirement of any Governmental Authority for
the existence of such property, building or improvements; and none of the Real
Property relies, or will rely, on any property not covered by this Deed of Trust
or any interest therein to fulfill any requirement of any Governmental
Authority. The Real Property has been properly subdivided from all other
property in accordance with the requirements of any applicable Governmental
Authorities, but the Leasehold Parcel has not been subdivided.
Section III.10. Existing Improvements. The existing Improvements, if
any, were constructed in accordance with all applicable Laws, including, without
limitation, zoning Laws.
Section III.11. [INTENTIONALLY OMITTED].
Section III.12. Leases, Rents, Contracts of Sale. The Leases, Rents
and Contracts of Sale, if any, are not subject to any Encumbrance other than the
Permitted Encumbrances.
Section III.13. Hazardous Materials Contamination; Compliance With
Environmental Requirements. To the best of each Grantor's knowledge and belief,
based on its review of the Environmental Report (a) no Hazardous Materials
Contamination has occurred on the Property and, (b) the Property has never been
used as a manufacturing, storage, treatment, processing, recycling or disposal
site for Hazardous Materials. The present condition and uses of, and activities
on, the
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Property do not violate any Environmental Requirement and the uses of the
Property which each Grantor and each tenant and subtenant, if any, intend in the
future to make of the Property comply and will comply with all applicable
Environmental Requirements. No Grantor has received any notice, or is aware, of
any Claim involving a violation of any Environment Requirement with respect to
the Property or any operation conducted on the Property or on any parcel in the
vicinity of the Property. To the best of each Grantor's knowledge, based on the
Environmental Report, there is no Environmental Requirement which requires any
work, repair, construction, capital expenditure, or other remedial work of any
nature whatsoever to be undertaken with respect to the Property.
Section III.14. Financial Statements. Each Grantor represents for
itself that the financial statements heretofore delivered by said Grantor, if
any, or any agent of the Grantor, to the Beneficiary are true and correct in all
material respects, have been prepared in accordance with generally accepted
accounting principles consistently applied, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates thereof.
No material adverse change has occurred in the financial conditions reflected
therein since the respective dates thereof and no material additional
liabilities have been incurred by such Grantor since the date thereof other than
the borrowings contemplated herein or as approved in writing by the Beneficiary.
Section III.15. Ground Lease. The Ground Lease (a) is a valid and
subsisting lease of the Land and all other real and personal property described
and demised therein for the term set forth in the Ground Lease; (b) is in full
force and effect in accordance with its terms; and (c) has not been amended,
modified or altered, except as described in the definition of Ground Lease set
forth in this Deed of Trust. All Ground Lease Payments have been paid to the
extent they were due and payable before the date hereof, and there are no
existing defaults under the provisions of the Ground Lease or in the performance
of any of its terms or conditions. The Corporate Guarantor is the sole owner of
the entire leasehold estate, and all of the lessee's right, title and interest
under the Ground Lease. The consent of the lessor under the Ground Lease is not
required as a condition precedent to the validity or enforceability of this Deed
of Trust.
Section III.16. Sub-Lease. The Sub-Lease (a) is a valid and
subsisting sublease of the Leasehold Parcel and all other real and personal
property described and demised therein for the term set forth in the Sub-Lease;
(b) is in full force and effect in accordance with its terms; and (c) has not
been amended, modified or altered, except as described in the definition of
Sub-Lease set forth in this Deed of Trust. All Sub-Lease Payments have been paid
to the extent they were due and payable before the date hereof, and there are no
existing defaults under the provisions of the Sub-Lease or in the performance of
any of its terms or conditions. The Borrower is the sole owner of the entire
leasehold estate in the Leasehold Parcel, and all of the lessee's right, title
and interest under the Sub-Lease.
Section III.17. Single Purpose Entity/Separateness. The Borrower
represents, warrants and covenants as follows:
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(a) the Borrower does not own and will not own any asset or property
other than (i) the Property, and (ii) incidental personal property necessary for
the ownership or operation of the Property;
(b) the Borrower will not engage in any business other than the
ownership, management, sale, exchange and operation of the Property and the
Borrower will conduct and operate its business as presently conducted and
operated;
(c) The Borrower will not enter into any contract or agreement with
any affiliate of the Borrower, any constituent party of the Borrower, any
Guarantor (a "Related Third Party") or any affiliate of any constituent party or
Related Third Party, except upon terms and conditions that are intrinsically
fair and substantially similar to those that would be available on an
arms-length basis with third parties other than any such party;
(d) The Borrower has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than (i) the Obligations, (ii)
trade and operational debt incurred in the ordinary course of business with
trade creditors and in amounts as are normal and reasonable under the
circumstances, and (iii) debt incurred in the financing of equipment and other
personal property used on the Property. No indebtedness other than the
Obligations (including the BioReliance Loan) may be secured (subordinate or pari
passu) by the Property.
(e) The Borrower has not made and will not make any loans or
advances to any third party (including any affiliate or constituent party, any
Related Third Party or any affiliate of any constituent party or Related Third
Party), and shall not acquire obligations or securities of its affiliates.
Article IV. Affirmative Covenants.
Section IV.1. Obligations. The Grantors agree to promptly pay and/or
perform all of the Obligations, time being of the essence in each case.
Section IV.2. Adjustment of Condemnation and Insurance Claims. The
Grantors shall give prompt Notice to the Beneficiary of any Casualty or any
Condemnation or threatened Condemnation. The Corporate Guarantor agrees that in
the event of any Condemnation, the Corporate Guarantor will at the Corporate
Guarantor's option either (a) promptly exercise its rights under the Ground
Lease to purchase the County's fee interest in the Real Property and remit all
Condemnation Awards to the Beneficiary to repay the Obligations, or (b) make
payment to the Beneficiary in an amount equal to the lesser of (i) the amount of
Condemnation Proceeds which the Corporate Guarantor would have received had the
Corporate Guarantor purchased the County's fee interest pursuant to provisions
(a) above, or (ii) by an amount determined by the Beneficiary in its reasonable
discretion sufficient to maintain the Loan to Value Ratio. Subject to the
provisions hereof, the Beneficiary agrees, however, that, so long as no Event of
Default has occurred, the
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Grantors may settle or compromise any such Claim with the prior written consent
of the Beneficiary, which consent shall not be unreasonably withheld or delayed.
If, prior to the receipt by the Beneficiary of any Condemnation Award or
insurance proceeds, the Property shall have been sold pursuant to the provisions
of Section 7.02, the Beneficiary shall have the right to receive such funds to
the extent of (a) any deficiency found to be due upon such sale with interest
thereon (whether or not a deficiency judgment on this Deed of Trust shall have
been sought or recovered or denied), and (b) necessary to reimburse the
Beneficiary for its Expenses. After the occurrence of any Event of Default, the
Grantors agree to execute and deliver from time to time, upon the request of the
Beneficiary, such further instruments or documents as may be requested by the
Beneficiary to confirm the grant and assignment to the Beneficiary of any
Condemnation Awards or insurance proceeds.
Section IV.3. Application of Net Proceeds. Net Proceeds must be
applied to either (a) the payment of the Obligations, or (b) the restoration of
the Improvements. If Net Proceeds are equal to or less than $1,000,000 and no
Event of Default has occurred and is continuing, the Grantors shall have the
right to receive the Net Proceeds from the insurer or the Beneficiary, without
having to satisfy any of the additional requirements of this Section 4.03, and
to apply the Net Proceeds to the restoration of the Improvements. If Net
Proceeds exceed $1,000,000, such Net Proceeds may be applied to rebuild and
restore the Improvements provided, that at the time of the receipt of such Net
Proceeds: (i) no Event of Default has occurred and is continuing, (ii) the
Beneficiary determines in its reasonable discretion and if requested by
Beneficiary, based on a feasibility report prepared by an independent third
party at the Grantors' expense, that it is economically feasible to rebuild the
Improvements to substantially their condition before the Casualty or
Condemnation with the Net Proceeds, and any additional funds provided by the
Grantors, and (iii) the Borrower continues to make payments on the Loan as and
when due, throughout the rebuilding and restoration of the Improvements. If for
any reason, any of these conditions are not met, the Net Proceeds will be
promptly applied to the payment of the Obligations.
Except as set forth above, in the event that Net Proceeds are to be applied to
the restoration of the Improvements, each of the following conditions must also
be met and complied with:
(a) An escrow account shall have been established with the
Beneficiary composed of Net Proceeds, and, if necessary, additional deposits
made by the Grantors, which, in the reasonable judgment of the Beneficiary, is
sufficient to restore the Property to its use, value and condition immediately
prior to the Casualty or Condemnation. The Beneficiary shall be entitled, at the
expense of the Grantors, to consult such professionals as the Beneficiary may
deem necessary, in its reasonable discretion, to determine the total costs of
restoring the Property. No interest will be paid on funds in the escrow account.
The Grantors hereby assign to, and grant the Beneficiary a security interest in,
such escrow account and the funds therein to secure the payment and performance
of the Obligations.
(b) The Beneficiary is satisfied that income under any Leases
then in place, or from such other sources as may be acceptable to the
Beneficiary, is sufficient to pay all of the Obligations when and as the same
are due and payable.
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(c) Proceeds from rental loss or business interruption
insurance, or both, or other moneys of the Grantors, must be available to the
Grantors in such amounts as the Beneficiary, in its reasonable judgment,
considers sufficient to pay the debt service under the Note, and all Property
Assessments, insurance premiums and other sums becoming due from the Grantors
pursuant to this Deed of Trust and the Note during the time required for
restoration.
(d) All restoration will be conducted under the supervision of
an engineer, selected and paid for by the Grantors and approved in advance by
the Beneficiary in its reasonable discretion and by a general contractor who
shall be approved by the Beneficiary in its reasonable discretion.
(e) The restoration will be performed pursuant to plans and
specifications approved by the Beneficiary in its reasonable discretion.
(f) If required by the Beneficiary at its sole but reasonable
option, the contractor or contractors responsible for the restoration shall have
obtained payment and performance bonds from a corporate surety acceptable to the
Beneficiary and naming the Beneficiary as dual obligee.
(g) The Guaranty shall remain in full force and effect and the
Corporate Guarantor shall so confirm to the Beneficiary.
If any of the foregoing conditions are not satisfied, the Beneficiary may, in
its sole discretion, apply Net Proceeds to the payment of the Obligations.
If applied to restoration, Net Proceeds (and any other funds
required to be deposited with the Beneficiary) shall be disbursed from time to
time in accordance with the terms and conditions of a construction loan
agreement similar to the Loan Agreement with such changes as the Beneficiary may
reasonably require, and subject also to the following conditions (which shall
control in the event of any conflict with the provisions of such construction
loan agreement):
(a) Restoration shall commence within thirty (30) days
following receipt of the Net Proceeds by the Beneficiary and shall be completed
within such time as may be determined by the Beneficiary in view of the extent
of the Casualty or Condemnation but, in any event, shall be completed within a
reasonable period after the date the Net Proceeds are received.
(b) At the time of each disbursement no Default shall have
occurred.
(c) Restoration shall be performed in accordance with the
requirements of Section 5.04.
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(d) Each disbursement and accompanying each request therefor,
shall be made in accordance with the terms set forth in the Loan Agreement
governing disbursements and any hold backs.
(e) The final hold backs, if any, shall be disbursed only upon
delivery to the Beneficiary, in addition to the items required in paragraph (d)
above, of the following:
(i) Final waivers of Liens from all contractors and
subcontractors.
(ii) A certificate of the architect or the Beneficiary's
Inspecting Engineer (as defined in the Loan Agreement) stating that the
restoration has been completed in a good and workmanlike manner, in accordance
with the plans and specifications approved by the Beneficiary and in accordance
with all applicable Laws.
(f) Immediately upon the occurrence of any Event of Default,
the Beneficiary may apply Net Proceeds and any other sums deposited with the
Beneficiary to the repayment of the Obligations.
Section IV.4. Property Assessments; Escrow. (a) Unless an escrow
account for payment of Property Assessments is created pursuant to subsection
(c) below, the Grantors will (i) promptly pay in full and discharge all Property
Assessments, and (ii) exhibit to the Beneficiary, upon demand, the receipted
bills for such Property Assessments prior to the day upon which the same shall
become delinquent. Property Assessments shall be considered delinquent as of the
first day any interest or penalties commence to accrue thereon.
(b) In the event of the passage of any Law subsequent to the
date of this Deed of Trust in any manner changing or modifying the Laws now in
force governing the taxation of deeds of trust or debts secured by deeds of
trust or the manner of collecting any such taxes so as to adversely affect the
Beneficiary (including, without limitation, a requirement that internal revenue
stamps be affixed to this Deed of Trust or any of the other Loan Documents), the
Grantors will promptly pay any such tax upon receipt of an invoice therefor. If
the Grantors fail to make such prompt payment, or if any Law prohibit the
Grantors from making such payment or would penalize the Beneficiary if the
Grantors make such payment, then the entire unpaid balance of the Obligations
shall, immediately become due and payable at the sole option of the Beneficiary
upon ninety (90) days notice from Beneficiary to the Grantors. In no event,
however, shall any income taxes of the Beneficiary or franchise taxes of the
Beneficiary measured by income, or taxes in lieu of such income taxes or
franchise taxes, be required to be paid by the Grantors.
(c) At any time and from time to time following the occurrence
of an Event of Default, the Grantors shall pay to the Beneficiary monthly, on
any date selected by the Beneficiary, such amount as the Beneficiary from time
to time estimates will generate sufficient funds to pay all Property Assessments
and premiums for the insurance required by Section 4.02 prior to the date such
Property Assessments or insurance premiums next become due. The Beneficiary's
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estimates shall be based on the amounts actually payable or, if unknown, on the
amounts actually paid for the year preceding that for which such payments are
being made. Any deficiencies shall be promptly paid by the Grantors to the
Beneficiary on demand. The Grantors shall transmit bills for the Property
Assessments and insurance premiums to the Beneficiary as soon as received. When
the Beneficiary has received from the Grantors, or on its account, funds
sufficient to pay the same, the Beneficiary shall pay such bills. Payments for
such purposes may be made by the Beneficiary at its discretion even though
subsequent owners of the Property may benefit thereby. Upon foreclosure or
release of this Deed of Trust or, to the extent permitted by Law, upon the
occurrence of an Event of Default, the Beneficiary may apply any sums so
deposited to the payment of the Obligations. If from time to time funds are
accumulated under the terms of this Section in excess of the amount needed to
pay the Property Assessments and such insurance premiums, the Grantors at least
annually shall be given the option of (i) receiving a refund of the excess
funds, (ii) applying the excess funds to the payment of the Obligations (without
penalty or prepayment fees under the Note), or (iii) permitting the excess funds
to remain in the escrow account established pursuant to this Section. If the
Grantors fail to give Notice to the Beneficiary of their intent with respect to
the application of the excess funds as provided in this Section within sixty
(60) days from the date the Beneficiary mailed notice of the accumulation of the
excess funds, the Beneficiary shall promptly return the excess funds to the
Grantors. Within sixty (60) days after receipt from the Grantors of a Notice
requesting a refund, the Beneficiary shall also return excess funds to the
Grantors.
Section IV.5. Compliance with Laws. Each Grantor will comply with
and not violate, and cause to be complied with and not violated in all material
respects, all present and future Laws applicable to the Property and its use and
operation.
Section IV.6. Maintenance and Repair of the Property. Each Grantor,
at the Grantors' sole expense, will (a) keep and maintain or will cause to be
kept or maintained, the Improvements and the Equipment in good condition,
working order and repair, and (b) make, or cause to made, all necessary or
appropriate repairs and Additions to the Improvements and Equipment, so that
each part of the Improvements and all of the Equipment shall at all times be in
good condition and fit and proper for the respective purposes for which they
were originally intended, erected, or installed.
Section IV.7. Additions to Security. All right, title and interest
of the Grantors in and to all Improvements and Additions hereafter constructed
or placed on the Property and in and to any Equipment hereafter acquired shall,
without any further deed of trust, conveyance, assignment or other act by the
Grantors, become subject to the Lien of this Deed of Trust as fully and
completely, and with the same effect, as though now owned by the Grantors and
specifically described in the granting clauses hereof. The Grantors agree,
however, to execute and deliver to the Trustees and/or the Beneficiary such
further documents as may be required pursuant to Section 9.02.
Section IV.8. Inspection. The Grantors will permit the Beneficiary,
or any Person authorized by the Beneficiary, to enter and make inspections of
the Property at all reasonable times and as often as may be requested by the
Beneficiary, provided, all such inspections are made in
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accordance with each Grantor's (and any subtenant's) security and
confidentiality policies and procedures. No Person who is a competitor of any
Grantor, the Affiliate or any subtenant of the Affiliate may inspect the
Property unless such Person is a potential purchaser of the Real Property and
such inspection takes place not less forty five (45) days after any Monetary
Default and not less than one hundred twenty (120) days after an other Event of
Default.
Section IV.9. Management. The Borrower at all times shall provide
for the competent and responsible management and operation of the Property. Any
management contract or contracts affecting the Property must be approved in
writing by the Beneficiary prior to the execution of the same.
Section IV.10. Estoppel Certificates. Within ten (10) days after any
request by the Beneficiary or a proposed assignee or purchaser of the Loan, the
Borrower shall certify in writing to the Beneficiary, or to such proposed
assignee or purchaser, the then unpaid balance of the Loan and whether the
Borrower has any right of defense or set off to the payment or performance of
any of the Obligations.
Section IV.11. Subrogation. To the extent permitted by Law, the
Beneficiary shall be subrogated, notwithstanding its release of record, to any
Lien now or hereafter existing on the Property to the extent that such Lien is
paid or discharged by the Beneficiary whether or not from the proceeds of the
Loan. This Section shall not be deemed or construed, however, to obligate the
Beneficiary to pay or discharge any Lien.
Section IV.12. Leases. (a) The Beneficiary shall have the right to
approve any Lease executed after the date of this Deed of Trust as to form,
content and financial strength of the tenant. All such Leases shall, at the
Beneficiary's option, include subordination provisions acceptable to the
Beneficiary in its sole and absolute discretion. The Beneficiary agrees that it
will provide all tenants under Leases which have terms (including any renewal
options) of twenty four (24) months or less and all tenants under Leases
approved by the Beneficiary in its sole, but reasonable discretion, with the
Beneficiary's customary subordination, attornment and non-disturbance agreement.
At any time, within thirty (30) days after Notice from the Beneficiary, the
Borrower will deliver to the Beneficiary a written description in such
reasonable detail as the Beneficiary may request of all of the Leases,
including, without limitation, the names of all tenants, the terms of all Leases
and the Rents payable under all Leases, and, on demand, the Borrower will
furnish to the Beneficiary fully executed copies of any Leases and such
subordination and attornment agreements as the Beneficiary may request. If any
Lease provides for the giving by the tenant of certificates with respect to the
status of such Lease, the Borrower shall exercise its right to require such
certificate within ten (10) days after any request by the Beneficiary. Within
thirty (30) days after any request by the Beneficiary, the Borrower will notify
all tenants under existing Leases, and agrees to thereafter notify all tenants
under future Leases, that (i) the Borrower collects and receives all Rents
pursuant to the license granted to it hereunder, and (ii) upon Notice from the
Beneficiary that such license has been revoked, the tenant (including, but not
limited to the Affiliate) shall pay all unpaid Rent directly to the Beneficiary.
After the completion of the Improvements, the Borrower may assign its interest
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as lessee in the Sub-Lease and its interests as a lessor in the Facility Lease
to a third party acceptable to the Beneficiary in its reasonable discretion,
provided such assignment is made subject to the lien of this Deed of Trust, and
further provided that the assignee assumes all of the obligations of the
Borrower under the Loan Documents pursuant to a written agreement acceptable to
the Beneficiary in all material respects. Notwithstanding anything set forth in
this Section to the contrary, the Affiliate may sublease in the aggregate up to
forty nine percent (49%) of the Leasehold Parcel under the Facility Lease to
third parties, provided each such assignment is made subject to the lien of this
Deed of Trust. In the event the Affiliate wishes to sublease in the aggregate
more than forty nine percent (49%) of the Leasehold Real Property under the
Facility Lease to third parties, in addition to the conditions set forth in the
preceding sentence, the Beneficiary must approve the identity of each such third
party, which approval will not be unreasonably withheld, and further provided,
that for any assignment or sublease of all or substantially all of the Leasehold
Real Property, the sublessee/assignee assumes all of the obligations of the
Affiliate under the Loan Documents pursuant to a written agreement acceptable to
the Beneficiary in all material respects.
(b) So long as no Event of Default has occurred, the Grantors
shall each have a license (which license shall terminate automatically and
without Notice upon the occurrence of an Event of Default) to collect upon, but
not prior to accrual, the Rents under the Leases and, where applicable,
subleases, such Rents to be held in trust for the Beneficiary, provided that
prior to the occurrence and during the continuance of any Event of Default, the
Grantors may use such Rents in their businesses. The Grantors and the
Beneficiary acknowledge and agree that a portion of the Rents under the Facility
Lease necessary to pay the Obligations will be paid directly to the Beneficiary
for application against the Loan. Upon revocation of the license described above
following the occurrence of an Event of Default, and following notification to
the tenants (other than the Affiliate) under the Leases by the Beneficiary or
the Trustees that Rents are to be paid to the Beneficiary, all Rents (other than
those already being paid by the Affiliate directly to the Beneficiary) shall be
paid directly to the Beneficiary and not through the Borrower or the Corporate
Guarantor. A demand by the Beneficiary on any tenant for the payment of Rent
shall be sufficient to warrant such tenant to make future payments of Rent to
the Beneficiary without the necessity of further consent by the Borrower or the
Corporate Guarantor.
(c) The Borrower and the Corporate Guarantor, at their sole
cost and expense, will use their best efforts to enforce or secure, or cause to
be enforced or secured, the performance of each and every obligation and
undertaking of the respective tenants under any Leases and will appear in and
defend, at their sole cost and expense, any action or proceeding arising under,
or in any manner connected with, such Leases.
(d) Except as permitted in the Loan Documents, neither the
Borrower, nor the Corporate Guarantor will assign the whole or any part of the
Leases or Rents without the prior written consent of the Beneficiary, and any
assignment without such consent shall be null and void.
(e) The Grantors will promptly perform all of their material
obligations under any Leases. The Grantors will not, without the prior written
consent of the Beneficiary, (i) cancel, terminate, accept a surrender of, reduce
the payment of rent under, or accept any prepayment
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of rent for more than one (1) month in advance under, any Lease, or (ii) permit
a Lien on the Property superior to any Lease, other than this Deed of Trust.
(f) Except to the extent the Beneficiary has agreed to provide
certain tenants with non-disturbance agreements pursuant to subsection (a) of
this Section, if any Leases are subordinate (either by their date, their express
terms, or by subsequent agreement of the tenant) to this Deed of Trust, such
Leases shall be subject to the condition (and this Deed of Trust so authorizes)
that, in the event of any sale of the Property pursuant to the provisions of
Section 7.02, the Leases shall, at the sole option of the Beneficiary or any
purchaser at such sale, either (i) continue in full force and effect as set
forth in the required advertisement of sale, and the tenant or tenants
thereunder will, upon request, attorn to and acknowledge in writing the
purchaser or purchasers at such sale or sales as landlord thereunder, or (ii)
upon notice to such effect from the Beneficiary, the Trustees or any purchaser
or purchasers, terminate within ninety (90) days from the date of sale. As to
any Lease, neither the Beneficiary nor any purchaser or purchasers at
foreclosure shall be bound by any payment of rent for more than one (1) month in
advance or by any amendment or modification of the Lease made without the prior
written consent of the Beneficiary or, subsequent to a foreclosure sale, such
purchaser or purchasers.
(g) Neither the Trustees nor the Beneficiary shall be
obligated to perform or discharge any obligation of the Grantors under any
Lease, provided, however, that if the Beneficiary takes possession of the
Property and operates the Property it will perform the obligations of the
Grantors under the Lease to the extent applicable. This assignment of the Leases
in no manner places on the Beneficiary or the Trustees any responsibility for
(i) the control, care, management or repair of the Property, (ii) the carrying
out of any of the terms and conditions of the Leases, (iii) any waste committed
on the Property, or (iv) any dangerous or defective condition on the Property
(whether known or unknown). The Grantors agree to indemnify the Trustees and the
Beneficiary for, and forever hold them harmless from, any and all Claims arising
out of, or in connection with, any Leases or any assignment thereof, provided,
however, that the Beneficiary is not released from any Claims which arise solely
from the Beneficiary's gross negligence or willful misconduct.
Section IV.13. Contracts of Sale. Following the occurrence of an
Event of Default, each Grantor irrevocably authorizes the Beneficiary, at its
sole option, to collect, in the name of each Grantor or in its own name as
assignee, all payments due or to become due under any Contract of Sale. Each
Grantor agrees that it will facilitate in every reasonable way the collection by
the Beneficiary of such payments, and will, upon written request by the
Beneficiary, execute a written notice and deliver the same to each purchaser
directing the purchaser to make such payments to the Beneficiary. In no event
shall the Beneficiary be accountable for more moneys than it actually receives
pursuant to a Contract of Sale, nor shall the Beneficiary be liable for any
failure to collect payments under any Contract of Sale. The right to determine
the method of collection and the extent to which the enforcement of collection
shall be prosecuted is reserved to the sole discretion of the Beneficiary. The
Grantors, without the prior written consent of the Beneficiary, will not execute
any assignment of any Contract of Sale or the payments due thereunder. The
Grantors shall furnish to the Beneficiary, within ten (10) days after a written
request from the Beneficiary, a written
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certification containing the names of all contract purchasers of the Property
and shall attach to such certification a copy of any Contract of Sale. Nothing
contained in this Section shall (a) be construed as a consent by the Beneficiary
to any Transfer of the Property, or (b) constitute a delegation to the
Beneficiary of any of the Grantors' duties or obligations under any Contract of
Sale. The Grantors agree to indemnify the Beneficiary and the Trustees for, and
forever hold them harmless from, any Claim arising out of, or in connection
with, any Contract of Sale, prior to the closing of such sale, provided,
however, that the Beneficiary is not released from any Claims which arise solely
from the Beneficiary's gross negligence or willful misconduct.
Section IV.14. Taxes. The Grantors shall pay and discharge all Taxes
prior to the date on which penalties are attached thereto unless and to the
extent only that such Taxes are contested in accordance with Section 4.18.
Section IV.15. Hazardous Materials; Contamination. (a) Each Grantor
agrees to (i) give Notice to the Beneficiary immediately upon each Grantor's
acquiring knowledge of any Hazardous Materials Contamination or of any Claim
made or threatened against any Grantor or the Property with respect to any
Environmental Requirement with a full description thereof; (ii) at the Grantors'
sole cost and expense, promptly comply or cause compliance with any and all
Environmental Requirements relating to the Property or such Hazardous Materials
Contamination and provide the Beneficiary with satisfactory evidence of such
compliance; and (iii) take whatever other action as the Beneficiary may deem
necessary or appropriate in its reasonable discretion to restore to the Grantors
the full use and benefit of the Property as contemplated by the Loan Documents.
(b) If an Event of Default shall have occurred hereunder or
under any of the other Loan Documents, the Grantors shall immediately upon the
receipt of Notice from the Beneficiary, which may be given at any time and from
time to time by the Beneficiary in its sole discretion (but not more frequently
than once during any twelve (12) month period), cause an Environmental
Assessment to be undertaken with respect to the Property and furnish the same to
the Beneficiary within thirty (30) days after the date of the Beneficiary's
request. The cost of any such Environmental Assessment shall be borne
exclusively by the Grantors. The Grantors shall cooperate with each
environmental consulting firm engaged to make any such Environmental Assessment
and shall supply to each such environmental consulting firm, from time to time
and promptly on request, all information available to the Grantors to facilitate
the completion of the Environmental Assessment. Notwithstanding the foregoing,
the Beneficiary shall be under no duty to require the preparation of any
Environmental Assessment of the Property, and in no event shall any such
Environmental Assessment by the Beneficiary be or give rise to any
representation or warranty by the Beneficiary that Hazardous Materials are or
are not present on the Property, or that there has been compliance by the
Grantors or any other Person with any Environmental Requirement.
(c) The Grantors shall protect, indemnify, defend and hold the
Beneficiary, the Trustees, any Persons owned or controlled by, owning or
controlling, or under the common control of or affiliated with, the Beneficiary
and/or the Trustees, any participants in the
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Loan, the directors, officers, employees and agents of the Beneficiary, and/or
such other Persons, and the heirs, personal representatives, successors and
assigns of each of the foregoing, harmless from and against any and all Claims
of any kind or nature whatsoever arising out of or in any way connected with any
investigative, enforcement, cleanup, removal, containment, remedial or other
private, governmental or regulatory action at any time threatened, instituted or
completed pursuant to any applicable Environmental Requirement against the
Grantors or the Beneficiary or against or with respect to the Property or any
condition, use or activity on the Property or at any time threatened or made by
any Person against the Grantors or the Beneficiary or against or with respect to
the Property or any condition, use or activity on the Property relating to any
damage, contribution, cost recovery, compensation, loss or injury resulting from
or in any way arising in connection with any Hazardous Materials or Hazardous
Materials Contamination. Upon demand by the Beneficiary, the Grantors shall
diligently defend any such Claim which affects the Property or is made or
commenced against the Beneficiary, whether alone or together with the Grantor or
any other Person, all at the Grantors' sole cost and expense and by counsel to
be approved by the Beneficiary in the exercise of its reasonable judgment. In
the alternative, the Beneficiary may at any time elect to conduct its own
defense through counsel selected by the Beneficiary and at the cost and expense
of the Grantors.
Section IV.16. Right to Perform. If either Grantor fails to promptly
pay or perform any of the Obligations after any applicable grace or cure period,
the Beneficiary, without Notice to or demand upon either Grantor, and without
waiving or releasing any Obligation or Default, may (but shall be under no
obligation to) at any time thereafter make such payment or perform such act for
the account and at the expense of the Grantors. The Beneficiary may enter upon
the Property for that purpose and take all action thereon as the Beneficiary
considers necessary or appropriate. All Expenses incurred by the Beneficiary
pursuant to this Section, together with interest thereon at the Reimbursement
Rate, shall be paid by the Grantors to the Beneficiary as provided in Section
4.17.
Section IV.17. Reimbursement; Interest. If the Beneficiary or the
Trustees shall incur any Expenses or pay any Claims to which the Beneficiary or
the Trustees become a party by reason of this Deed of Trust or the rights and
remedies provided hereunder (regardless of whether this Deed of Trust expressly
provides for an indemnification against such Claims by the Grantor), such
Expenses and Claims shall be (a) paid by the Grantors to the Beneficiary on
demand, together with interest thereon from the date incurred until paid in full
by the Grantor at the Reimbursement Rate, and (b) a part of the Obligations
secured by this Deed of Trust. Notwithstanding the foregoing, however, in any
action or proceeding to foreclose this Deed of Trust or to recover or collect
the Obligations, the provisions of Law governing the recovery of costs,
disbursements and allowances shall prevail unaffected by this Section. Whenever
this Deed of Trust provides for interest to be paid at the Reimbursement Rate,
the Reimbursement Rate shall be calculated on the basis of a 360-day year factor
applied to actual days elapsed and adjusted simultaneously with any change in
the Beneficiary's prime rate of interest.
Section IV.18. Permitted Contests. The Grantors shall not be
required to pay any of the Property Assessments, or to comply with any Law, so
long as the Grantors shall in good faith, and at their cost and expense, contest
the amount or validity thereof, or take other appropriate action
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with respect thereto, in good faith and in an appropriate manner or by
appropriate proceedings; provided that (a) such proceedings operate to prevent
the collection of, or other realization upon, such Property Assessments or
enforcement of the Law so contested, (b) there will be no sale, forfeiture or
loss of the Property during the contest, (c) neither the Beneficiary nor the
Trustees are subjected to any Claim, and (d) the Grantors provide assurances
satisfactory to the Beneficiary in its reasonable discretion (including, without
limitation, the establishment of an appropriate reserve account with the
Beneficiary) of their ability to pay such Property Assessments or comply with
such Law in the event the Grantors are unsuccessful in its contest. Each such
contest shall be promptly prosecuted to final conclusion or settlement, and the
Grantors shall indemnify and save the Beneficiary and Trustees harmless against
all Claims in connection therewith. Promptly after the settlement or conclusion
of such contest or action, the Grantors shall comply with such Law and/or pay
and discharge the amounts which shall be levied, assessed or imposed or
determined to be payable, together with all penalties, fines, interests, costs
and expenses in connection therewith.
Section IV.19. Security Agreement. This Deed of Trust creates a
security interest in the Personalty, and, to the extent the Personalty is not
real property, this Deed of Trust constitutes a security agreement from the
Grantors and the Affiliate to the Beneficiary under the Uniform Commercial Code
of the State. The Grantors hereby agree to execute and deliver on demand, and,
if appropriate, to file with the appropriate filing office or offices, such
financing statements or other instruments as the Beneficiary may request or
require in order to perfect the security interest granted hereby or to continue
the effectiveness of the same.
Section IV.20. Ground Lease Obligations. The Corporate Guarantor
agrees that it will (a) unless an escrow for Ground Lease Payments has been
established pursuant to the following clause (b), pay when due all Ground Lease
Payments; (b) if at any time requested by the Beneficiary, after the occurrence
and during the continuance of any Event of Default, at the Beneficiary's sole
option, pay to the Beneficiary monthly, on any date selected by the Beneficiary,
such amount as the Beneficiary from time to time estimates will generate
sufficient funds to pay all Ground Lease Payments on the date such Ground Lease
Payments next become due (such sums shall be held subject to the terms and
conditions governing the escrow for Property Assessments and insurance premiums
as set forth in Section 4.04); (c) at all times perform and comply with all of
its obligations under the Ground Lease; (d) promptly after receipt of any notice
of default pursuant to the terms of the Ground Lease, fully and timely cure the
same; (e) do all things necessary to preserve and keep unimpaired the rights of
the tenant under the Ground Lease and to prevent any default thereunder or
termination, surrender, cancellation or impairment thereof; (f) give prompt
Notice to the Beneficiary of any default by the lessor under the Ground Lease
and (g) give prompt Notice to the Beneficiary of the giving of any notice by the
lessor under the Ground Lease of any default by the Corporate Guarantor, as
tenant under the Ground Lease. In the event Ground Lease Payments are escrowed
with the Beneficiary pursuant to this Section, the Beneficiary will use such
Ground Lease Payments, to the extent available, to make payments to the County
when such payments are due.
Section IV.21. Sub-Lease Obligations. The Borrower agrees that it
will (a) unless an escrow for Sub-Lease Payments has been established pursuant
to the following clause (b), pay when due all Sub-Lease Payments; (b) if at any
time requested by the Beneficiary, after the
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occurrence and during the continuance of any Event of Default, at the
Beneficiary's sole option, pay to the Beneficiary monthly, on any date selected
by the Beneficiary, such amount as the Beneficiary from time to time estimates
will generate sufficient funds to pay all Sub-Lease Payments on the date such
Sub-Lease Payments next become due (such sums shall be held subject to the terms
and conditions governing the escrow for Property Assessments and insurance
premiums as set forth in Section 4.04); (c) at all times perform and comply with
all of its obligations under the Sub-Lease; (d) promptly after receipt of any
notice of default pursuant to the terms of the Sub-Lease, fully and timely cure
the same; (e) do all things necessary to preserve and keep unimpaired the rights
of the tenant under the Sub-Lease and to prevent any default thereunder or
termination, surrender, cancellation or impairment thereof; (f) give prompt
Notice to the Beneficiary of any default by the Corporate Guarantor under the
Sub-Lease and (g) give prompt Notice to the Beneficiary of the giving of any
notice by the Corporate Guarantor under the Ground Lease of any default by the
Borrower, as tenant under the Sub-Lease.
Section IV.22. Non-Merger. The Corporate Guarantor agrees that prior
to acquiring the fee simple, or any other estate, title or interest in the Land
or the Improvements, the Corporate Guarantor shall execute and deliver to the
Beneficiary such instruments, deeds and documents as the Beneficiary deems
necessary or prudent to cause this Deed of Trust to attach to and cover and be a
first lien upon each other estate so acquired, and to cause such estate so
acquired to be considered as mortgaged, assigned or conveyed to the Trustees
hereunder and the Lien of this Deed of Trust spread to cover such estate,
subject only to the Permitted Encumbrances. The Grantors agree upon request of
the Beneficiary to promptly execute and deliver to the Beneficiary such
additional documents as the Beneficiary may reasonably request to carry out the
intent of this Section.
Section IV.23. Appraisals. The Beneficiary shall have the right to
require updated appraisals of the Property not more frequently than once every
three (3) years or at any time after the occurrence of an Event of Default,
which appraisals shall be prepared by an appraiser or appraisers designated by
the Beneficiary and shall be in all respects acceptable to the Beneficiary. The
basis of the appraisal calculations shown on such appraisal reports and all
other aspects of the appraisal reports must be satisfactory to the Beneficiary
in all respects. Such appraisal reports shall not be released by the Beneficiary
to the Grantors unless the Grantors have paid all costs for such appraisal
reports. The Grantors shall reimburse the Beneficiary upon demand for all costs
and expenses incurred by the Beneficiary with respect to the preparation and
review of all future appraisals required pursuant to the terms hereof.
Section IV.24 Handicapped Access.
(a) The Grantors agree that they will use commercially reasonable
efforts to cause the Property to comply to the extent applicable with the
requirements of the Americans with Disabilities Act of 1990, the Fair Housing
Amendments Act of 1998 (if applicable), all state and local laws and ordinances
related to handicapped access and all rules, regulations, and orders issued
pursuant thereto including, without limitation, the Americans with Disabilities
Act Accessibility Guidelines for Buildings and Facilities (collectively, "Access
Laws").
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(b) Each Grantor agrees to give prompt notice to the Beneficiary of
the receipt by such Grantor of any written complaints related to violation of
any Access Laws and of the commencement of any proceedings or investigations
which relate to compliance with applicable Access Laws.
Article V. Negative Covenants.
Section V.1. Encumbrances. Without the prior written consent of the
Beneficiary, the Grantors will not cause, other than as permitted in the Related
Leases, the Real Property or the Personalty, or the Leases, Rents and Contracts
of Sale, to become subject to any Encumbrances other than the Permitted
Encumbrances. The Grantors shall give the Beneficiary Notice of any default
under any Lien and Notice of any foreclosure or threat of foreclosure.
Section V.2. Transfer of the Property. The Grantors will not
Transfer, or contract to Transfer, all or any part of the Leasehold Parcel or
any legal or beneficial interest therein, except for the assignments and
subleases permitted under the Loan Documents.
Section V.3. [Intentionally Omitted]
Section V.4. Additional Improvements. The Grantors will not
construct any Improvements other than those presently on the Land, those
described in the Loan Agreement, and those described in the documents evidencing
the BioReliance Loan, without the prior written consent of the Beneficiary which
consent will not be unreasonably withhold. The Grantors will construct and erect
any permitted Improvements (a) strictly in accordance with all applicable Laws
and any private restrictive covenants, (b) entirely on lots or parcels of the
Land, (c) so as not to encroach upon any easement or right of way or upon the
land of others, and (d) wholly within any building restriction lines applicable
to the Land.
Section V.5. Restrictive Covenants, Zoning, etc. Without the prior
written consent of the Beneficiary in its reasonable discretion, the Grantors
will not initiate, join in, or consent to any change in, any restrictive
covenant, easement, zoning ordinance, or other public or private restrictions,
limiting or defining the uses which may be made of the Property, unless required
by the County. Each Grantor will (a) promptly perform and observe, and cause to
be performed and observed, all of the terms and conditions of all agreements
affecting the Property (including, but not limited to, the Ground Lease), and
(b) do or cause to be done all things necessary to preserve intact and
unimpaired any and all easements, appurtenances and other interests and rights
in favor of, or constituting any portion of, the Property.
Section V.6. Prohibition on Hazardous Materials Contamination. The
Grantors will not cause, commit, permit or allow to continue any violation of
any Environmental Requirement by any Person on or with respect to the Property.
The Grantors will keep the Property free of all Hazardous Materials
Contamination.
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Article VI. Events of Default. The occurrence of any one or more of the
following shall constitute an "Event of Default" under this Deed of Trust:
Section VI.1. Accuracy of Information; Representations and
Warranties. Any information contained in any financial statement, schedule,
report or any other material document delivered by any Grantor or any other
party or parties on behalf of any Grantor to the Beneficiary in connection with
the Loan proves at any time to be not in all material respects true and
accurate, as of the time made or any Grantor or any such other party or parties
shall have failed to state any material fact or any fact necessary to make such
information not misleading, or any representation or warranty contained in this
Deed of Trust, including, but not limited to the representations set forth in
Section 3.17 of this Deed of Trust, or in any other material document,
certificate or opinion delivered by any Grantor to the Beneficiary in connection
with the Loan, proves at any time to be incorrect or misleading in any material
respect as of the time made.
Section VI.2. Payment Obligations. The Grantors fail to promptly pay
any of the Obligations when and as due and payable, and such failure remains
uncured for five (5) days after written notice thereof (a "Monetary Default").
Section VI.3. Transfer of the Property; Encumbrances. The Grantors
knowingly violates the provisions of Section 5.01 or 5.02, or the Grantors
otherwise violate the provisions of Section 5.01 or 5.02 and such failure
remains uncured for thirty (30) days after written notice thereof, unless (a)
the nature of the failure is such that it cannot be cured within the thirty (30)
day period, (b) the Grantors institute corrective action within the thirty (30)
day period, and (c) the Grantors complete the cure within a period of an
additional sixty (60) days.
Section VI.4. Insurance Obligations. The Grantors fail to promptly
perform or comply with any of the terms and conditions set forth in Section 4.02
and such failure remains uncured for thirty (30) days after written notice
thereof, provided, however, that no such cure period shall be required if at any
time any such insurance would lapse or terminate.
Section VI.5. Other Obligations. The Grantors fail to promptly
perform or comply with any of the Obligations (other than those expressly
described in other Sections of this Article VI), and such failure continues
uncured for a period of thirty (30) days after Notice from the Beneficiary to
the Grantors, unless (a) the nature of the failure is such that it cannot be
cured within the thirty (30) day period, (b) the Grantors institute corrective
action within the thirty (30) day period, and (c) the Grantors complete the cure
within a period of an additional sixty (60) days.
Section VI.6. Event of Default Under Other Loan Documents. An Event
of Default (as defined therein) occurs under any of the Loan Documents other
than this Deed of Trust.
Section VI.7. Change in Zoning or Public Restriction. Any change in
any zoning ordinance or regulation or any other public restriction is enacted,
adopted or implemented, that limits
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or defines the uses which may be made of the Property such that the present or
intended use of the Property, as specified in the Loan Documents, would be in
violation of such zoning ordinance or regulation or public restriction, as
changed, unless such use is permitted under a "grandfather" provision.
Section VI.8. Default Under Other Lien Documents. A default occurs
under any other mortgage, deed of trust or security agreement covering all or
any portion of the Property, including, without limitation, any Permitted
Encumbrances, and such default remains uncured beyond any applicable grace or
cure period.
Section VI.9. Voluntary Bankruptcy, etc. Any Grantor applies for, or
consents in writing to, the appointment of a receiver, trustee or liquidator of
such Grantor or of the Property or of all or substantially all of any Grantor's
other assets, or (b) files a voluntary petition in bankruptcy or admits in
writing its inability to pay its debts as they become due, or (c) makes a
general assignment for the benefit of creditors, or (d) files a petition or an
answer seeking a reorganization (other than a reorganization not involving the
liabilities of any Grantor) or an arrangement with creditors or takes advantage
of any bankruptcy or insolvency law, or (e) files an answer admitting the
material allegations of a petition filed against any Grantor in any bankruptcy,
reorganization or insolvency proceeding.
Section VI.10. Involuntary Bankruptcy, etc. An order, judgment or
decree is entered by any court of competent jurisdiction on the application of a
creditor adjudicating any Grantor as bankrupt or insolvent, or appointing a
receiver, trustee or liquidator of any Grantor or of the Property, or of all or
substantially all of any Grantor's other assets, and such order, judgment or
decree continues unstayed and in effect for a period of ninety (90) days from
the date entered.
Section VI.11. Execution; Attachment. Any execution or attachment is
levied against the Property, and such execution or attachment is not set aside,
discharged or stayed within sixty (60) days after the same is levied.
Section VI.12. Judgment. Unless adequately covered by insurance in
the opinion of the Beneficiary, the entry of a final judgment for the payment of
money involving more than $5,000,000 against any Grantor and the failure by such
Grantor to pay or discharge the same, or cause it to be discharged, or bonded
off to the Beneficiary's satisfaction, within thirty (30) days from the date of
the order, decree or process under which or pursuant to which such judgment was
entered.
Section VI.13. Change in Business Status. Unless the written consent
of the Beneficiary is previously obtained, the sale of all or substantially all
of the business assets of the Borrower, or the commencement of any proceeding to
dissolve or liquidate any Grantor, or the occurrence of any change in the form
of business entity through which the Borrower presently conducts its business,
or any change to the operating agreement of the Borrower.
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Section VI.14. Default Under Other Indebtedness. Any Grantor fails
to pay any indebtedness of such Grantor in excess of $5,000,000 (other than the
Loan but including the BioReliance Loan) when and as due and payable (whether by
acceleration or otherwise), and such default remains uncured beyond any
applicable grace or cure period.
Section VI.15. Ground Lease. The Corporate Guarantor fails to
promptly perform or comply with the terms and conditions of Section 4.20(b), (d)
or (g) beyond any applicable grace or cure period, if any, for performance under
the Ground Lease, or the Ground Lease is terminated, canceled or in any way
modified without the prior written consent of the Beneficiary, unless such
termination is by virtue of the Corporate Guarantor's exercise of its purchase
option thereunder.
Section VI.16. Sub-Lease. The Borrower fails to promptly perform or
comply with any of the terms and conditions of Section 4.21(b), (d) or (g)
beyond any applicable grace or cure period, if any, for performance under the
Sub-Lease, or the Sub-Lease is terminated, canceled or in any way modified
without the prior written consent of the Beneficiary.
Section VI.17. Dissolution of the Borrower. Without the
Beneficiary's prior express written consent thereto, (a) the Borrower is
dissolved either pursuant to the provisions of its operating agreement, by
operation of law, or in any other manner, voluntarily or otherwise; (b) the
operating agreement of the Borrower is terminated pursuant to any of its
provisions or by operation of law, or amended or modified in any manner; or (c)
if the Borrower fails to comply with any of the terms and conditions set forth
in Section 3.17.
Article VII. Rights and Remedies. Upon the occurrence of any Event of
Default, the Beneficiary, or the Trustees at the direction of the Beneficiary,
may at any time thereafter exercise any of the following rights, powers or
remedies:
Section VII.1. Acceleration. The Beneficiary may declare (without
further Notice to the Grantors and without presentment, demand, protest or
notice of protest or of dishonor, all of which the Grantors hereby waive) the
Obligations to be immediately due and payable.
Section VII.2. Foreclosure. The Trustees may take possession of and
sell the Property, or any part thereof requested by the Beneficiary to be sold,
and in connection therewith the Grantors hereby (a) assent to the passage of a
decree for the sale of the Property by the equity court having jurisdiction, and
(b) authorize and empower the Trustees to take possession of and sell (or in
case of the default of any purchaser to resell) the Property, or any part
thereof, all in accordance with the Laws or rules of court relating to deeds of
trust, including any amendments thereof, or additions thereto, which do not
materially change or impair the remedy. In connection with any foreclosure, the
Beneficiary and/or the Trustees may (a) procure such title reports, surveys, tax
histories and appraisals as they deem necessary, and (b) make such repairs and
Additions to the Property as they deem advisable, all of which shall constitute
Expenses. In case of any sale under this Deed of Trust, by virtue of judicial
proceedings or otherwise, the Grantor's interest in the Property may be sold as
an entirety or in parcels, by one sale or by several sales, as may be deemed
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by the Trustees to be appropriate and without regard to any right of the
Grantors or any other Person to the marshaling of assets. Any sale hereunder may
be made at public auction, at such time or times, at such place or places, and
upon such terms and conditions and after such previous public notice as the
Trustees shall deem appropriate and advantageous and as required by Law. Upon
the terms of such sale being complied with, the Trustees shall convey to, and at
the cost of, the purchaser or purchasers the interests of the Grantors in the
Property so sold, free and discharged of and from all estate, title or interest
of the Grantors, at law or in equity (including, but not limited to any rights
under the Sub-Lease and/or the Facility Lease to occupy the Property), such
purchaser or purchasers being hereby discharged from all liability to see to the
application of the purchase money, and such purchaser or purchasers having the
right to terminate the Sub-Lease and/or the Facility Lease. The proceeds of such
sale or sales under this Deed of Trust, whether under the assent to a decree,
the power of sale, or by equitable foreclosure, shall be held by the Trustees
and applied as follows: First, to pay (a) all Expenses incurred in connection
with such sale or in preparing the Property for such sale including, among other
things, a counsel fee of $5,000 to the attorneys representing the Beneficiary
and the Trustees for conducting the proceedings if without contest, but if legal
services be rendered to the Trustees and the Beneficiary in connection with any
contested matter in the proceedings, then such other counsel fees shall be
allowed and paid out of the proceeds of such sale or sales as the court having
jurisdiction may deem proper, and (b) a trustees' commission equal to the
commission allowed trustees for making sales of property under decrees of the
equity court having jurisdiction; Second, to pay all of the Obligations and all
interest then due and accrued thereon, which shall include interest through the
date of ratification of the auditor's account; and lastly, to pay the surplus,
if any, to the Grantors or any Person entitled thereto upon surrender and
delivery to the purchaser or purchasers of the Property, and less the Expenses,
if any, of obtaining possession. Immediately upon the filing of any foreclosure
under this Deed of Trust, there shall also become due and owing by the Grantors
a commission on the total amount of the Obligations then due equal to one-half
of the percentage allowed as commission to trustees making sales under orders or
decrees of the equity court having jurisdiction, and no Person shall be required
to receive only the aggregate amount of the Obligations to the date of payment
unless the same is accompanied by a tender of such commission.
Section VII.3. Taking Possession or Control of the Property. As a
matter of right without regard to the adequacy of the security, and to the
extent permitted by law without Notice to the Grantors, the Beneficiary shall be
entitled, upon application to a court of competent jurisdiction, to the
immediate appointment of a receiver for all or any part of the Property and the
Rents, whether such receivership be incidental to a proposed sale of the
Property or otherwise, and the Grantors hereby consent to the appointment of
such a receiver. In addition, to the extent permitted by Law, and with or
without the appointment of a receiver, or an application therefor, the
Beneficiary may (a) enter upon, and take possession of (and the Grantors shall
surrender actual possession of), the Property or any part thereof, without
Notice to the Grantors and without bringing any legal action or proceeding, or,
if necessary by force, legal proceedings, ejectment or otherwise, and (b) remove
and exclude the Grantors and their agents and employees therefrom, other than
subtenants of the Affiliate who have received written non-disturbance agreements
from the Beneficiary.
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Section VII.4. Management of the Property. Upon obtaining possession
of the Property or upon the appointment of a receiver as described in Section
7.03, the Beneficiary, the Trustees or the receiver, as the case may be, may, at
their sole option, (a) make all necessary or proper repairs and Additions to or
upon the Property, (b) operate, maintain, control, make secure and preserve the
Property, (c) receive all Rents, and (d) complete the construction of any
unfinished Improvements on the Property and, in connection therewith, continue
any and all outstanding contracts for the erection and completion of such
Improvements and make and enter into any further contracts which may be
necessary, either in their or its own name or in the name of any Grantor (the
cost of completing the Improvements shall be Expenses secured by this Deed of
Trust and accrue interest as set forth in Section 4.17). In so doing, the
Beneficiary, the Trustees or such receiver shall have the right to manage the
Property and may exercise all of the rights and powers of each Grantor with
respect to the Property, either in the name of each Grantor, or otherwise,
including, but without limiting the generality of the foregoing, the right to
lease the Property, to cancel, modify, renew or extend any Lease or sub-lease of
the Property and to carry on any contracts entered into by any Grantor with
respect to the Property. The Beneficiary, the Trustees or such receiver shall be
under no liability for, or by reason of, any such taking of possession, entry,
holding, removal, maintaining, operation or management, except for gross
negligence or willful misconduct. Any Rents received shall be applied (a) first,
to pay all Expenses, and (b) the balance, if any, to payment of the other
Obligations. The Grantors shall pay on demand to the Beneficiary, the receiver
or the Trustees (as the case may be) the amount of any deficiency between (a)
the Rents received by the Beneficiary, the receiver or the Trustees, and (b) all
Expenses incurred together with interest thereon at the Reimbursement Rate as
provided in Section 4.17. The exercise of the remedies provided in this Section
shall not cure or waive any Event of Default, and the enforcement of such
remedies, once commenced, shall continue for so long as the Beneficiary shall
elect, notwithstanding the fact that the exercise of such remedies may have, for
a time, cured the original Event of Default.
Section VII.5. Uniform Commercial Code. The Beneficiary may proceed
under the Uniform Commercial Code of the State as to all or any part of the
Personalty, and in conjunction therewith may exercise all of the rights,
remedies and powers of a secured creditor under the Uniform Commercial Code of
the State. Upon the occurrence of any Event of Default, the Grantors shall
assemble all of the Equipment and make the same available within the
Improvements. Any notification required by Section 9-504 of the Uniform
Commercial Code of the State shall be deemed reasonably and properly given if
sent in accordance with the Notice provision of this Deed of Trust at least ten
(10) days before any sale or other disposition of the Personalty. Disposition of
the Personalty shall be deemed commercially reasonable if made pursuant to a
public sale advertised at least twice in a newspaper of general circulation in
the community where the Property is located. Proceeds from any such sale shall
be applied as follows: (a) first, to pay all Expenses incurred in connection
with the sale, and (b) the balance, if any, to payment of the other Obligations.
Section VII.6. Other Remedies. The Beneficiary shall have the right
from time to time to enforce any legal or equitable remedy against each Grantor
and to sue each Grantor for any sums (whether interest, damages for failure to
pay principal or any installments thereof, taxes, or any other sums required to
be paid under the terms of this Deed of Trust, as the same become due),
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<PAGE> 32
without regard to whether or not any other of the Obligations shall be due, and
without prejudice to the right of the Beneficiary thereafter to enforce any
appropriate remedy against any Grantor, including, without limitation, an action
of foreclosure or an action for specific performance, for an Event of Default by
the Grantors existing at the time such earlier action was commenced.
Section VII.7. Remedies, etc. Cumulative. Each right, power and
remedy of the Beneficiary or the Trustees as provided for in this Deed of Trust,
or in any of the other Loan Documents or now or hereafter existing by Law, shall
be cumulative and concurrent and shall be in addition to every other right,
power or remedy provided for in this Deed of Trust, or in any of the other Loan
Documents or now or hereafter existing by Law, and the exercise or beginning of
the exercise by the Beneficiary or the Trustees of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later exercise
by the Beneficiary or the Trustees of any or all such other rights, powers or
remedies.
Section VII.8. No Waiver by Beneficiary. No course of dealing or
conduct between the Beneficiary, the Trustees and the Grantors shall be
effective to amend, modify or change any provisions of this Deed of Trust or the
other Loan Documents. No failure or delay by the Beneficiary or the Trustees to
insist upon the strict performance of any term, covenant or agreement of this
Deed of Trust or of any of the other Loan Documents, or to exercise any right,
power or remedy consequent upon a breach thereof, shall constitute a waiver of
any such term, covenant or agreement or of any such breach, or preclude the
Beneficiary or the Trustees from exercising any such right, power or remedy at
any later time or times. By accepting payment after the due date of any of the
Obligations, the Beneficiary or the Trustees shall not be deemed to waive the
right either to require prompt payment when due of all other Obligations, or to
declare an Event of Default for failure to make prompt payment of any such other
Obligations. Neither the Grantors nor any other Person now or hereafter
obligated for the payment of the whole or any part of the Obligations shall be
relieved of such liability by reason of (a) the failure of the Beneficiary to
comply with any request of the Grantors or of any other Person to take action to
foreclose this Deed of Trust or otherwise enforce any of the provisions of this
Deed of Trust, or (b) any agreement or stipulation between any subsequent owner
or owners of the Property and the Beneficiary, or (c) the Beneficiary extending
the time of payment or modifying the terms of this Deed of Trust or any of the
other Loan Documents without first having obtained the consent of the Grantors
or such other Person. Regardless of consideration, and without the necessity for
any notice to or consent by the holder of any subordinate Lien on the Property,
the Beneficiary may release any Person at any time liable for any of the
Obligations or any part of the security for the Obligations, and may extend the
time of payment or otherwise modify the terms of this Deed of Trust or any of
the other Loan Documents without in any way impairing or affecting the Lien of
this Deed of Trust or the priority of this Deed of Trust over any subordinate
Lien. The holder of any subordinate Lien shall have no right to terminate any
Lease regardless of whether or not such Lease is subordinate to this Deed of
Trust. The Beneficiary may resort to the security or collateral described in
this Deed of Trust or any of the other Loan Documents in such order and manner
as the Beneficiary may elect in its sole discretion.
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Section VII.9. Waivers and Agreements Regarding Remedies. To the
full extent the Grantors may do so, the Grantors hereby:
(a agree that they will not at any time plead, claim or
take advantage of any Laws now or hereafter in force providing for any
appraisement, valuation, stay, extension or redemption, and waives and releases
all rights of redemption, valuation, appraisement, stay of execution, extension
and notice of election to accelerate the Obligations;
(b waive all rights to a marshaling of the assets of the
Grantors, including without limitation, the Property, or to a sale in the
inverse order of alienation in the event of a foreclosure of the Property, and
agrees not to assert any right under any Law pertaining to the marshaling of
assets, the sale in inverse order of alienation, the exemption of homestead, the
administration of estates of decedents, or other matters whatsoever to defeat,
reduce or affect the right of the Beneficiary under the terms of this Deed of
Trust to a sale of the Property without any prior or different resort for
collection, or the right of the Beneficiary to the payment of the Obligations
out of the proceeds of sale of the Property in preference to every other
claimant whatsoever;
(c waive any right to bring or utilize any defense,
counterclaim or set off, other than one which denies the existence or
sufficiency of the facts upon which any foreclosure action is grounded. If any
defense, counterclaim or set off, other than one permitted by the preceding
clause, is timely raised in a foreclosure action, such defense, counterclaim or
set off shall be dismissed. If such defense, counterclaim or set off is based on
a Claim which could be tried in an action for money damages, such Claim may be
brought in a separate action which shall not thereafter be consolidated with the
foreclosure action. The bringing of such separate action for money damages shall
not be deemed to afford any grounds for staying the foreclosure action; and
(d waive and relinquish any and all rights and remedies
which any Grantor may have or be able to assert by reason of the provisions of
any Laws pertaining to the rights and remedies of sureties.
Article VIII. The Trustees.
Section VIII.1. Liability of the Trustees. The Trustees shall have
no liability or responsibility for, and make no warranties in connection with,
the validity or enforceability of any of the Loan Documents or the description,
value or status of title to the Property. The Trustees shall be protected in
acting upon any notice, request, consent, demand, statement, note or other paper
or document believed by them to be genuine and to have been signed by the party
or parties purporting to sign the same. The Trustees shall not be liable for any
error of judgment, nor for any act done or step taken or omitted, nor for any
mistakes of law or fact, nor for anything which the Trustees may do or refrain
from doing in good faith, nor generally shall the Trustees have any
accountability hereunder except for willful misconduct or gross negligence. The
powers and duties of the Trustees hereunder may be exercised through such
attorneys, agents or servants as they may appoint, and the
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Trustees shall have no liability or responsibility for any act, failure to act,
negligence or willful conduct of such attorney, agent or servant, so long as
they were selected with reasonable care. In addition, the Trustees may consult
with legal counsel selected by them and the Trustees shall have no liability or
responsibility by reason of any act or failure to act in accordance with the
opinions of such counsel. The Trustees may act hereunder and may sell or
otherwise dispose of the Property or any part thereof as herein provided,
although the Trustees have been, may now be or may hereafter be, attorneys,
officers, agents or employees of the Beneficiary, in respect of any matter of
business whatsoever. The Trustees, however, shall have no obligation to sell all
or any part of the Property following an Event of Default or to take any other
action authorized to be taken by them hereunder except upon the demand of the
Beneficiary.
Section VIII.2. Substitution of Trustees, etc. The Beneficiary shall
have, and is hereby granted with warranty of further assurances, the irrevocable
power to appoint a new or replacement or substitute Trustee or Trustees. Such
power may be exercised at any time without notice, without cause and without
specifying any reason therefor, by filing for record in the office where this
Deed of Trust is recorded a Deed of Appointment. The power of appointment of a
successor Trustee or Trustees may be exercised as often as and whenever the
Beneficiary may choose, and the exercise of the power of appointment, no matter
how often, shall not be an exhaustion thereof. Upon the recordation of such Deed
or Deeds of Appointment, the Trustee or Trustees so appointed shall thereupon,
without any further act or deed of conveyance, become fully vested with
identically the same title and estate in and to the Property and with all the
rights, powers, trusts and duties of their, his or its predecessor in the trust
hereunder with like effect as if originally named as Trustees or as one of the
Trustees hereunder. Whenever in this Deed of Trust reference is made to the
Trustees, it shall be construed to mean the Trustee or Trustees for the time
being, whether original or successors or successor in trust. All title, estate,
rights, powers, trusts and duties hereunder given or appertaining to or
devolving upon the Trustees shall be in each of the Trustees so that any action
hereunder or purporting to be hereunder of any one of the original or any
successor Trustees shall for all purposes be considered to be, and as effective
as, the action of all the Trustees.
Article IX. Miscellaneous.
Section IX.1. Application of Moneys. Whenever it is provided in this
Deed of Trust for any moneys to be applied to payment of the Obligations, and no
express order of payment is set forth, such moneys shall be applied to the
Obligations in such order and manner as the Beneficiary may determine in its
sole discretion.
Section IX.2. Further Assurances. At any time, and from time to
time, upon request by the Beneficiary, the Grantors will, at the Grantors'
expense, (a) correct any defect, error or omission which may be discovered in
the form or content of any of the Loan Documents, and (b) make, execute, deliver
and record, or cause to be made, executed, delivered and recorded, any and all
further instruments, certificates, and other documents as may, in the opinion of
the Beneficiary, be necessary or desirable in order to complete, perfect or
continue and preserve the Lien of this Deed of Trust consistent with the intent
of the Loan Documents. With respect to any financing statement,
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<PAGE> 35
the Grantors agree that a carbon, photographic or other reproduction of a
security agreement or a financing statement is sufficient as a financing
statement for purposes of Section 9-402 of the Uniform Commercial Code of the
State.
Section IX.3. Notices. All Notices shall be deemed to have been
received when delivered by hand, when delivered by an overnight courier, or
three (3) Banking Days after being deposited in the mail in the manner provided
for in the definition of Notices in Article I above.
Section IX.4. Successors and Assigns. All of the grants, covenants,
terms, provisions and conditions of this Deed of Trust shall run with the Land
and shall apply to and bind the successors and assigns of the Grantors
(including any permitted subsequent owner of the Property), and inure to the
benefit of the Beneficiary, its successors and assigns and to the successors in
trust of the Trustees.
Section IX.5. No Warranty by Beneficiary or Trustees. By inspecting
the Property or by accepting or approving anything required to be observed,
performed or fulfilled by the Grantors or to be given to the Beneficiary or the
Trustees pursuant to this Deed of Trust or any of the other Loan Documents, the
Beneficiary and the Trustees shall not be deemed to have warranted or
represented the condition, sufficiency, legality, effectiveness or legal effect
of the same, and such acceptance or approval shall not constitute any warranty
or representation with respect thereto by the Beneficiary or the Trustees.
Section IX.6. Amendments. This Deed of Trust may not be modified or
amended except by an agreement in writing, signed by the party against whom
enforcement of the change is sought.
Section IX.7. Illegality. If fulfillment of any provision of this
Deed of Trust or any transaction related hereto shall at any time involve
transcending the limit of validity prescribed by Law, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity; and
if any clause or provision herein contained, other than the provisions requiring
the Grantors to pay the Obligations, operates or would prospectively operate to
invalidate this Deed of Trust in whole or in part, then such clause or provision
only shall be void, as though not herein contained, and the remainder of this
Deed of Trust shall remain operative and in full force and effect; and if such
clause or provision requires the Grantors to pay any of the Obligations, then at
the sole option of the Beneficiary, all of the Obligations shall become due and
payable.
Section IX.8. Subdivision of Real Property and Partial Release. The
Corporate Guarantor and the Beneficiary agree that the Corporate Guarantor shall
have the right, subject to the provisions of this Section, to subdivide the Real
Property into two parcels, one of which will contain the Leasehold Real Property
and the other will contain the remainder of the Real Property (such parcel being
called the "New Parcel"). Subject to the provisions of this Section, the
Beneficiary agrees to execute and deliver to the Corporate Guarantor, at the
Corporate Guarantor's expense, such documents and instruments as may be
reasonably required to subdivide the Real Property. After
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<PAGE> 36
such subdivision, the Beneficiary agrees to instruct the Trustees, without
expense to the Beneficiary, to release the New Parcel from the lien of this Deed
of Trust, provided that at the time of such release: (a) no Event of Default has
occurred and is continuing under any of the Loan Documents, and (b) the current
principal balance of the Loan, plus any amount then remaining to be advanced
under the Loan Agreement does not exceed ninety percent (90%) of the current
value of the Leasehold Real Property, as determined by the Beneficiary (such
amount being called the "Loan to Value Ratio").
Section IX.9. Governing Law. This Deed of Trust is being executed
and delivered in the State and shall be construed, governed and enforced in
accordance with the Laws in effect from time to time in the State.
[Remainder of Page Intentionally Blank]
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<PAGE> 37
IN WITNESS WHEREOF, the Grantors have caused this Deed of Trust to be
executed under seal as of the day and year first written above.
WITNESS/ATTEST: BPG INDUSTRIAL PARTNERS II, LLC
______________________________ By:____________________________(SEAL)
Name:
Title:
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<PAGE> 38
WITNESS/ATTEST: BIORELIANCE CORPORATION
______________________________ By:____________________________(SEAL)
Name:
Title:
38
<PAGE> 39
WITNESS/ATTEST: MAGENTA CORPORATION
______________________________ By:____________________________(SEAL)
Name:
Title:
39
<PAGE> 40
STATE OF MARYLAND, __________ OF __________, TO WIT:
I HEREBY CERTIFY, that on this ____ day of April, 1998, before me, the
undersigned Notary Public of said State, personally appeared
_____________________, who acknowledged himself/herself to be a member of BPG
INDUSTRIAL PARTNERS II, LLC, a limited liability company, know to me (or
satisfactorily proven) to be the person whose name is subscribed to the within
instrument, and acknowledged that he/she executed the same for the purposes
therein contained as the duly authorized member of said limited liability
company by signing the name of the limited liability company by himself/herself
as member.
WITNESS my hand and Notarial Seal.
_________________________________
Notary Public
My Commission Expires:
40
<PAGE> 41
STATE OF MARYLAND, __________ OF __________, TO WIT:
I HEREBY CERTIFY, that on this ____ day of April, 1998, before me, the
undersigned Notary Public of said State, personally appeared
_____________________, who acknowledged himself/herself to be a _____________ of
BIORELIANCE CORPORATION, a corporation, known to me (or satisfactorily proven)
to be the person whose name is subscribed to the within instrument, and
acknowledged that he/she executed the same for the purposes therein contained as
the duly authorized ____________ of said corporation by signing the name of the
corporation by himself/herself as ________________.
WITNESS my hand and Notarial Seal.
_________________________________
Notary Public
My Commission Expires:
41
<PAGE> 42
STATE OF MARYLAND, __________ OF __________, TO WIT:
I HEREBY CERTIFY, that on this ____ day of April, 1998, before me, the
undersigned Notary Public of said State, personally appeared
_____________________, who acknowledged himself/herself to be a _____________ of
MAGENTA CORPORATION_______________, a corporation, known to me (or
satisfactorily proven) to be the person whose name is subscribed to the within
instrument, and acknowledged that he/she executed the same for the purposes
therein contained as the duly authorized ____________ of said corporation by
signing the name of the corporation by himself/herself as ________________.
WITNESS my hand and Notarial Seal.
_________________________________
Notary Public
My Commission Expires:
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<PAGE> 43
THE UNDERSIGNED, a member in good standing of the Bar of the Court of
Appeals of Maryland, hereby certifies that the within instrument was prepared by
him.
_____________________________
Richard M. Pollak
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<PAGE> 44
EXHIBIT A
PROPERTY DESCRIPTION
ALL that tract or parcel of land located in the ____________ Election
District, County of Montgomery, State of Maryland, and more particularly
described as follows:
<PAGE> 1
EXHIBIT 10.25
GUARANTY OF PAYMENT
THIS GUARANTY OF PAYMENT (this "Agreement") is made this 1st day of
April 1998, by BIORELIANCE CORPORATION, a corporation organized and in good
standing under the laws of the State of Delaware (the "Guarantor") in favor of
NATIONSBANK, N.A., a national banking association, its successors and assigns
(the "Lender").
A. BPG INDUSTRIAL PARTNERS II, LLC, a limited liability company
organized under the laws of the State of Maryland (the "Borrower"), has applied
to the Lender for a term loan in the principal amount of $4,650,000 (the
"Loan"). The Loan is to be advanced pursuant to the provisions of a Loan
Agreement of even date herewith by and between the Borrower and the Lender, and
acknowledged by the Guarantor (as amended, modified, restated, substituted,
extended and renewed at any time and from time to time, the "Loan Agreement").
The Loan is to be evidenced by, and repaid with interest in accordance with the
provisions of, a Deed of Trust Note of even date herewith from the Borrower
payable to the Lender in the principal amount of the Loan (as amended, modified,
restated, substituted, extended and renewed at any time and from time to time,
the "Note") and is secured by that certain Deed of Trust, Assignment and
Security Agreement (as amended, modified, restated, substituted, extended and
renewed at any time and from time to time the "Deed of Trust"), of even date
herewith, made by the Borrower, the Guarantor and MAGENTA Corporation in favor
of the trustees named therein for the benefit of the Lender.
B. The proceeds of the Loan are being used for finance (i) the costs of
constructing certain improvements located at Parcel N/Q in the Life Sciences
Center, Montgomery County, Maryland (the "Premises") thereon consisting of a
shell building and mezzanine, containing 58,733 square feet of space, more or
less, certain systems in the building shell which the Borrower is
<PAGE> 2
constructing, and the parking lot, sidewalks, driveways and landscaping (the
"Improvements"; the Premises and the Improvements being hereinafter collectively
referred to as the "Property"), (ii) the costs of acquiring the Property,
obtaining the Loan, leasing the building and all related activities, including,
without limitation, costs of all appraisals, inspections, studies and
investigations of the Property prior to the Loan Closing, title reports and
surveys, site preparation and development costs, fees of architects, engineers,
site planners and other consultants, attorneys' fees (including those of
Lender's counsel) and all fees and costs in connection with applying for and
obtaining any permits and approvals, (iii) the development fee payable to the
Borrower for constructing the Improvements, (iv) the amount payable to the
Borrower in consideration for its option to purchase or lease Parcel N/Q, (v)
reimbursements to the Guarantor of amounts advanced to the Borrower by the
Guarantor, (vi) the Lender's commitment fee, and (vii) payments of interest
under the Note, in accordance with the Loan Agreement. The Leasehold Parcel is
leased to MAGENTA Corporation, an affiliate (the "Affiliate") of the Guarantor,
pursuant to that certain Project Lease of even date herewith by and between the
Borrower, as landlord, and the Affiliate, as tenant.
C. The Guarantor as leasehold owner of the Property and parent
corporation of the Affiliate will receive a direct economic benefit from the
Loan and has requested the Lender to make the Loan to the Borrower pursuant to
the Loan Agreement.
D. The Lender has required, as a condition to the making of the Loan,
the execution of this Agreement by the Guarantor.
E. All defined terms used in this Agreement and not defined herein
shall have the meaning given to such terms in the Deed of Trust.
2
<PAGE> 3
NOW, THEREFORE, in order to induce the Lender to make the Loan to the
Borrower, the Guarantor covenants and agrees with the Lender as follows:
1. Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees to the Lender (the "Obligations"): (a) the due and punctual payment
in full (and not merely the collectibility) of the principal of the Note and the
interest thereon, in each case when due and payable, whether on any installment
payment date or at the stated or accelerated maturity, all according to the
terms of the Note and the Deed of Trust; (b) the due and punctual payment in
full (and not merely the collectibility) of all other sums and charges which may
at any time be due and payable in accordance with, or secured by, the Note, the
Loan Agreement, the Deed of Trust or any other document now or hereafter
evidencing or securing the Loan (together with the Note and the Deed of Trust,
the "Loan Documents"); and (c) the due and punctual performance of all of the
other terms, covenants and conditions contained in the Note and the other Loan
Documents, on the part of the Borrower or any subsequent leasehold owner of the
Property to be performed.
2. Guaranty Unconditional. The Guarantor expressly agrees that the
Lender may, in its sole and absolute discretion, without notice to or further
assent of the Guarantor, but in accordance with and subject to the requirements
of such Loan Documents, and without in any way releasing, affecting or impairing
the obligations and liabilities of the Guarantor hereunder: (a) waive compliance
with, or any defaults under, or grant any other indulgences with respect to, the
Loan Documents, provided, however, that the Lender will not enter into any
written agreement to waive any Event of Default without the written consent of
the Guarantor; (b) make advances for the purpose of performing any term or
covenant contained in any of the Loan Documents with respect to which the
Borrower or the then leasehold owner of the Property shall be in default and
which the
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<PAGE> 4
Lender is not otherwise obligated to provide the Guarantor with notice
thereof; and (c) after an Event of Default assign or otherwise transfer the Loan
Documents or this Agreement or any interest therein or herein. The obligations
of the Guarantor under this Agreement shall be unconditional, irrespective of
the genuineness, validity, regularity or enforceability of the Note or the Deed
of Trust, or any security given therefor or in connection therewith, or any
other circumstances which might otherwise constitute a legal or equitable
discharge of a surety or guarantor. The Lender will not enter into any written
agreement to extend, renew, modify, amend, change or terminate any provisions of
the Loan Documents without the written consent of the Guarantor.
3. Guaranty Primary. The obligations and liability of the Guarantor
under this Agreement shall be primary, direct and immediate; shall not be
conditional or contingent upon pursuit by the Lender of any remedies it may have
against the Borrower with respect to the Loan Documents, whether pursuant to the
terms thereof or by law; and shall not be subject to any counterclaim,
recoupment, set-off, reduction or defense based upon any claim that the
Guarantor may have against the Borrower or the Lender. Without limiting the
generality of the foregoing, the Lender shall not be required to make any demand
on the Borrower and/or the then leasehold owner of the Property, or to sell at
foreclosure or otherwise pursue or exhaust its remedies against the Property or
any part thereof and/or against the Borrower or the then leasehold owner of the
Property, before, simultaneously with or after enforcing its rights and remedies
hereunder against the Guarantor. Any one or more successive and/or concurrent
actions may be brought hereon against the Guarantor either in the same action,
if any, brought against the Borrower and/or the then leasehold owner of the
Property or in separate actions, as often as the Lender may deem advisable. The
Lender agrees to promptly notify the Guarantor of the occurrence of any Default
under the
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<PAGE> 5
Loan, at the same time it provides the Borrower with written notice of any such
Default and provide the Guarantor with the same opportunity to cure as the
Borrower under the Loan Documents.
4. Waivers by Guarantor. The Guarantor hereby unconditionally and
irrevocably waives: (a) presentment and demand for payment of the principal of
or interest on the Note and protest of non-payment; (b) notice of acceptance of
this Agreement and of presentment, demand and protest; (c) notice of all
indulgences; (d) demand for observance, performance, or enforcement of any terms
or provisions of this Agreement or any of the Loan Documents; and (e) any right
or claim of right to cause a marshaling of the assets of the Borrower.
5. Reimbursement for Expenses. If the Lender shall commence any action
or proceeding for the enforcement of this Agreement, the Guarantor shall
reimburse the Lender promptly upon demand, for all expenses incurred in
connection therewith, including, without limitation, reasonable attorneys' fees.
6. Acceleration. Anything in this Agreement or in any of the Loan
Documents to the contrary notwithstanding, the Lender, at its option, may, as to
the Guarantor, accelerate the indebtedness evidenced and secured by the Loan
Documents in the event (each an "Event of Default"): (a) a Default shall occur
under any of the other Loan Documents, and such Default is not cured within any
applicable grace period provided therein; (b) the Guarantor shall (i) apply for
or consent to the appointment of a receiver, trustee or liquidator for itself or
any of its property, (ii) admit in writing its inability to pay its debts as
they mature, (iii) make a general assignment for the benefit of creditors, (iv)
be adjudicated a bankrupt or insolvent, (v) file a voluntary petition in
bankruptcy or a petition or an answer seeking reorganization or an arrangement
with creditors or to take advantage of any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution or
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<PAGE> 6
liquidation law or statute, or an answer admitting the material allegations of a
petition filed against it in any proceeding under any such law or if corporate
action shall be taken by the Guarantor for the purposes of effecting any of the
foregoing, or (vi) by any act indicate its consent to, approval of or
acquiescence in any such proceeding or the appointment of any receiver of or
trustee for any of its property, or suffer any such receivership, trusteeship or
proceeding to continue undischarged for a period of ninety (90) days, (c)
default shall be made with respect to any evidence of indebtedness or liability
for borrowed money (other than the Loan) having a principal amount in excess of
$5,000,000, or any operating or capital lease having a value in excess of
$5,000,000, if the effect of such default is to accelerate the maturity of such
evidence of indebtedness or liability, (d) default shall occur under the
Existing BioReliance Loan Term Agreement (as hereinafter defined) which remains
uncured beyond any applicable grace or cure period, or (e) unless adequately
insured in the opinion of the Lender, the entry of a final judgment for the
payment of money involving more than $5,000,000 in excess of any amounts covered
by insurance against the Guarantor and the failure by the Guarantor to pay or
discharge the same, or cause it to be discharged or vacated, within sixty (60)
days from the date of the order, decree or process under which or pursuant to
which such judgment was entered, or to secure a stay of execution pending appeal
of such judgment.
7. Subordination; Subrogation. If the Guarantor shall advance any sums
to the Borrower or if the Borrower shall hereafter become indebted to the
Guarantor, such sums and indebtedness shall be subordinate in all respects to
the amounts then or thereafter due and owing to the Lender under the Loan
Documents. Nothing herein contained shall be construed to give the Guarantor any
right of subrogation in and to the Note or the Deed of Trust or all or any part
of the Lender's interest therein, until all amounts owing to the Lender shall
have been paid in full.
6
<PAGE> 7
Notwithstanding any provision of this Paragraph to the contrary, if the
Guarantor is or becomes an "insider" (as defined from time to time in Section
101 of the Federal Bankruptcy Code) with respect to the Borrower, then the
Guarantor irrevocably and absolutely waives any and all rights of subrogation,
contribution, indemnification, reimbursement or any similar rights against the
Borrower with respect to this Agreement, whether such rights arise under an
express or implied contract or by operation of law. It is the intention of the
parties hereto that the Guarantor shall not be deemed to be a "creditor" (as
defined in Section 101 of the Federal Bankruptcy Code) of the Borrower by reason
of the existence of this Agreement in the event that the Borrower becomes a
debtor in any proceeding under the Federal Bankruptcy Code.
8. Representations and Warranties. The Guarantor represents and
warrants that it will receive a direct and substantial benefit from the making
of the Loan to the Borrower, that it has examined or has had an opportunity to
examine documents referred to herein, that it has full power, authority and
legal right to execute and deliver this Agreement, and that this Agreement is a
binding legal obligation of the Guarantor.
9. Affirmative Covenants. Until payment in full and the performance of
all of the Obligations, the Guarantor shall comply with all of the covenants set
forth in that certain Amended and Restated Replacement Loan Agreement dated as
of October 31, 1997, by and among the Guarantor, Ma Bioservices, Inc., the
Affiliate, Magenta Viral Production, Inc., and the Lender, as amended by that
certain First Amendment to Amended and Restated Replacement Loan Agreement of
even date herewith by and among the Guarantor, Ma Bioservices, Inc., the
Affiliate, Magenta Viral Production, Inc., and the Lender (the Amended and
Restated Replacement Loan Agreement,
7
<PAGE> 8
as the same may be amended from time to time, the "Existing BioReliance Term
Loan Agreement") including, but not limited to, the financial covenants set
forth in Sections 5.3 and 5.4 thereof.
10. Financial Statements. The Guarantor shall furnish or cause to be
furnished to the Lender the financial information required under the Existing
BioReliance Term Loan Agreement at the times required thereunder.
11. Governing Law. The provisions of this Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Maryland as
the same may be in effect from time to time.
12. Consent to Jurisdiction. The Guarantor irrevocably submits to the
jurisdiction of any state court in Montgomery County or federal court for the
Southern District of Maryland over any suit, action, or proceeding arising out
of or relating to this Agreement. The Guarantor irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action, or proceeding brought in
any such court and any claim that any such suit, action, or proceeding brought
in any such court has been brought in an inconvenient forum. Final judgment
after any period to appeal has expired in any such suit, action, or proceeding
brought in any such court shall be conclusive and binding upon the Guarantor and
may be enforced in any court to whose jurisdiction the Guarantor is subject, by
a suit upon such judgment provided that service of process is effected upon the
Guarantor in a manner specified in this Agreement or as otherwise permitted by
applicable law.
13. Service of Process. The Guarantor hereby irrevocably designates and
appoints The Corporate Trust Incorporated, 300 E. Lombard Street, Baltimore,
Maryland 21202, as its authorized agent to accept and acknowledge on its behalf
service of any and all process that may be served in
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<PAGE> 9
any suit, action, or proceeding instituted in connection with this Agreement in
any state or federal court sitting in the State of Maryland. If such agent shall
cease so to act, the Guarantor shall irrevocably designate and appoint without
delay another such agent in the State of Maryland satisfactory to the Lender and
shall promptly deliver to the Lender evidence in writing of such agent's
acceptance of such appointment and its agreement that such appointment shall be
irrevocable.
The Guarantor hereby consents to process being served in any suit,
action, or proceeding instituted in connection with this Agreement by (a) the
mailing of a copy thereof by certified mail, postage prepaid, return receipt
requested, to it at its address designated herein and (b) serving a copy thereof
upon the agent, if any, hereinabove designated and appointed by the Guarantor as
the Guarantor's agent for service of process. The Guarantor irrevocably agrees
that such service shall be deemed in every respect to be effective service of
process in any such suit, action, or proceeding. Nothing in this Agreement shall
affect the right of the Lender to serve process in any manner otherwise
permitted by law.
14. Waiver of Jury Trial. The Guarantor and the Lender hereby waive
trial by jury in any action or proceeding to which the Guarantor and the Lender
may be parties, arising out of or in any way pertaining to (a) this Agreement,
(b) the Loan or (c) the other Loan Documents. It is agreed and understood that
this waiver constitutes a waiver of trial by jury of all claims against all
parties to such actions or proceedings, including claims against parties who are
not parties to this Agreement. This waiver is knowingly, willingly and
voluntarily made by the Guarantor, and the Guarantor hereby represents and
warrants that no representations of fact or opinion have been made by any
individual to induce this waiver of trial by jury or to in any way modify or
nullify its effect. The Guarantor further represents and warrants that it has
been represented in the signing of this
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<PAGE> 10
Agreement and in the making of this waiver by independent legal counsel,
selected of its own free will, and that it has had the opportunity to discuss
this waiver with counsel.
15. Voidable Preference; Fraudulent Conveyance. If at any time any
payment, or portion thereof, made by, or for the account of, the Guarantor on
account of any of the obligations and liabilities hereunder is set aside by any
court or trustee having jurisdiction as a voidable preference or fraudulent
conveyance or must otherwise be restored or returned by the Lender under any
insolvency, bankruptcy or other federal and/or state laws or as a result of any
dissolution, liquidation or reorganization of the Borrower or upon, or as a
result of, the appointment of any receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any substantial part of its
properties or assets, the Guarantor hereby agrees that this Agreement shall
continue and remain in full force and effect or be reinstated, as the case may
be, all as though such payment(s) had not been made.
16. Notices. Notice, demand, request or other communication which
either party may desire to give to the other with respect to this Agreement,
shall be deemed to have been properly given if in writing and shall be effective
upon delivery by hand or delivery by an overnight courier or three (3) banking
days after being mailed by certified mail, postage prepaid return receipt
requested, addressed as follows:
If to the Lender, at: NationsBank, N.A.
6610 Rockledge Drive
Third Floor
Bethesda, Maryland 20817
Attn: Elizabeth F. Shore
with a copy to: Ober, Kaler, Grimes & Shriver, P.C.
1401 H Street, N.W., Suite 500
Washington, D.C. 20005
Attn: Richard M. Pollak, Esq.
if to the Guarantor: BioReliance Corporation
9900 Blackwell Road
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Rockville, Maryland 20850
Attn: General Counsel
with a copy to: Shulman, Rogers, Gandal, Pordy & Ecker, P.A.
11921 Rockville Pike, 3rd Floor
Rockville, Maryland 20852
Attn: Rebecca Oshoway, Esquire
and
BPG Industrial Partners II, LLC
Tavern Square, Suite 305
110 North Royal Street
Alexandria, Virginia 22314
Attn: Robert E. Buccini
and
with a copy to: Arent, Fox, Kintner, Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
Attn: Richard L. Brand, Esq.
Any of the parties hereto may designate a change of address by notice in writing
to the other parties. Whenever in this Agreement the giving of notice by mail or
otherwise is required, the giving of such notice may be waived in writing by the
person or persons entitled to receive such notice.
17. Remedies Cumulative. All rights and remedies afforded to the Lender
by reason of this Agreement, the Loan Documents, or by law are separate and
cumulative and the exercise of one shall not in any way limit or prejudice the
exercise of any other such rights or remedies. Every right, power and remedy
given by this Agreement to the Lender shall be concurrent and may be pursued
separately, successively or together against the Guarantor and each such right,
power and remedy may be exercised from time to time as often as the Lender may
deem expedient. No delay or omission by the Lender in exercising any such right
or remedy shall operate as a waiver thereof. No
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waiver of any rights and remedies hereunder, and no modification or amendment
hereof, shall be deemed made by the Lender unless in writing and duly signed by
the Lender. Any such written waiver shall apply only to the particular instance
specified therein and shall not impair the further exercise of such right or
remedy or of any other right or remedy of the Lender and no single or partial
exercise of any right or remedy hereunder shall preclude any other or further
exercise thereof or any other right or remedy.
18. Severability. If any provision (or any part of any provision)
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision (or remaining part of the affected
provision) of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision (or part thereof) had never been
contained herein but only to the extent it is invalid, illegal or unenforceable.
19. Successors and Assigns. This Agreement shall inure to the benefit
of, and be enforceable by, the Lender and its successors and assigns as holder
of the Note, and shall be binding upon, and enforceable against, the Guarantor
and its heirs, personal representatives, successors and assigns.
WITNESS the signature and seal of the Guarantor as of the day and year
first above written.
WITNESS/ATTEST BIORELIANCE CORPORATION
_______________________________ BY:______________________________(SEAL)
Name:
Title:
<PAGE> 1
EXHIBIT 10.26
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement"), made this 1st day of April,
1998, by and between BPG INDUSTRIAL PARTNERS II, LLC, a limited liability
company organized and existing under the laws of the State of Maryland (the
"Borrower") and NATIONSBANK, N.A., a national banking association, its
successors and assigns (the "Lender"). BIORELIANCE CORPORATION, a Delaware
corporation (the "Corporate Guarantor") joins in this Agreement for purposes of
acknowledging and consenting to its terms and conditions.
RECITALS
1. The Corporate Guarantor has acquired the leasehold interest in
certain real estate situate in Montgomery County, Maryland known as Parcel N/Q
("Parcel N/Q") in the Life Sciences Center, Montgomery County, Maryland (the
"County"), and more fully described in the Deed of Trust (as hereinafter
defined), pursuant to that certain Lease Purchase Agreement of even date
herewith by and between the County, as landlord, and the Corporate Guarantor, as
tenant (the "Ground Lease").
2. The Corporate Guarantor is leasing a portion of Parcel N/Q (the
"Land") to the Borrower pursuant to that certain Lease Agreement of even date
herewith by and between the Corporate Guarantor, as landlord, and the Borrower,
as tenant (the "Sub-Lease"). The Borrower proposes to construct certain
improvements on the Land in accordance with the Plans and Specifications (as
hereinafter defined) consisting of a shell building and mezzanine, containing
58,733 square feet of space, more or less, certain systems in the building
shell, and the parking lot, sidewalks, driveways and landscaping (the
"Improvements"). Upon completion of the Improvements, the Property (as
hereinafter defined) shall be leased to MAGENTA Corporation (the "Affiliate")
pursuant to the terms of that certain Lease Agreement of even date herewith (the
"Facility Lease") by and between the Borrower, as landlord, and the Affiliate,
as tenant.
3. The Borrower has applied to the Lender for a loan (the "Loan") in
the principal sum of Four Million Six Hundred Fifty Thousand Dollars
($4,650,000) to be evidenced by the Borrower's Deed of Trust Note (the "Note")
of even date herewith to finance the construction of the Improvements.
4. The Note is secured by, among other things, a Leasehold Deed of
Trust, Assignment and Security Agreement of even date herewith (the "Deed of
Trust") from the Borrower, the Corporate Guarantor and the Affiliate in favor of
the Lender covering the Borrower's, the Corporate Guarantor's and the
Affiliate's interest in Parcel N/Q and the Improvements and such other real and
personal property as therein more particularly set forth (collectively, the
"Property").
5. The Lender has agreed to make the Loan upon the condition that this
Agreement be executed and delivered to assure the application of the net
proceeds of the Loan to (i) the costs of the construction of the Improvements in
accordance with the loan budget attached hereto as EXHIBIT
<PAGE> 2
A and incorporated herein by reference (as amended from time to time with the
approval of the Lender, the "Budget"); (ii) of acquiring the Property, (iii)
obtaining the Loan, (iv) leasing the building and all related activities,
including, without limitation, costs of all appraisals, inspections, studies and
investigations of the Property prior to the date hereof, title reports and
surveys, fees of architects, engineers, site planners and other consultants,
reasonable attorneys' fees (including those of Lender's counsel), all fees and
costs in connection with applying for and obtaining any permits and approvals,
(v) constructing the Improvements, (vi) the amount payable to the Borrower in
consideration for its option to purchase or lease the Land, (vii) reimbursements
to the Corporate Guarantor of amounts advanced to the Borrower by the Corporate
Guarantor, (viii) the Lender's commitment fee, and (ix) payments of interest
under the Note in such amounts as are set forth in the Budget, until the
Leasehold Improvement Commencement Date (as hereinafter defined).
NOW, THEREFORE, and in consideration of these presents, and in further
consideration of the mutual covenants and agreements herein set forth and of the
sum of Ten Dollars ($10.00) lawful money of the United States of America by each
of the parties to the other paid, receipt of which is hereby acknowledged, the
parties hereto do hereby covenant and agree as follows:
ARTICLE I. DEFINITIONS; RULES OF CONSTRUCTION.
Section I.1 Definitions. The Borrower and the Lender hereby
agree that, unless the context otherwise specifies or requires, the following
terms shall have the meanings herein specified, such definitions to be
applicable equally to the singular and the plural forms of such terms and to all
genders:
(a) "Architect" shall mean the architect named in the
Architect's Contract, if any, and his or its successors and permitted assigns.
(b) "Architect's Contract" shall mean collectively, the scope
of services agreement dated September 2, 1997 and the summary of fees dated
September 10, 1997, both by and between the Borrower, as owner and Gaudreau,
Inc., as architect, or any contract for architectural services relating the
construction of the Improvements made by the Borrower and an architect and
approved in writing by the Lender, as the same may be amended from time to time
with the prior written approval of the Lender.
(c) "Banking Day" shall mean any day that is not a Saturday,
Sunday or banking holiday in the State of Maryland.
(d) "BioReliance Loan" shall mean any loan now or hereafter
made to the Corporate Guarantor and/or the Affiliate in the principal amount as
may be mutually agreed upon by the Lender, the Corporate Guarantor and the
Affiliate for the purpose of constructing the Leasehold Improvements, as the
same may be amended, renewed, modified, increased or refinanced, from time to
time.
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<PAGE> 3
(e) "Commitment" shall mean the commitment letter from the
Lender to the Borrower and the Guarantors dated February 19, 1998.
(f) "Completion Date" shall mean the earlier of (i) July 31,
1998 or (ii) the date the Lender receives evidence satisfactory to the Lender in
all material respects that the Borrower has substantially completed the
Improvements in accordance with the Plans and Specifications.
(g) "Construction Contract" shall mean the construction
management agreement dated December 18, 1997 by and between the Borrower, as
owner, and The Whiting -Turner Contracting Company, as construction manager, or
any contract for the management of the construction of the Improvements made by
the Borrower and a construction manager and approved in writing by the Lender,
as the same may be amended from time to time with the prior written approval of
the Lender.
(h) "Construction Manager" shall mean the construction manager
named in the Construction Contract and his or its successors and permitted
assigns.
(i) "County" has the meaning set forth in the Recitals to this
Agreement.
(j) "Default" shall mean an event which, with the giving of
Notice or lapse of time, or both, would constitute an Event of Default under the
provisions of this Agreement.
(k) "Event(s) of Default" shall mean the occurrence of any one
or more of the events specified in Article VI of this Agreement and the
continuance of such event beyond the applicable grace and/or cure periods
therefor, if any, set forth in Article VI.
(l) "Force Majeure" shall mean events occasioned by strikes,
lock-outs, war or civil disturbance, natural disaster or acts of God which cause
a delay in the Borrower's performance of an obligation; provided, however, that
the Borrower must give Notice to the Lender within ten (10) days after the
Borrower's having knowledge of the occurrence of an event which it believes to
constitute an event of Force Majeure.
(m) "Governmental Authority or Authorities" shall mean any
governmental or quasi-governmental entity, including, without limitation, any
department, commission, board, bureau, agency, administration, service or other
instrumentality of any governmental entity.
(n) "Guarantors" means collectively the Corporate Guarantor
and Robert E. Buccini and David B. Pollin, and their respective, successors,
successors and assigns.
(o) "Hydric Soils" shall mean any soil category upon which
building would be prohibited or restricted under applicable governmental
requirements, including, without limitation, those imposed by the U.S.
Army Corps of Engineers.
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(p) "Improvements" has the meaning set forth in Recital 2 to
this Agreement.
(q) "Inspecting Engineer" shall mean such person or firm as
the Lender may from time to time appoint or designate for purposes related to
the inspection of the progress of the construction of the Improvements,
conformity of construction with the Plans and Specifications, and for such other
purposes as the Lender may from time to time deem appropriate or as may be
required by the terms of this Agreement.
(r) "Leasehold Improvements" shall mean all improvements now
or hereafter made to the Property the costs of which are advanced pursuant to
the BioReliance Loan.
(s) "Leasehold Improvement Completion Date" shall mean the
earlier of (i) the date which is twelve (12) months from the date hereof, or
(ii) the date the Lender receives a copy of a certificate of occupancy for the
Property issued by the County.
(t) "Loan Documents" shall mean the Commitment, this
Agreement, the Note, the Deed of Trust and any and all other documents which the
Borrower, the Guarantors or any other party or parties have executed and
delivered, or may hereafter execute and deliver, to evidence, secure or
guarantee the Obligations, or any part thereof, as the same may from time to
time be extended, amended, restated, supplemented or otherwise modified.
(u) "Notice" shall mean a written communication delivered by
hand, or sent by overnight courier, or by certified mail, postage prepaid,
return receipt requested, to the party to whom communication is to be given, at
the following addresses:
Borrower: BPG Industrial Partners II, LLC
Tavern Square, Suite 305
110 North Royal Street
Alexandria, Virginia 22314
Attn: Robert E. Buccini
with a copy to: Arent, Fox, Kintner, Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
Attn: Richard L. Brand, Esq.
Corporate
Guarantor: BioReliance Corporation
9900 Blackwell Road
Rockville, Maryland 20850
Attn: General Counsel
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<PAGE> 5
with a copy to: Shulman, Rogers, Gandal, Pordy & Ecker, P.A.
11921 Rockville Pike, 3rd Floor
Rockville, Maryland 20852
Attn: Rebecca Oshoway, Esquire
Lender: NationsBank, N.A.
6610 Rockledge Drive, Third Floor
Bethesda, Maryland 20817
Attn: Elizabeth F. Shore
with a copy to Ober, Kaler, Grimes & Shriver, P.C.
1401 H Street, N.W., Suite 500
Washington, D.C. 20005
Attn: Richard M. Pollak, Esq.
or at such other address as any party shall have notified the others in the
manner set forth in this definition. The Lender will contemporaneously send
copies of all written notices sent to the Borrower hereunder to the Corporate
Guarantor.
(v) "Obligations" shall mean all present and future debts,
obligations and liabilities of the Borrower to the Lender arising pursuant to,
and/or on account of, the provisions of this Agreement, the Note, the
BioReliance Loan and any of the other Loan Documents, including, without
limitation, the obligation (i) to pay all principal (including, again without
limitation, any principal advanced after the date of the Deed of Trust and any
principal that is repaid and readvanced), interest, late charges and prepayment
premiums (if any) due at any time under the Note; (ii) to pay all Expenses (as
defined in the Deed of Trust), indemnification payments and other sums due at
any time under the Deed of Trust, together with interest thereon as provided in
Section 4.17 of the Deed of Trust; and (iii) to perform, observe and comply with
all of the terms, covenants and conditions, expressed or implied, which the
Borrower is required to perform, observe or comply with pursuant to the terms of
the Deed of Trust or any of the other Loan Documents.
(w) "Person" shall mean an individual, a corporation, a
partnership, a joint venture, a trust, a limited liability company, an
unincorporated association, any Governmental Authority or any other entity.
(x) "Plans and Specifications" shall mean (i) the
architectural and structural plans entitled "Magenta Corporation, Shady Grove
Life Science Center, Rockville, Maryland," dated November 17, 1997, prepared by
Gaudreau, Inc. and Faisant Associates, Inc., and (ii) specifications entitled
"Project Manual for Magenta Corporation, Shady Grove Life Sciences Center,
Rockville Maryland," dated November 17, 1997, prepared by Gaudreau, Inc. and
Faisant Associates, Inc., as each of the same may be modified with the prior
written approval of the Lender. For purposes of determining whether the
Improvements have been completed in substantial accordance with the
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<PAGE> 6
Plans and Specifications, the Plans and Specifications shall not be deemed to
include the items set forth in Schedule A attached hereto and incorporated
herein by this reference.
(y) "Survey" shall mean a plat of the Land which clearly
designates at least (i) the location of the perimeter of the Land by courses and
distances; (ii) the location of all easements, rights-of-way, alleys, streams,
waters, paths and encroachments; (iii) the location of all building restriction
lines and set-backs, however established; (iv) the location of any streets or
roadways abutting the Land; and (v) the then "as-built" location of the
Improvements and the relation of the Improvements by courses and distances to
the perimeter of the Land, building restriction lines and set-backs, all in
conformity with the Minimum Standard Detail Requirements for Land Title Surveys
adopted by the American Congress on Surveying and Mapping (1988 Edition).
(z) "Taxes" shall mean all taxes and assessments whether
general or special, ordinary or extraordinary, or foreseen or unforeseen, which
at any time may be assessed, levied, confirmed or imposed on the Borrower or on
any of its properties or assets or any part thereof or in respect of any of its
franchises, businesses, income or profits.
Section I.2 Rules of Construction. The words "hereof",
"herein", "hereunder", "hereto", and other words of similar import refer to this
Agreement in its entirety. The terms "agree" and "agreements" mean and include
"covenant" and "covenants". The headings of this Agreement are for convenience
only and shall not define or limit the provisions hereof. All references (a)
made in the neuter, masculine or feminine gender shall be deemed to have been
made in all such genders, (b) made in the singular or plural number shall be
deemed to have been made, respectively, in the plural or singular number as
well, (c) to the Land, the Improvements or the Property shall mean all or any
portion of each of the foregoing, respectively, and (d) to Section numbers are
to the respective Sections contained in this Agreement unless expressly
indicated otherwise. All capitalized terms used herein and not otherwise defined
shall have the meanings given to such terms in the Deed of Trust.
ARTICLE II. THE LOAN ADVANCES.
Section II.1 The Loan. The Lender agrees to lend to the
Borrower, subject to the terms and conditions herein set forth and in accordance
with the Budget, sums in the aggregate not in excess of the Loan amount.
Interest shall accrue and be payable only on sums advanced hereunder for the
period of time outstanding.
Section II.2 Purpose. The Loan shall be advanced by the Lender
in accordance with the terms of this Agreement to pay those expenses related to
the Loan and the Property described in the Budget. With the prior approval of
the Lender and the Corporate Guarantor, any cost savings, actual or estimated,
affecting any approved Budget category, other than the interest reserve, may be
reallocated by the Borrower to any other approved expense related to the Loan or
the Property. Upon completion of the Improvements and the payment of all costs
in connection therewith, any undisbursed Loan proceeds shall be allocated to the
interest reserve or to such other
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<PAGE> 7
Budget category as the Lender and the Corporate Guarantor shall approve. Each
disbursement from the contingency reserve, if any, shall be subject to approval
by the Lender and the Corporate Guarantor as to the amount and purpose for which
such disbursement will be used.
Section II.3 Requisitions. Advances shall be made not more
frequently than monthly on requisitions in the form approved by the Lender
signed by David B. Pollin or Robert E. Buccini on behalf of the Borrower and
approved by the Corporate Guarantor and by or on behalf of the Lender, showing
the percentage of completion and setting forth in trade breakdown form and in
such detail as may be required by the Lender the amounts expended and/or costs
incurred for work done and necessary materials incorporated in the Improvements.
The requisition shall also show the percentage of completion of each line item
on the Borrower's cost breakdown approved by the Lender. The Borrower shall
submit with each requisition a statement that the work completed to the date of
such requisition is of quality consistent with the Plans and Specifications. In
addition, at the time of each request by the Borrower for an advance of a
portion of the Loan proceeds with respect to indirect costs related to the Loan
or the Improvements, the Borrower shall furnish to the Lender such additional
information (such as paid receipts, invoices, statements of accounts, etc.) as
the Lender may reasonably require to assure that amounts requisitioned are to be
used to reimburse the Borrower for costs previously paid by the Borrower or to
pay costs incurred by the Borrower which are due and owing. Advances for direct
construction costs (other than the last advance and for any contracts for less
than $50,000 or for the steel) shall be not more than ninety five percent (95%)
of the amount requisitioned. The final holdback of the direct costs of
construction will be retained until each of the conditions precedent to the
final advance of the Loan proceeds set forth in Section 2.06 hereof shall have
been satisfied to the complete satisfaction of the Lender; provided, however,
that the holdback on any subcontractor, laborer or materialman who has completed
his work or services; whose work or services has been accepted and approved by
the Lender; and who has delivered to the Lender a final waiver of liens, may be
requisitioned by the Borrower and disbursed at the discretion of the Lender. All
advances for indirect expenses related to the Loan or the Improvements and made
in accordance with the Budget or otherwise approved by the Lender and the
Corporate Guarantor, or for contracts for less than $50,000, or for the steel,
shall, be in an amount equal to one hundred percent (100%) of the sum
requisitioned. The Lender shall have a period of five (5) Banking Days within
which to fund each approved requisition.
Section II.4 Conditions Precedent to First Advance. The
following shall be conditions precedent to the first advance of the Loan
proceeds:
(a) The Note, the Deed of Trust and the other Loan Documents
shall have been properly executed and delivered to the Lender, the Deed of Trust
shall be acknowledged and recorded in the appropriate public office or delivered
to a representative of the title company for recording and payment shall have
been made for all conveyancing and recording in connection with the settlement
of the Loan, and for any transfer or documentary stamp taxes due under any
federal, state or municipal law.
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(b) The Lender shall have received a paid policy of title
insurance (American Land Title Association Standard Form "B" Loan Policy -
Current Edition) or a valid and enforceable commitment to issue the same,
together with such reinsurance agreements and direct access agreements as may be
required by the Lender, from a company satisfactory to the Lender in the amount
of the Loan and which may be endorsed or assigned to the successors and assigns
of the Lender without additional cost, insuring the lien of the Deed of Trust to
be a valid first lien on the Property, free and clear of all defects, exceptions
and encumbrances except such as the Lender and its counsel shall have approved.
(c) The Lender shall have received all policies of insurance
required by the terms hereof and by the other Loan Documents to be in effect
from a company or companies and in form and amount satisfactory to the Lender,
including without limitation, flood insurance (in the amount of the Loan or the
maximum limit of coverage available on the Property, whichever is less or
evidence that flood insurance is not available or otherwise required with
respect to the Property), together with written evidence, in form and substance
satisfactory to the Lender, that all fees and premiums due on account thereof
have been paid in full.
(d) The Lender shall have received and approved an appraisal
of the Property.
(e) The Lender shall have received from the Borrower a
complete set of the Plans and Specifications signed and sealed by the Architect,
together with written evidence, in form and substance satisfactory to the
Lender, to the effect that the Plans and Specifications are satisfactory to the
Borrower, the Construction Manager, the Inspecting Engineer and, to the extent
required by applicable law or any effective restrictive covenant, have been
approved by all Governmental Authorities having or claiming jurisdiction and by
the beneficiary of any such restrictive covenant, respectively.
(f) The Lender shall have received and approved a fully
executed copy of the Construction Contract, the Architect's Contract and of all
executed subcontracts as well as any information regarding the Construction
Manager, the Architect or any subcontractor which the Lender has requested.
(g) The Lender shall have received and approved fully executed
copies of the Ground Lease, the Sub-Lease and the Facility Lease.
(h) The Lender shall have received and approved a copy of a
current Survey of the Land certified to the Lender and to the title insurance
company and any recorded subdivision plat of the Land.
(i) The Lender shall have received and approved a site plan
for the Improvements approved by all appropriate Governmental Authorities.
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<PAGE> 9
(j) The Lender shall have received and approved in its
reasonable discretion a cost breakdown in trade form showing, if available,
subcontractors and material suppliers.
(k) The Lender shall have received and approved evidence that
the Construction Manager carries public liability and property damage insurance
and workers' compensation insurance in form, amounts and issued by companies
acceptable to the Lender.
(l) The Lender shall have received and approved an
environmental audit of the Property prepared by a person or firm acceptable to
the Lender.
(m) The Lender shall have received and approved soil reports
which shall (i) demonstrate that the soil conditions of the Land are suitable
for the construction of the Improvements and (ii) evidence to the Lender's
satisfaction that there are no Hydric Soils on the Land.
(n) The Lender shall have received and approved performance
and labor and material payment bonds covering those major subcontractors
designated by the Lender, from a corporate surety acceptable to the Lender and
in dual obligee form, naming the Lender as dual obligee, together with written
evidence, in form and substance satisfactory to the Lender that all fees and
premiums due on account thereof have been paid in full.
(o) The Lender shall have received and approved a copy of the
Borrower's fully executed Operating Agreement and a copy of the recorded
Articles of Organization.
(p) The Lender shall have received and approved a certificate
executed by all of the members of the Borrower authorizing the execution and
delivery of the Loan Documents and consenting to the Loan.
(q) The Lender shall have received and approved an opinion of
counsel for the Borrower as to the Borrower's good standing, form, powers and
authority and as to the validity, binding effect and enforceability of the Loan
Documents.
Section II.5 Conditions Precedent to All Advances. The Lender
shall not be obligated to make any advance of the Loan proceeds unless the
conditions described in Section 2.04 and the following additional conditions
shall have been satisfied:
(a) Until such time as the title insurance company issues
endorsements for the full amount of the Loan, the Lender shall have received a
notice of title continuation or an endorsement to the title insurance policy
theretofore delivered, indicating that since the last preceding advance, there
has been no change in the status of title and no other exceptions not
theretofore approved by the Lender, which endorsement shall have the effect of
advancing the effective date of the policy to the date of the advance then being
made and increasing the coverage
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of the policy by an amount equal to the advance then being made if the policy
does not by its terms provide for such an increase.
(b) No Event of Default shall have occurred and is continuing
under the Note or any of the other Loan Documents.
(c) The Improvements shall not have been materially damaged by
fire or other casualty unless the Lender shall have received proceeds of
insurance sufficient in the judgment of the Lender to effect a satisfactory
restoration of the Improvements in accordance with the terms of the Deed of
Trust.
(d) The Lender shall be satisfied in its reasonable
discretion, based upon the advice of the Inspecting Engineer, that the
Improvements can be completed by a date no later than the Completion Date with
the balance of the Loan proceeds then held by the Lender and available for
advance pursuant to the terms of this Agreement and other funds which the Lender
is reasonably satisfied are available to the Borrower.
(e) The representations and warranties made in Article III of
this Agreement shall be true and correct on and as of the date of the advance
with the same effect as if made on such date.
(f) All terms and conditions of the Loan Documents required to
be met as of the date of the applicable advance shall have been met to the
complete satisfaction of the Lender in its reasonable discretion.
(g) In the reasonable judgment of the Lender, all work
completed at the time of the application for an advance has been performed in a
good and workmanlike manner and all materials and fixtures usually furnished and
installed at that stage of construction have been furnished and installed.
Section II.6 Conditions Precedent to Final Advance. The Lender
shall not be obligated to make the final advance of the Loan proceeds unless the
following additional conditions shall have been satisfied:
(a) The Lender shall have received the final "as built"
Survey.
(b) The Lender shall have received written confirmation from
the Corporate Guarantor that the Improvements have been accepted in accordance
with the terms of the Facility Lease.
(c) The Lender shall have received written confirmation from
the Inspecting Engineer that the Improvements have been substantially completed
in accordance with the Plans and Specifications.
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(d) All terms and conditions of the Loan Documents required to
be met as of the date of the final advance of the Loan proceeds shall have been
met to the complete satisfaction of the Lender in its reasonable discretion.
(e) All final waivers of liens of the Construction Manager and
subcontractors, have been furnished to the Lender or, as to any disputed lien or
claim of lien, a bond in form and substance acceptable to the Lender has been
provided or sufficient funds to cover it are placed in escrow with an escrow
agent satisfactory to the Lender.
Section II.7 Releases of Liens. Before making any advance of
the Loan proceeds, the Lender may require the Borrower to obtain from the
Construction Manager and from all subcontractors acknowledgments of payment and
releases of liens and rights to claim liens for work performed or materials
delivered through the date of the last preceding advance and concurrently with
the final advance. All such acknowledgments and releases shall be in form and
substance satisfactory to the Lender and the title insurance company.
Section II.8 Trust Funds. The Borrower will receive the
advances to be made hereunder and will hold the same as a trust fund for the
purpose of paying the costs of the Improvements in accordance with the Budget
and the Borrower agrees not to expend any part of the proceeds of the Loan for
any purpose except in connection with the uses and purposes provided for in this
Agreement without the prior written consent of the Lender.
Section II.9 Advances to Others for the Account of the
Borrower. At the option of the Lender, the Lender may apply amounts due
hereunder to the satisfaction of the conditions of the Loan Documents and any
amounts so applied shall be part of the Loan and shall be secured by the Deed of
Trust. At the option of the Lender, and without limiting the generality of the
foregoing, the Lender may pay directly from the Loan proceeds all interest bills
rendered by the Lender in connection with the Loan, and following the occurrence
of an uncured Event of Default may make advances directly to the Construction
Manager, the title insurance company, any subcontractor or materialman, or to
any of them jointly, and the execution hereof by the Borrower shall, and hereby
does, constitute an irrevocable authorization to so advance the proceeds of the
Loan. No further direction or authorization from the Borrower shall be necessary
to warrant such direct advances and all such advances shall satisfy pro tanto
the obligations of the Lender hereunder and shall be secured by the Deed of
Trust as fully as if made to the Borrower, regardless of the disposition thereof
by the party or parties to whom such advance is made.
Section II.10. Additional Funds. If at any time the unpaid
costs, both direct and indirect costs and calculated on a line item by line item
basis, necessary to complete the construction of the Improvements exceed the
undisbursed balance of the Loan or of any line item in the Budget, as determined
by the Lender in the reasonable exercise of its discretion, the Borrower shall
provide from sources other than the Loan the funds necessary to pay the total
costs or the costs of the line item in the Budget which exceed the amount
budgeted, as the case may be. The Borrower shall deposit with the Lender from
time to time such amounts in excess of the Loan proceeds as may be
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required to pay these costs (the "Deposit"). In making advances under this
Agreement, the Lender shall draw first upon the Deposit until such sums are
exhausted, and then upon the proceeds of the Loan.
Section II.11. Assignments. The Borrower agrees not to
transfer, assign, pledge or hypothecate any right or interest in any payment or
advance due pursuant to this Agreement, or any of the other benefits of this
Agreement, without the prior written consent of the Lender. Any assignment made
or attempted by the Borrower without the prior written consent of the Lender
shall be void and of no effect. No consent by the Lender to an assignment by the
Borrower shall release the Borrower as the party primarily obligated and liable
under the terms of this Agreement unless the Borrower shall be released
specifically by the Lender in writing. No consent by the Lender to an assignment
shall be deemed to be a waiver of the requirement of prior written consent by
the Lender with respect to each and every further assignment and as a condition
precedent to the effectiveness of such assignment.
Section II.12. Liability of the Lender. The Lender shall in no
event be responsible or liable to any person other than the Borrower and the
Corporate Guarantor for the disbursement of or failure to disburse the Loan
proceeds or any part thereof and neither the Construction Manager nor any
subcontractor, laborer or material supplier shall have any right or claim
against the Lender under this Agreement or the administration thereof.
ARTICLE III. REPRESENTATIONS AND WARRANTIES.
Section III.1 Organization, Power and Authority. The Borrower
represents and warrants that the Borrower is a limited liability company duly
organized and validly existing and in good standing under the laws of the State
of Maryland, has the power and authority to consummate the transactions
contemplated hereby, and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the Loan Documents.
Section III.2 Compliance in Zoning. The Borrower represents
and warrants that the anticipated use of the Property complies with applicable
zoning ordinances, regulations and restrictive covenants affecting the Land, all
use requirements of any Governmental Authority having jurisdiction have been
satisfied, and no violation of any law or regulation exists with respect
thereto.
Section III.3 Plans and Specifications. The Borrower
represents and warrants that to the extent required by applicable law or any
effective restrictive covenant the Plans and Specifications have been approved
by all Governmental Authorities having or claiming jurisdiction and by the
beneficiary of any such restrictive covenant.
Section III.4 Building Permits; Other Permits. The Borrower
represents and warrants that all building, construction and other permits
necessary or required in connection with
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the construction of the Improvements have been validly issued and all fees and
bonds required in connection therewith have been paid or posted, as the
circumstances may require.
Section III.5 Utilities. The Borrower represents and warrants
that all utility services necessary for the construction of the Improvements and
the operation thereof for their intended purpose are available, or will be
available when needed, at the boundaries of Parcel N/Q, including, without
limitation, telephone service, water supply, storm and sanitary sewer
facilities, natural gas and electric facilities.
Section III.6 Other Liens. The Borrower represents and
warrants that except as otherwise provided in the Loan Documents, the Borrower
has made no contract or arrangement of any kind the performance of which by the
other party thereto would give rise to a lien on the Property.
Section III.7 Financial Statements. The Borrower represents
and warrants that the financial statements, if any, heretofore delivered to the
Lender are true and correct in all respects, have been prepared in accordance
with generally accepted accounting practices consistently applied, and fairly
present the respective financial conditions of the subjects thereof as of the
respective dates thereof. No material adverse change has occurred in the
financial conditions reflected therein since the respective dates thereof and no
material additional liabilities have been incurred by the Borrower since the
date thereof other than the borrowings contemplated herein or as approved in
writing by the Lender.
Section III.8 Defaults. The Borrower represents and warrants
that there is no default on the part of the Borrower under the Loan Documents
and no event has occurred and is continuing which, with notice or the passage of
time, or both, would constitute a default under the Note or any of the other
Loan Documents.
Section III.9 Permits. The Borrower represents and warrants
that all building, construction and other permits required in connection with
the construction of the Improvements have been validly issued, that all fees and
bonds required in connection therewith (if any) have been paid in full or
posted, as the circumstances may require, and that the Improvements meet zoning
requirements and all sewer and storm drain requirements.
Section III.10 Affirmation of Representations and Warranties.
Each requisition, or the receipt of the funds requested thereby, shall
constitute an affirmation that the foregoing representations and warranties of
the Borrower are true and correct as of the date thereof and, unless the Lender
is notified to the contrary prior to the disbursement of the advance
requisitioned, will be so on the date thereof.
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ARTICLE IV. AFFIRMATIVE COVENANTS AND AGREEMENTS.
Section IV.1 Construction. The Borrower shall continue to
construct the Improvements upon the Land and will prosecute the same in good
faith with diligence and continuity in accordance with the Plans and
Specifications.
Section IV.2 Approval of Construction. The Plans and
Specifications have been approved by the Lender and, to the extent required by
applicable law or any effective restrictive covenant, by all Governmental
Authorities having or claiming jurisdiction and by the beneficiary of any such
restrictive covenant, and all building, construction and other permits necessary
or required in connection with the construction of the Improvements have been
validly issued and all fees and bonds required in connection therewith have been
paid or posted, as the circumstances may require.
Section IV.3 Completion of Construction. Construction of the
Improvements shall be completed by the Borrower on or before the Completion
Date, free and clear of all liens and claims of liens for materials supplied and
for services or labor performed in connection with the construction of the
Improvements.
Section IV.4 Compliance with Laws; Encroachments. The
Improvements shall be constructed in accordance with all applicable (whether
present or future) laws, ordinances, rules, regulations, requirements and orders
of any Governmental Authority having or claiming jurisdiction. The Improvements
shall be constructed entirely on the Land and shall not encroach upon any
easement or right-of-way, or upon the land of others. Construction of the
Improvements shall occur wholly within all applicable building restriction lines
and set-backs, however established, and shall be in strict compliance with all
applicable use or other restrictions and the provisions of any prior agreements,
declarations, covenants and all applicable zoning and subdivision ordinances and
regulations.
Section IV.5 Surveys. Upon the completion of the construction
of the Improvements, the Borrower shall furnish the Lender with a Survey with a
current certification to the Lender by a registered land surveyor of the
jurisdiction in which the Land is located. At the times the Borrower is required
to furnish a Survey to the Lender pursuant to the terms of this Agreement, the
Borrower shall also furnish an original print thereof to the title insurance
company and such Survey shall not be sufficient for the purposes of this
Agreement unless and until the title insurance company shall advise the Lender,
by endorsement to the title insurance policy or otherwise, that the Survey
discloses no violations, encroachments or other variances from applicable
set-backs or other restrictions except such as the Lender and its counsel shall
approve.
Section IV.6 Inspections; Cooperation; Payment of Inspecting
Engineer. The Borrower shall permit the Lender and its duly authorized
representatives (including, without limitation, the Inspecting Engineer) to
enter upon the Land, to inspect the Improvements and any and all materials to be
used in connection with the construction of the Improvements, to examine all
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detailed plans and shop drawings and similar materials as well as all records
and books of account maintained by or on behalf of the Borrower relating thereto
and to discuss the affairs, finances and accounts pertaining to the Loan and the
Improvements with representatives of the Borrower. The Borrower shall at all
times cooperate and instruct the Construction Manager and each and every one of
its subcontractors and materialmen to cooperate with the Lender and its duly
authorized representatives (including, without limitation, the Inspecting
Engineer) in connection with or in aid of the performance of the Lender's
functions under this Agreement. The fees of any Inspecting Engineer engaged or
employed by the Lender in connection with or in aid of the performance of the
Lender's functions under this Agreement shall be paid by the Borrower, provided
however that the Inspecting Engineer's fee will not exceed $2,500 and the
Lender's fees will not exceed an initial fee of $2,000 and $350 at the time of
each requisition under the Loan.
Section IV.7 Vouchers and Receipts. The Borrower shall furnish
to the Lender, promptly on demand, any contracts, bills of sale, statements,
receipted vouchers or agreements pursuant to which the Borrower has any claim of
title to any materials, fixtures or other articles delivered or to be delivered
to the Land or incorporated or to be incorporated into the Improvements. The
Borrower shall furnish to the Lender, promptly on demand, a verified written
statement, in such form and detail as the Lender may require, showing all
amounts paid for labor and materials and all items of labor and materials
furnished or to be furnished for which payment has not been made and the amounts
to be paid therefor.
Section IV.8 Payments for Labor and Materials. The Borrower
shall pay when due all bills for services or labor performed and materials
supplied in connection with the construction of the Improvements. In the event
any mechanics' lien or other lien or encumbrance shall be filed or attached
against the Property without the prior written consent of the Lender in each
instance, the Borrower covenants and agrees that, within twenty (20) days after
the filing of such lien, the Borrower will promptly discharge the same by
payment or filing bond or otherwise as permitted by law; and if the Borrower
fails to do so, the Lender may, at its option, in addition to, and not in
limitation of, all other rights and remedies of the Lender in the Event of
Default by the Borrower, and without regard to the priority of said mechanics'
lien or other lien or encumbrance, pay the same, and all amounts expended by the
Lender for such purpose shall constitute loans to the Borrower and shall be
secured by the Deed of Trust and the other Loan Documents, and be due and
payable forthwith by the Borrower to the Lender with interest thereon at the
Reimbursement Rate provided for in the Deed of Trust.
Section IV.9 Correction of Construction Defects. Promptly
following any demand by the Lender, the Borrower shall correct or cause the
correction of any structural defects in the Improvements and any material
departures or deviations from the Plans and Specifications not approved in
writing by the Lender.
Section IV.10. Insurance. The Borrower shall, or shall cause
the Corporate Guarantor or the Affiliate, to, provide or cause to be provided to
the Lender, and shall maintain in full force and effect at all times during the
term of the Loan, all of the insurance required under the
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Ground Lease, the Sub-Lease and the Facility Lease, at no cost or expense to the
Lender. In addition, such insurance will meet the following requirements:
(a) Unless otherwise agreed in writing by the Lender, all
Casualty (as defined in the Deed of Trust) insurance, shall be for the greater
of (i) the full insurable value of the Property, or (ii) the full principal
amount of the Loan. The deductible amount under such policy or policies shall
not exceed $25,000. No policy of insurance shall be written such that the
proceeds thereof will produce less than the minimum coverage required by this
reason of co-insurance provisions or otherwise. The term "full insurable value"
means the actual replacement cost of the Property (excluding foundation and
excavation costs and costs of underground flues, pipes, drains and other
uninsurable items).
(b) All liability insurance, shall name the Lender as an
additional insured. In addition, the Borrower will obtain and keep in force such
other and further insurance as may be reasonably required from time to time by
the Lender in order to comply with regular requirements and practices of the
Lender in similar transactions.
Each policy of insurance shall (i) be issued by one or more recognized,
financially sound and responsible insurance companies approved by the Lender, in
its reasonable discretion and which are qualified or authorized by the Laws of
the State to assume the risks covered by such policy, (ii) with respect to the
insurance described under the preceding subsections (a) and (b), have attached
thereto standard non-contributing, non-reporting mortgagee clauses in favor of
and entitling the Lender without contribution to collect any and all proceeds
payable under such insurance, (iii) provide that such policy shall not be
canceled or modified without at least forty five (45) days prior written notice
to the Lender and (iv) provide that any loss otherwise payable thereunder shall
be payable notwithstanding any act or negligence of the Borrower or the
Corporate Guarantor which might, absent such agreement, result in a forfeiture
of all or a part of such insurance payment. The Borrower shall promptly pay all
premiums when due on such insurance and, not less than thirty (30) days prior to
the expiration dates of each such policy, the Borrower will deliver to the
Lender a renewal policy or policies marked "premium paid" or accompanied by
other evidence of payment satisfactory to the Lender. The Borrower will
immediately give the Lender Notice of any cancellation of, or change in, any
insurance policy. The Lender shall not, because of accepting, rejecting,
approving or obtaining insurance, incur any liability for (i) the existence,
nonexistence, form or legal sufficiency thereof, (ii) the solvency of any
insurer, or (iii) the payment of losses. The Lender acknowledges that the
insurance currently being maintained by the Borrower and the Corporate Guarantor
is, as of the date hereof, acceptable to the Lender.
Section IV.11. Flood Insurance. If required by applicable law
or regulation, the Borrower shall provide or cause to be provided to the Lender
a separate policy of flood insurance in the amount of the Loan or the maximum
limit of coverage available with respect to the Property, whichever is the
lesser, from a company or companies satisfactory to the Lender and written in
strict conformity with the Flood Disaster Protection Act of 1973, as amended,
and all applicable regulations adopted pursuant thereto. In the event that flood
insurance is not required by applicable
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law or regulation to be provided in connection with the Loan or is not otherwise
available with respect to the Property, the Borrower shall supply the Lender
with written evidence, in form and substance satisfactory to the Lender, to that
effect. Any such policy shall provide that the policy may not be surrendered,
canceled or substantially modified (including, without limitation, cancellation
for non-payment of premiums) without at least thirty (30) days' prior written
notice to any and all insureds named therein, including the Lender.
Section IV.12. Fees and Expenses; Indemnity. Except as
otherwise limited by this Agreement, the Borrower shall pay all fees, charges,
costs and expenses required to satisfy the conditions of the Loan Documents. The
Borrower shall hold the Lender harmless and indemnify the Lender against all
claims of brokers and "finders" arising by reason of the execution and delivery
of the Loan Documents or the consummation of the transaction contemplated
hereby.
Section IV.13. Copies of Notices. Promptly following the
giving or receipt by the Borrower of any notice given to or received from the
Construction Manager or any subcontractor or materialman with respect to the
Property, if such notice concerns any default or failure to perform by any
party, or relates to any matter requiring the Lender's approval under this
Agreement, the Borrower shall forward to the Lender copies of any such notice.
Section IV.14. BioReliance Loan. At the time of the making of
the BioReliance Loan, the Borrower agrees to join as a grantor (on a
non-recourse basis) in any deed of trust, assignment and security agreement and
related documents, prepared by the Lender to secure repayment of the BioReliance
Loan. All of such documents will be satisfactory to the Borrower in its
reasonable discretion, provided, that the Borrower shall not unreasonably delay
or condition its consent to such documents.
Section IV.15. Facility Lease Payments. The payments under the
Facility Lease shall always be in an amount sufficient to pay all of the
Borrower's Obligations as and when the same are due and payable.
Section IV.16. Books and Records. The Borrower will keep and
maintain full and accurate records and books administered in accordance with
generally accepted accounting principles, consistently applied, showing in
detail the earnings and expenses of the Property and the operation thereof. The
Borrower shall permit the Lender, or any Person authorized by the Lender, to
inspect and examine such records and books (regardless of where maintained) and
all supporting vouchers and data and to make copies and extracts therefrom at
all reasonable times and as often as may be requested by the Lender. In
addition, the Borrower shall furnish the following information at the following
times:
(a) As soon as available, but in no event more than one
hundred twenty five (125) days after the close of each of the Borrower's fiscal
years, copies of all the Borrower's federal tax returns and schedules thereto,
in form and detail satisfactory to the Lender, prepared in
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accordance with generally accepted accounting principles, consistently applied,
and certified by an officer of the Borrower to the Lender.
(b) With reasonable promptness, such additional information,
reports, or statements as the Beneficiary may from time to time reasonably
request.
All such financial items must be in form and detail acceptable to the Lender and
certified as to accuracy by the Borrower.
Section IV.17. Compliance with Leases. Borrower shall comply
with all material terms of the Sub-Lease and the Facility Lease and will not
modify either of these leases without the Lender's prior written consent.
ARTICLE V. NEGATIVE COVENANTS.
Section V.1 Other Liens; Transfers; "Due-on-Sale"; etc. The
Borrower shall not, without the prior written consent of the Lender, create or
permit to be created or remain with respect to the Property or any part thereof
or income therefrom, any mortgage, pledge, lien, encumbrance or charge, or
security interest, or conditional sale or other title retention agreement,
whether prior or subordinate to the lien of the Loan Documents, other than the
Facility Lease, in connection with the Loan Documents or as otherwise provided
or permitted therein, provided, however, after the Completion Date, the Borrower
may assign its interest as lessee in the Sub-Lease and/or its interest as a
lessor in the Facility Lease to a third party acceptable to the Lender in its
reasonable discretion, provided such assignment is made subject to lien of the
Deed of Trust, and further provided that the assignee assumes all of the
Borrower's Obligations under the Loan Documents pursuant to a written agreement
acceptable to the Lender in all material respects. Except as provided above, or
for any grant, conveyance, sale, assignment or transfer in the ordinary course
of the Borrower's business and which is specifically conditioned upon the
release of record of the lien of the Deed of Trust and the other Loan Documents
as to that portion of the Property granted, conveyed, sold, assigned or
transferred, the Borrower shall not, without the prior written consent of the
Lender, make, create, permit or consent to any conveyance, sale, assignment or
transfer of the Property or any part thereof, other than in connection with the
Loan Documents or as otherwise provided or permitted therein.
Section V.2 Impairment of Security. The Borrower shall take no
action which shall impair in any manner the value of the Property or the
validity, priority or security of the Deed of Trust.
Section V.3 Conditional Sales. The Borrower shall not
incorporate in the Improvements any property acquired under a conditional sales
contract, or lease, or as to which the vendor retains title or a security
interest, without the prior written consent of the Lender.
Section V.4 Changes to Plans and Specifications. The Borrower
shall not permit any material changes in the Plans and Specifications,
including, without limitation, any change by
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altering or adding to the work to be performed, orders for extra work, any
change which will result in a material net construction cost increase or a
material net cumulative construction cost decrease, or any change in the design
concept for the Improvements, without the prior written consent of the Lender
and under such reasonable conditions as the Lender may then establish.
Section V.5 Bonds. The Borrower shall not do or permit to be
done anything that would affect the coverage or indemnities provided for
pursuant to the provisions of any performance bond, labor and material payment
bond or any other bond required pursuant to the provisions of the Loan
Documents.
Section V.6 Construction Contract; Construction Management.
The Borrower shall not execute any contract or agreement or become a party to
any arrangement for the construction of the Improvements or for construction
management services with respect to the Property without the prior written
consent of the Lender.
ARTICLE VI. EVENTS OF DEFAULT.
The terms "Event(s) of Default", as used in this Agreement shall mean
the occurrence or happening, from time to time, of any one or more of the
following:
Section VI.1 Defaults Under Other Loan Documents. Any Event of
Default (as defined therein) shall occur under the Note or any of the other Loan
Documents.
Section VI.2 Representations and Warranties. Any material
representation or warranty contained in this Agreement, or in any other
document, certificate or opinion delivered to the Lender in connection with the
Loan, shall prove at any time to be incorrect or misleading in any material
respect either on the date when made or on the date when reaffirmed pursuant to
Article III of this Agreement.
Section VI.3 Compliance with Covenants. The Borrower shall
fail to comply with the terms of any covenant or agreement contained in this
Agreement and such failure shall continue uncured for a period of thirty (30)
days after Notice from the Lender to the Borrower, unless (a) the nature of the
failure is such that it cannot be cured within the thirty (30) day period, (b)
the Borrower institutes corrective action within the thirty (30) day period, and
(c) the Borrower completes the cure within a period of an additional sixty (60)
days.
Section VI.4 Progress of Construction. Except for delays
caused by Force Majeure, construction of the Improvements is not carried on in
good faith and with reasonable dispatch or is abandoned or discontinued for a
period of more than thirty (30) consecutive days.
Section VI.5 Conditions Precedent to Any Advance. Except for
delays caused by Force Majeure, the Borrower shall be unable to satisfy any
condition precedent to its right to receive an advance of the Loan proceeds for
a period in excess of thirty (30) days.
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Section VI.6 Completion of Construction. Except for delays
caused by Force Majeure, the Improvements, in the exclusive judgment of the
Lender, are not or cannot be completed on or before the Completion Date.
Section VI.7 Mechanic's Lien. A lien for the performance of
work or the supply of materials which is perfected against the Land remains
unsatisfied or unbonded for a period of twenty (20) days after the date of
perfection.
Section VI.8 Survey Matters. Any Survey required by the Lender
during the period of construction shows any matters not approved by the Lender
and such matters not approved are not removed within thirty (30) days after
Notice thereof by the Lender to the Borrower, unless (a) the nature of the
failure is such that it cannot be cured within the thirty (30) day period, (b)
the Borrower institutes corrective action within the thirty (30) day period, and
(c) the Borrower completes the cure within a period of an additional sixty (60)
days.
Section VI.9 Construction Manager Default. The Construction
Manager shall have defaulted under the Construction Contract, which default the
Lender, in its sole discretion, shall deem substantial, and the Borrower, after
fifteen (15) days Notice from the Lender, shall fail to exercise any resulting
right or remedy to which it may be entitled thereunder or hire a replacement
construction manager acceptable to the Corporate Guarantor and the Lender.
Section VI.10 BioReliance Loan Default A default shall occur
and remain uncured beyond any applicable cure period under the BioReliance Loan
if and when such loan is made, provided that the Borrower is given notice of any
such default and the same opportunity to cure such default as the Lender
provides to the borrower under the BioReliance Loan.
ARTICLE VII. REMEDIES ON DEFAULT.
Section VII.1 Remedies on Default. The Lender shall have the
right, upon the happening of any Event of Default, to terminate this Agreement
by Notice to the Borrower and, in addition to any rights or remedies available
to it under the Deed of Trust or any of the other Loan Documents, to enter into
possession of the Property and perform any and all work and labor necessary to
complete the construction of the Improvements (whether or not in accordance with
the Plans and Specifications) and to employ watchmen to protect the Property and
the Improvements, provided, however, that prior to taking any action to complete
the Improvements, the Lender will notify the Corporate Guarantor and the
Corporate Guarantor will have six (6) months to complete the Improvements or
cause the Improvements to be completed. All sums expended by the Lender for the
purposes described above shall be deemed to have been advanced to the Borrower
under the Note and shall be secured by the Deed of Trust. Subject to the rights
of the Corporate Guarantor to complete the Improvements, the Borrower hereby
empowers the Lender and its agents as follows:
(a) To use any funds of the Borrower including any balance
which may be held in escrow and any funds which may remain unadvanced hereunder
for the purpose of completing the
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<PAGE> 21
construction of the Improvements, whether or not in the manner called for in the
Plans and Specifications;
(b) To make such additions and changes and corrections to the
Plans and Specifications which shall be necessary or desirable in the judgment
of the Lender to complete the construction of the Improvements;
(c) To employ such contractors, subcontractors, agents,
architects and inspectors as shall be necessary or desirable for said purpose;
(d) To pay, settle or compromise all existing bills and claims
which are or may be liens against the Property, or may be necessary or desirable
for the completion of the work or the clearance of title to the Property;
(e) To execute all applications and certificates which may be
required in the name of the Borrower; and
(f) To do any and every act with respect to the construction
of the Improvements which the Borrower may do in its own behalf.
Section VII.2 No Conditions Precedent to Exercise of Remedies.
The Borrower shall not be relieved of any obligation by reason of the failure of
the Lender to comply with any request of the Borrower or of any other person to
take action to foreclose on the Property under the Deed of Trust or otherwise to
enforce any provision of the Loan Documents, or by reason of the release,
regardless of consideration, of all or any part of the Property, or by reason of
any agreement or stipulation between any subsequent owner of the Property and
the Lender extending the time of payment or modifying the terms of the Loan
Documents without first having obtained the consent of the Borrower; and in the
latter event, the Borrower shall continue to be liable to make payments
according to the terms of any such extension or modification agreement, unless
expressly released and discharged in writing by the Lender.
Section VII.3 Remedies Cumulative and Concurrent. No remedy
herein conferred upon or reserved to the Lender is intended to be exclusive of
any other remedies provided for in the Loan Documents, and each and every such
remedy shall be cumulative, and shall be in addition to every other remedy given
hereunder, or under the Loan Documents, or now or hereafter existing at law or
in equity or by statute. Every right, power and remedy given by the Loan
Documents to the Lender shall be concurrent and may be pursued separately,
successively or together against the Borrower or the Property or any part
thereof, and every right, power and remedy given by the Loan Documents may be
exercised from time to time as often as may be deemed expedient by the Lender.
Section VII.4 Strict Performance. No delay or omission of the
Lender to exercise any right, power or remedy accruing upon the happening of an
Event of Default shall impair any such right, power or remedy or shall be
construed to be a waiver of any such Event of Default or any
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<PAGE> 22
acquiescence therein. No delay or omission on the part of the Lender to exercise
any option for acceleration of the maturity of the Obligations, or for
foreclosure of the Deed of Trust following any Event of Default as aforesaid, or
any other option granted to the Lender hereunder in any one or more instances,
or the acceptance by the Lender of any partial payment on account of the
Obligations shall constitute a waiver of any such Event of Default and each such
option shall remain continuously in full force and effect.
ARTICLE VIII. MISCELLANEOUS.
Section VIII.1 No Warranty by Lender. By accepting or
approving anything required to be observed, performed or fulfilled by the
Borrower or to be given to the Lender pursuant to this Agreement, including,
without limitation, any certificate, balance sheet, statement of profit and loss
or other financial statement, Survey, receipt, appraisal or insurance policy,
the Lender shall not be deemed to have warranted or represented the sufficiency,
legality, effectiveness or legal effect of the same, or of any term, provision
or condition thereof and any such acceptance or approval thereof shall not be or
constitute any warranty or representation with respect thereto by the Lender.
Section VIII.2 Liability of Lender. The Lender shall not be
liable for any act or omission by it pursuant to the provisions of this
Agreement in the absence of fraud or gross negligence. The Lender shall incur no
liability to the Borrower or any other party in connection with the acts or
omissions of the Lender in reliance upon any certificate or other paper believed
by the Lender to be genuine or with respect to any other thing which the Lender
may do or refrain from doing, unless such act or omission amounts to fraud or
gross negligence. In connection with the performance of its duties pursuant to
this Agreement, the Lender may consult with counsel of its own selection, and
anything which the Lender may do or refrain from doing, in good faith, in
reliance upon the opinion of such counsel shall be full justification and
protection to the Lender.
Section VIII.3 No Partnership. Nothing contained in this
Agreement shall be construed in a manner to create any relationship between the
Borrower and the Lender other than the relationship of borrower and lender and
the Borrower and the Lender shall not be considered partners or co-venturers for
any purpose on account of this Agreement.
Section VIII.4 Severability. In the event any one or more of
the provisions of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable, in whole or in part or in any other respect, or in the
event any one or more of the provisions of any of the Loan Documents operates or
would prospectively operate to invalidate this Agreement, then and in either of
those events, at the option of the Lender, such provision or provisions only
shall be held for naught and shall not affect any other provision of the Note or
of any of the other Loan Documents or the validity of the remaining Obligations
and the remaining provisions of the Note and the Loan Documents shall remain
operative and in full force and effect and shall in no way be affected,
prejudiced or disturbed thereby.
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<PAGE> 23
Section VIII.5 Successors and Assigns. Each and every one of
the covenants, terms, provisions and conditions of this Agreement and the Loan
Documents shall apply to, bind and inure to the benefit of the Borrower, its
successors and those assigns of the Borrower consented to in writing by the
Lender, and shall apply to, bind and inure to the benefit of the Lender and the
endorsees, transferees, successors and assigns of the Lender, and all persons
claiming under or through any of them.
Section VIII.6 Modification; Waiver. None of the terms or
provisions of this Agreement may be changed, waived, modified, discharged or
terminated except by instrument in writing executed by the party or parties
against whom enforcement of the change, waiver, modification, discharge or
termination is asserted. None of the terms or provisions of this Agreement shall
be deemed to have been abrogated or waived by reason of any failure or failures
to enforce the same.
Section VIII.7 Third Parties; Benefit. All conditions to the
obligation of the Lender to make advances hereunder are imposed solely and
exclusively for the benefit of the Lender and its assigns and no other persons
shall have standing to require satisfaction of such conditions in accordance
with their terms or be entitled to assume that the Lender will refuse to make
advances in the absence of strict compliance with any or all thereof and no
other person shall, under any circumstances, be deemed to be the beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
the Lender at any time in the sole and absolute exercise of its discretion. The
terms and provisions of this Agreement are for the benefit of the parties hereto
and the Corporate Guarantor, and, except as herein specifically provided, no
other person shall have any right or cause of action on account thereof.
Section VIII.8 Conditions; Verification. Any condition of this
Agreement which requires the submission of evidence of the existence or
non-existence of a specified fact or facts implies as a condition to the
existence or non-existence, as the case may be, of such fact or facts that the
Lender shall, at all times, be free independently to establish to its
satisfaction and in its absolute discretion such existence or non-existence.
Section VIII.9 Captions and Headings. The captions and
headings contained in this Agreement are included herein for convenience of
reference only and shall not be considered a part hereof and are not in any way
intended to limit or enlarge the terms hereof.
Section VIII.10 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be considered an original for
all purposes; provided, however, that all such counterparts shall together
constitute one and the same instrument.
Section VIII.11 Notices. All Notices shall be deemed to have
been received when delivered by hand, when delivered by an overnight courier, or
three (3) Banking Days after being deposited in the mail in the manner provided
for the giving of Notice.
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<PAGE> 24
Section VIII.12 Signs; Publicity. At the Lender's request, but
at the expense of the Borrower, the Lender may place a sign at a location on the
Property, which sign shall recite, among other things, that the Lender is
financing the construction of the Improvements, subject to such requirements as
may be imposed by the Borrower, the Corporate Guarantor and the County. The
Borrower expressly authorizes the Lender to prepare and to furnish to the news
media for publication from time to time news releases with respect to the
Property, specifically to include but not limited to, releases detailing the
Lender's involvement with the financing of the Property.
Section VIII.13 Applicable Law. This Agreement shall be
governed by and construed, interpreted and enforced in accordance with the laws
of the State of Maryland.
Section VIII.14 Time of Essence. Time shall be of the essence
for each and every provision of this Agreement of which time is an element.
[COUNTERPART SIGNATURE PAGES TO FOLLOW]
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<PAGE> 25
IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Agreement to be executed under seal as of the day and year first above written.
WITNESS: BPG INDUSTRIAL PARTNERS II, LLC
______________________________ By:___________________________(SEAL)
Name:
Title:
WITNESS: NATIONSBANK, N.A.
______________________________ By:___________________________(SEAL)
Elizabeth F. Shore
Vice President
25
<PAGE> 26
The Corporate Guarantor joins in the execution of this Loan Agreement for the
purposes of consenting to its terms and provisions.
BIORELIANCE CORPORATION
BY: ________________________
Name:
Title:
26
<PAGE> 1
EXHIBIT 10.27
FIRST AMENDMENT TO AMENDED AND
RESTATED REPLACEMENT LOAN AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED REPLACEMENT LOAN AGREEMENT
(the "Agreement") is made this ___ day of April 1998, by and among BIORELIANCE
CORPORATION, a corporation organized and in good standing under the laws of the
State of Delaware, successor in interest to Microbiological Associates, Inc.
(the "Company"), MA BIOSERVICES, INC., a corporation organized and in good
standing under the laws of the State of Delaware ("MA BioServices"), MAGENTA
CORPORATION, a corporation organized and in good standing under the laws of the
State of Delaware ("Magenta") and MAGENTA VIRAL PRODUCTION, INC., a corporation
organized and in good standing under the laws of the State of Delaware ("Magenta
Viral"; together with the Company, MA BioServices and Magenta, each a "Borrower"
and collectively, the "Borrowers") and NATIONSBANK, N.A., successor in interest
to Maryland National Bank, each a national banking association, its successors
and assigns, (the "Lender").
RECITALS
A. The Borrowers and the Lender are parties to a certain Amended and
Restated Replacement Loan Agreement dated as of October 31, 1997 (the "Loan
Agreement"), pursuant to which the Lender has agreed to make available to the
Borrowers certain loans as more fully described therein. Unless otherwise
defined herein, all capitalized terms used herein shall have the meanings given
to such terms in the Loan Agreement.
B. At the request of the Company, the Lender is making a term loan in
the original principal amount of Four Million Six Hundred Fifty Thousand Dollars
($4,650,000) (the "BPG Term Loan") to BPG Industrial Partners II LLC, a Maryland
limited liability company ("BPG"). The proceeds of the BPG Term Loan are being
used to finance the construction of a shell building and mezzanine, containing
58,733 square feet of space, more or less, certain systems in the building
shell, and the parking lot, sidewalks, driveways and landscaping to be occupied
by Magenta. The Company has agreed to guaranty repayment of the BPG Loan
pursuant to that certain Guaranty of Payment of even date herewith from the
Company in favor of the Lender (together with all amendments, modifications,
replacements and substitutions, the "BPG Guaranty").
C. The Borrowers have requested and the Lender has agreed to modify
certain provisions of the Loan Agreement as hereinafter set forth.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are
<PAGE> 2
hereby acknowledged, the Borrowers and the Lender hereby agree that the Loan
Agreement is hereby modified as follows:
1. Recitals. The parties hereto acknowledge and agree that the above
Recitals are true and correct in all respect and that the same are incorporated
herein and made a part hereof by reference.
2. Definitions The definition of "Loan Documents" as set forth in
Section I of the Loan Agreement is hereby amended to include the BPG Guaranty.
3. Financial Statements. Section 5.1 (b) of the Loan Agreement is
hereby deleted in its entirety.
4. Tangible Net Worth. Section 5.2 of the Loan Agreement is hereby
deleted in its entirety.
5. Funded Debt to EBITDA. Section 5.3 of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in full substitution
thereof:
Section 5.3 Funded Debt to EBITDA. Maintain a ratio of Funded
Debt to EBITDA not greater than 3.5 to 1.0 as of the end of each fiscal
quarter, based on the four (4) quarter period ending on such date. For
purposes hereof, "Funded Debt" shall mean all bank indebtedness
(secured and unsecured), plus all capitalized lease obligations,
subordinated debt and any other similar liabilities and contingent
liabilities reported in financial statements of the Company and its
affiliates as direct or contingent liabilities. For purposes hereof,
"EBITDA" shall mean earnings before interest, taxes, depreciation and
amortization, all as determined in accordance with GAAP and all as
determined on a consolidated basis for the twelve (12) month period
then ending.
6. Profitability. Section 5.4 of the Loan Agreement is hereby deleted
in its entirety and the following is inserted in full substitution thereof:
Section 5.4 Profitability. The Borrowers will not as of the
end of each fiscal year, on a consolidated basis have any Operating
Losses. For purposes hereof, "Operating Losses" shall mean net income
of the Borrowers, before income taxes and non cash extraordinary items.
7. Insurance. Section 5.10 of the Loan Agreement is hereby deleted in
its entirety and the following is inserted in full substitution thereof:
Section 5.10 Insurance. Maintain insurance with insurance
companies on such of its properties, in such amounts and against such
risks as is customarily maintained by similar businesses operating in
the same vicinity; maintain general public liability insurance against
claims for personal injury, death or property damage in such amounts as
are commercially
<PAGE> 3
reasonable and worker's compensation insurance in statutory amounts
with such companies as are licensed to do business in the state
requiring the same. Notwithstanding the foregoing, the Borrowers may
"self insure" pursuant to a formal plan adopted and approved by Board
of Directors of each applicable Borrower, provided that the aggregate
amount of contingent liability at any time under such self insurance
plan or plans does not exceed Three Million Dollars ($3,000,000).
8. Books and Records. Section 5.12 of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in full substitution
thereof:
Section 5.12 Books and Records. (a) Keep and maintain accurate
books and records and (b) permit any person designated by the Lender to
enter the premises of any Borrower and examine, audit and inspect the
books and records at any reasonable time and from time to time without
notice, provided, however, that prior to the occurrence and continuance
of any Event of Default hereunder, the Lender will provide the
Borrowers with reasonable notice prior to any such examination, audit
or inspection. Each Borrower will permit any Person designated by the
Lender to enter the premises of any Borrower and examine, audit and
inspect the books and records pertaining to any Borrower's ability to
perform its obligations under any of the Loans at any reasonable time
and from time to time without notice, at the Borrowers' expense,
provided, however, that prior to the occurrence and continuance of any
Event of Default hereunder, the Lender will provide the Borrowers with
reasonable notice prior to any such examination, audit or inspection,
and further provided, that the Lender shall not request such audits at
the Borrowers' expense (which expense will not exceed $5,000 per audit)
more frequently then once per calendar year, unless an Event of Default
shall have occurred hereunder and be continuing in which event the
Lender may request audits more frequently at the Borrowers' joint and
several expense. All examinations, audits and inspections will be made
in accordance with each Borrower's security and confidentiality
policies and procedures.
9. Environmental Audits. Section 5.15 of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in full substitution
thereof:
Section 5.15 Environmental Audits. If an Event of Default
shall have occurred hereunder or under any of the other Loan Documents,
the Borrowers shall immediately upon the receipt of notice from the
Lender, which may be given at any time and from time to time by the
Lender in its sole discretion (but not more frequently than once during
any twelve (12) month period), cause an Environmental Assessment (as
hereinafter defined) to be undertaken with respect of any property or
properties owned or leased by any Borrower and furnish the same to the
Lender within thirty (30) days after the date of the Lender's request.
The cost of any such Environmental Assessment shall be borne
exclusively by the Borrowers. The Borrowers shall cooperate with each
environmental consulting firm engaged to make any such Environmental
Assessment and shall supply to each such environmental consulting firm,
from time to time and promptly on request, all information available to
the Borrowers
3
<PAGE> 4
to facilitate the completion of the Environmental Assessment.
Notwithstanding the foregoing, the Lender shall be under no duty to
require the preparation of any Environmental Assessment of any such
properties, and in no event shall any such Environmental Assessment by
the Lender be or give rise to any representation or warranty by the
Lender that Hazardous Materials are or are not present on any such
property, or that there has been compliance by the Borrowers or any
other person with any Environmental Laws. For purposes hereof,
"Environmental Assessment" means a report of an environmental
assessment of the Property of such scope (including but not limited to
the taking of soil borings and air and groundwater samples and other
above and below ground testing) as the Lender may request, prepared by
a recognized environmental consulting firm acceptable to the Lender in
all respects and sufficient in detail to comply with the Lender's
established guidelines and the guidelines of any appropriate
governmental authority. For purposes hereof, "Hazardous Materials"
means any and all hazardous or toxic substances, wastes or materials
which, because of their quantity, concentration, or physical, chemical
or infectious characteristics, may cause or pose a present or potential
hazard or nuisance to human health, safety or welfare or to the
environment when used, treated, stored, disposed of, generated,
manufactured, transported or otherwise handled, including without
limitation, any substance, waste or material which is or contains
asbestos, radon, polychlorinated biphenyls, urea formaldehyde,
explosives, radioactive materials or petroleum products.
10. Mortgages and Pledges. Section 6.1 of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in full substitution
thereof:
Section 6.1 Mortgages and Pledges. Create, incur, assume or
suffer to exist any mortgage, pledge, lien or other material
encumbrance of any kind upon, or any security interest in, any of its
property or assets ("Lien"), whether now owned or hereafter acquired,
except (a) Liens for taxes not delinquent or being contested in good
faith and by appropriate proceedings, (b) Liens in connection with
worker's compensation, unemployment insurance or other social security
obligations, (c) deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like
nature arising in the ordinary course of business, (d) mechanics',
worker's, materialmen's, landlords', carriers', or other like Liens
arising in the ordinary course of business with respect to obligations
which are not due or which are being contested in good faith, and which
do not violate the terms of the Deed of Trust, (e) any Lien created in
connection with the refinancing of indebtedness in existence on the
date hereof and any Liens securing any extension, renewal or
replacement of obligations secured by any such Lien, (f) the assumption
of any Lien in any property hereafter acquired by virtue of any
Acquisition, existing at the time of such Acquisition; provided,
however, that (i) the indebtedness secured by any such Lien so created,
assumed or existing shall not exceed the fair market value of the
property covered thereby to the entity acquiring the same, (ii) each
such Lien shall attach only to the property so acquired, (iii) that
such Lien interest shall not secure any working capital indebtedness,
(g) any purchase money mortgage, or purchase money security interest in
any property, or interest therein created or assumed
4
<PAGE> 5
contemporaneously with the purchase of such property, or interest
therein, to secure or provide for the payment or financing of any part
of the purchase price thereof; provided, however, that (i) the
indebtedness secured by such purchase money mortgage or security
interest shall not exceed one hundred percent (100%) of cost of the
property covered thereby (ii) each such purchase money mortgage or
purchase money security interest shall attach only to the property so
purchased, (iii) the purchase of such property or interest therein to
which any such purchase money mortgage or purchase money security
interest relates shall not result in a default under any other
provision of this Agreement or any Loan Document, and (h) any Liens not
otherwise covered by clauses (a) through (g) above, in an aggregate
amount not to exceed Five Hundred Thousand Dollars ($500,000).
Notwithstanding the foregoing, the Borrowers may grant Liens to secure
indebtedness in excess of Five Hundred Thousand Dollars ($500,000),
provided that (i) the aggregate amount secured by such Liens does not
at any time exceed Five Million Dollars ($5,000,000); and (ii) at the
time such Lien is granted, the Lender receives a Lien on a pari passu
basis with the Lien given to any such third party in connection with
such indebtedness.
11. Merger or Acquisition. Section 6.3 of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in full substitution
thereof:
Section 6.3 Merger or Acquisition. Acquire all or
substantially all the assets, outstanding stock or any other or
additional interest in, any Person or merge with any Person (each an
"Acquisition" and collectively, the "Acquisitions"), unless, each of
the following conditions are met: (a) the acquired entity (the
"Target") is a going concern, unless the total cash consideration paid
for the Acquisition is less than or equal to $500,000; (b) the Company
is the controlling corporation; (c) total cash consideration paid for
any Acquisition does not exceed Ten Million Dollars ($10,000,000) in
the aggregate in any fiscal year; and (d) after giving affect to the
Acquisition, the Borrowers' shall not be in default under this
Agreement or any of the Loan Documents provided, however, that nothing
in this Section 6.3 shall be construed to prohibit any Borrower from
undertaking a joint venture that complies with subsections (a), (c) and
(d) of this Section, provided, further, that notwithstanding anything
in this Agreement to the contrary, the Company and/or any of the
Borrowers may, merge with or into, consolidate with, be liquidated or
dissolved into the Company, any Borrower, or any other Subsidiary,
provided that such Subsidiary becomes a party to this Agreement and a
co-obligor of the Loans. All Targets which are headquartered in the
United States which survive an Acquisition, where the total cash
consideration equals or exceeds Five Million Dollars ($5,000,000) will,
at the Borrowers' expense, be added as a co-obligor of the Loans.
12. Advances and Loans. Section 6.4 of the Loan Agreement is hereby
deleted in its entirety.
13. Investments. Section 6.5 of the Loan Agreement is hereby deleted in
its entirety and the following is inserted in full substitution thereof:
5
<PAGE> 6
Section 6.5 Investments. Except as permitted under Section 6.3
of this Agreement, make cash investments by purchasing or acquiring the
obligations or stock of, or any other or additional interest in, any
Person, except (a) obligations, stock or interest of any Person that is
or, as a result of such Acquisition, becomes a Subsidiary, (b) publicly
traded stock not in excess of any amounts permitted by law, (c) general
obligations of, or obligations unconditionally guaranteed as to
principal and interest by, the United States of America, (d) bonds,
debentures, participation certificates or notes issued by any agency or
corporation which is or may hereafter be created by Act of the Congress
of the United States as an agency or instrumentality thereof, (e)
Public Housing Bonds, Temporary Notes or Preliminary Loan Notes, fully
secured by contracts with the United States, (f) certificates of
deposit with maturities of one (1) year or less from the date of
acquisition thereof, or money market accounts maintained with, the
Lender or any other domestic commercial bank having capital and surplus
in excess of One Hundred Million Dollars ($100,000,000.00) or such
other domestic financial institutions or domestic brokerage houses to
the extent disclosed to, and approved by, the Lender, and (g)
commercial paper of a domestic issuer rated at least either A-1 by
Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc.
with maturities of six (6) months or less from the date of acquisition.
14. Subsidiaries. Section 6.6 of the Loan Agreement is hereby deleted
in its entirety and the following is inserted in full substitution thereof:
Section 6.6 Subsidiaries. Create or acquire any Subsidiaries
other than the Subsidiaries existing as of the date hereof and listed
on EXHIBIT A, or created pursuant to an Acquisition under Section 6.3
of this Agreement, unless such Subsidiaries do not own any material
assets or such Subsidiaries are added as a co-makers or co-guarantors,
as the case may be, of the Loans. Notwithstanding the foregoing, it is
understood and agreed that the Lender will not require any of the
Released Parties or MAL, MA Holding, MA BioServices GmbH and BIOMEVA
GmbH or any Subsidiary of the foregoing or any Subsidiary hereafter
created under the laws of any country other than the United States
(collectively, the "Excluded Subsidiaries") to either pledge any of
their respective assets to secure the Loans or to be added as co-makers
or co-guarantors of the Loans. The Borrowers each jointly and severally
agree not to cumulatively transfer, sell or assign in the aggregate
more than ten percent (10%) of their respective assets to any of the
Excluded Subsidiaries, unless each such Excluded Subsidiary is added as
a co-maker or co-guarantor, of the Loans.
15. Stock of Subsidiaries. Section 6.7 of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in full substitution
thereof:
Section 6.7 Stock of Subsidiaries. Sell or otherwise dispose
of any shares of capital stock of any Subsidiary which when taken in
the aggregate exceed ten percent (10%) of the capital stock of such
Subsidiary (except in connection with the merger or consolidation of
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<PAGE> 7
any solvent Wholly Owned Subsidiary into the Company or with another
solvent Wholly Owned Subsidiary or the dissolution of any Subsidiary).
16. Sale and Leaseback. Section 6.9 of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in full substitution
thereof:
Section 6.9 Sale and Leaseback. Directly or indirectly enter
into any arrangement to cumulatively sell or transfer more than ten
percent (10%) of its fixed assets in the aggregate then owned by it and
there upon or within one year thereafter rent or lease the assets so
sold or transferred.
17. Line of Business. Section 6.10 of the Loan Agreement is hereby
deleted in its entirety and the following is inserted in full substitution
thereof:
Section 6.10 Line of Business. Enter into any lines or areas
of business outside of the life sciences field.
18. Events of Default. Sections 7.1, 7.2, 7.4, 7.6, 7.7 and 7.8 of the
Loan Agreement are hereby deleted in their entirety and the following are
inserted in full substitution thereof:
Section 7.1 Failure to Pay. The Borrowers shall fail to make
any payment of principal or interest on any of the Obligations, when
and as the same shall become due and payable and such failure shall
continue for a period of five (5) days after notice thereof.
Section 7.2 Breach of Representations and Warranties. Any
information contained in any financial statement, schedule, report or
any other material document delivered by any Borrower or any other
party or parties on behalf of any Borrower to the Lender in connection
with any of the Loans proves at any time to be not in all material
respects true and accurate, as of the time made or any Borrower or any
such other party or parties shall have failed to state any material
fact or any fact necessary to make such information not misleading, or
any representation or warranty contained in this Agreement, the Loan
Documents, or in any other material document, certificate or opinion
delivered by any Borrower to the Lender in connection with any of the
Loans, proves at any time to be incorrect or misleading in any material
respect as of the time made.
Section 7.4 Other Defaults. Any Borrower shall default in the
due observance or performance of any other term, covenant or agreement
herein contained and such default shall continue uncured for thirty
(30) days after notice thereof shall have been given to such Borrower
by the Lender, unless (a) the nature of the failure is such that it
cannot be cured within the thirty (30) day period, (b) the Borrower
institutes corrective action within the thirty (30) day period, and (c)
the Borrower complete the cure within a period of an additional sixty
(60) days.
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<PAGE> 8
Section 7.6 Receiver; Bankruptcy. Any Borrower shall (a) apply
for or consent to the appointment of a receiver, trustee or liquidator
for itself or any of its property, (b) admit in writing its inability
to pay its debts as they mature, (c) make a general assignment for the
benefit of creditors, (d) be adjudicated a bankrupt or insolvent, (e)
file a voluntary petition in bankruptcy or a petition or an answer
seeking reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, insolvency, readjustment
of debt, dissolution or liquidation law or statute, or an answer
admitting the material allegations of a petition filed against it in
any proceeding under any such law or if corporate action shall be taken
by any Borrower for the purposes of effecting any of the foregoing, or
(f) by any act indicate its consent to, approval of or acquiescence in
any such proceeding or the appointment of any receiver of or trustee
for any of its property, or suffer any such receivership, trusteeship
or proceeding to continue undischarged for a period of ninety (90)
days.
Section 7.7 Judgment. Unless adequately insured in the opinion
of the Lender, the entry of a final judgment for the payment of money
involving more than $5,000,000 in excess of any amounts covered by
insurance against any Borrower and the failure by any Borrower to
discharge the same, or cause it to be discharged or vacated, within
sixty (60) days from the date of the order, decree or process under
which or pursuant to which such judgment was entered, or to secure a
stay of execution pending appeal of such judgment.
Section 7.8 Default Under Other Borrowings. Default shall be
made with respect to any evidence of indebtedness or liability for
borrowed money in excess of $5,000,000 (other than the Loan) or any
operating or capital lease having a value in excess of $5,000,000 if
the effect of such default is to accelerate the maturity of such
evidence of indebtedness or liability.
19. Performance by Lender and Other Remedies. Sections 8.2 and 8.3 of
the Loan Agreement are hereby deleted and restated in their entirety and the
following are inserted in full substitution thereof:
Section 8.2 Performance by Lender. Upon the occurrence of an
Event of Default, if any Borrower shall fail to pay the Obligations or
otherwise fail to perform, observe or comply with any of the material
conditions, covenants, terms, stipulations or agreements contained in
this Agreement or any of the other Loan Documents, the Lender without
notice to or demand upon the Borrowers and without waiving or releasing
any of the Obligations or any Event of Default, may (but shall be under
no obligation to) at any time thereafter make such payment or perform
such act for the account and at the expense of the Borrowers, and may
enter upon the premises of each Borrower for that purpose and take all
such action thereon as the Lender may consider necessary or appropriate
for such purpose. All sums so paid or advanced by the Lender and all
costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred in connection therewith (the
"Expense Payments") together with interest thereon from the date of
payment, advance or incurring
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<PAGE> 9
until paid in full at the Default Rate payable under the Notes shall be
paid by the Borrowers to the Lender on demand and shall constitute and
become a part of the Obligations.
Section 8.3 Other Remedies. Upon the occurrence of an Event of
Default (and in addition to all of its rights, powers and remedies
under this Agreement), the Lender shall have all of the rights and
remedies under applicable laws.
20. Material Adverse Change. Section 7.9 of the Loan Agreement is
hereby deleted in its entirety.
21. Conditions Precedent. This Agreement shall become effective on the
date the Lender receives the following documents, each of which shall be
satisfactory in form and substance to the Lender:
(a) The Second Replacement Revolving Promissory Note issued
and delivered by the Borrowers in the form of EXHIBIT B attached hereto and
incorporated herein by reference, payable to the order of the Lender in the
maximum principal amount of One Million Dollars ($1,000,000) (the "Line of
Credit Replacement Note");
(b) The Second Deed of Trust Note Modification Agreement
issued and delivered by and among the Borrowers and the Lender in the form of
EXHIBIT D attached hereto and incorporated herein by reference (the "Deed of
Trust Note Modification");
(c) The Second Note Modification Agreement issued and
delivered by and among the Borrowers and the Lender in the form of EXHIBIT E
attached hereto and incorporated herein by reference (the "Term Note
Modification Agreement"); and
(d) A Third Modification Agreement - Leasehold Deed of Trust
and Security Agreement by and among the Company, the trustees named therein and
the Lender, in the form of EXHIBIT F attached hereto and incorporated herein by
reference (the "Deed of Trust Modification").
22. MISCELLANEOUS
(a) Notices. From and after the date hereof, the address for
notice for the Borrower is hereby revised as follows:
BioReliance Corporation
9900 Blackwell Road
Rockville, Maryland 20850
Attn: General Counsel
with a copy to: Shulman, Rogers, Gandal, Pordy & Ecker, P.A.
11921 Rockville Pike, 3rd Floor
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<PAGE> 10
Rockville, Maryland 20852
Attn: Rebecca Oshoway, Esquire
(b) Acknowledgments. The Borrowers hereby confirm to the
Lender the enforceability and validity of each of the Loan Documents. In
addition, the Borrowers hereby agree to the execution and delivery of this
Agreement and the terms and provisions, covenants or agreements contained in
this Agreement shall not in any manner , impair, lessen, modify, waive or
otherwise limit the liability and obligations of the Borrowers under the terms
of any of the Loan Documents, except as otherwise specifically set forth in this
Agreement. The Borrowers issue, remake, ratify and confirm the representations,
warranties and covenants contained in the Loan Documents. Nothing in this
Agreement shall be deemed to waive any defaults existing under any of the Loan
Documents as of the date hereof.
(c) ENTIRE AGREEMENT. NO STATEMENTS, AGREEMENTS OR
REPRESENTATIONS, ORAL OR WRITTEN, WHICH MAY HAVE BEEN MADE TO ANY OF THE
BORROWERS OR TO ANY EMPLOYEE OR AGENT OF ANY OF THE BORROWERS, EITHER BY THE
LENDER OR BY ANY EMPLOYEE, AGENT OR BROKER ACTING ON THE LENDER'S BEHALF, WITH
RESPECT TO THE MODIFICATION OF THE LOANS, SHALL BE OF ANY FORCE OR EFFECT,
EXCEPT TO THE EXTENT STATED IN THIS AGREEMENT, AND ALL PRIOR AGREEMENTS AND
REPRESENTATIONS WITH RESPECT TO THE MODIFICATION OF THE LOANS ARE MERGED HEREIN.
(d) Survival of Agreement; Successors and Assigns. All
covenants, agreements, representations and warranties made by the Borrowers
herein and in any certificate, in the Loan Documents and in any other
instruments or documents delivered pursuant hereto shall survive the making by
the Lender of the Loans and the execution and delivery of the Notes, and shall
continue in full force and effect so long as any of the Obligations are
outstanding and unpaid. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of the Borrowers, which are contained in this Agreement shall inure to
the benefit of the successors and assigns of the Lender, and all covenants,
promises and agreements by or on behalf of the Lender which are contained in
this Agreement shall inure to the benefit of the permitted successors and
permitted assigns of the Borrowers, but this Agreement may not be assigned by
the Borrowers without the prior written consent of the Lender.
(e) Expenses. The Borrowers agree to pay all reasonable
out-of-pocket expenses of the Lender (including the reasonable fees and expenses
of its legal counsel) in connection with the preparation of this Agreement, the
recordation of all financing statements and such other instruments as may be
required by the Lender subsequent to the execution of this Agreement to secure
the Obligations (including any and all recordation tax and other costs and taxes
incident to recording), the enforcement of any provision of this Agreement and
the collection of the Obligations. The Borrowers agree to indemnify and save
harmless the Lender for any liability resulting from the failure to pay any
required recordation tax, transfer taxes, recording costs or any other expenses
incurred by the Lender in connection with the Obligations. The provisions of
this Section shall
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<PAGE> 11
survive the execution and delivery of this Agreement and the repayment of the
Obligations. The Borrowers further agree to reimburse the Lender upon demand for
all reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses) incurred by the Lender in enforcing any of the Obligations or
any security therefor, which agreement shall survive the termination of this
Agreement and the repayment of the Obligations.
(f) Counterparts. This Agreement may be executed in any number
of multiple counterparts, each of which shall be deemed an original hereof and
all of which when taken together shall constitute one and the same instrument.
It shall not be necessary that the signature of, or on behalf of, each party, or
that the signature of the persons required to bind any party, appear on more
than one counterpart.
(g) Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of the State of Maryland.
(h) Modifications. No modification or waiver of any provision
of this Agreement or of any of the other Loan Documents, nor consent to any
departure by the Borrowers therefrom, shall in any event be effective unless the
same shall be in writing, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on the Borrowers in any case shall entitle the Borrowers to any other
or further notice or demand in the same, similar or other circumstance.
(i) Illegality. If fulfillment of any provision hereof or any
transaction related hereto or to any of the other Loan Documents, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity; and if any clause or provisions
herein contained other than the provisions hereof pertaining to repayment of the
Obligations operates or would prospectively operate to invalidate this Agreement
in whole or in part, then such clause or provision only shall be void, as though
not herein contained, and the remainder of this Agreement shall remain operative
and in full force and effect; and if such provision pertains to repayment of the
Obligations, then, at the option of the Lender, all of the Obligations of the
Borrowers to the Lender shall become immediately due and payable.
(j) Headings. The headings in this Agreement are for
convenience only and shall not limit or otherwise affect any of the terms
hereof.
(k) ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF THIS AGREEMENT,
THE LOAN DOCUMENTS OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS,
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
(OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
11
<PAGE> 12
PROCEDURE FOR ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., D/B/A
J.A.M.S./ENDISPUTE ("J.A.M.S.") AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE
EVENT OF AN INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY
ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING ANY ACTION, INCLUDING A SUMMARY
OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO
WHICH THIS INSTRUMENT, AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
MONTGOMERY COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN
ARBITRATOR. IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR
ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCING OF SUCH HEARING FOR AN ADDITIONAL SIXTY (60)
DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS INSTRUMENT,
AGREEMENT OR DOCUMENT SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED
IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY THE LENDER OF
THE PROTECTION AFFORDED TO IT BY 12 U.S.C. Section91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDER: (A) TO EXERCISE
SELF HELP REMEDIES (BUT NOT INCLUDING SETOFF), OR (B) TO FORECLOSE AGAINST ANY
REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL
OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE LENDER MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF ANY
ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE
A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
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<PAGE> 13
[SIGNATURES ARE ON THE FOLLOWING PAGE]
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<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement on the day and year first above written.
WITNESS/ATTEST: BIORELIANCE CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MA BIOSERVICES, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA VIRAL PRODUCTION, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS: NATIONSBANK, N.A.
______________________________ By:__________________________(SEAL)
Elizabeth F. Shore
Vice President
<PAGE> 1
EXHIBIT 10.28
SECOND NOTE MODIFICATION AGREEMENT
THIS SECOND NOTE MODIFICATION AGREEMENT (this "Agreement") is made this
1st day of April, 1998, by and among BIORELIANCE CORPORATION, a corporation
organized and in good standing under the laws of the State of Delaware,
successor in interest to Microbiological Associates, Inc. (the "Company"), MA
BIOSERVICES, INC., a corporation organized and in good standing under the laws
of the State of Delaware ("MA BioServices"), MAGENTA CORPORATION., a corporation
organized and in good standing under the laws of the State of Delaware
("Magenta") and MAGENTA VIRAL PRODUCTION, INC., a corporation organized and in
good standing under the laws of the State of Delaware ("Magenta Viral"; together
with the Company and MA BioServices, each a "Borrower" and collectively, the
"Borrowers") and NATIONSBANK, N.A., successor in interest to Maryland National
Bank, each a national banking association, its successors and assigns, (the
"Lender").
INTRODUCTORY STATEMENT
A. The Lender has made a loan (the "Loan") in the original principal
amount of One Million Eight Hundred Thousand Dollars ($1,800,000), which Loan is
evidenced by that certain Promissory Note dated June 27, 1996, from the Company,
BioReliance, Limited, a corporation organized and existing under the laws of
Scotland, formerly known as Microbiological Associates Limited, Microbiological
Associates International Limited and ("MAL"), Magenta Corporation ("Magenta"),
and Magenta Services, Ltd., a corporation organized and existing under the laws
of Scotland ("Magenta Services") in favor of the Lender, and which Promissory
Note was amended and restated in its entirety pursuant to the provisions of that
certain Amended and Restated Promissory Note dated September 19, 1996 in the
principal amount of One Million Eight Hundred Thousand Dollars ($1,800,000),
from the Company, MAL, Magenta and Magenta Services in favor of the Lender (the
Promissory Note as amended and restated in its entirety is hereinafter called,
the "Original Note"). The Original Note was modified pursuant to that certain
Note Modification Agreement dated October 31, 1997 by and among the Borrowers
and the Lenders (the Original Note as amended hereby is hereinafter called the
"Note").
B. The Loan is currently governed by the provisions of that certain
First Amended and Restated Loan Agreement (the "Original Loan Agreement") dated
December 1, 1994, by and among the Company, MAL, Magenta, Magenta Services and
the Lender, which Original Loan Agreement was amended by that certain
Modification of Loan Agreement dated April 25, 1995, by and among the Company,
MAL, Magenta, Magenta Services and the Lender, which Original Loan Agreement was
further amended by that certain Modification of Loan Agreement dated August 7,
1995 by and among the Company, MAL, Magenta, Magenta Services and the Lender,
which Original Loan Agreement was further amended by that certain Modification
of Loan Agreement dated January 18, 1996, by and among the Company, MAL,
Magenta, Magenta Services and the Lender, which Original Loan Agreement was
further amended by that certain Modification of Loan Agreement dated May 31,
1996 by and among the Company, MAL, Magenta, Magenta Services and the Lender,
and which Original Loan Agreement was further modified by that certain Second
Modification of
<PAGE> 2
Loan Agreement dated June 27, 1996, by and among the Company, MAL, Magenta,
Magenta Services and the Lender, which among other things, obligated the Company
to cause MA Holding, GmbH, a German Company ("MA Holding") to become an
additional maker on the Loan (the Original Loan Agreement, as thereafter
amended, is hereinafter called the "Loan Agreement").
C. The Loan Agreement was amended and restated in its entirety upon the
terms and subject to the conditions set forth in that certain Amended and
Restated Replacement Loan Agreement dated October 31, 1997 by and among the
Borrowers and the Lender, which Amended and Restated Replacement Loan Agreement
is being amended by that certain First Amendment to Amended and Restated
Replacement Loan Agreement of even date herewith by and among the Borrowers and
the Lender (the Amended and Restated Replacement Loan Agreement as the same may
be amended from time to time, the "Restated Loan Agreement").
D. The Borrowers have requested and the Lender has agreed to modify the
terms of repayment of the Loan.
E. In order to induce the Lender to modify the terms of repayment of
the Loan, the parties hereto have agreed to execute and deliver this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for the sum of One
Dollar ($1.00) and other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, the parties hereto, for themselves,
their respective heirs, personal representatives, successors and assigns do
hereby mutually covenant and agree as follows:
1. Incorporation of Recitals. The parties hereto acknowledge and agree
that the recitals hereinabove set forth are true and correct in all respects and
that the same are incorporated herein and made a part hereof.
2. Outstanding Obligations. The parties hereto acknowledge and agree
(a) that the outstanding principal balance of the Note as of March 31, 1998 is
$1,170,000 (the "Principal Sum"), (b) that interest on the unpaid principal
balance of the Note has been paid through March 31, 1998, and (c) that the
unpaid principal balance of the Note, together with accrued and unpaid interest
thereon, is due and owing subject to the terms of repayment hereinafter set
forth, without defense or offset.
3. Continuation of Loan Terms. Except as otherwise expressly set forth
below, the outstanding principal balance of the Note shall continue to bear
interest and to be repaid on the terms and subject to the conditions set forth
in the Note and the other documents evidencing and securing the Loan (this
Agreement, the Note, the Restated Loan Agreement and all such other documents,
whether currently existing or hereafter executed, and all modifications thereto,
extensions or renewals thereof and substitutions therefor being hereinafter
collectively referred to as the "Loan Documents"). All capitalized terms used
but not defined in this Agreement shall have the meaning given to such terms in
the Loan Documents.
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<PAGE> 3
4. Interest. Commencing as of the 1st day of April, 1998, until all
sums due under the Loan shall be repaid in full, the unpaid principal balance of
the Note shall bear interest at a rate which is at all times equal to the
fluctuating at the LIBOR Rate (as hereinafter defined), plus the applicable
LIBOR Rate Additional Percentage (the "LIBOR Rate Option").
(1) For purposes hereof, the "LIBOR Rate Additional
Percentage" shall mean the percentages applicable to the Loan in accordance with
the following:
(i) If the ratio of Funded Debt divided by EBITDA is
equal to or greater than 2.75 to 1.0, the LIBOR Rate Additional
Percentage shall be two and 15/100 percent (2.15%);
(ii) If the ratio of Funded Debt divided by EBITDA is
less than 2.75 to 1.0, but equal to or greater than 2.0 to 1.0, the
LIBOR Rate Additional Percentage shall be one and nine tenths percent
(1.90%);
(iii) If the ratio of Funded Debt divided by EBITDA
is less than 2.0 to 1.0, but equal to or greater than 1.25 to 1.0 the
LIBOR Rate Additional Percentage shall be one and four tenths percent
(1.40%); and
(iv) If the ratio of Funded Debt divided by EBITDA is
less than 1.25 to 1.0, the LIBOR Rate Additional Percentage shall be
one percent (1.0%)
(2) The initial the LIBOR Rate Additional Percentage shall be
one percent (1.00%). Thereafter, the applicable LIBOR Rate Additional Percentage
for all Advances shall be calculated and adjusted quarterly, based on the
quarterly financial statements of the Borrowers required to be submitted to the
Lender pursuant to Section 5.1(c) of the Restated Loan Agreement, commencing
with the statements for the quarter ending December 31, 1997. Such quarterly
changes shall be effective commencing five (5) Banking Days after submission by
the Borrowers of the required financial statements; it being understood,
however, that, subject to the provisions of the immediately following sentence,
in the event the quarterly financial statements are not submitted when due, the
LIBOR Rate Additional Percentage shall be two and 15/100 percent (2.15%), until
such financial statements are submitted as required, at which time, the LIBOR
Rate Additional Percentage (for the balance of the quarterly period) shall be
determined as set forth above. If such financial statements are not submitted
when due, but are received within thirty (30) days of when due, the Lender will
return to the Borrowers any additional interest collected in excess of the
amount that should have otherwise been due hereunder based on the financial
statements. For purposes of the Note, "Funded Debt" and "EBITDA" shall each be
determined based on the consolidated quarterly financial statements of the
Borrowers and shall have the meanings set forth in the Restated Loan Agreement.
(3) For purposes hereof, the "LIBOR Rate" shall mean a
fluctuating rate of interest equal to the one month rate of interest (rounded
upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the one month London interbank
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<PAGE> 4
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
on the second preceding business day as adjusted from time to time in Lender's
sole discretion for then applicable reserve requirements, deposit insurance
assessment rates and other regulatory costs. If for any reason such rate is not
available, the term "LIBOR Rate" shall mean the fluctuating rate of interest
equal to the one month rate of interest (rounded upwards, if necessary to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the one month
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) on the second preceding business day, as adjusted from time
to time in Lender's sole discretion for then applicable reserve requirements,
deposit insurance assessment rates and other regulatory costs; provided,
however, if more than one rate is specified on Reuters Screen LIBO page, the
applicable rate shall be the arithmetic mean of all such rates. "Telerate Page
3750" means the British Bankers Association Libor Rates (determined as of 11:00
a.m. London time) that are published by Dow Jones Telerate, Inc.
(4) The Borrowers shall pay to the Lender, as additional
interest, the following sums, at the time and in the manner hereinafter set
forth:
i) if, due to either: (i) the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation or (ii) the compliance by the Lender with any guideline
or request from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to the Lender
of agreeing to make or making, funding or maintaining advances of all or a
portion of the Principal Sum, then the Borrowers shall from time to time, upon
demand by the Lender, pay to the Lender additional amounts to indemnify the
Lender against any such increased costs. A certificate as to the amount of such
increased costs submitted to the Borrowers by the Lender shall be conclusive. It
shall be deemed, for purposes of computing any increased costs pursuant to this
Section, that (i) the making and maintaining of advances of the Principal Sum
which accrue interest based on the LIBOR Rate have been made by the Lender from
its office in London, England and (ii) the funding of each Advance of the
Principal Sum by the Lender which accrues interest based on the LIBOR Rate has
been made through the London Interbank Market. Such additional cost shall be
payable hereunder at the time and in the manner that interest is payable
hereunder for such costs incurred since the last interest payment;
ii) the Borrowers shall also pay to
the Lender at the time and in the manner that interest is payable hereunder for
each advance, the cost since the last interest payment date, as determined in
good faith by the Lender, of complying, in connection with such advance during
such interest period, with any reserve, special deposit or similar requirement
(including but not limited to reserve requirements under Federal Reserve
Regulation D) imposed or deemed applicable against any assets held by or
deposits or accounts in or with or credit extended by the Lender, or the office
of the Lender in London, England, by any United States governmental authority
charged with the administration of such requirements. Each notification as to
the amount of such cost, delivered to the Borrowers by the Lender shall, in the
absence of manifest error, be conclusive as to the amount of such cost. It shall
be deemed for purposes of computing cost pursuant to the above provision that
the making and maintaining of each advance which accrues interest based on the
LIBOR Rate has been made by the Lender through its office in London, England.
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<PAGE> 5
(5) In respect to any interest rate election hereunder and any
transactions contemplated hereby, the Borrowers authorize the Lender to accept,
rely upon, act upon and comply with, any verbal or written instructions,
requests, confirmations and orders of Michael R. N. Thomas or Sherry L. Rhodes
on behalf of the Borrowers. The Borrowers acknowledge and agree that the
transmission between the Borrowers and the Lender of any such instructions,
requests, confirmations and orders involves the possibility of errors,
omissions, mistakes and discrepancies and agrees to adopt such internal measures
and operational procedures to protect its interests. By reason thereof, the
Borrowers hereby assume all risk of loss and responsibility for, releases and
discharges the Lender from any and all responsibility or liability for, and
agrees to indemnify, reimburse on demand and hold the Lender harmless from, any
and all claims, actions, damages, losses, liability and expenses by reason of,
arising out of or in any way connected with or related to, (i) the Lender's
acceptance, reliance and actions upon, compliance with or observation of any
such instructions, requests, confirmations or orders, and (ii) any such errors,
omissions, mistakes and discrepancies, except those caused by the Lender's gross
negligence or willful misconduct.
(6) All interest payable under the terms of the Note shall be
calculated on the basis of a 360-day year and the actual number of days elapsed.
5. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF THIS AGREEMENT, THE
LOAN DOCUMENTS OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING
ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR
ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., D/B/A J.A.M.S./ENDISPUTE
("J.A.M.S.") AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF AN
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING ANY ACTION, INCLUDING A SUMMARY OR
EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH
THIS INSTRUMENT, AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN MONTGOMERY
COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR. IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN
THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL
BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCING OF SUCH HEARING FOR AN ADDITIONAL SIXTY (60) DAYS.
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(B) RESERVATION OF RIGHTS. NOTHING IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY THE LENDER OF THE
PROTECTION AFFORDED TO IT BY 12 U.S.C. Section 91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDER: (A) TO EXERCISE
SELF HELP REMEDIES (BUT NOT INCLUDING SETOFF), OR (B) TO FORECLOSE AGAINST ANY
REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL
OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE LENDER MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF ANY
ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE
A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
6. Expenses. In consideration of the Lender's agreement to modify the
Loan, the Borrowers covenant and agree to pay all other reasonable fees, costs,
charges and expenses incurred by the Lender in connection with the preparation
of this Agreement and the modification of the Loan, including without
limitation, the Lender's reasonable attorneys fees and all recording costs.
7. Events of Default. The events of default specifically enumerated in
the Note are hereby amended and replaced with the following enumerated events of
default, and the occurrence of any of the following events shall constitute an
event of default and shall entitle the Lender to exercise all rights and
remedies provided in the Note, as well as all other rights and remedies provided
to the Lender under the terms of any of the other Loan Documents as a result of
the occurrence of the same:
(a) The Borrowers shall fail to make any payment of principal
or interest when due on the Note, or on any other promissory note or other
obligation payable by any of the Borrowers to the Lender and such failure
remains uncured for five (5) days after written notice thereof;
(b) The Borrowers shall fail to comply with the terms of any
covenant or agreement contained herein and such failure remains uncured for
thirty (30) days after notice thereof unless the nature of the default is such
that it cannot be cured within the thirty (30) day period, and the Borrowers
institute corrective action within the thirty (30) day period, and the Borrowers
complete the cure within a period of an additional sixty (60) days; or
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(c) An event of default (as described or defined therein)
shall occur under any of the Loan Documents, and such event of default is not
cured within any applicable grace period provided therein.
8. Continuing Agreements; Novation. Except as expressly modified
hereby, the parties hereto ratify and confirm each and every provision of the
Note and each of the other Loan Documents as if the same were set forth herein.
In the event that any of the terms and conditions in the Note or in any of the
other Loan Documents conflict in any way with the terms and provisions hereof,
the terms and provisions hereof shall prevail. The parties hereto covenant and
agree that the execution of this Agreement is not intended to and shall not
cause or result in a novation with regard to the Note and/or the other Loan
Documents and that the existing indebtedness of the Borrowers to the Lender
evidenced by the Note is continuing, without interruption, and has not been
discharged by a new agreement.
9. Entire Agreement. NO STATEMENTS, AGREEMENTS OR REPRESENTATIONS, ORAL
OR WRITTEN, WHICH MAY HAVE BEEN MADE TO ANY OF THE BORROWERS OR TO ANY EMPLOYEE
OR AGENT OF ANY OF THE BORROWERS, EITHER BY THE LENDER OR BY ANY EMPLOYEE, AGENT
OR BROKER ACTING ON THE LENDER'S BEHALF, WITH RESPECT TO THE MODIFICATION OF THE
LOAN, SHALL BE OF ANY FORCE OR EFFECT, EXCEPT TO THE EXTENT STATED IN THIS
AGREEMENT, AND ALL PRIOR AGREEMENTS AND REPRESENTATIONS WITH RESPECT TO THE
MODIFICATION OF THE LOAN ARE MERGED HEREIN.
10. Captions. The captions herein set forth are for convenience only
and shall not be deemed to define, limit or describe the scope or intent of this
Agreement.
11. Governing Law. The provisions of this Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Maryland as
the same may be in effect from time to time.
12. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original. It
shall not be necessary that the signature of, or on behalf of, each party, or
that the signatures of the persons required to bind any party, appear on more
than one counterpart.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first above written.
WITNESS/ATTEST: BIORELIANCE CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MA BIOSERVICES, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA VIRAL PRODUCTION, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
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WITNESS: NATIONSBANK, N.A.
______________________________ By:__________________________(SEAL)
Elizabeth F. Shore
Vice President
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<PAGE> 1
EXHIBIT 10.29
SECOND DEED OF TRUST NOTE MODIFICATION AGREEMENT
THIS SECOND DEED OF TRUST NOTE MODIFICATION AGREEMENT (this
"Agreement") is made this first day of April, 1998, by and among BIORELIANCE
CORPORATION, a corporation organized and in good standing under the laws of the
State of Delaware, successor in interest to Microbiological Associates, Inc.
(the "Company"), MA BIOSERVICES, INC., a corporation organized and in good
standing under the laws of the State of Delaware ("MA BioServices"), MAGENTA
CORPORATION, a corporation organized and in good standing under the laws of the
State of Delaware ("Magenta") and MAGENTA VIRAL PRODUCTION, INC., a corporation
organized and in good standing under the laws of the State of Delaware ("Magenta
Viral"; together with the Company and MA BioServices, each a "Borrower" and
collectively, the "Borrowers") and NATIONSBANK, N.A., successor in interest to
Maryland National Bank, each a national banking association, its successors and
assigns, (the "Lender").
INTRODUCTORY STATEMENT
A. The Lender has made a loan (the "Loan") in the original principal
amount of Three Million Dollars ($3,000,000) to the Company and Microbiological
Associates International Limited, which changed its name to BioReliance Limited
("MAL") pursuant to the terms of a Deed of Trust Note dated December 17, 1993
from the Borrower and MAL, which Deed of Trust Note was amended by that certain
First Loan Modification Agreement (the "First Loan Modification Agreement")
dated May 31, 1994 by and among the Lender, the Company, MAL, Magenta and
Magenta Services, which among other things added Magenta and Magenta Services as
joint and several co-makers to the Deed of Trust Note, which Deed of Trust Note
was further amended by that certain Second Loan Modification Agreement dated
September 30, 1994 by and among the Company, MAL, Magenta, Magenta Services and
the Lender, and which Deed of Trust Note was amended and restated in its
entirety pursuant to the provisions of that certain Third Loan Modification
Agreement dated as of December 1, 1994, by and among the Company, MAL, Magenta,
Magenta Services and the Lender, which among other things, increased the maximum
principal amount of the Loan from Three Million Dollars ($3,000,000) to Four
Million Three Hundred Thousand Dollars ($4,300,000) (the Deed of Trust Note as
amended and restated from time to time, is hereinafter called, the "Original
Note"). The Original Note was modified pursuant to that certain Deed of Trust
Note Modification Agreement dated as of October 31, 1997 by and among the
Borrowers and the Lender (the "Original Note" as amended and restated from time
to time, is hereinafter called the "Note").
B. The Loan was originally governed by the provisions of that certain
First Amended and Restated Loan Agreement (the "Original Loan Agreement") dated
December 1, 1994, by and among the Company, MAL, Magenta, Magenta Services and
the Lender, which Original Loan Agreement was amended by that certain
Modification of Loan Agreement dated April 25, 1995, by and among the Company,
MAL, Magenta, Magenta Services and the Lender, which Original Loan
<PAGE> 2
Agreement was further amended by that certain Modification of Loan Agreement
dated August 7, 1995 by and among the Company, MAL, Magenta, Magenta Services
and the Lender, which Original Loan Agreement was further amended by that
certain Modification of Loan Agreement dated January 18, 1996, by and among the
Company, MAL, Magenta, Magenta Services and the Lender, which Original Loan
Agreement was further amended by that certain Modification of Loan Agreement
dated May 31, 1996 by and among the Company, MAL, Magenta, Magenta Services and
the Lender, and which Original Loan Agreement was further modified by that
certain Second Modification of Loan Agreement dated June 27, 1996, by and among
the Company, MAL, Magenta, Magenta Services and the Lender, which among other
things, obligated the Company to cause MA Holding, GmbH, a German Company ("MA
Holding") to become an additional maker on the Loan (the Original Loan
Agreement, as thereafter amended, is hereinafter called the "Loan Agreement").
C. The Loan is secured by, among other things, the Company's leasehold
interest in the property described (the "Property") in that certain Leasehold
Deed of Trust and Security Agreement dated December 17, 1993 from the Company to
the trustees named therein for the benefit of the Lender, which Leasehold Deed
of Trust and Security Agreement was recorded December 20, 1993, among the Land
Records for Montgomery County, Maryland in Liber 12140, at folio 779, and which
Leasehold Deed of Trust and Security Agreement was amended by that certain
Modification Agreement-Leasehold Deed of Trust and Security Agreement dated
December 1, 1994 by and among the Company, the trustees named therein and the
Lender, and which Leasehold Deed of Trust and Security Agreement was further
amended by that certain Second Modification Agreement-Leasehold Deed of Trust
and Security Agreement dated October 31, 1997 by and among the Company, the
trustees named therein and the Lender, and which Leasehold Deed of Trust and
Security Agreement is being further amended by that certain Third Modification
Agreement-Leasehold Deed of Trust and Security Agreement dated as of April 1,
1998 by and among the Company, the trustees named therein and the Lender (the
Leasehold Deed of Trust and Security Agreement as amended is hereinafter called
the "Deed of Trust").
D. The Loan Agreement was amended and restated in its entirety upon the
terms and subject to the conditions set forth in that certain Amended and
Restated Replacement Loan Agreement dated October 31, 1997 by and among the
Borrowers and the Lender, which Amended and Restated Replacement Loan Agreement
is being amended by that certain First Amendment to Amended and Restated
Replacement Loan Agreement of even date herewith by and among the Borrowers and
the Lender (the Amended and Restated Replacement Loan Agreement as the same may
be amended from time to time, the "Restated Loan Agreement").
E. The Borrowers have requested and the Lender has agreed to modify the
interest rate applicable to the Loan.
F. On this date the Company continues to be the leasehold owner of the
Property and the Borrowers acknowledge and agree that the Deed of Trust
constitutes a valid and subsisting first lien on the Company's leasehold
interest in the Property for the entire outstanding principal balance of the
Note and interest thereon, all in accordance with the terms, covenants,
conditions and
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<PAGE> 3
warranties of the Deed of Trust and the Note secured thereby, and that all of
the other provisions of the same are in full force and effect.
G. In order to induce the Lender to modify the interest rate applicable
to the Loan and upon the express condition that the lien of the Deed of Trust
remains a valid and subsisting first lien on the Company's leasehold interest in
the Property and that the execution and delivery of this Agreement shall not
impair the lien thereof, the parties hereto have agreed to execute and deliver
this Agreement to modify the terms of repayment of the Loan as hereinafter more
particularly set forth.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for the sum of One
Dollar ($1.00) and other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, the parties hereto, for themselves,
their respective heirs, personal representatives, successors and assigns do
hereby mutually covenant and agree as follows:
1. Incorporation of Recitals. The parties hereto acknowledge and agree
that the recitals hereinabove set forth are true and correct in all respects and
that the same are incorporated herein and made a part hereof.
2. Outstanding Obligations. The parties hereto acknowledge and agree
(a) that the outstanding principal balance of the Note as of March 31, 1998 is
$3,135,416.71 (the "Principal Sum"), (b) that interest on the unpaid principal
balance of the Note has been paid through March 31, 1998, and (c) that the
unpaid principal balance of the Note, together with accrued and unpaid interest
thereon, is due and owing subject to the terms of repayment hereinafter set
forth, without defense or offset.
3. Confirmation of Lien. The Borrowers hereby acknowledge and agree
that the Property is and shall remain in all respects subject to the lien,
charge and encumbrance of the Deed of Trust, and nothing herein contained, and
nothing done pursuant hereto, shall adversely affect or be construed to
adversely affect the lien, charge or encumbrance of, or warranty of title in, or
conveyance effected by the Deed of Trust, or the priority thereof over other
liens, charges, encumbrances or conveyances, or to release or adversely affect
the liability of any party or parties whomsoever who may now or hereafter be
liable under or on account of the Loan or any of the Loan Documents (as
hereinafter defined), nor shall anything herein contained or done in pursuance
hereof adversely affect or be construed to adversely affect any other security
or instrument held by the Lender as security for or evidence of the indebtedness
evidenced and secured thereby.
4. Continuation of Loan Terms. Except as otherwise expressly set forth
below, the outstanding principal balance of the Note shall continue to bear
interest and to be repaid on the terms and subject to the conditions set forth
in the Note and the other documents evidencing and securing
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<PAGE> 4
the Loan (this Agreement, the Note, the Deed of Trust, the Restated Loan
Agreement and all such other documents, whether currently existing or hereafter
executed, and all modifications thereto, extensions or renewals thereof and
substitutions therefor being hereinafter collectively referred to as the "Loan
Documents"). All capitalized terms used but not defined in this Agreement shall
have the meaning given to such terms in the Loan Documents.
5. Interest. Commencing as of the 1st day of April, 1998, until all
sums due under the Loan shall be repaid in full, the unpaid principal balance of
the Note shall bear interest at a rate which is at all times equal to the
fluctuating at the LIBOR Rate (as hereinafter defined), plus the applicable
LIBOR Rate Additional Percentage (the "LIBOR Rate Option").
(1) For purposes hereof, the "LIBOR Rate Additional
Percentage" shall mean the percentages applicable to the Loan in accordance with
the following:
(i) If the ratio of Funded Debt divided by EBITDA is
equal to or greater than 2.75 to 1.0, the LIBOR Rate
Additional Percentage shall be two and 15/100 percent (2.15%);
(ii) If the ratio of Funded Debt divided by EBITDA is
less than 2.75 to 1.0, but equal to or greater than 2.0 to
1.0, the LIBOR Rate Additional Percentage shall be one and
nine tenths percent (1.90%);
(iii) If the ratio of Funded Debt divided by EBITDA
is less than 2.0 to 1.0, but equal to or greater than 1.25 to
1.0 the LIBOR Rate Additional Percentage shall be one and four
tenths percent (1.40%); and
(iv) If the ratio of Funded Debt divided by EBITDA is
less than 1.25 to 1.0, the LIBOR Rate Additional Percentage
shall be one percent (1.00%)
(2) The initial the LIBOR Rate Additional Percentage shall be
one percent (1.00%). Thereafter, the applicable LIBOR Rate Additional Percentage
for all Advances shall be calculated and adjusted quarterly, based on the
quarterly financial statements of the Borrowers required to be submitted to the
Lender pursuant to Section 5.1(c) of the Restated Loan Agreement, commencing
with the statements for the quarter ending September 30, 1997. Such quarterly
changes shall be effective commencing five (5) Banking Days after submission by
the Borrowers of the required financial statements; it being understood,
however, that, subject to the provisions of the immediately following sentence,
in the event the quarterly financial statements are not submitted when due, the
LIBOR Rate Additional Percentage shall be two and 15/100 percent (2.15%), until
such financial statements are submitted as required, at which time, the LIBOR
Rate Additional Percentage (for the balance of the quarterly period) shall be
determined as set forth above. If such financial statements are not submitted
when due, but are received within thirty (30) days of when due, the Lender will
return to the Borrowers any additional interest collected in excess of the
amount that should have otherwise been due hereunder based on the financial
statements. For purposes of the Note, "Funded Debt" and "EBITDA" shall each be
determined based on the consolidated
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<PAGE> 5
quarterly financial statements of the Borrowers and shall have the meanings set
forth in the Restated Loan Agreement.
(3) For purposes hereof, the "LIBOR Rate" shall mean a
fluctuating rate of interest equal to the one month rate of interest (rounded
upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the one month London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) on the second
preceding business day as adjusted from time to time in Lender's sole discretion
for then applicable reserve requirements, deposit insurance assessment rates and
other regulatory costs. If for any reason such rate is not available, the term
"LIBOR Rate" shall mean the fluctuating rate of interest equal to the one month
rate of interest (rounded upwards, if necessary to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the one month London interbank offered
rate for deposits in Dollars at approximately 11:00 a.m. (London time) on the
second preceding business day, as adjusted from time to time in Lender's sole
discretion for then applicable reserve requirements, deposit insurance
assessment rates and other regulatory costs; provided, however, if more than one
rate is specified on Reuters Screen LIBO page, the applicable rate shall be the
arithmetic mean of all such rates. "Telerate Page 3750" means the British
Bankers Association Libor Rates (determined as of 11:00 a.m. London time) that
are published by Dow Jones Telerate, Inc.
(4) The Borrowers shall pay to the Lender, as additional
interest, the following sums, at the time and in the manner hereinafter set
forth:
i) if, due to either: (i) the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation or (ii) the compliance by the Lender with any guideline
or request from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to the Lender
of agreeing to make or making, funding or maintaining advances of all or a
portion of the Principal Sum, then the Borrowers shall from time to time, upon
demand by the Lender, pay to the Lender additional amounts to indemnify the
Lender against any such increased costs. A certificate as to the amount of such
increased costs submitted to the Borrowers by the Lender shall be conclusive. It
shall be deemed, for purposes of computing any increased costs pursuant to this
Section, that (i) the making and maintaining of advances of the Principal Sum
which accrue interest based on the LIBOR Rate have been made by the Lender from
its office in London, England and (ii) the funding of each Advance of the
Principal Sum by the Lender which accrues interest based on the LIBOR Rate has
been made through the London Interbank Market. Such additional cost shall be
payable hereunder at the time and in the manner that interest is payable
hereunder for such costs incurred since the last interest payment;
ii) the Borrowers shall also pay to
the Lender at the time and in the manner that interest is payable hereunder for
each advance, the cost since the last interest payment date, as determined in
good faith by the Lender, of complying, in connection with such advance during
such interest period, with any reserve, special deposit or similar requirement
(including but not limited to reserve requirements under Federal Reserve
Regulation D) imposed or deemed applicable against any assets held by or
deposits or accounts in or with or credit extended
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<PAGE> 6
by the Lender, or the office of the Lender in London, England, by any United
States governmental authority charged with the administration of such
requirements. Each notification as to the amount of such cost, delivered to the
Borrowers by the Lender shall, in the absence of manifest error, be conclusive
as to the amount of such cost. It shall be deemed for purposes of computing cost
pursuant to the above provision that the making and maintaining of each advance
which accrues interest based on the LIBOR Rate has been made by the Lender
through its office in London, England.
(5) In respect to any interest rate election hereunder and any
transactions contemplated hereby, the Borrowers authorize the Lender to accept,
rely upon, act upon and comply with, any verbal or written instructions,
requests, confirmations and orders of Michael R. N. Thomas or Sherry L. Rhodes
on behalf of the Borrowers. The Borrowers acknowledge and agree that the
transmission between the Borrowers and the Lender of any such instructions,
requests, confirmations and orders involves the possibility of errors,
omissions, mistakes and discrepancies and agrees to adopt such internal measures
and operational procedures to protect its interests. By reason thereof, the
Borrowers hereby assume all risk of loss and responsibility for, releases and
discharges the Lender from any and all responsibility or liability for, and
agrees to indemnify, reimburse on demand and hold the Lender harmless from, any
and all claims, actions, damages, losses, liability and expenses by reason of,
arising out of or in any way connected with or related to, (i) the Lender's
acceptance, reliance and actions upon, compliance with or observation of any
such instructions, requests, confirmations or orders, and (ii) any such errors,
omissions, mistakes and discrepancies, except those caused by the Lender's gross
negligence or willful misconduct.
(6) All interest payable under the terms of the Note shall be
calculated on the basis of a 360-day year and the actual number of days elapsed.
6. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF THIS AGREEMENT, THE
LOAN DOCUMENTS, OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING
ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR
ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., D/B/A J.A.M.S./ENDISPUTE
("J.A.M.S.") AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF AN
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING ANY ACTION, INCLUDING A SUMMARY OR
EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH
THIS INSTRUMENT, AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
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<PAGE> 7
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN MONTGOMERY
COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR. IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN
THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL
BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCING OF SUCH HEARING FOR AN ADDITIONAL SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY THE LENDER OF THE
PROTECTION AFFORDED TO IT BY 12 U.S.C. SECTION 91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDER: (A) TO EXERCISE
SELF HELP REMEDIES (BUT NOT INCLUDING SETOFF), OR (B) TO FORECLOSE AGAINST ANY
REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL
OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE LENDER MAY EXERCISE SUCH SELF
HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER
THE EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF ANY
ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE
A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
7. Expenses. In consideration of the Lender's agreement to modify the
Loan, the Borrowers covenant and agree to pay all other reasonable fees, costs,
charges and expenses incurred by the Lender in connection with the preparation
of this Agreement and the modification of the Loan, including without
limitation, the Lender's reasonable attorneys fees and all recording costs.
8. Events of Default. The events of default specifically enumerated in
the Note are hereby amended and replaced with the following enumerated events of
default, and the occurrence of any of the following events shall constitute an
event of default and shall entitle the Lender to exercise all rights and
remedies provided in the Note and the Deed of Trust, as well as all other rights
and remedies provided to the Lender under the terms of any of the other Loan
Documents as a result of the occurrence of the same:
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<PAGE> 8
(a) The Borrowers shall fail to make any payment of principal
or interest when due on the Note, or on any other promissory note or other
obligation payable by any of the Borrowers to the Lender and such failure
remains uncured for five (5) days after written notice thereof;
(b) The Borrowers shall fail to comply with the terms of any
covenant or agreement contained herein and such failure remains uncured for
thirty (30) days after notice thereof unless the nature of the default is such
that, it cannot be cured within the thirty (30) day period, and the Borrowers
institute corrective action within the thirty (30) day period, and the Borrowers
complete the cure within a period of an additional sixty (60) days; or
(c) An event of default (as described or defined therein)
shall occur under any of the Loan Documents, and such event of default is not
cured within any applicable grace period provided therein.
9. Continuing Agreements; Novation. Except as expressly modified
hereby, the parties hereto ratify and confirm each and every provision of the
Note, the Deed of Trust and each of the other Loan Documents as if the same were
set forth herein. In the event that any of the terms and conditions in the Note
or in any of the other Loan Documents conflict in any way with the terms and
provisions hereof, the terms and provisions of the Restated Loan Agreement shall
prevail. The parties hereto covenant and agree that the execution of this
Agreement is not intended to and shall not cause or result in a novation with
regard to the Note, the Deed of Trust and/or the other Loan Documents and that
the existing indebtedness of the Borrowers to the Lender evidenced by the Note
is continuing, without interruption, and has not been discharged by a new
agreement.
10. ENTIRE AGREEMENT. NO STATEMENTS, AGREEMENTS OR REPRESENTATIONS,
ORAL OR WRITTEN, WHICH MAY HAVE BEEN MADE TO ANY OF THE BORROWERS OR TO ANY
EMPLOYEE OR AGENT OF ANY OF THE BORROWERS, EITHER BY THE LENDER OR BY ANY
EMPLOYEE, AGENT OR BROKER ACTING ON THE LENDER'S BEHALF, WITH RESPECT TO THE
MODIFICATION OF THE LOAN, SHALL BE OF ANY FORCE OR EFFECT, EXCEPT TO THE EXTENT
STATED IN THIS AGREEMENT, AND ALL PRIOR AGREEMENTS AND REPRESENTATIONS WITH
RESPECT TO THE MODIFICATION OF THE LOAN ARE MERGED HEREIN.
11. Captions. The captions herein set forth are for convenience only
and shall not be deemed to define, limit or describe the scope or intent of this
Agreement.
12. Governing Law. The provisions of this Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Maryland as
the same may be in effect from time to time.
13. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original. It
shall not be necessary that the signature of, or on behalf of, each party, or
that the signatures of the persons required to bind any party, appear on more
than one counterpart.
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<PAGE> 9
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first above written.
WITNESS/ATTEST: BIORELIANCE CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MA BIOSERVICES, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA VIRAL PRODUCTION, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
9
<PAGE> 10
WITNESS: NATIONSBANK, N.A.
______________________________ By:__________________________(SEAL)
Elizabeth F. Shore
Vice President
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<PAGE> 1
EXHIBIT 10.30
SECOND REPLACEMENT REVOLVING
PROMISSORY NOTE
$1,000,000 Rockville, Maryland
Effective as of April 1, 1998
FOR VALUE RECEIVED, BIORELIANCE CORPORATION, a corporation organized and
in good standing under the laws of the State of Delaware, successor in interest
to Microbiological Associates, Inc. (the "Company"), MA BIOSERVICES, INC., a
corporation organized and in good standing under the laws of the State of
Delaware ("MA BioServices"), MAGENTA CORPORATION, a corporation organized and in
good standing under the laws of the State of Delaware ("Magenta") and MAGENTA
VIRAL PRODUCTION, INC., a corporation organized and in good standing under the
laws of the State of Delaware ("Magenta Viral"; together with the Company, MA
BioServices and Magenta, each a "Borrower" and collectively, the "Borrowers"),
jointly and severally, promise to pay to the order of NATIONSBANK, N.A., a
national banking association, its successors and assigns (the "Lender"), the
principal sum of ONE MILLION DOLLARS ($1,000,000) (the "Principal Sum"), or so
much thereof as has been or may be advanced or readvanced to or for the account
of the Borrowers pursuant to the terms and conditions of the Loan Agreement (as
hereinafter defined), together with interest thereon at the rate or rates
hereinafter provided, in accordance with the following:
1. INTEREST. Commencing as of the date hereof and continuing until
repayment in full of all sums due hereunder, the unpaid Principal Sum shall bear
interest at the LIBOR Rate (as hereinafter defined), plus the applicable LIBOR
Rate Additional Percentage (the "LIBOR Rate Option").
<PAGE> 2
(a) For purposes hereof, the "LIBOR Rate Additional Percentage"
shall mean the percentages applicable to this Note in accordance with the
following:
(i) If the ratio of Funded Debt divided by EBITDA is
equal to or greater than 2.75 to 1.0, the LIBOR Rate Additional Percentage
shall be two percent (2.00%);
(ii) If the ratio of Funded Debt divided by EBITDA is
less than 2.75 to 1.0, but equal to or greater than 2.0 to 1.0, the LIBOR
Rate Additional Percentage shall be one and three quarters percent
(1.75%);
(iii) If the ratio of Funded Debt divided by EBITDA is
less than 2.0 to 1.0, but equal to or greater than 1.25 to 1.0 the LIBOR
Rate Additional Percentage shall be one and one quarter percent (1.25%);
and
(iv) If the ratio of Funded Debt divided by EBITDA is
less than 1.25 to 1.0, the LIBOR Rate Additional Percentage shall be
85/100 percent (.85%)
(b) The initial LIBOR Rate Additional Percentage shall be 85/100
percent (.85%). Thereafter, the applicable LIBOR Rate Additional Percentage for
all Advances shall be calculated and adjusted quarterly, based on the quarterly
financial statements of the Borrowers required to be submitted to the Lender
pursuant to Section 5.1(c) of the Loan Agreement, commencing with the statements
for the quarter ending December 31, 1997. Such quarterly changes shall be
effective commencing five (5) Banking Days after submission by the Borrowers of
the required financial statements; it being understood, however, that, subject
to the provisions of the immediately following sentence, in the event the
quarterly financial statements are not submitted when due, the LIBOR Rate
Additional Percentage shall be two percent (2.00%), until such financial
2
<PAGE> 3
statements are submitted as required, at which time, the LIBOR Rate Additional
Percentage (for the balance of the quarterly period) shall be determined as set
forth above. If such financial statements are not submitted when due, but are
received within thirty (30) days of when due, the Lender will return to the
Borrower any additional interest collected in excess of the amount that should
have otherwise been due hereunder based on the financial statements. For
purposes of this Note, "Funded Debt" and "EBITDA" shall each be determined based
on the consolidated quarterly financial statements of the Borrowers and shall
have the meanings set forth in the Loan Agreement.
(c) For purposes hereof, the "LIBOR Rate" shall mean a fluctuating
rate of interest equal to the one month rate of interest (rounded upwards, if
necessary to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the one month London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) on the second preceding
business day as adjusted from time to time in Lender's sole discretion for then
applicable reserve requirements, deposit insurance assessment rates and other
regulatory costs. If for any reason such rate is not available, the term "LIBOR
Rate" shall mean the fluctuating rate of interest equal to the one month rate of
interest (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the one month London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) on the second
preceding business day, as adjusted from time to time in Lender's sole
discretion for then applicable reserve requirements, deposit insurance
assessment rates and other regulatory costs; provided, however, if more than one
rate is specified on Reuters Screen LIBO page, the applicable rate shall be the
arithmetic mean of all such rates. "Telerate Page 3750" means the British
Bankers Association Libor Rates (determined as of 11:00 a.m. London time) that
are published by Dow Jones Telerate, Inc.
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<PAGE> 4
(d) The Borrowers shall pay to the Lender, as additional interest,
the following sums, at the time and in the manner hereinafter set forth:
(A) if, due to either: (i) the introduction of or any
change (including, without limitation, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation or (ii) the compliance by the Lender with any guideline or request
from any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to the Lender of agreeing
to make or making, funding or maintaining advances of all or a portion of the
Principal Sum, then the Borrowers shall from time to time, upon demand by the
Lender, pay to the Lender additional amounts to indemnify the Lender against any
such increased costs. A certificate as to the amount of such increased costs
submitted to the Borrowers by the Lender shall in the absence of manifest error
be conclusive. It shall be deemed, for purposes of computing any increased costs
pursuant to this Section, that (i) the making and maintaining of advances of the
Principal Sum which accrue interest based on the LIBOR Rate have been made by
the Lender from its office in London, England and (ii) the funding of each
Advance of the Principal Sum by the Lender which accrues interest based on the
LIBOR Rate has been made through the London Interbank Market. Such additional
cost shall be payable hereunder at the time and in the manner that interest is
payable hereunder for such costs incurred since the last interest payment;
(B) the Borrowers shall also pay to the Lender at the
time and in the manner that interest is payable hereunder for each advance, the
cost since the last interest payment date, as determined in good faith by the
Lender, of complying, in connection with such advance during such interest
period, with any reserve, special deposit or similar requirement
4
<PAGE> 5
(including but not limited to reserve requirements under Federal Reserve
Regulation D) imposed or deemed applicable against any assets held by or
deposits or accounts in or with or credit extended by the Lender, or the office
of the Lender in London, England, by any United States governmental authority
charged with the administration of such requirements. Each notification as to
the amount of such cost, delivered to the Borrowers by the Lender shall, in the
absence of manifest error, be conclusive as to the amount of such cost. It shall
be deemed for purposes of computing cost pursuant to the above provision that
the making and maintaining of each advance which accrues interest based on the
LIBOR Rate has been made by the Lender through its office in London, England.
(e) In respect to any interest rate election hereunder and any
transactions contemplated hereby, the Borrowers authorize the Lender to accept,
rely upon, act upon and comply with, any verbal or written instructions,
requests, confirmations and orders of Michael R. N. Thomas or Sherry L. Rhodes
on behalf of the Borrowers. The Borrowers acknowledge and agree that the
transmission between the Borrowers and the Lender of any such instructions,
requests, confirmations and orders involves the possibility of errors,
omissions, mistakes and discrepancies and agrees to adopt such internal measures
and operational procedures to protect its interests. By reason thereof, the
Borrowers hereby assume all risk of loss and responsibility for, releases and
discharges the Lender from any and all responsibility or liability for, and
agrees to indemnify, reimburse on demand and hold the Lender harmless from, any
and all claims, actions, damages, losses, liability and expenses by reason of,
arising out of or in any way connected with or related to, (i) the Lender's
acceptance, reliance and actions upon, compliance with or observation of any
such instructions,
5
<PAGE> 6
requests, confirmations or orders, and (ii) any such errors, omissions, mistakes
and discrepancies, except those caused by the Lender's gross negligence or
willful misconduct.
(f) All interest payable under the terms of this Note shall be
calculated on the basis of a 360-day year and the actual number of days elapsed.
2. PAYMENTS AND MATURITY. The unpaid Principal Sum, together with interest
thereon at the rate or rates provided above, shall be payable as follows:
(a) Interest only on the unpaid Principal Sum shall be due and
payable monthly, commencing April 30, 1998 and on the last day of each month
thereafter to maturity; and
(b) Unless sooner paid, the unpaid Principal Sum, together with
interest accrued and unpaid thereon, shall be due and payable in full on May 31,
1998.
The fact that the balance hereunder may be reduced to zero from time to
time pursuant to the Loan Agreement will not affect the continuing validity of
this Note or the Loan Agreement, and the balance may be increased to the
Principal Sum after any such reduction to zero.
3. DEFAULT INTEREST. Upon the occurrence of an Event of Default (as
hereinafter defined), the unpaid Principal Sum shall bear interest thereafter at
a rate five percent (5.0%) per annum in excess of the LIBOR Rate until such
Event of Default is cured.
4. LATE CHARGES. If the Borrowers shall fail to make any payment under the
terms of this Note within fifteen (15) days after the date such payment is due,
the Borrowers shall pay to the Lender on demand a late charge equal to three
percent (3%) of such payment.
5. COMMITMENT FEE. The Borrowers jointly and severally agree to pay to the
Lender on the first day of every third calendar month hereafter commencing after
the date of this Note a commitment fee (computed on the basis of a year
consisting of three hundred and sixty (360) days
6
<PAGE> 7
for the actual number of days elapsed) of one quarter of one percent (.25%) per
annum on the daily average of the unused amount of this Note during such period.
6. APPLICATION AND PLACE OF PAYMENTS. All payments, made on account of
this Note shall be applied first to the payment of any late charge then due
hereunder, second to the payment of accrued and unpaid interest then due
hereunder, and the remainder, if any, shall be applied to the unpaid Principal
Sum. All payments on account of this Note shall be paid in lawful money of the
United States of America in immediately available funds during regular business
hours of the Lender at its principal office in Rockville, Maryland or at such
other times and places as the Lender may at any time and from time to time
designate in writing to the Borrowers.
7. LOAN AGREEMENT AND OTHER LOAN DOCUMENTS. This Note is the "Line of
Credit Replacement Note" described in that certain Amended and Restated
Replacement Loan Agreement dated October 31, 1997 by and among the Borrowers and
the Lender (the Amended and Restated Replacement Loan Agreement, as thereafter
amended from time to time, is hereinafter called the "Loan Agreement"). This
Note amends and restates in its entirety that certain Replacement Revolving
Promissory Note dated October 31, 1997 in the maximum principal amount of One
Million Dollars ($1,000,000) from the Borrowers in favor of the Lender (as
amended from time to time, the "Original Note"). It is expressly agreed that the
indebtedness evidenced by the Original Note has not been extinguished or
discharged hereby. The Borrowers agree that the execution of this Agreement is
not intended to and shall not cause or result in a novation with respect to the
Original Note. The indebtedness evidenced by this Note is included within the
meaning of the term "Obligations" as defined in the Loan Agreement. The term
"Loan Documents" as used in this Note shall mean collectively this Note, the
Loan Agreement and any other instrument, agreement, or
7
<PAGE> 8
document previously, simultaneously, or hereafter executed and delivered by the
Borrowers and/or any other person, singularly or jointly with any other person,
evidencing, securing, guaranteeing, or in connection with the Principal Sum,
this Note and/or the Loan Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Loan
Agreement.
8. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an event of default (individually, an "Event of Default"
and collectively, the "Events of Default") under the terms of this Note:
(a) The failure of the Borrowers to pay to the Lender when due any
and all amounts payable by the Borrowers to the Lender and such failure remains
uncured for five (5) days after written notice thereof; or
(b) The occurrence of an event of default (as defined therein) under
the terms and conditions of any of the other Loan Documents.
9. REMEDIES. Upon the occurrence of an Event of Default, at the option of
the Lender, all amounts payable by the Borrowers to the Lender under the terms
of this Note shall immediately become due and payable by the Borrowers to the
Lender without notice to the Borrowers or any other person, and the Lender shall
have all of the rights, powers, and remedies available under the terms of this
Note, any of the other Loan Documents and all applicable laws. The Borrowers and
all endorsers, guarantors, and other parties who may now or in the future be
primarily or secondarily liable for the payment of the indebtedness evidenced by
this Note hereby severally waive presentment, protest and demand, notice of
protest, notice of demand and of dishonor and non-payment of this Note and
expressly agree that this Note or any payment hereunder may be extended
8
<PAGE> 9
from time to time without in any way affecting the liability of the Borrowers,
guarantors and endorsers.
Until such time as the Lender is not committed to extend further credit to
the Borrowers and all Obligations of the Borrowers to the Lender have been
indefeasibly paid in full in cash, and subject to and not in limitation of the
provisions set forth in the next following paragraph below, no Borrower shall
have any right of subrogation (whether contractual, arising under the Bankruptcy
Code or otherwise), reimbursement or contribution from any Borrower or any
guarantor, nor any right of recourse to its security for any of the debts and
obligations of any Borrower which are the subject of this Note. Except as
otherwise expressly permitted by the Loan Agreement, any and all present and
future debts and obligations of any Borrower to any other Borrower are hereby
subordinated to the full payment and performance of all present and future debts
and obligations to the Lender under this Note and the Loan Agreement and the
Loan Documents, provided, however, notwithstanding anything set forth in this
Note to the contrary, prior to the occurrence of a payment Default, the
Borrowers shall be permitted to make payments on account of any of such present
and future debts and obligations from time to time in accordance with the terms
thereof.
Each Borrower further agrees that, if any payment made by any Borrower or
any other person is applied to this Note and is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any property hereafter
securing this Note is required to be returned by the Lender to any Borrower, its
estate, trustee, receiver or any other party, including, without limitation,
such Borrower, under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, such
Borrower's liability hereunder (and any lien, security interest or other
9
<PAGE> 10
collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, or, if prior thereto
any such lien, security interest or other collateral hereafter securing such
Borrower's liability hereunder shall have been released or terminated by virtue
of such cancellation or surrender, this Note (and such lien, security interest
or other collateral) shall be reinstated in full force and effect, and such
prior cancellation or surrender shall not diminish, release, discharge, impair
or otherwise affect the obligations of such Borrower in respect of the amount of
such payment (or any lien, security interest or other collateral securing such
obligation).
The JOINT AND SEVERAL obligations of each Borrower under this Note shall
be absolute, irrevocable and unconditional and shall remain in full force and
effect until the outstanding principal of and interest on this Note and all
other Obligations or amounts due hereunder and under the Loan Agreement and the
Loan Documents shall have been indefeasibly paid in full in cash in accordance
with the terms thereof and this Note shall have been canceled.
10. EXPENSES. The Borrowers, jointly and severally, promise to pay to the
Lender on demand by the Lender all reasonable costs and expenses incurred by the
Lender in connection with the collection and enforcement of this Note,
including, without limitation, reasonable attorneys' fees and expenses and all
court costs.
11. NOTICES. Any notice, request, or demand to or upon the Borrowers or
the Lender shall be deemed to have been properly given or made when delivered in
accordance with Section 9.1 of the Loan Agreement.
12. MISCELLANEOUS. Each right, power, and remedy of the Lender as provided
for in this Note or any of the other Loan Documents, or now or hereafter
existing under any applicable law or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power,
10
<PAGE> 11
or remedy provided for in this Note or any of the other Loan Documents or now or
hereafter existing under any applicable law, and the exercise or beginning of
the exercise by the Lender of any one or more of such rights, powers, or
remedies shall not preclude the simultaneous or later exercise by the Lender of
any or all such other rights, powers, or remedies. No failure or delay by the
Lender to insist upon the strict performance of any term, condition, covenant,
or agreement of this Note or any of the other Loan Documents, or to exercise any
right, power, or remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, condition, covenant, or agreement or of any such
breach, or preclude the Lender from exercising any such right, power, or remedy
at a later time or times. By accepting payment after the due date of any amount
payable under the terms of this Note, the Lender shall not be deemed to waive
the right either to require prompt payment when due of all other amounts payable
under the terms of this Note or to declare an Event of Default for the failure
to effect such prompt payment of any such other amount. No course of dealing or
conduct shall be effective to amend, modify, waive, release, or change any
provisions of this Note.
13. PARTIAL INVALIDITY. In the event any provision of this Note (or any
part of any provision) is held by a court of competent jurisdiction to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provision (or remaining part of
the affected provision) of this Note; but this Note shall be construed as if
such invalid, illegal, or unenforceable provision (or part thereof) had not been
contained in this Note, but only to the extent it is invalid, illegal, or
unenforceable.
14. CAPTIONS. The captions herein set forth are for convenience only and
shall not be deemed to define, limit, or describe the scope or intent of this
Note.
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<PAGE> 12
15. APPLICABLE LAW. Each of the Borrowers acknowledges and agrees that
this Note shall be governed by the laws of the State of Maryland, even though
for the convenience and at the request of the Borrowers, this Note may be
executed elsewhere.
16. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF THIS NOTE, THE LOAN
DOCUMENTS OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY
CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR
ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., D/B/A J.A.M.S./ENDISPUTE
("J.A.M.S.") AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF AN
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS NOTE,
AGREEMENT OR DOCUMENT MAY BRING ANY ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
NOTE, AGREEMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN MONTGOMERY
COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR. IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM
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<PAGE> 13
ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL
SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN NINETY (90) DAYS OF THE
DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF
CAUSE, BE PERMITTED TO EXTEND THE COMMENCING OF SUCH HEARING FOR AN ADDITIONAL
SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS NOTE, AGREEMENT OR DOCUMENT
SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE
STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS NOTE,
AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY THE LENDER OF THE PROTECTION
AFFORDED TO IT BY 12 U.S.C. SECTION 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE
LAW; OR (III) LIMIT THE RIGHT OF THE LENDER: (A) TO EXERCISE SELF HELP REMEDIES
( BUT NOT INCLUDING SETOFF), OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL
PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. THE LENDER MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS NOTE, AGREEMENT OR DOCUMENT. NEITHER THE EXERCISE OF SELF HELP
REMEDIES NOR THE
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<PAGE> 14
INSTITUTION OR MAINTENANCE OF ANY ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
IN WITNESS WHEREOF, the Borrowers have caused this Note to be executed
under seal by their duly authorized officers as of the date first written above.
WITNESS/ATTEST: BIORELIANCE CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MA BIOSERVICES, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: MAGENTA VIRAL PRODUCTION, INC.
______________________________ By:__________________________(SEAL)
Name:
Title:
14
<PAGE> 1
EXHIBIT 10.31
NOTE TO CLERK: THIS IS A SUPPLEMENTAL INSTRUMENT OF WRITING AS DEFINED IN
SECTION 12-101(g), REAL PROPERTY ARTICLE, ANNOTATED CODE OF MARYLAND (1994 REPL.
VOL.) WHICH IS EXEMPT FROM RECORDATION TAX PURSUANT TO SECTION 12-108(e) OF THE
AFORESAID CODE.
THIRD MODIFICATION AGREEMENT - LEASEHOLD
DEED OF TRUST AND SECURITY AGREEMENT
THIS THIRD MODIFICATION AGREEMENT - LEASEHOLD DEED OF TRUST AND SECURITY
AGREEMENT (this "Amendment") is made as of the ___ day of April, 1998 by and
among BIORELIANCE CORPORATION, a corporation organized and in good standing
under the laws of State of Delaware, successor in interest to and formerly know
of record as MICROBIOLOGICAL ASSOCIATES, INC., (the "Grantor"), ELIZABETH F.
SHORE, as trustee (the "Trustee") and NATIONSBANK, N.A., a national banking
association successor-in-interest to MARYLAND NATIONAL BANK, a national banking
association (the "Beneficiary").
RECITALS
A. The Beneficiary has made a line of credit converting into a term loan
(the "Loan") in the original principal amount of Three Million Dollars
($3,000,000), which Loan is evidenced by that certain Deed of Trust Note dated
December 17, 1993 from the Grantor and Microbiological Associates International
Limited, which name has been changed to BioReliance Limited ("MAL"), which Deed
of Trust Note was amended by that certain First Loan Modification Agreement (the
"First Loan Modification Agreement") dated May 31, 1994 by and among the
Beneficiary, the Grantor, MAL, MAGENTA Corporation and Magenta Services, Ltd.,
which among other things added Magenta Corporation and Magenta Services, Ltd. as
joint and several co-makers to the Deed
<PAGE> 2
of Trust Note, which Deed of Trust Note was further amended by that certain
Second Loan Modification Agreement dated September 30, 1994 by and among the
Grantor, MAL, MAGENTA Corporation ("Magenta"), Magenta Services, Ltd. ("Magenta
Services") and the Beneficiary, and which Deed of Trust Note was amended and
restated in its entirety pursuant to the provisions of that certain Third Loan
Modification Agreement dated as of December 1, 1994, by and among the Grantor,
MAL, Magenta, Magenta Services and the Beneficiary, which among other things,
increased the maximum principal amount of the Loan from Three Million Dollars
($3,000,000) to Four Million Three Hundred Thousand Dollars ($4,300,000) and
which Deed of Trust Note is being further amended by that certain Deed of Trust
Note Modification Agreement of even date herewith by and among the Grantor, MA
BioServices, Inc., Magenta and Magenta Viral Production, Inc. (collectively, the
"Borrowers") and the Beneficiary (the Deed of Trust Note as amended and restated
from time to time, is hereinafter called, the "Note").
B. The Loan is secured by that certain Leasehold Deed of Trust and
Security Agreement dated December 17, 1993 from the Grantor to the trustees
named therein for the benefit of the Beneficiary, which Leasehold Deed of Trust
and Security Agreement was recorded December 20, 1993, among the Land Records
for Montgomery County, Maryland in Liber 12140, at folio 779, and which
Leasehold Deed of Trust and Security Agreement was amended by that certain
Modification Agreement-Leasehold Deed of Trust and Security Agreement dated
December 1, 1994 by and among the Grantor, the trustees named therein and the
Beneficiary, and which Leasehold Deed of Trust and Security Agreement was
further amended by that certain Second Modification Agreement-Leasehold Deed of
Trust and Security Agreement dated October 31, 1997 by and among the Grantor,
the
2
<PAGE> 3
trustees named therein and the Beneficiary (the Leasehold Deed of Trust and
Security Agreement as thereafter amended from time to time is hereinafter called
the "Deed of Trust").
C. The Borrowers and the Beneficiary have entered into that certain
Amended and Restated Replacement Loan Agreement dated October 31, 1997 (the
"Restated Loan Agreement"), which Restated Loan Agreement is being amended by
that certain First Amendment to Amended and Restated Replacement Loan Agreement
(the "First Amendment") of even date herewith (the Restated Loan Agreement as
amended from time to time is hereinafter called the "Loan Agreement").
D. The Borrowers have requested and the Beneficiary has agreed to amend or
delete certain provisions of the Deed of Trust to conform with the terms and
provisions of the First Amendment, all as more fully described herein.
NOW, THEREFORE, this Amendment, witnesseth that for Five Dollars
($5.00) and other good and valuable consideration payable to each of the parties
by the other parties, the parties hereby agree as follows:
1. Incorporation of Recitals. The parties hereto acknowledge and agree
that the recitals hereinabove set forth are true and correct in all respects and
that the same are incorporated herein and made a part hereof.
2. Insurance. The parties hereto agree, that under the provisions of
Section 4.5 of the Deed of Trust the Borrowers may "self insure" pursuant to a
formal plan adopted and approved by Board of Directors of each applicable
Borrower, provided that the aggregate amount of contingent liability at any time
under such self insurance plan or plans does not exceed Three Million Dollars
($3,000,000).
3
<PAGE> 4
3. Events of Default. Sections 6.1 (Payment of Indebtedness), 6.2
(Performance of Obligations), and 6.15 (Default Under the Lease) of the Deed of
Trust are hereby amended and restated in their entirety as follows:
6.1 Payment of Indebtedness. Grantor shall fail to make any payment
of the Indebtedness, when and as the same shall become due and payable and
such failure shall continue for a period of five (5) days after written
notice thereof.
6.2 Performance of Obligations. Grantor shall default in the due
observance or performance of any of the Obligations and such default shall
continue uncured for thirty (30) days after notice thereof shall have been
given to Grantor by the Beneficiary, unless (a) the nature of the default
is such that it cannot be cured within the thirty (30) day period, and (b)
the Grantor institutes corrective action within the thirty (30) day
period, and (c) the Grantor completes the cure within a period of an
additional sixty (60) days.
6.15 Default Under the Lease. The occurrence of any Event of Default
under the Lease.
4. Assignment of Leases and Rents. Section 9.3 (No Third-Party Assignment)
of the Deed of Trust is hereby amended and restated in its entirety as follows:
9.3 No Third-Party Assignment. Grantor will not without
Beneficiary's prior written consent assign, permit subletting (except
assignments and subleases to Subsidiaries of the Grantor) (unless the
right is expressly reserved by the tenant) or otherwise encumber future
rental payments under the Leases or in and to the Rents to third parties,
nor will Grantor anticipate for more than one (1) month any rents that may
become collectible under such Leases.
5. Environmental Concerns. Section 11.0 of the Deed of Trust is hereby
amended and restated in its entirety as follows:
11.0 Compliance. (a) Grantor agrees to (i) give notice to the
Beneficiary immediately upon the Grantor's acquiring knowledge of any and
all enforcement, cleanup,
4
<PAGE> 5
remedial, removal or other governmental or regulatory actions instituted,
completed or threatened pursuant to any applicable Environmental
Regulations relating to any Hazardous Materials affecting the Mortgaged
Property or the Grantor ("Hazardous Material Claims") with respect to any
Environmental Regulations with a full description thereof; (ii) at the
Grantor's sole cost and expense, promptly comply or cause compliance with
any and all Environmental Regulations relating to the Mortgaged Property
or such Hazardous Materials Claim and provide the Beneficiary with
satisfactory evidence of such compliance; and (iii) take whatever other
action as the Beneficiary may deem necessary or appropriate in its
reasonable discretion to restore to the Grantor the full use and benefit
of the Mortgaged Property as contemplated by the Loan Documents.
(b) If an Event of Default shall have occurred hereunder or under
any of the other Loan Documents, the Grantor shall immediately upon the
receipt of notice from the Beneficiary, which may be given at any time and
from time to time by the Beneficiary in its sole discretion (but not more
frequently than once during any twelve (12) month period), cause a report
of the Mortgaged Property of such scope (including but not limited to the
taking of soil borings and air and groundwater samples and other above and
below ground testing) as the Beneficiary may request, prepared by a
recognized environmental consulting firm acceptable to the Beneficiary in
all respects and sufficient in detail to comply with the Beneficiary's
established guidelines and the guidelines of any appropriate governmental
authority (an "Environmental Assessment") to be undertaken with respect to
the Mortgaged Property and furnish the same to the Beneficiary within
thirty (30) days after the date of the Beneficiary's request. The cost of
any such environmental assessment shall be borne exclusively by the
Grantor. The Grantor shall cooperate with each environmental consulting
firm engaged to make any such Environmental Assessment and shall supply to
each such environmental consulting firm, from time to time and promptly on
request, all information available to the Grantor to facilitate the
completion of the Environmental Assessment. Notwithstanding the foregoing,
the Beneficiary shall be under no duty to require the preparation of any
Environmental Assessment of the Mortgaged Property, and in no event shall
any such Environmental Assessment by the Beneficiary be or give rise to
any representation or warranty by the Beneficiary that Hazardous Materials
are or are not present on the Mortgaged Property, or that there has been
compliance by the Grantor or any other person with any Environmental
Regulations.
(c) The Grantor shall protect, indemnify, defend and hold the
Beneficiary, the Trustees, any persons owned or controlled by, owning or
controlling, or under the common control of or affiliated with, the
Beneficiary and/or the Trustees, any participants in the Loan, the
directors, officers, employees and agents of the Beneficiary, and/or such
other persons, and the heirs, personal representatives, successors and
assigns of each of the foregoing, harmless from and against any and all
any liability, suit, action, claim, demand, loss, expense, penalty, fine,
judgment or other cost of any kind or nature whatsoever, including without
limitation, fees, costs and expenses of attorneys, consultants,
contractors and experts ("Claims") of any kind or nature whatsoever
arising out of or in any way connected with any
5
<PAGE> 6
investigative, enforcement, cleanup, removal, containment, remedial or
other private, governmental or regulatory action at any time threatened,
instituted or completed pursuant to any applicable Environmental
Requirement against the Grantor or the Beneficiary or against or with
respect to the Mortgaged Property or any condition, use or activity on the
Mortgaged Property or at any time threatened or made by any person against
the Grantor or the Beneficiary or against or with respect to the Mortgaged
Property or any condition, use or activity on the Mortgaged Property
relating to any damage, contribution, cost recovery, compensation, loss or
injury resulting from or in any way arising in connection with any
Hazardous Materials or Hazardous Materials Claims. Upon demand by the
Beneficiary, the Grantor shall diligently defend any such Claim which
affects the Mortgaged Property or is made or commenced against the
Beneficiary, whether alone or together with the Grantor or any other
Person, all at the Grantor's sole cost and expense and by counsel to be
approved by the Beneficiary in the exercise of its reasonable judgment. In
the alternative, the Beneficiary may at any time elect to conduct its own
defense through counsel selected by the Beneficiary and at the cost and
expense of the Grantor.
For purposes of Section 11.2 of the Deed of Trust, Beneficiary
hereby acknowledges that it has been advised of the Ramp Industries matter
described in that certain Registration Statement on Form S-1 (Registration
No. 333-25011) as amended, and as filed with the Securities and Exchange
Commission.
6. Additional Representations and Warranties. The Grantor hereby
represents and warrants that:
(a) The Deed of Trust, as modified by this Amendment, is the
Grantor's valid, binding and enforceable obligation and constitutes a first lien
on the Grantor's leasehold interest in the Mortgaged Property;
(b) The Grantor has no present claims, actions, causes of action,
defenses, counterclaims or setoffs of any kind or nature which they can assert
against the Beneficiary in connection with the making, closing, administration,
collection and/or enforcement by the Beneficiary of the Obligations, the Deed of
Trust or any related agreement. In the event that the Grantor has any present
claims, actions or causes of action, defenses, counterclaims or setoffs of any
kind or nature which it may now assert against the Beneficiary in connection
with the making,
6
<PAGE> 7
closing, administration, collection and/or enforcement by the Beneficiary by the
Obligations, the Deed of Trust or any related agreements, which occurred prior
to the date of this Amendment then by executing this Amendment they have forever
irrevocably waived and relinquished them.
7. Confirmation. Except as expressly modified hereby, the Deed of Trust as
previously modified, is hereby ratified and confirmed in all respects and shall
remain in full force and effect. The parties hereto acknowledge that the Trustee
is executing this Amendment for the sole purpose of consenting to the terms
hereof. This Amendment shall be one of the "Loan Documents" for all purposes of
the Deed of Trust.
8. Counterparts. This Amendment may be executed in any number of multiple
counterparts, each of which shall be deemed an original hereof and all of which
when taken together shall constitute one and the same instrument.
9. Further Assurances. The Grantor shall execute and deliver such
additional documents and instruments and perform such further acts as may be
requested by the Beneficiary from time to time to confirm the provisions of this
Amendment, to carry out more effectively the purposes of the Amendment, or to
confirm the priority of the lien created by the Deed of Trust, as modified by
this Amendment, on any property, rights or interest encumbered or intended to be
encumbered by the Deed of Trust, as modified by this Amendment.
10. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF THIS AMENDMENT, THE
DEED OF TRUST, THE LOAN DOCUMENTS OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL
BE DETERMINED BY BINDING
7
<PAGE> 8
ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR
ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., D/B/a J.A.M.S./ENDISPUTE
("J.A.M.S.") AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF AN
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
INSTRUMENT, AMENDMENT OR DOCUMENT MAY BRING ANY ACTION, INCLUDING A SUMMARY OR
EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH
THIS INSTRUMENT, AMENDMENT OR DOCUMENT RELATES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(a) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN MONTGOMERY
COUNTY, MARYLAND AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR. IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN
THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL
BE COMMENCED WITHIN NINETY (90) DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCING OF SUCH HEARING FOR AN ADDITIONAL SIXTY (60) DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS INSTRUMENT, AMENDMENT OR
DOCUMENT SHALL BE DEEMED TO: (I) LIMIT THE APPLICABILITY
8
<PAGE> 9
OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS
CONTAINED IN THIS INSTRUMENT, AMENDMENT OR DOCUMENT; OR (II) BE A WAIVER BY THE
BENEFICIARY OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SECTION 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE BENEFICIARY:
(a) TO EXERCISE SELF HELP REMEDIES (BUT NOT INCLUDING SETOFF), OR (B) TO
FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN
FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE
BENEFICIARY MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR
OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT,
AMENDMENT OR DOCUMENT. NEITHER THE EXERCISE OF SELF HELP REMEDIES NOR THE
INSTITUTION OR MAINTENANCE OF ANY ACTION FOR FORECLOSURE OR FOR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
11. Notices. From and after the date of this Amendment, all notices to the
Grantor and the Beneficiary under the Deed of Trust shall be given to such
parties in the manner and at the addresses set forth in the Restated Loan
Agreement.
9
<PAGE> 10
12. Severability. If any provision of this Amendment is held to be invalid
or unenforceable by a court of competent jurisdiction, the other provisions of
this Amendment and the same provision as applied under the circumstances shall
remain in full force and effect and shall be liberally construed in favor of the
Beneficiary in order to affect the intent of this Amendment.
13. Governing Law and Captions. This Amendment shall be governed and
construed in accordance with the laws of the State of Maryland. The headings
used in this Amendment are for the convenience of the parties only and shall not
be used in interpreting and construing the meaning of this Amendment.
WITNESS the signatures and seals of the parties hereto as of the day and
year first above written:
GRANTOR:
WITNESS/ATTEST: BIORELIANCE CORPORATION
______________________________ By:__________________________(SEAL)
Name:
Title:
BENEFICIARY:
NATIONSBANK, N.A.
_________________________ By:_________________________________(SEAL)
Elizabeth F. Shore
Vice President
WITNESS: TRUSTEE:
_________________________ ____________________________________(SEAL)
Elizabeth F. Shore, as Trustee
10
<PAGE> 11
STATE/COMMONWEALTH OF _________________,
CITY/COUNTY OF ________________, TO WIT:
I HEREBY CERTIFY, that on this _____ day of _____, 1998, before me, the
undersigned Notary Public of said State/Commonwealth, personally appeared
_______________________, who acknowledged himself to be the ______________ of
BioReliance Corporation, a Delaware corporation known to me (or satisfactorily
proven) to be the person whose name is subscribed to the within instrument, and
acknowledged that he executed the same for the purposes therein contained as the
duly authorized __________________ of said corporation by signing the name of
the corporation by himself as ________________.
WITNESS my hand and Notarial Seal.
_____________________________________
Notary Public
My Commission Expires: _______________.
STATE/COMMONWEALTH OF ___________,
CITY/COUNTY OF _____________ , TO WIT:
I HEREBY CERTIFY, that on this _____ day of April, 1998, before me, the
undersigned Notary Public of said State/Commonwealth, personally appeared
Elizabeth F. Shore, known to me (or satisfactorily proven) to be a person whose
name is subscribed to the within instrument, and acknowledged that he executed
the same for the purposes therein contained.
WITNESS my hand and Notarial Seal.
______________________________
Notary Public
11
<PAGE> 12
STATE/COMMONWEALTH OF ___________,
CITY/COUNTY OF ____________ , TO WIT:
I HEREBY CERTIFY, that on this _____ day of April, 1988 before me, the
undersigned Notary Public of said State/Commonwealth, personally appeared
Elizabeth F. Shore, who acknowledged herself to be a Vice President of
NATIONSBANK, N.A. known to me (or satisfactorily proven) to be a person whose
name is subscribed to the within instrument, and acknowledged that she executed
the same for the purposes therein contained as the duly authorized Vice
President of said national association signing the name of the national
association by herself as Vice President.
WITNESS my hand and Notarial Seal.
______________________________
Notary Public
My Commission Expires:
THE UNDERSIGNED, a member in good standing of the Bar of the Court of
Appeals of Maryland, hereby certifies that the within instrument was prepared by
him.
_____________________________
Richard M. Pollak
12
<PAGE> 13
Grantee's Address:
c/o NationsBank, N.A.
6610 Rockledge Drive, Third Floor
Bethesda, Maryland 20817
Attn: Elizabeth F. Shore
Commercial Banking
Property Address:
9900 Blackwell Road
Rockville, Maryland 20850
Title Insurer:
Chicago Title Insurance Company
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 1ST
QUARTER 10-Q UNAUDITED CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS
OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,800
<SECURITIES> 24,633
<RECEIVABLES> 16,416
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 51,762
<PP&E> 15,433
<DEPRECIATION> 0
<TOTAL-ASSETS> 67,950
<CURRENT-LIABILITIES> 12,107
<BONDS> 0
0
0
<COMMON> 78
<OTHER-SE> 50,675
<TOTAL-LIABILITY-AND-EQUITY> 67,950
<SALES> 11,971
<TOTAL-REVENUES> 11,971
<CGS> 7,146
<TOTAL-COSTS> 7,146
<OTHER-EXPENSES> 3,280
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 159
<INCOME-PRETAX> 1,740
<INCOME-TAX> 734
<INCOME-CONTINUING> 1,006
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,006
<EPS-PRIMARY> .13
<EPS-DILUTED> .12
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