Exhibit 10.20
PLEDGE AGREEMENT
From
OSIRIS THERAPEUTICS, INC.
A Delaware Corporation
Pledgor
On Behalf Of
SIGNET BANK/MARYLAND
a Maryland banking institution
Lender
Date as of June 1, 0000
Xxxxxxxxx, Xxxxxxxx
PLEDGE AGREEMENT
This Pledge Agreement (this "Agreement") is made this June 1, 1995, by
OSIRIS THERAPEUTICS, INC., a Delaware corporation (the "Pledgor"), in favor
of SIGNET BANK/MARYLAND, a Maryland banking institution (the "Lender").
RECITALS
R.1 The Pledgor has requested the Lender to provide a loan to the
Pledgor in the principal amount of Seven Hundred Fifty Thousand Dollars
($750,000.00) (the "Loan") as evidenced by that certain Promissory Note
executed by the Pledgor and delivered to the Lender of even date herewith
(the "Note").
R.2 To secure the full and punctual payment and performance of all of
the Obligations (as hereinafter defined), including the repayment of the
Loan, together with all accrued interest and such other amounts due thereon,
the Lender has required the Pledgor to execute and deliver this Agreement.
R.3 As additional security for the Obligations under the Loan, the
Maryland Industrial Development Financing Authority ("MIDFA") has agreed to
insure a portion of the Loan as set forth in that certain insurance agreement
issued by MIDFA for the benefit of the Lender dated as of June 1, 1995 (the
"Insurance Agreement") and MIDFA has required that the Pledgor execute this
Agreement to secure the Obligations to MIDFA should MIDFA acquire the Loan
from the Lender pursuant to the terms of the Insurance Agreement.
NOW, THEREFORE, in consideration of the premises and for other good,
valuable and legal consideration, the receipt and adequacy of which are
hereby acknowledged, the Pledgor, intending to be legally bound, hereby
agrees as follows:
l. Construction of Agreement and Definitions. Unless varied by this
Agreement, all of the terms used herein without definition which are defined
by the Maryland Uniform Commercial Code shall have the meanings assigned to
them by the Maryland Uniform Commercial Code. Whenever used herein, the words
"Pledgor", "MIDFA", "Lender" and "Obligor" shall be deemed to include their
respective heirs, legal representatives, successors and assigns. All words
used herein shall be deemed to refer to the singular, plural, masculine,
feminine or neuter as the identity of the person or entity or the context may
require.
The following terms shall have the following meanings when used herein:
"Collateral" shall mean: (a) Account No.166010504 maintained at the
Signet Trust Company (the "Account"); (b) all of the property of the Pledgor
listed on Schedule A attached
hereto and made a part of this Agreement by reference which shall only
include cash or Securities (as hereinafter defined)) and all property
subsequently pledged or deposited pursuant hereto in addition to or in
substitution for any such property which shall only include cash and
Securities; (c) all proceeds (cash and non-cash) of all of the property
listed on Schedule A attached hereto and made a part of this Agreement by
reference, including any money or other property to which the Pledgor shall
become entitled for any reason whatsoever in respect of; in evidence of; as
an addition to, in substitution for, in replacement or renewal of or in
exchange for any of such property, including any cash, interest, income,
payments, dividends, distributions, subscription rights, settlements or
exchanges of any kind in respect of or applicable or incident to such
property, whether in the ordinary course of business or, if applicable, in
connection with any merger, consolidation, reorganization, redemption,
recapitalization, reclassification, stock split, liquidation or increase or
reduction of capital in respect of any issuer of any of such property; and
(d) all of the Pledgor's books and records relating to any of the foregoing
property.
"Loan Documents" shall mean this Agreement, the Note, any other note, any
loan commitment, letter agreement, line of credit agreement, commercial
financing agreement, security agreement, guaranty of payment, mortgage, deed
of trust, pledge agreement, loan agreement, loan and security agreement,
hypothecation agreement, indemnity agreement, letter of credit application
and agreement, assignment or any other document or agreement previously,
simultaneously or hereafter executed and delivered by the Pledgor and/or by
any other Obligor, singly or jointly with another person or persons, to the
Lender in connection with the Note, whether or not the Note is specifically
referred to therein, as the same may from time to time be amended
"Noninsured Amount" shall mean that amount of the outstanding principal
balance of the Loan, together with interest thereon which exceeds the amount
of principal and accrued interest insured by MIDFA under the Insurance
Agreement.
"Obligations" shall mean the full and punctual observance and performance
of all present and future duties, covenants and responsibilities due to the
Lender by the Pledgor arising under or in connection with the Note including
all past, present and future indebtedness, liabilities and obligations of the
Pledgor to the Lender under the Note, the other Loan Documents and this
Agreement for the payment of money (extending to all principal, interest,
fees, expense payments, liquidation costs, and attorney1s fees and expenses).
"Obligor" shall mean individually and collectively the Pledgor, each
person who is primarily or secondarily liable for the repayment of the Note
or any portion thereof; and each person who has granted security for the
repayment of the Note, together with such person's heirs, personal
representatives, successors and assigns. For the purposes of this Agreement,
MIDFA shall not be considered an Obligor.
"Permitted Liens" shall mean liens and security interests of the Lender.
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The term "person" shall include an individual, a corporation, an
association, a partnership, a limited liability company, a trust and an
organization. The words "hereof," "herein," "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision hereof.
"Securities" shall mean securities issued or guaranteed by the United
States of America or collateralized with U.S. Government Securities.
2. Security Interest and Collateral. In order to secure to the Lender
the prompt payment and performance of the Obligations whether or not any
agreement relating to any Obligations specifically refers to this Agreement
or the security interest created hereunder, the Pledgor hereby grants to the
Lender and agrees that the Lender shall have a perfected lien and continuing
security interest in, and pledges and assigns to the Lender, the Collateral.
The Pledgor and the Lender expressly agree that none of the Collateral shall
be applied or deemed to be applied to satisfy or reduce any of the
Obligations, except as provided herein.
The Collateral shall be maintained in the Account at the Signet Trust
Company. Pledgor acknowledges that a copy of this Pledge Agreement shall be
delivered to the Trust Company. Pledgor acknowledges and agrees that the
Trust Company shall comply with all requests regarding the Collateral made by
Secured Party and, except for acts of gross negligence and willful misconduct
by the Trust Company, Pledgor agrees to release the Trust Company from any
and all liability arising from implementing the Secured Patty's requests as
to the disposition of the Collateral.
3. Interest and Cash Dividends. Provided that no "Event of Default", as
defined below, has occurred under this Agreement, any amounts representing
interest and/or cash dividends derived from the Collateral may be withdrawn
from time to time by the Pledgor.
4. Additional Collateral Requirement If on any day that the Lender is
open for business the Lender, in its sole discretion, determines that the
aggregate "Market Value" (as defined in Section 8 below) of the Collateral is
less than one hundred five percent (105%) of the Non-Insured Amount, then,
prior to the close of business on the following business day, the Pledgor
shall deliver or deposit, or cause to be delivered or deposited, to the
Lender as security for the Obligations such additional cash as will cause the
aggregate Market Value of the Collateral to equal or exceed one hundred five
percent (105%) of the Non-Insured Amount on such date. Such additional cash
shall constitute Collateral.
5. Appointment of the Lender as Attorney in-Fact. The Pledgor hereby
irrevocably constitutes and appoints the Lender its attorney-in-fact, with
full power of substitution, and hereby irrevocably authorizes and empowers
the Lender to prepare, execute, deliver, and if appropriate, record with the
appropriate filing office or offices, in the name of the Pledgor, all such
instruments, assignments, stock or bond powers, financing statements,
amendments to or assignments of financing statements, certifications,
acknowledgments, security interest filing
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statements, and/or other documents as the Lender may request or require in
order to perfect, preserve, maintain, continue, protect and/or extend the
security interest and lien granted to the Lender under this Agreement and its
priority, such power of attorney being coupled with an interest. If the
Pledgor fails to execute any such documents within ten (10) days of being
requested to do so by the Lender, the Lender or any officer of the Lender may
exercise this power of attorney and execute such documents in Pledgor's name,
place and stead. This power of attorney may not re revoked or canceled before
all of the Obligations have been paid or otherwise satisfied.
6. Transfers of Collateral. On or prior to the date of this Agreement,
and on any date during the term hereof that additional cash is to be
delivered to the Lender pursuant to Section 4 of this Agreement, the Pledgor
shall cause all of the Collateral and any such cash to be transferred to the
Lender. Such Collateral and cash shall be placed by the Lender in the Account
at the Trust Company.
7. Possession of the Collateral. The Pledgor irrevocably constitutes
and appoints the Lender its attorney-in-fact, with full power of
substitution, and hereby irrevocably authorizes and empowers the Lender: (a)
to demand, collect, receive, receipt for, xxx and recover all interest,
dividends, other sums of money due, other property due and all other proceeds
which may now or hereinafter become due under the Collateral; (1))to execute,
sign and endorse any and all instruments, receipts, checks, drafts and
warrants issued in payment for the Collateral; (c) to settle or compromise
any and all claims arising under the Collateral and in the place and stead of
the Pledgor to execute and deliver the Pledgor's release; (d) to file any
claim(s) or to take any action or institute or take part in any proceedings,
either in the Lender's own name or m the name of the Pledgor or otherwise in
connection with the Collateral; (e) to execute in the Pledgor's name any
necessary instruments or documents in connection with the Collateral; and (f)
to exercise any and all rights of conversion, exchange, subscription or any
other rights, privileges or options pertaining to the Collateral as if the
Lender were the absolute owner thereof; including the right to exchange, in
the Lender's discretion, any and all of the Collateral upon any merger,
consolidation, reorganization, recapitalization, reclassification, stock
split, liquidation or other readjustment in respect to any issuer of any of
the Collateral. Any or all of the Collateral may at any time, at the option
of the Lender, be registered in the name of the Lender or its nominee. In the
event that any of the Collateral shall mature or otherwise become payable,
the Lender may, in the place and stead of the Pledgor, cause the same to be
renewed, rolled over or reinvested in such manner and upon such terms and
conditions as the Lender may reasonably determine. Except as may be otherwise
provided herein, following the occurrence of an Event of Default and during
the continuance thereof the Lender shall have the right to receive and to
apply to any of the Obligations, as the Lender may determine in its
discretion, any money or other property payable on account of any sale,
assignment or transfer of any of the Collateral, whether pursuant to a
redemption or repurchase of the Collateral by the issuer thereof; or
otherwise.
8. Right to Withdraw Excess Collateral. Provided that no Event of
Default has occurred or will occur under this Agreement either before or
after any such withdrawal which has
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not been waived by the Lender or cured by the Pledgor, the Pledgor may, not
more frequently than quarterly, demand from the Lender the return of any
"Excess Collateral", and the Lender shall return such "Excess Collateral" to
the Pledgor. For purposes hereof; "Excess Collateral" shall mean such
Collateral as, after its return to the Pledgor will leave Collateral
remaining with an aggregate "Market Value" greater than or equal to one
hundred five percent (105%) of the Non-Insured Amount due under the Note on
the date of calculation. For purposes hereof; "Market Value" shall mean the
amount of cash and the value of any other Collateral as determined by the
Lender in accordance with market convention. The Pledgor shall not request
the Trust Company to return Excess Collateral, but shall request the Lender
to require the Trust Company to return Excess Collateral, as the Pledgor
acknowledges that the control over the withdrawal of Collateral from the
Account has been transferred by Pledgor to the Lender.
9. Duty of Care. The powers conferred on the Lender hereunder are
solely to protect its security interest in the Collateral and shall not
impose any duty upon the Lender to exercise any such powers. The Pledgor
shall be responsible for the preservation of any Collateral in the Lender's
possession. Beyond the exercise of reasonable care to assure the safe custody
of any of the Collateral while in the possession of the Lender, the Lender
shall have no duty or liability: (a) to collect any of the Collateral or any
moneys due or to become due thereunder, (b)to give any notices with respect
to the Collateral, (c) to preserve or maintain any of the Collateral not in
its possession, or (d) to preserve any rights of the Pledgor against prior
parties to the Collateral. The Lender shall be relieved of all responsibility
for the Collateral upon surrendering the same to the Pledgor. In particular,
but without limitation, the Lender shall have no responsibility for any
depreciation in value of the Collateral. The Lender shall be deemed to have
exercised reasonable care with respect to the Collateral in its possession if
the Lender takes such action as the Pledgor shall reasonably request in
writing; but no failure to comply with any such request shall be deemed a
failure to exercise reasonable care, and no failure to do any act not
requested by the Pledgor shall be deemed a failure to exercise reasonable
care.
10. Rights of the Pledgor in the Collateral. The Pledgor shall not have
any right to modify, amend or waive any terms or conditions of the Collateral,
or any rights or interests therein, without the Lender's prior written
consent. The Pledgor shall have the right to direct the investment of cash in
the Account, provided the cash is invested in Securities. The Pledgor,
however, shall not have the right to withdrawal cash or Securities from the
Account without the Lender's prior consent, except as provided in Section 3
(as to dividends and interest) herein.
11. Representations and Warranties. The Pledgor represents, warrants and
agrees that: (a) the Pledgor is and shall remain the legal and equitable
owner of all of the Collateral and has good and marketable title to the
Collateral free and clear of all liens, pledges, security interests and
encumbrances, except for Permitted Liens; (b)this Agreement and any other
Loan Documents executed by the Pledgor constitute the legally binding
obligations of the Pledgor and are fully enforceable against the Pledgor in
accordance with their terms; (c) to the Pledgor's knowledge, there are no
injunctions or similar orders outstanding against any of the Collateral and
no actions, suits or proceedings pending or threatened relating to the
Collateral; (d) the
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Pledgor's name is as specified on the signature line of this Agreement; and
(e) all information contained in any financial statement, application,
schedule, report or any other document given to the Lender by the Pledgor is
true and accurate in all material respects, and the Pledgor has not omitted
to state any fact or any fact necessary to make such information not
materially misleading.
12. Affirmative Covenants. Until all of the Obligations have been paid
in full, the Pledgor covenants and agrees that the Pledgor shall, except as
otherwise agreed to in writing by the Lender: (a) pay as and when due all
taxes, levies, license fees, assessments and other impositions levied on the
Collateral or any part thereof or for its use and operation; (b)do, file,
record, make, execute and deliver all such additional and further acts,
things, notices, deeds, assurances, instruments and documents as the Lender
may reasonably request to register in the name of the Lender and to vest in,
perfect, preserve, protect and assure to the Lender its rights hereunder or
in any of the Collateral or to give effect to the rights, powers and remedies
of the Lender hereunder, and pay to the Lender all taxes, fees and costs
(including reasonable attorney's fees) paid or incurred by the Lender in
connection with the preparation, transfer, filing or recordation thereof; (c)
defend its title to the Collateral against all persons (other than
transferees of the Lender and all persons claiming through them) and, upon
request of the Lender, furnish such further assurances of title as may be
required by the Lender; (d) execute and deliver to the Lender, whenever
requested by the Lender, any security agreements, financing statements,
amendments to or assignments of financing statements, assignments, notices,
transfer instruments, stock powers, sight drafts, withdrawal forms and such
other documents and instruments as the Lender may request, in form and
content satisfactory to the Lender, and otherwise do or cause to be done from
time to time all things requested by the Lender, in order to confirm,
preserve, protect or perfect, or to maintain the perfection of; the Lender's
security interest in any of the Collateral and/or its priority; (e) pay on
demand the cost of filing any financing, continuation, or termination
statement as well as any recordation or transfer tax required by law to be
paid in connection with the filing or recording of any such statement; and
(f) pay on demand all costs for insuring, maintaining and 'preserving the
Collateral.
13. Negative Covenants. Until all of the Obligations have been paid in
full, the Pledgor covenants and agrees that the Pledgor shall not, except as
otherwise agreed to in writing by the Lender, sell, lease, transfer, exchange
or otherwise encumber or dispose of the Collateral, or any part thereof.
14. Performance by the Lender. If the Pledgor fails to perform, observe,
or comply with any of the conditions, terms or covenants contained in this
Agreement, the Lender, without notice to or demand upon the Pledgor and
without waiving or releasing any of the Obligations or any default, may, but
shall be under no obligation to, at any time thereafter perform such
conditions, terms or covenants for the account of and at the expense of the
Pledgor. All sums paid or advanced by the Lender in connection with the
foregoing and all costs and expenses as calculated and determined by the
Lender (including, without limitation, reasonable attorneys' fees and
expenses) incurred in connection therewith (collectively, the "Expense
Payments")
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together with interest thereon at a per annum rate of interest which is equal
to the then highest rate of interest charged on the principal of the Note
giving effect to any default rate therein, from the date incurred until
repaid in full, shall be paid by the Pledgor to the Lender on demand and
shall constitute and become a part of the Obligations secured hereby.
15. Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default" under this Agreement:
(a) The failure of the Pledgor or any other Obligor to perform,
observe or comply with any agreement, covenant, or promise made under this
Agreement which failure remains uncured for a period of thirty (30) days
after written notice thereof by the Lender to the Pledgor;
(b) if any representation or warranty made herein or if any
information contained in any financial statement, application, schedule,
report or any other document given by the Pledgor, any Obligor or any other
person in connection with this Agreement or with any of the Loan Documents is
not in all material respects true and accurate, or if the Pledgor, such
Obligor or such other person omitted to state any fact necessary to make such
information not materially misleading; and
(c) the occurrence of an Event of Default as defined under any of
the Loan Documents or under any of the Obligations and the expiration of any
applicable grace period.
16. Rights and Remedies Upon Default. Upon the occurrence of an Event of
Default hereunder, the Lender may, at its option and without notice to the
Pledgor or any other Obligor: (a) charge, setoff and otherwise apply all or
any part of the Collateral against the Obligations; (b) exercise the rights
and remedies of a secured party under the applicable Uniform Commercial Code
and all other applicable laws (in addition to all of its rights, powers,
remedies under this Agreement); (c) take or retain control of any of the
Collateral; (d) enforce the security interest granted to the Lender hereunder
by' retaining, collecting or liquidating all or any part of the Collateral or
selling or otherwise disposing of all or any part of the Collateral, in one
or more parcels, at the same or different times, at public or private sale or
disposition; and (e) notify any or all obligors on the Collateral to make
payments thereon directly to the Lender and demand, collect, xxx for and
receive any money or property at any time due, payable or receivable on
account of any or all of the Collateral.
17. Notice of Sale of the Collateral. Any written notice of the sale,
disposition or other intended action by the Lender with respect to the
Collateral which is required by applicable laws and is hand-delivered or is
sent by facsimile transmission or is sent by first class mail, postage
prepaid to the Pledgor at the Pledgor's address as specified below or such
other address of the Pledgor which may from time to time be shown on the
Lender's records shall constitute reasonable notice to the Pledgor so long
as: (a) with respect to such of the Collateral as is of a type customarily
sold on a recognized market, such notice is given contemporaneously with such
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sale, disposition or other intended action; and (b) with respect to the rest
of the Collateral, such notice is given at least ten (10) days prior to such
sale, disposition or other intended action. However, this provision shall not
be construed to impose any obligation on the Lender to notify the Pledgor of
the Lender's intent to sell, dispose of; or take other action with respect to
the Collateral, except to the extent applicable law requires such notice.
18. Sale of the Collateral. All sales or other dispositions of
Collateral may be made for cash, upon credit or for future delivery. In no
event shall the Pledgor be credited with any part of the proceeds of
liquidation, sale or other disposition of any Collateral until cash payment
thereon has actually been received by the Lender, and the Lender shall have
no obligation to delay any liquidation, sale, or other disposition because
the same may result in the imposition of any forfeiture, premium or penalty,
the Pledgor hereby acknowledging that the risk of such forfeiture, premium or
penalty is inherent in granting a security interest in the Collateral to the
Lender. In connection with any liquidation, sale or other disposition of any
of the Collateral, the Lender shall have the right, in the name, place and
stead of the Pledgor, to execute all necessary endorsements, assignments or
other instruments of conveyance or transfer with respect to the Collateral.
19. Liquidation Costs. All costs and expenses, including, without
limitation, attorneys' fees and expenses, incurred by or on behalf of the
Lender in connection with the taking, holding, preparing for sale or other
disposition, selling, replacement, reinvestment, managing, collecting, or
otherwise disposing of the Collateral (collectively, the "Liquidation
Costs"), together with interest thereon at a per annum rate of interest which
is equal to the then highest rate of interest charged on the principal of the
Note giving effect to any default rate thereon, from the date of payment
until repaid in full, shall be paid by the Pledgor to the Lender on demand
and shall constitute and become a part of the Obligations secured hereby. Any
proceeds of disposition of the Collateral will be applied by the Lender in
the manner provided in the Note.
20. Certain Waivers by the Pledgor. The Lender, without notice to or
further consent of the Pledgor and without in any respect compromising,
impairing, releasing, lessening or affecting the obligations of the Pledgor
hereunder (except as may be specifically agreed in connection therewith),
may: (a) Release, surrender, waive, add, substitute, settle, exchange,
compromise, modify, extend or grant indulgences with respect to (i) the Note,
(ii) any of the Loan Documents, (iii) all or any part of the Collateral or
other security for the Note, and/or (iv) any Obligor; (b) Waive or excuse a
default or defaults hereunder, under the Note or under any of the Loan
Documents; (c) Grant extensions of time for the payment or performance of any
of the Obligations; and (d) Release in whole or in part any Obligor;
21. Indemnification. The Pledgor shall indemnify and hold the Lender
harmless from and against losses, liabilities, claims, suits, damages and
expenses (including attorneys' fees) suffered or incurred by the Lender and
relating to or arising out of this Agreement and the transactions
contemplated thereby, other than such losses, liabilities, claims, suits,
damages and
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expenses arising out of the gross negligence or willful misconduct of the
Lender, and any such losses and expenses shall become part of the Obligations
and be secured hereby.
22. Remedies Cumulative. Each right, power and remedy of the Lender
hereunder, under the Loan Documents or now or hereafter existing at law, in
equity, by statute or otherwise shall be cumulative and concurrent, and the
exercise or the beginning of the exercise of any one or more of them 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 one or more provisions of this
Agreement or of the Loan Documents or to exercise any right, power or remedy
consequent upon a breach thereof or a default hereunder shall constitute a
waiver thereof; or preclude the Lender from exercising any such right, power
or remedy. By accepting full or partial payment after the due date of any of
the Obligations, the Lender shall not be deemed to have waived the right
either to require prompt payment when due of all other Obligations, or to
declare a default for failure to effect such payment of any such other
Obligations.
23. Choice of Law: Forum Selection: Consent to Jurisdiction. This
Agreement shall be governed by, construed and interpreted in accordance with
the laws of the State of Maryland (excluding the choice of law rules
thereof). The Pledgor hereby (a) agrees that all disputes and matters
whatsoever arising under, in connection with, or incident to this Agreement
shall be litigated, if at all, in and before a court located in the State of
Maryland to the exclusion of the courts of any other state or country and
(b)irrevocably submits to the non-exclusive jurisdiction of any Maryland
court or federal court sitting in the State of Maryland in any action or
proceeding arising out of or relating to this Agreement, and hereby
irrevocably waives any objection to the laying or venue of any such action or
proceeding in any such court and any claim that any such action or proceeding
has been brought in an inconvenient forum. A final judgment in any such
action or proceeding shall be conclusive and may be enforced in any other
jurisdiction by suit on the judgment or in any other manner provided by law.
24. Service of Process. The Pledgor hereby consents to process being
served in any suit, action or proceeding instituted in connection with this
Agreement by the mailing of a copy thereof to the Pledgor by certified mail,
postage prepaid, return receipt requested. The Pledgor hereby irrevocably
agrees that such service shall be deemed to be service of process upon the
Pledgor in any such suit, action or proceeding. Nothing in this Agreement
shall affect the right of the Lender to serve process in any other manner
otherwise permitted by law, and nothing in this Agreement will limit the
right of the Lender otherwise to bring proceedings against the Pledgor in the
courts of any other jurisdiction or jurisdictions.
25. Commercial Purposes. The Pledgor acknowledges and warrants that (a)
the indebtedness evidenced by the Note is incurred for the purpose of
acquiring or carrying on a business or commercial enterprise and that such
indebtedness is a "commercial loan" within the meaning of Title 12 of the
Commercial Law Article of the Annotated Code of Maryland (1990 Rep. Vol.),as
amended, and (b) all proceeds arising from such indebtedness will be used
solely
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in connection with such business or commercial enterprise and (c) the
proceeds of such indebtedness will not be used for the purchase of registered
equity securities within the purview of Regulation "U" issued by the Board of
Governors at the Federal Reserve System.
26. Invalidity of Any Part. If any provision or part of any provision of
this Agreement shall for any reason be held invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision (or any remaining part of any provision) of this
Agreement, and this Agreement shall be construed as if such invalid, illegal
or unenforceable provision (or part thereof) had never been contained in this
Agreement, but only to the extent of its invalidity, illegality, or
unenforceability.
27. WAIVER OF JURY TRIAL. THE PLEDGOR HEREBY (i) COVENANTS AND AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND
(ii) WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE LENDER AND
THE PLEDGOR MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY
PERTAINING TO THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS AND/OR ANY
TRANSACTIONS, OCCURRENCES, COMMUNICATIONS, OR UNDERSTANDINGS (OR THE LACK OF
ANY OF THE FOREGOING) RELATING IN ANY WAY TO THE PLED GOR-LENDER RELATIONSHIP
BETWEEN THE PARTIES. IT IS UNDERSTOOD AND AGREED 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 OF JURY TRIAL IS SEPARATELY GIVEN, KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY THE PLED GOR AND THE PLED GOR HEREBY AGREES
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 LENDER IS HEREBY AUTHORIZED TO SUBMIT THIS AGREEMENT TO ANY COURT
HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PLED GOR SO AS TO SERVE
AS CONCLUSIVE EVIDENCE OF SUCH WAIVER OF RIGHT TO TRIAL BY JURY. THE PLED GOR
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND/OR THAT IT HAS IIAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.
28. Notice: Any notice, demand, request or other communication which the
Lender or the Pledgor may be required to give hereunder shall be given in the
manner provided in the Loan Agreement executed on even date herewith by and
between the Pledgor and the Lender.
-10-
29. Miscellaneous. Time is of the essence under this Agreement. The
paragraph headings of this Agreement are for convenience only, and shall not
limit or otherwise affect any of the terms hereof. This Agreement and the
Loan Documents, if any, constitute the entire agreement between the parties
with respect to their subject matter and supersede all prior letters,
representations, or agreements, oral or written, with respect thereto. The
Lender may, without notice to or consent of the Pledgor, sell, assign or
transfer the Note and this Agreement or sell, assign, transfer or grant
participations in all or any part of the Obligations to others at any time
and from time to time including, but not limited to an assignment to MIDFA
pursuant to the Insurance Agreement; in connection therewith, the Lender
shall have the right to assign all or any part of the rights in any of the
Collateral, and the Lender may divulge to any potential assignee, transferee
or participant all information, reports, financial statements and documents
obtained in connection with this Agreement and any other Loan Documents or
otherwise; provided, however, that (a)the Lender may not assign any of its
obligations to make advances under the Loan, and (1)) the Lender may not
disclose to any potential assignee, transferee or participant any information
with respect to the Pledgor or the Loan unless such person has agreed in
writing to treat such information as confidential. Any such assignee,
transferee or participant including, but not limited to MIDFA shall have the
rights of the Lender with respect to the Collateral so assigned, transferred
or participated, and the Lender shall thereafter be relieved from all duties
with respect to any such Collateral. No modification, release, or waiver of
this Agreement shall be deemed to be made by the Lender unless in writing
signed by the Lender, and each such waiver, if any, shall apply only with
respect to the specific instance involved. No course of dealing or conduct
shall be effective to modify, release or waive any provisions of this
Agreement or any of the other Loan Documents. This Agreement shall inure to
the benefit of and be enforceable by the Lender and the Lender's successors
and assigns and any other person to whom the Lender may grant an interest in
the Obligations and shall be binding upon and enforceable against the Pledgor
and the Pledgor's successors and assigns. Whenever used herein, the singular
number shall include the plural, the plural the singular, and the use of the
masculine, feminine, or neuter gender shall include all genders. This
Agreement may be executed in any number of counterparts, all of which, when
taken together shall constitute one Agreement.
-11-
IN WITNESS WHEREOF, the Pledgor has duly executed this Agreement under
seal as of the day and year first here in above set forth.
WITNESS/ATTEST: OSIRIS THERAPEUTICS, INC.
A Delaware Corporation
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx (SEAL)
------------------ ---------------------------
Xxxxx X. Xxxxx
President and Chief
Executive Officer
00000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx, Xxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
ACKNOWLEDGEMENT
STATE OF Ohio )
------ ) to wit:
CITY/COUNTY OF Cuyahoga )
--------
I HEREBY CERTIFY that on this 1 day of June, 1995, before me, the
---
subscriber, a Notary Public of the State of Ohio , personally appeared
------
Xxxxx X. Xxxxx, who acknowledged himself to be the Chief Executive Officer of
Osiris Therapeutics, Inc., a Delaware corporation, and that he, as the Chief
Executive Officer of Osiris Therapeutics, Inc.,
-12-
being authorized to do so, executed that Pledge Agreement for the purposes
contained in that instrument, by signing the name of the corporation by
himself as Chief Executive Officer.
IN WITNESS WHEREOF, I set my hand and official seal.
[NOTARY SEAL] Xxxxxxxx X. Xxxxxx
-------------------------
Notary Public
Xxxxxxxx X Xxxxxx
Notary Public, State of Ohio - Cuya, Cty.
My Commission Expires September 30,1997
-----------------------------------------
Printed Name of Notary Public
My Commission Expires: September 30, 1997
------------------
-13-
SCHEDULE A
LIST OF COLLATERAL
All cash, Securities and other property contained in Trust Account No.
00000000 at Signet Trust Company.
LOAN AGREEMENT
By and Between
OSIRIS THERAPEUTICS, INC.
A Delaware corporation
Borrower
and
SIGNET BANK/MARYLAND
A Maryland banking institution
Lender
Dated as of June 1, 1995
LOAN AGREEMENT
This Loan Agreement is made this 1st day of June, 1995 by and between
OSIRIS THERAPEUTICS, INC., a Delaware corporation (the "Borrower"), and
SIGNET BANK/MARYLAND, a Maryland banking institution (the "Lender").
RECITALS
R.1 The Borrower has requested the Lender to extend credit to the
Borrower up to the principal amount of Seven Hundred Fifty Thousand Dollars
($750,000.00) (the "Loan"), and the Lender is willing to extend such credit
to be evidenced by a Promissory Note of even date herewith (such Promissory
Note, as the same may be amended, extended and restated from time to time,
the "Note").
R.2 The obligations of the Borrower to the Lender are to be insured in
part by the Maryland Industrial Development Financing Authority ("MIDFA")
pursuant to that certain Insurance Agreement dated June 1, 1995 (the
"Insurance Agreement") issued for the benefit of the Lender. Under the terms
of the Insurance Agreement, MIDFA has the right, but not the obligation, to
purchase the Loan and the Loan Documents from the Lender.
R.3 The Lender has agreed to extend the Loan to the Borrower and MIDFA
has agreed to insure the Borrower's obligations in connection with the Loan,
provided the Borrower executes this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein, and other good, valuable and legal
consideration, the receipt and adequacy of which are hereby acknowledged, the
Borrower and the Lender, intending to be legally bound, do hereby agree as
follows:
l. CONSTRUCTION OF AGREEMENT AND DEFINITIONS OF TERMS.
Unless varied by this Agreement or unless the context otherwise requires,
all accounting terms used herein shall have the meanings assigned to them by
GAAP. Whenever the phrase "satisfactory to the Lender" is used in this
Agreement, such phrase shall mean "satisfactory to the Lender in its sole
discretion exercised reasonably and in good faith." Whenever used herein, the
words "Borrower", "Lender" and "Obligor" shall be deemed to include their
respective heirs, legal representatives, successors and assigns. All words
used herein shall be deemed to refer to the singular, plural, masculine,
feminine or neuter as the identity of the Person or the context may require.
The following words and terms shall have the following respective
meanings when used herein, unless the context otherwise requires:
"Agreement" shall mean collectively this Agreement, any rider(s) hereto
and any exhibit(s) and attachment(s) hereto, all as amended, extended, or
modified by the parties hereto from time to time.
"Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978,
as amended from time to time.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which the Lender is authorized or required to be closed. Any reference
in any Loan Document to the term "day", as distinct from a "Business Day"
shall mean a calendar day including Saturday, Sunday and every other day,
including any day when the Lender is authorized or required to be closed.
"Certified" shall mean that the information, statement, schedule, report
or other document required to be "Certified" shall contain a representation
of a duly authorized officer of the Borrower that such information,
statement, schedule, report or other document is true and complete.
"Closing Date" shall be the date selected by the Borrower and the Lender
as the date by which this Agreement has been executed by all parties and all
conditions precedent to an advance of finds hereunder have been satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning assigned to it in the Pledge
Agreement executed by the Borrower and delivered to the Lender on this date.
"Dollars" and the "$" sign shall mean lawful money of the United States
of America.
"GAAP" shall mean those ~ accounting principles and practices which are
recognized as such by the American Institute of Certified Public Accountants,
consistently applied and maintained throughout the period indicated and
consistent with the prior financial practices of the Borrower. In the event
of a change in GAAP, the Lender and the Borrower will thereafter negotiate in
good faith to revise any covenants of this Agreement affected thereby in
order to make such covenants consistent with GAAP then in effect.
"Governmental Authority" shall mean any nation or government, any state
or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Governmental Requirements" shall mean all laws, ordinances, codes,
rules, regulations, orders, writs, injunctions or decrees of any Governmental
Authority applicable to the Borrower or the Collateral.
2
"Indebtedness" shall mean all items of indebtedness, obligation or
liability, whether matured or unmatured, liquidated or unliquidated, funded
or unfunded, direct or contingent, joint or several, which would properly be
included in the liability section of a balance sheet or in a footnote to a
financial statement in accordance with GAAP, and shall also include (a) all
indebtedness guaranteed, directly or indirectly, in any manner, or endorsed
(other than for collection or deposit in the ordinary course of business) or
sold with recourse, (b) all indebtedness in effect guaranteed, directly or
indirectly, through agreements, contingent or otherwise, (c) all obligations
in respect of letters of credit, banker's or other acceptances or similar
obligations, and (d) all indebtedness secured by (or for which the holder of
such indebtedness has a right, contingent or otherwise, to be secured by) any
mortgage, deed of trust, pledge, assignment, lien, security interest or other
charge or encumbrance upon property owned or acquired subject thereto,
whether or not the liabilities secured thereby have been assumed or
guaranteed.
"Lien" shall mean any statutory or common law consensual or
non-consensual mortgage, deed of trust, pledge, security interest, right of
setoff, or encumbrance of any kind, whether perfected or unperfected,
avoidable or unavoidable, including, without limitation, any conditional sale
or other title retention agreement, any lease transaction in the nature
thereof and any secured transaction under the Uniform Commercial Code of any
jurisdiction.
"Loan Documents" shall mean this Agreement, the Pledge Agreement, the
Note, any other note, any loan commitment, letter agreement, line of credit
agreement, commercial financing agreement, security agreement, guaranty of
payment, mortgage, deed of trust, pledge agreement, loan agreement, loan and
security agreement, hypothecation agreement, indemnity agreement, letter of
credit application and agreement, assignment or any other document or
agreement previously, simultaneously or hereafter executed and delivered by
the Borrower and/or by any other Obligor, singly or jointly with another
Person, to the Lender in connection with the Loan, whether or not the Note is
specifically referred to therein, as the same may from time to time be
amended.
"Maximum Loan Amount" shall mean, at any time, Seven Hundred Fifty
Thousand Dollars ($750,000.00).
"Note" shall mean the promissory note of the Borrower of even date
herewith in the principal amount of Seven Hundred Fifty Thousand Dollars
($750,000.00), as the same may be amended, extended, renewed, supplemented or
replaced from time to time.
"Obligations" shall mean the full and punctual observance and performance
of all present and future duties, covenants and responsibilities due to the
Lender by the Borrower in connection with the Loan, including but not limited
to all past, present and future indebtedness, liabilities and obligations of
the Borrower to the Lender under the Loan Documents for the payment of money
(extending to all principal, interest, fees, expense payments, liquidation
costs, and attorney's fees and expenses).
3
"Obligor" shall mean individually and collectively the Borrower, each
Person who is primarily or secondarily liable for the repayment of the Note
or any portion thereof, and each Person who has granted security for the
repayment of the Note, together with such Person's heirs, personal
representatives, successors and assigns. For the purposes of this Agreement,
Obligor shall not include MIDFA.
"Person" shall include natural persons, corporations, limited liability
companies, associations, partnerships, joint ventures, trusts, Governmental
Authorities and every other organization or entity of every kind.
2. THE LOAN
2.01 Loan Advances. The Lender agrees to make advances to the
Borrower from time to time until December 1, 1995, subject to all of the
terms and conditions of this Agreement. All requests by the Borrower for
advances shall be made in such manner and form and with such prior notice to
the Lender as the Lender may reasonably require from time to time. Each
request for an advance shall be for a minimum amount of $50,000.00. Each such
request shall contain or be accompanied by such information and documents
(which shall be Certified if required by the Lender) concerning the
Collateral, the Borrower's financial condition, use of the proceeds of such
advance and of advances previously made and/or any other matters as the
Lender may from time to time require. In no event shall the Lender be
obligated to make any advance hereunder if an Event of Default has occurred
under the Note or if such advance would cause the total principal amount of
advances made and outstanding hereunder to exceed the Maximum Loan Amount.
Even if the total principal amount of advances outstanding shall at any time
and for any reason exceed the Maximum Loan Amount, the Borrower shall
nonetheless be liable for the entire principal amount outstanding, with
interest thereon at the rate and calculated in the manner provided in the
Note, in accordance with this Agreement and the Note. If the total principal
amount of advances outstanding hereunder shall at any time exceed the Maximum
Loan Amount, the Borrower shall immediately pay to the Lender upon demand the
amount of such excess, with interest thereon at the rate and calculated in
the manner provided in the Note. The Borrower agrees that the Borrower shall
be liable for, and the Collateral shall secure, the repayment of each advance
made by the Lender to or for the Borrower hereunder, with interest at the
rate and calculated in the manner provided in the Note, whether or not such
advance was duly requested or authorized by the Borrower and whether or not
any person requesting such advance was duly authorized to make such request.
Subject to all of the terms and conditions of this Agreement and the other
Loan Documents, the Borrower may borrow hereunder until December 1, 1995.
Borrower acknowledges and agrees that on December 1, 1995, the Lender shall
advance to the Borrower the balance of the Loan, should such funds not have
been previously advanced by the Lender.
2.02 Note. The Borrower's obligation to repay the Loan with
interest shall be evidenced by, and the Loan shall be repaid with interest in
accordance with, the Note.
4
2.03 Notice of Borrowing. Borrower shall give the Lender notice (the
"Notice") before 11:30 a.m. on the day which is one (I) Business Day prior to
any requested advance hereunder specifying the amount of the requested
advance. Each Notice shall be irrevocable and effective upon receipt thereof
by the Lender and the Borrower shall indemnify the Lender against any cost,
loss or expense incurred by the Lender as a result of any failure to fulfill,
on or before the date specified for any requested advance, the conditions to
such requested advance.
2.04 Borrowing Procedure.
(a) The following individuals may request advances hereunder
on behalf of Borrower:
Xxxxxx X. Xxxxxx, Vice President, Finance and
Administration, and Secretary
Xxxxx X Xxxxx, President and
Chief Executive Officer
Xxxxx X. Xxxxx, Director of Finance
The Borrower may from time to time appoint other individuals to
request advances hereunder, provided such persons are certified by the
President and Secretary of the Borrower as authorized to request advances.
Any request for an advance hereunder may be oral (including telephonic) or
written, but if oral shall be promptly confirmed in writing if so requested
by the Lender. Lender shall be protected and held harmless by Borrower in
acting upon any request for an Advance believed by it to have been genuine
and to have been given by a proper person.
(b) Lender will remit the proceeds of each advance hereunder
to Borrower's demand deposit account at the Lender.
2.05 Loan Records. The Lender will establish and maintain an account
on its books (the "Loan Account") to which (a) the principal amount of each
advance made by the Lender shall be debited on the date made, (b) each
payment made by the Borrower to the Lender for credit to the Loan Account
shall be credited on the date received, (c) all accrued interest on advances
and expenses incurred by the Lender in connection with or, in enforcing its
rights under, this Agreement (the "Enforcement Costs") shall be debited on
the date such become past due, (d) all Enforcement Costs shall be debited on
the date the same become due, and (e) all service charges and fees imposed by
the Lender in connection with the service of the Loan (if any) shall be
debited by recording thereon on the date imposed the amount of such charges
or fees. All credit entries to the Loan Account are conditional and shall be
readjusted as of the date made if final payment is not received by the Lender
in cash or solvent credits. The records
5
maintained by the Lender regarding the Loan Account shall be prima facie
evidence of the advances made hereunder. The Lender shall, whenever requested
by Borrower, provide such information as Borrower may reasonably request to
determine the balance of Borrower's Loan Account, the amount of the advances
debited to the Loan Account, the amounts of payments received by the Lender
and credited to the Loan Account and the amount of funds debited from the
Loan Account that were applied to the payment of interest, principal, late
charges, or Enforcement Costs due under the Note and under this Agreement.
2.06 Yield Protection. In the event that the Lender determines in
good faith but in its sole discretion that the adoption of or change in any
law or any rule, regulation, policy, guideline, request or directive of any
central bank or governmental authority (whether or not having the force of
law), or any interpretation thereof, or the compliance of the Lender or any
corporation controlling the Lender therewith:
(a) subjects the Lender to any increase in any tax, duty, charge or
withholding on or from payments due from the Borrower (excluding
taxation of the overall net income of the Lender), or changes the
basis of taxation of payments to the Lender in respect of the Loan
or other amounts due it hereunder, or
(b) imposes or modifies or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of; deposits with or for the account of, or credit extended
by the Lender or any corporation controlling the Lender, or
(c) imposes any other condition the result of which is: (i) to
increase the cost to the Lender of making, funding or maintaining
the Loan, or (ii) to reduce any amount received or receivable by
the Lender in connection with the Loan, or (iii) to require the
Lender to make any payment calculated by reference to the amount
of the Loans held or interest received by the Lender, or
(d) does or shall have the effect of reducing the effective rate of
return on the capital of the Lender or any corporation controlling
the Lender as a consequence of the Lender's obligations hereunder
to a level below that which the Lender or such corporation would
have achieved but for such adoption, change or compliance,
then, from time to time, within thirty (30) days after notice by the Lender,
the Borrower shall pay the Lender such additional amount incurred (including
any reduction in the rate of return on
6
capital to an amount below that which the Lender or any corporation
controlling the Lender could have achieved but for such change in regulation
after taking into account the Lender's policies as to capital adequacy) or
reduction in an amount received which the Lender determines in its sole but
reasonable discretion is attributable to making, funding, and maintaining the
Loan and the Lender's other obligations hereunder. A certificate of the
Lender claiming such compensation and setting forth the additional amount or
amounts to be paid to the Lender shall be conclusive in the absence of
manifest error.
2.07 The Borrower's Right to Terminate. The Borrower shall have the
right to terminate this Agreement upon written notice to the Lender;
provided, however, that no such notice of termination shall be or become
effective unless, at the time such notice is given, all Obligations shall
have been paid in full in immediately available funds and there exists no
commitment by the Lender which could give rise to any Obligations. The giving
of any such notice of termination by the Borrower, whether or not effective
under the foregoing provisions of this Subsection, shall immediately
terminate any obligation of the Lender to make advances under this Agreement
and, notwithstanding any attempt by the Borrower to revoke or withdraw any
notice of termination, no obligation of the Lender to make advances hereunder
shall rearise except to the extent and upon such terms and conditions as may
be agreed to by the Lender in writing in the Lender's sole discretion.
3. REPRESENTATIONS AND WARRANTIES
To induce the Lender, to enter into this Agreement, the Borrower makes
the representations and warranties set forth below. The Borrower acknowledges
the Lender's and MIDFA's justifiable right to rely upon these representations
and warranties.
3.01 Good Standing. The Borrower is a validly existing corporation
in good standing under the laws of the State of Delaware, and is qualified
and in good standing to conduct business in the State of Maryland, has the
power to own its property and conduct its business as now conducted and is
qualified to transact business in each state in which the character of the
properties owned by it therein or in which its transaction of business makes
such qualification necessary.
3.02 Status of Borrower. All copies of the articles of
incorporation, bylaws and corporate resolutions, as the case may be, of the
Borrower provided to the Lender are true, accurate, and complete, and no
action has been taken in diminution or abrogation thereof. The Borrower has
not changed its name or changed the location of its chief executive office
within the last year.
3.03 Authority. The Borrower has full power and authority to execute
and deliver this Agreement and any of the other Loan Documents to which it is
a party and to incur and perform the obligations provided for herein, all of
which have been duly authorized by all necessary and proper action by and on
behalf of the partners of the Borrower, and no consent or
7
approval of any Person, including, without limitation, any public authority
or regulatory body, which has not been obtained is required as a condition to
the validity or enforceability hereof or of any of the other Loan Documents
or to the performance by the Borrower of its Obligations.
3.04 Binding Agreement. This Agreement and each of the other Loan
Documents to which the Borrower is a party has been duly executed and
delivered by the Borrower, constitutes the valid and legally binding
obligation of the Borrower and is fully enforceable against the Borrower in
accordance with its terms, subject only to laws affecting the rights of
creditors generally and application of general principles of equity.
3.05 No Conflicting Agreements. The execution and delivery of; and
the performance of the Obligations under, this Agreement and each of the
other Loan Documents to which the Borrower is a party will not immediately or
with the passage of time, the giving of notice, or both: (a)violate (i) any
provision of law or any order, rule or regulation of any Governmental
Authority, (ii) any award of any arbitrator or any judgment, license, order
or permit applicable to the Borrower, or (iii) the articles of incorporation
or by-laws of the Borrower or (b) be in conflict with, result in a breach of
or constitute (with due notice and/or lapse of time) a material default
under, any indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Borrower is a party, or (c) result in the creation or
imposition of any Lien upon any of the property or assets of the Borrower
except for Liens created in favor of the Lender under or pursuant to this
Agreement.
3.06 Consents. No consent or approval of, or exemption by, any
Person and no waiver of any right by any Person (except to the extent
obtained) is required to authorize or permit, or is otherwise required in
connection with, the execution, delivery and performance of this Agreement or
any of the other Loan Documents to which the Borrower is a party or in
connection with the validity and priority of any Liens granted hereunder.
3.07 Litigation. Except as heretofore disclosed to the Lender in
Schedule 3.07 attached hereto and made a part hereof: (a) there are no
judgments, injunctions or similar orders or decrees, claims, actions, suits
or proceedings pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any property of the Borrower, at law or
in equity, by or before any Governmental Authority, which could result in any
material adverse change in the business, operations, prospects, properties or
in the condition, financial or otherwise, of the Borrower; and (1)) the
Borrower is not to the Borrower's knowledge, in default in any material
respect with respect to any judgment, order, writ, injunction, decree, rule
or regulation of any Governmental Authority which could have a material
adverse effect on the Borrower.
3.08 Borrower's Name. The Borrower's name is as specified on the
signature line of this Agreement, and in the event that the Borrower has used
a different legal or trade name at any time during the past twelve years,
such different legal or trade name has been disclosed in Schedule 3.08
attached hereto and made a part hereof by reference.
8
3.09 Taxes. The Borrower has filed or caused to be filed all
federal, State and local tax returns which are required to be filed by the
Borrower and has paid or caused to be paid all federal, State and local taxes
and governmental charges to the extent that such taxes and charges have
become due prior to the date on which penalties attach thereto except any
such taxes and charges that are being diligently contested in good faith by
appropriate proceedings which have been disclosed to the Lender in Schedule
3.09 attached hereto and made a part hereof and for which adequate reserves
have been set aside on the Borrower's books in accordance with GAAP.
3.10 Compliance With Governmental Requirements. The Borrower is
currently in full compliance with all applicable Governmental Requirements
unless and to the extent only that the validity or applicability thereof is
being diligently contested by the Borrower in good faith by appropriate
proceedings which have been disclosed to the Lender in writing in Schedule
3.10 attached hereto and made apart hereof. The Borrower is not under
investigation with respect to, or threatened to be charged or given notice of
a violation of; any applicable Governmental Requirement except as disclosed
in Schedule 3.10.
3.11 License and Permits. The Borrower has duly obtained and now
holds all licenses, permits, certifications, approvals and the like required
by Governmental Authorities in the jurisdiction(s) in which the Borrower
conducts business, and the Borrower also has duly obtained and now holds all
patents, copyrights, trademarks and trade names or rights thereto to conduct
the Borrower's business as now conducted, and each remains valid and in full
force and effect, free of any conflict with the rights of any other Person.
3.12 Defaults. There is no existing action, event, or condition
which would constitute an Event of Default or which, upon the giving of
notice and/or the lapse of time, could constitute an Event of Default on the
part of the Borrower.
3.13 Financial Information. All information contained in any
financial statement, application, schedule, report or any' other document
given by the Borrower, by any other Obligor, or by any other Person in
connection with the Obligations is in all respects true and accurate, and
neither the Borrower nor any other Obligor nor any other Person has omitted
to state any material fact or any fact necessary to make such information not
misleading.
3.14 Financial Condition. Any financial statements of the Borrower
heretofore delivered to the Lender or MIDFA are true, correct and complete,
fairly present the financial condition of the Borrower as at such dates and
the results of its operations for the periods then ended and were prepared in
accordance with GAAP applied on a consistent basis for prior periods. There
is no indebtedness of the Borrower as of the date of such statements which is
not reflected therein. No material adverse change in the Borrower's financial
condition, business operations or prospects has occurred since the date of
such statements, nor has the Borrower incurred any material liability, direct
or indirect, fixed or contingent, since the date of such financial
statements. The Borrower is not the subject of any Bankruptcy, insolvency,
9
readjustment of debt, trusteeship, receivership, dissolution or liquidation
proceeding. The Borrower is not currently insolvent and will not be insolvent
(as defined in Section 101(32) of the United States Bankruptcy Code) after
giving effect to all borrowings contemplated in the Loan Documents.
3.15 Full Disclosure. There is no material fact that the Borrower
has not disclosed to the Lender or MIDFA which could have a material adverse
effect on the properties, business, prospects or condition (financial or
otherwise) of the Borrower. Borrower has no knowledge of any circumstance
which would prevent Borrower from delivering to the Lender, on or before June
30, 1995, its audited financial statements for fiscal year ending December
31,1994.
3.16 Environmental Compliance. The Borrower has obtained all
permits, licenses and other authorizations ("Environmental Authorizations")
which are required under any and all federal, state, local and foreign
statutes, ordinances, codes, laws, regulations and other such authorities
relating to the environment or the release of any materials into the
environment ("Environmental Laws"). The Borrower is in compliance with the
terms and conditions of all such Environmental Authorizations, and is in
compliance with all Environmental Laws and with all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices, or demand letters
issued, entered, promulgated or approved thereunder. No notice, notification,
demand, request for information, citation, summons or order has been issued,
no complaint has been filed, no penalty has been assessed and no
investigation or review is pending or threatened by any Governmental
Authority: (a) with respect to any alleged failure by the Borrower to have
any Environmental Authorizations required in connection with the conduct of
the business of the Borrower;(b)with respect to any generation, treatment,
storage, recycling, transportation, disposal, or any release as defined in 42
U.S.C. Section 9601(22) ("Release") on, at, under, about or from any property
or facility now or formerly owned, leased or operated by the Borrower of any
substance regulated under any Environmental Laws ("Hazardous Material"); or
(c) with respect to any arrangement by the Borrower for disposal, treatment
or transport of any Hazardous Material. No oral or written notification of a
release of a Hazardous Material has been filed by or on behalf of the
Borrower and no property or facility now or previously owned, leased or
operated by the Borrower is listed or proposed for listing on the National
Priorities List under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, or on any similar state list of sites
requiring investigation or clean-up. There are no Liens arising under or
pursuant to any Environmental Laws on any real property or properties owned
or leased by the Borrower, and no actions have been taken by any Governmental
Authority or are in process which could subject any of such properties to
such Liens. There are no Hazardous Materials present on, in, at, under or
about any real property of properties owned or leased by the Borrower in
amounts or concentrations or under circumstances that could materially
adversely affect the use or value of such real property or properties. The
Lender acknowledges and agrees, however, that in the ordinary course of its
business operations the Borrower utilizes research quantities of radioactive
and other Hazardous Materials.
10
3.17 Margin Stock. None of the proceeds of the loan will be used,
directly or indirectly, by the Borrower for the purpose of purchasing or
carrying, or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry, any "margin stock" within the
meaning of Regulation G (12 CFR Part 207) or Regulation U (12 CFR Part 221)
of the Board of Governors of the Federal Reserve System, as amended, (herein
called "margin stock") or for any other purpose which might make the
transactions contemplated herein a "purpose credit" within the meaning of
said Regulation G or Regulation U, or cause this Agreement to violate or
trigger any other requirement under any other regulation of the Board of
Governors of the Federal Reserve System or the Securities Exchange Act of
1934 or the Small Business Investment Act of 1958, as amended, or any rules
or regulations promulgated under any of such statutes.
3.18 ERISA. Except as otherwise noted herein, the following
representations and covenants apply to each employee benefit plan, as defined
in Section 3 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), which the Borrower or an ERISA Affiliate sponsors or
maintains, or to which it contributes. Unless the context indicates
otherwise, the provisions also apply with respect to prior or future employee
benefit plans of the Borrower or an ERISA Affiliate. The term ERISA Affiliate
means any entity that is affiliated with the Borrower, within the meaning of
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code").
Borrower covenants, represents, and warrants that: (a) each employee
benefit plan is maintained in all material respects in conformity with all
applicable provision of ERISA, the Internal Revenue Code, and other federal
and state statutes relating to such plans; ~) the assets of the Borrower are
not subject to any liens under ERISA or the Internal Revenue Code in respect
of any employee benefit plan; (c) with respect to each employee pension
benefit plan, as defined in Section 3(2) of BRISA: (i) no such plan has
incurred an accumulated funding deficiency under Section 412 of the Internal
Revenue Code or Section 302 of ERISA (whether or not waived); and (ii) there
have not been any reportable events as defined in Section 4043 of ERISA, with
respect to which the 30 day notice requirement has not been waived; (d) the
Borrower has not incurred and would not incur any material withdrawal
liability under ERISA upon the complete withdrawal (within the meaning of
Section 4203 of ERISA) or the partial withdrawal (within the meaning of
Section 4205 of ERISA) of Borrower or any ERISA Affiliate from any
multiemployer plan, as defined in Section 3(37) of ERISA; (e) to Borrower's
knowledge, no multiemployer plan to which the Borrower or an ERISA Affiliate
contributes or previously contributed has been terminated (within the meaning
of Section 4041A of ERISA), is insolvent (within the meaning of Section 4245
of ERISA), or is jn reorganization (within the meaning of Section 4241 of
ERISA), and neither the Borrower nor any ERISA Affiliate has received any
notice that such plan may become insolvent or be placed in reorganization;
and (f) the financial statements of the Borrower accurately reflect the
amount of any material post-retirement benefits, in accordance with the
Statement of Financial Accounting Standard No. 106, or the Borrower has
provided to the Lender and MIDFA in writing a separate disclosure of such
post-retirement benefits that conforms to FASB 106 which disclosure may be
attached as a Schedule to this Agreement.
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The Borrower further represents and warrants to the Lender and MIDFA
that, with respect to each current or future employee benefit plan, it will:
(a) maintain or cause the appropriate ERISA Affiliate to maintain such
employee benefit plan in conformity in all material respects with all
applicable provisions of ERISA, the Internal Revenue Code, and all other
federal and state statutes relating to such plans; (b) timely file or cause
the appropriate ERISA Affiliate to timely file all required governmental
returns or reports; (c) make or cause the appropriate ERISA Affiliate to
timely make all contributions required under the terms of such employee
benefit plan but, in all events, make such contributions as are sufficient to
meet the minimum funding standards set forth in ERISA (including any required
quarterly contributions) (unless a waiver of such minimum funding standards
has been granted by the Internal Revenue Service); (d) promptly furnish the
Lender and MIDFA with any information or document (including, but not limited
to, annual reports (Forms 5500), financial statements and records, and
actuarial statements and reports) requested by the Lender and MIDFA with
respect to such employee benefit plan; and (e) promptly notify the Lender and
MIDFA with respect to: (i) the occurrence of any reportable event, as defined
in Section 4043 of ERISA and the regulations thereunder; (ii) the termination
of any employee benefit plan which could result in a liability which
adversely affects the financial condition of the Borrower; (iii) receipt of
any notice, claim, or assessment with respect to an employee benefit plan
that could result in a liability which would adversely affect the financial
condition of the Borrower (including, but not limited to, any notice that a
multiemployer plan to which Borrower or an ERISA Affiliate contributes is or
may become insolvent, or is or may be placed in reorganization). Any notice
provided by Borrower shall be in the form of a certificate, signed by the
Chief Financial Officer of the Borrower, setting forth the details of such
event or occurrence. If, in the reasonable opinion of the Lender or MIDFA,
such event or occurrence could have a material adverse affect on the
financial condition of the Borrower, the Lender and MIDFA may treat such
event or occurrence as an Event of Default.
3.19 Information. Furnish to the Lender and MIDFA promptly at any
time and from time to time such information concerning the operations,
business, affairs and financial condition of the Borrower as the Lender may
request.
4. CONDITIONS OF LENDING
Unless the Lender shall otherwise agree, the Lender shall have no
obligation to advance any funds to the Borrower hereunder unless each of the
following conditions precedent shall be satisfied as provided below:
4.01 Documents. There shall have been delivered to the Lender,
appropriately completed and duly executed (when applicable), the following,
each in form and substance satisfactory to the Lender:
(a) The Note.
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(b) A certificate of the Borrower substantially in the form
attached hereto as Exhibit B unless otherwise determined by the Lender.
(c) Evidence satisfactory to the Lender and MIDFA that
Borrower maintains insurance coverages which are reasonable and prudent in
the conduct of its business including, if requested by Lender, copies of all
insurance policies.
(d) A written opinion of counsel to the Borrower, dated as of
the Closing and addressed to the Lender.
(e) Such financing statements as may be required by the Lender.
(f) Pledge Agreement substantially in the form attached hereto
as Exhibit C unless otherwise determined by the Lender.
4.02 Legal Matters. At the Closing, all legal matters in connection
therewith or incidental thereto shall be fully satisfactory to the Lender's
counsel.
4.03 MIDFA Insurance. The Lender shall have received duly executed
the Insurance Agreement issued by MIDFA, in form and content acceptable to
the Lender.
4.04 Facility Fee. The Lender shall have received a fee in the
amount of$7,500.00.
5. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with the Lender and MIDFA that,
during the term of this Agreement and until (a) all of the Obligations have
been paid in full and (b) there exists no commitment by the Lender which
could give rise to any Obligations, the Borrower will absolutely and
unconditionally do and perform each of the following acts, promises and
covenants:
5.01 Good Standing. The Borrower shall maintain its existence as a
corporation in good standing under the laws of the State of Delaware and
shall be registered and in good standing under the laws of the State of
Maryland, continue its business as now conducted and maintain its
qualification to transact business in each state in which the character of
the properties owned by it therein or in which its transaction of business
makes such qualification necessary.
5.02 Litigation. The Borrower shall promptly notify the Lender and
MIDFA in writing of any judgment, injunction or similar order or decree,
claim, action, suit or proceeding against or affecting the Borrower or any
property of the Borrower, at law or in equity, by or before any court or any
Governmental Authority, which could result in any material
13
adverse change in the business, operations, prospects, properties or in the
condition, financial or otherwise, of the Borrower.
5.03 Taxes. The Borrower shall file or cause to be filed all
federal, State and local tax returns which are required to be filed by the
Borrower and shall pay or cause to be paid all federal, State and local taxes
and governmental charges to the extent that such taxes and charges become due
prior to the date on which penalties attach thereto except any such taxes and
charges that are being diligently contested in good faith by appropriate
proceedings, provided, however, that (a) the Lender and MIDFA shall have been
given reasonable prior written notice of such intention to contest, (b) such
nonpayment will not, in the Lender's and MIDFA's sole discretion, materially
impair any of the Collateral or the Lender's rights or remedies with respect
thereto or the prospect for full and punctual payment of all of the
Obligations, (c) the Borrower at all times effectively stays or prevents any
official or judicial sale of or action or filing against any of the
Collateral by reason of such nonpayment and (d) the Borrower establishes
reasonable reserves on the Borrower's books in accordance with GAAP for any
liabilities being contested and for expenses arising out of such contest.
5.04 Compliance with Governmental Requirements. The Borrower shall
comply with all applicable Governmental Requirements unless and to the extent
only that the validity or applicability thereof is being diligently contested
by the Borrower in good faith by appropriate proceedings, provided, however,
that (a) the Lender and MIDFA shall have been given reasonable prior written
notice of such intention to contest, (b) such noncompliance will not, in the
Lender's and MIDFA's sole discretion, materially impair any of the Collateral
of the Lender's and MIDFA's rights or remedies with respect thereto or the
prospect for full and punctual payment of all of the Obligations, (c) the
Borrower at all times effectively stays or prevents any official or judicial
sale of or action or filing against any of the Collateral by reason of such
noncompliance and (d) the Borrower establishes reasonable reserves on the
Borrower's books in accordance with GAAP for any liabilities or expenses
which may arise out of such noncompliance and contest.
5.05 License and Permits. The Borrower shall maintain, preserve and
protect all licenses, permits, certifications, approvals and the like
required by Governmental Authorities in the jurisdiction(s) in which the
Borrower conducts business, and the Borrower also shall maintain, preserve
and protect all patents, copyrights, trademarks and trade names or rights
thereto to conduct the Borrower's business as now conducted free of any
conflict with the rights of any other Person.
5.06 Books and Records. The Borrower shall keep and maintain
accurate and current books and records pertaining to the operation, business
and financial condition of the Borrower and pertaining to the Collateral in
accordance with GAAP and permit access by the Lender and MIDFA to,
reproduction by the Lender and MIDFA of and copying by the Lender and MIDFA
from, such books and records upon reasonable prior notice during normal
business hours.
14
5.07 Financial Statements. The Borrower shall furnish to the Lender
and MIDFA in writing:
(a) as soon as available but in no event more than forty-five
(45) days after the end of each quarterly accounting period of the Borrower,
a statement of income and retained earnings and a statement of cash flow of
the Borrower for such period and for the period from the beginning of the
current fiscal year of the Borrower to the end of such period, and a balance
sheet of the Borrower as at the end of such period, setting forth in each
case in comparative form figures for the corresponding periods in the
preceding fiscal year of the Borrower, all in detail and scope satisfactory
to the Lender, prepared in accordance with GAAP, Certified by the chief
financial officer of the Borrower and accompanied by a certificate of that
officer stating whether any event has occurred which constitutes an Event of
Default or which could constitute an Event of Default with the giving of
notice and/or the lapse of time and, if so, stating the facts with respect
thereto;
(b) as soon as available but in no event more than one hundred
twenty (120) days after the end of each fiscal year of the Borrower, a
statement of income, earnings and surplus and a statement of cash flow of the
Borrower for such year, and a balance sheet of the Borrower as at the end of
such year, setting forth in each case in comparative form figures for the
corresponding periods in the preceding fiscal year of the Borrower, all in
detail and scope satisfactory to the Lender, prepared in accordance with GAAP
and audited in accordance with the standards established by the American
Institute of Certified Public Accountants by Coopers & Xxxxxxx or such other
independent certified public accountants selected by the Borrower and
satisfactory to the Lender and MIDFA accompanied by an unqualified report of
such independent certified public accounts with respect to such financial
statements, Certified by the chief financial officer of the Borrower stating
whether any event has occurred which constitutes an Event of Default or which
could constitute an Event of Default with the giving of notice and/or the
lapse of time and, if so, stating the facts with respect thereto; and
(c) promptly upon the Lender's or MIDFA's request, and
periodically if the Lender or MIDFA shall so require, such written
statements, schedules or reports (which shall be Certified if required by the
Lender or MIDFA) in such form, containing such information and accompanied by
such documents as may be satisfactory to the Lender and MIDFA from time to
time in their reasonable discretion concerning the Borrower's financial
condition or business operations or any other matter or matters.
5.08 Environmental Compliance. The Borrower shall obtain all
Environmental Authorizations which are required under any and all
Environmental Laws. The Borrower shall remain in compliance with the terms
and conditions of all such Environmental Authorizations and shall remain in
compliance with all Environmental Laws and with all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or demand letters
issued, entered, promulgated or approved thereunder. The Borrower shall: (a)
promptly notify
15
the Lender and MIDFA and any other Person that it is required to notify
pursuant to any applicable Environmental Laws once it is aware of a Release
or threatened Release of Hazardous Material on, from, or near any property
that it owns or occupies; (b) promptly notify the Lender and MIDFA once the
Borrower has received notice that an environmental investigation or clean-up
proceeding has been instituted by any Person in connection with any such
property; (c) fully comply with and cooperate with any such environmental
investigation and clean-up proceeding, unless and to the extent only that the
same is being diligently contested by the Borrower in good faith by
appropriate proceedings, provided, however, that (i) the Lender and MIDFA
shall have been given reasonable prior written notice of such intention to
contest, (ii) such noncompliance will not, in the Lender's and MIDFA's sole
discretion, materially impair the prospect for full and punctual payment of
all of the Obligations, (iii) the Borrower at all times effectively stays or
prevents any official or judicial sale of or action or filing against any of
its real property by reason of such noncompliance and (iv) the Borrower
establishes reasonable reserves on the Borrower's books in accordance with
GAAP for any liabilities or expenses arising out of such noncompliance and
contest; and (d) promptly execute and complete any "Remedial Actions" (as
defined herein) within the control of the Borrower necessary to ensure that
no environmental Liens or encumbrances are levied against or exist with
respect to any such property. As used herein, "Remedial Actions" shall mean:
(a) the cleanup or removal of Hazardous Materials; (b) such actions as may be
necessary to monitor, assess, or evaluate the Release or threatened Release
of Hazardous Materials; (c) the proper disposal or removal of Hazardous
Materials; (d) the taking of such other actions as may be necessary to
prevent, minimize, or mitigate the damages caused by a Release or threatened
Release of Hazardous Materials to the public health or welfare or to the
environment; and (e) the providing of emergency assistance after a Release.
"Remedial Actions" shall include, but are hot limited to, such actions at the
location of a Release as: storage; confinement; perimeter protection using
dikes, trenches, or ditches; clay cover; neutralization; clean-up of
Hazardous Materials or contaminated materials; recycling or reuse; diversion;
destruction; segregation of reactive wastes; dredging or excavations; repair
or replacement of leaking containers; collection of leakage and runoff;
on-site treatment or incineration; providing alternative water supplies; and
any monitoring reasonably required to assure that such actions protect the
public health and welfare and the environment. The Borrower shall indemnify
and hold harmless the Lender and MIDFA from all loss, liability, damage,
cost, and expense, including without limitation, reasonable attorneys' fees,
fines, or other penalties or payments, for failure of any property that the
Borrower owns or occupies to comply in all respects with all Environmental
Laws. The provisions of this section shall survive payoff release,
foreclosure, or other disposition of this Agreement. The Borrower shall
remain liable hereunder regardless of any other provisions hereof which may
limit the Borrower's liability.
5.09 Further Assurances and Corrective Instruments. The Borrower
shall promptly execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, to the Lender from time to time such security
agreements, financing statements, amendments to or assignments of financing
statements, security interest filing statements, assignments and such other
documents as the Lender may reasonably request, in form and
16
content satisfactory to the Lender and otherwise to do or cause to be done
from time to time all things requested by the Lender, in order to confirm,
preserve, protect or perfect, or to maintain the perfection of; the Lender's
security interest in any of the Collateral and/or its priority, it being the
intention of the Borrower to hereby provide a full and absolute warranty of
further assurance to the Lender. If the Borrower fails to execute any of such
documents within ten (10) days of being requested to do so by the Lender, the
Borrower hereby appoints the Lender or any officer of the Lender as the
Borrower's attorney in fact for purposes of executing such documents in the
Borrower's name, place and stead, which power of attorney shall be considered
as coupled with an interest and irrevocable.
5.10 Notice of Event of Default. Immediately notify the Lender and
MIDFA of the occurrence of any Event of Default or any event which, with the
giving of notice and/or the lapse of time, could constitute an Event of
Default and the facts with respect thereto.
5.11 Use of Proceeds. Use the proceeds of advances made hereunder
only to finance construction of the leasehold improvements to the SAGA
building in Baltimore City, Maryland and related "soft" costs, and to pay the
costs, expenses and fees payable by the Borrower under this Agreement and the
other Loan Documents.
5.12 Compliance With Laws. The Borrower shall comply in all material
respects with the requirements of all applicable laws, rules, regulations and
orders of governmental or regulatory authorities or agencies (including,
without limitation, all Environmental Laws and the Occupational Safety and
Health Act). In addition, the Borrower agrees to deliver to the Lender and
MIDFA promptly after receipt of notice of same (whether such notice is oral
or written) copies of any notices of administrative action related to
suspected or actual failures on the part of the Borrower, or any assets of
the Borrower to comply with Environmental Laws and/or the state or federal
Occupational Safety and Health Act, the Americans With Disabilities Act or
other laws or regulations related thereto.
5.13 Insurance. The Borrower shall maintain insurance with
responsible insurance companies on such of its assets and properties, in such
amounts and against such risks as is customary and prudent in the normal
course of the Borrower's business, and furnish to the Lender and MIDFA
promptly upon request certificates evidencing such insurance.
5.14 Employment Count. The Borrower shall upon request, but no more
frequent than twice annually, supply the employment count at the Borrower's
premises to the Lender and MIDFA.
5.15 Equal Employment. The Borrower shall prohibit discrimination on
the basis of (i) political or religious opinion or affiliation, marital
status, race, color, creed, or natural origin, or (ii) sex or age, except
when sex and age constitutes a bona fide occupational qualification, or (iii)
the physical or mental disability of a qualified individual with a
disability. Upon the request of the Lender, MIDFA or the Department of
Economic and Employment
17
Development, the Borrower will submit to it information relating to its
operations, with regard to political or religious opinion or affiliation,
marital status, physical or mental disability, race, color, creed, sex, age
or national origin on a form to be prescribed by the Department of Economic
and Employment Development.
5.16 Drug and Alcohol Free Workplace. The Borrower shall make a good
faith effort to eliminate illegal drug use and alcohol and drug abuse from
its workplace during the term of this agreement. Specifically, the Borrower
shall:
(i) Prohibit the unlawful manufacture, distribution,
dispensation, possession, or use of drugs in its workplace;
(ii) Prohibit its employees from working under the influence of
alcohol or drugs;
(iii) Not hire or assign to work on an activity funded in whole
or in part with State funds, anyone whom it knows, or in the exercise of due
diligence should know, currently abuses alcohol or drugs and is not actively
engaged in a bona fide rehabilitation program;
(iv) Promptly inform the appropriate law enforcement agency or
every drug related crime that occurs in its workplace if it or its employee
has observed the violation or otherwise has reliable information that a
violation has occurred; and
(v) Notify employees that drug and alcohol abuse is banned in
the workplace, impose sanctions on employees who abuse drugs and alcohol in
the workplace, and institute steps to maintain a drug and alcohol free
workplace.
6. NEGATIVE COVENANTS
The Borrower covenants and agrees with the Lender and MIDFA that, during
the term of this Agreement and until (a) all of the Obligations have been
paid in full and (b) there exists no commitment by the Lender which could
give rise to any Obligations, the Borrower will not, directly or indirectly,
without the Lender's and MIDFA's prior written consent:
6.01 Merger. Sale of Assets. etc. Enter into or be a party to any
merger or consolidation; sell, assign, transfer, convey or lease any interest
in all or any substantial part of its property except in the ordinary course
of the Borrower1s business as now being conducted; purchase or otherwise
acquire all or substantially all of the assets of any other person, or any
shares of stock of; or similar interest in, any other person. The consent of
the Lender and MIDFA to any requested merger or consolidation of the Borrower
with any other person shall not be unreasonably withheld if (a) the net worth
of the entity surviving such merger or consolidation (the "Surviving Entity")
would be not less than the net worth of the Borrower
18
immediately preceding such consolidation or merger, and (b) if the Surviving
Entity is not the Borrower, the Surviving Entity assumes the payment and
performance of the Obligations pursuant to such written agreements as may be
satisfactory to the Lender, and MIDFA. MIDFA may further condition its
consent to any consolidation or merger on the Surviving Entity agreeing that
while any amounts remain outstanding under the Loan it will not (x) transfer
its business operations then being conducted by the Borrower at the premises
known as 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000 (the
"Premises") out of the State of Maryland, or (y) materially reduce the number
of employees at the Premises. Notwithstanding the foregoing, the consent of
MIDFA to any matter described in this Section 6.01 shall not be required if
the Surviving Entity provides additional collateral for the Obligations of a
type, in an amount and pursuant to written agreements which are in form and
substance satisfactory to the Lender, and the Lender consents to the
termination of the Insurance Agreement. The Lender and MIDFA further covenant
and agree to use their best efforts in good faith to promptly respond to any
request by the Borrower for a consent required under this Section 6.01.
6.02 Investments. Make any capital contribution to any other person
or purchase or acquire a beneficial interest in any stock, securities or
evidences of Indebtedness of; or make any investment or acquire any interest
in, any other person, except for (a) investments of the Collateral as the
Lender and the Borrower shall from time to time agree, (b) investments in
federally insured certificates of deposit or direct and indirect obligations
of the United States of America maturing within one year from the date of
acquisition or (c) Moodys or Standard and Poors A or better rated
investments. The consent of the Lender and MIDFA to any action otherwise
prohibited under this Section 6.02 shall not be unreasonably withheld. The
Lender and MIDFA further covenant and agree to use their best efforts in good
faith to promptly respond to each request by the Borrower for any such
consent.
6.03 Fiscal Year. Change the Borrower's fiscal year.
6.04 Loans. Make or permit to exist any loan to any person, not
including (a) existing loans outstanding on the date hereof; (b) advances for
travel and the like made to officers and employees in the ordinary course of
business, (c) loans to employees for expenses incurred in relocating to
Maryland, and (d) loans to officers of the Borrower for the purpose of
financing the purchase of stock of the Borrower. The consent of the Lender
and MIDFA to any loan otherwise prohibited under this Section 6.04 shall not
be unreasonably withheld. The Lender and MIDFA further covenant and agree to
use their best efforts in good faith to promptly respond to each request by
the Borrower for any such consent.
6.05 Change of Name. Change the name of the Borrower.
6.06 Trade Names. Use any trade name other than the Borrower's true
name.
19
6.07 Handling of Hazardous Materials. Use in its business or
operations, produce as a result or as a by-product of its business or
operations, or store or hold at any site or location at which it conducts its
business or operations, or at any other properties, Hazardous Materials which
under any Environmental Laws require special handling, collection, storage,
treatment, disposal, or transportation, unless the Borrower strictly and
fully complies with all requirements of applicable Environmental Laws which
require the special handling, collection, storage, treatment, disposal, or
transportation of such Hazardous Materials.
6.08 Releases of Hazardous Materials. Permit the Release or
threatened Release of any Hazardous Materials.
6.09 Environmental Laws. Violate any applicable Environmental Laws.
6.10 ERISA. (a) Take or permit any action with respect to an
employee benefit plan which would result in the imposition of any lien under
ERISA or the Internal Revenue Code on the assets of the Borrower; (b) engage
in or permit any violation of ERISA (including, but not limited to, any
breach of fiduciary duty, within the meaning of Title I, subtitle B, part 4
of ERISA, or prohibited transaction, within the meaning of Section 406
through 408 of ERISA or Section 4975 of the Internal Revenue Code); (c)
withdraw (complete or partial) from any multiemployer plan if such withdrawal
would result in the imposition of a material liability on the Borrower; and
(d) take any other action with respect to an employee benefit plan which
would have a material adverse affect on the financial condition of the
Borrower.
6.11 Sale and Leaseback. Directly or indirectly enter into any
arrangement hereby the Borrower shall sell or transfer all or any substantial
part of its fixed assets then owned by it and shall thereupon, or within one
year thereafter, rent or lease the assets so sold or transferred. The consent
of the Lender and MIDFA to any action otherwise prohibited under this Section
6.11 shall not be unreasonably withheld. The Lender and MIDFA further
covenant and agree to use their best efforts in good faith to promptly
respond to each request by the Borrower for any such consent.
6.12 Management. Fail to notify Lender or MIDFA of any change in the
Directors and officers of the Borrower, giving specific reasons for any such
change.
7. DEFAULT DEMAND: RIGHTS AND REMEDIES
7.01 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default" under this Agreement:
(a) The failure of the Borrower to pay any sum due under the
Note within two (2) Business Days after written notice from the Lender to the
Borrower that such sum has become due, whether by demand or otherwise;
20
(b) the failure of the Borrower to perform, observe or comply
with any agreement, covenant, or promise made under the Note, under this
Agreement, or under any of the other Loan Documents (other than payment
defaults), which failure remains uncured for a period of thirty (30)days
after written notice thereof has been given by the Lender to the Borrower;
(c) if any representation or warranty made herein or in any of
the other Loan Documents or if any information contained in any financial
statement application, schedule or report or any other document given by the
Borrower, or any other Person in connection with the Loan, with any of the
Collateral, or with any of the Loan Documents is not in all respects true and
accurate, or if the Borrower or such other Person omitted to state any fact
necessary to make such information not materially misleading;
(d) the occurrence of a default under any of the other Loan
Documents which is not cured within any applicable cure period;
(e) the Borrower shall be or become insolvent (as defined in
Section 101 of the United States Bankruptcy Code) or unable to pay its debts
as they become due, or admit in writing to such insolvency or to such
inability to pay its debts as they become due;
(f) there shall be filed against the Borrower an involuntary
petition or other pleading seeking the entry of a decree or order for relief
under the United States Bankruptcy Code or any similar federal or state
insolvency or similar laws ordering: (i) the liquidation of the Borrower, or
(ii) a reorganization of the Borrower or the business and affairs of the
Borrower, or (iii) the appointment of a receiver, liquidator, assignee,
custodian, trustee, or similar official for the Borrower of the property of
the Borrower, and the failure to have such petition or other pleading denied
or dismissed within sixty (60) calendar days from the date of filing;
(g) the commencement by the Borrower of a voluntary case under
the federal Bankruptcy laws or any federal or state insolvency or similar
laws or the consent by the Borrower to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, or
similar official for the Borrower of any of the property of the Borrower, or
the making by the Borrower of an assignment for the benefit of creditors, or
the failure by the Borrower generally to pay the debts of the Borrower as the
debts become due;
(h) the dissolution, merger, consolidation or reorganization
of; or the entry of any order, judgment, or decree for the dissolution,
merger, consolidation or reorganization of; the Borrower not otherwise
permitted under Section 6.01 hereof;
(i) the entry of any judgment, order, award, or decree (a
"Judgment") against the Borrower in excess of $500,000.00 in the aggregate
which is not covered by insurance and a determination by the Lender, in good
faith but in its sole discretion, that the
21
same, when aggregated with all other Judgments outstanding against the
Borrower, could have a material adverse effect on the Borrower, the
Collateral, the Lender's rights with respect to the Collateral, or the
prospect for full and punctual payment and performance of the Note, this
Agreement or the other Loan Documents, if the Judgment has not been
discharged or execution thereof stayed within sixty (60) days after its entry
or discharged within sixty (60) days after the expiration of any stay;
(j) the entry of an order by a court of competent jurisdiction
enjoining or restraining the Borrower in any manner from conducting its
business in whole or in part and a determination by the Lender, in good faith
but in its sole discretion, that such order could have a material adverse
effect on the Borrower, the Collateral, the Lender's rights with respect to
the Collateral, or the prospect for full and punctual payment and performance
of the Note, this Agreement or the other Loan Documents, if such order is not
terminated or stayed within ten (10) days after its entry or terminated
within ten (10) days after the expiration of any stay; and
(k) any assets of the Borrower (in excess of $500,000.00 in
the aggregate) shall be attached, levied upon, seized or repossessed, or come
into the possession of a trustee, receiver or other custodian.
7.02 Rights and Remedies Upon Demand. If the Borrower or any Obligor
fails to immediately pay all sums due under the Note upon demand by the
Lender, the Lender, in the Lender's sole discretion and without notice to the
Borrower or any other Obligor, may exercise any or all rights, powers, and
remedies provided for in the Loan Documents or now or hereafter existing at
law, in equity, by statute or otherwise.
8. MISCELLANEOUS
8.01 Performance for the Borrower. The Borrower agrees and hereby
authorizes that the Lender may, in the Lender's sole discretion, but the
Lender shall not be obligated to, regardless of the Maximum Loan Amount,
advance funds on behalf of the Borrower, without prior notice to the
Borrower, in order to insure Borrower's compliance with any covenant,
warranty, representation or agreement of the Borrower made in or pursuant to
this Agreement or any of the other Loan Documents, to continue or complete,
or cause to be continued or completed, performance of the Borrower's
obligations under any contracts of the Borrower, to cover overdrafts in any
checking or other accounts of the Borrower at the Lender or to preserve or
protect any right or interest of the Lender in the Collateral or under or
pursuant to this Agreement or any of the other Loan Documents, including,
without limitation, the payment of any insurance premiums or taxes and the
satisfaction or discharge of any judgment or any Lien upon the Collateral or
other property or assets of the Borrower. The Borrower shall pay to the
Lender upon demand all such advances made by the Lender with interest thereon
at the highest rate provided in the Note. All such advances shall be deemed
to be included in the Obligations and secured by the security interest
granted the Lender hereunder; provided, however, that the
22
provisions of this Subsection shall survive the termination of this Agreement
and the Lender's security interest hereunder and the payment of all other
Obligations.
8.02 Expenses. Whether or not any of the transactions contemplated
hereby shall be consummated, the Borrower agrees to pay to the Lender on
demand the amount of all reasonable expenses paid or incurred by the Lender
(including the reasonable fees and expenses of its counsel) in connection
with the preparation of all written commitments of the Lender antedating this
Agreement, this Agreement and the other Loan Documents and all documents and
instruments referred to herein. The provisions of this Subsection shall
survive the termination of this Agreement and the Lender's security interest
hereunder and the payment of all other Obligations.
8.03 Waivers by the Borrower. The Borrower hereby waives, to the
extent the same may be waived under applicable law: (a) notice of acceptance
of this Agreement; (b) all claims, causes of action and rights of the
Borrower against the Lender on account of actions taken or not taken by the
Lender in the exercise of the Lender's rights or remedies hereunder, under
the other Loan Documents or under applicable law unless attributable to the
Lender's gross negligence or willful misconduct; (c) presentment, demand for
payment, protest and notice of non-payment and all exemptions; (d) any and
all other notices or demands which by applicable law must be given to or made
upon the Borrower by the Lender; and (e) settlement, compromise or release of
the obligations of any person primarily or secondarily liable upon any of the
Obligations.
8.04 Waivers by the Lender. Neither any failure nor any delay on the
part of the Lender in exercising any right, power or remedy hereunder, under
any of the other Loan Documents or under applicable Governmental Requirements
shall operate as a waiver thereof; nor shall a single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
8.05 The Lender's Right of Setoff. The Lender shall have the right,
in addition to all other rights and remedies available to it, to set off
against any Obligations due the Lender any debt owing to the Borrower by the
Lender, including, without limitation, any funds in any checking or other
account now or hereafter maintained by the Borrower at the Lender. The
Borrower hereby confirms the Lender's right to banker's lien and setoff, and
nothing in this Agreement or any of the other Loan Documents shall be deemed
a waiver or prohibition of the Lender's right of banker's lien and setoff.
8.06 Choice of Law: Forum Selection: Consent to Jurisdiction. This
Agreement shall be governed by, construed and interpreted in accordance with
the laws of the State of Maryland (excluding the choice of law rules
thereof). The Borrower hereby (a) agrees that all disputes and matters
whatsoever arising under, in connection with, or incident to this Agreement
shall be litigated, if at all, in and before a court located in the State of
Maryland to the exclusion of the courts of any other state or country and
(b)irrevocably submits to the
23
non-exclusive jurisdiction of any Maryland court or federal court sitting in
the State of Maryland in any action or proceeding arising out of or relating
to this Agreement, and hereby irrevocably waives any objection to the laying
of venue of any such action or proceeding in any such court and any claim
that any such action or proceeding has been brought in an inconvenient forum.
A final judgment in any such action or proceeding shall be conclusive and may
be enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law.
8.07 Invalidity of Any Part. If any provision or part of any
provision of this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision (or any remaining part of any provision)
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision (or part thereof) had never been contained
in this Agreement, but only to the extent of its invalidity, illegality, or
unenforceability.
8.08 WAIVER OF JURY TRIAL. THE BORROWER HEREBY (i) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY,
AND (ii) WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE LENDER
AND THE BORROWER MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH OR IN ANY
WAY PERTAINING TO THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS AND/OR ANY
TRANSACTIONS, OCCURRENCES, COMMUNICATIONS, OR UNDERSTANDINGS (OR THE LACK OF
ANY OF THE FOREGOING) RELATING IN ANY WAY TO THE BORROWER-LENDER RELATIONSHIP
BETWEEN THE PARTIES. IT IS UNDERSTOOD AND AGREED THAT THIS WAIVER CONSTITUTES
A WAIVER OF TRIAL BY JURY OF ALL CLMMS AGAINST ALL PARTIES TO SUCH ACTIONS OR
PROCEEDINGS, INCLUDING CLMMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
AGREEMENT. THIS WAIVER OF JURY TRIAL IS SEPARATELY GIVEN, KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY THE BORROWER AND THE BORROWER HEREBY AGREES
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 LENDER IS HEREBY AUTHORIZED TO SUBMIT THIS AGREEMENT TO ANY COURT
HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE BORROWER SO AS TO SERVE
AS CONCLUSIVE EVIDENCE OF SUCH WAIVER OF RIGHT TO TRIAL BY JURY. THE BORROWER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND/OR THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.
24
8.09 Service of Process.
The Borrower hereby consents to process being served in any suit,
action or proceeding instituted in connection with this Agreement by the
mailing of a copy thereof to the Borrower by certified mail, postage prepaid,
return receipt requested. The Borrower hereby irrevocably agrees that such
service shall be deemed to be service of process upon the Borrower in any
such suit, action or proceeding. Nothing in this Agreement shall affect the
right of the Lender to serve process in any other manner otherwise permitted
by law, and nothing in this Agreement will limit the right of the Lender
otherwise to bring proceedings against the Borrower in the courts of any
other jurisdiction or jurisdictions.
8.10 Notice: Any notice, demand, request or other communication
which the Lender or the Borrower may be required to give hereunder shall be
in writing, shall be effective when sent by first class United States mail,
postage prepaid, and shall be addressed as follows, or to such other
addresses as the parties may designate by like notice:
If to the Borrower:
OSIRIS THERAPEUTICS, INC.
00000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx, Xxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxx X Xxxxxx
with a copy to:
XXXXX & XXXXXXX, L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esquire
If to the Lender:
SIGNET BANK/MARYLAND
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X Xxxxxxx, Vice President
25
with a copy to:
XXXXXXXX & GREEN LLC
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, XX, Esquire
Notwithstanding anything to the contrary, all notices and demands for payment
from the Lender actually received in writing by the Borrower shall be
considered to be effective upon the receipt thereof by the Borrower
regardless of the procedure or method utilized to accomplish delivery thereof
to the Borrower.
8.11 Miscellaneous. Time is of the essence under this Agreement. The
paragraph headings of this Agreement are for convenience only, and shall not
limit or otherwise affect any of the terms hereof. This Agreement and the
other Loan Documents, if any, constitute the entire agreement between the
parties with respect to their subject matter and supersede all prior letters,
representations, or agreements, oral or written, with respect thereto. The
Lender may, without notice to or consent of the Borrower, sell, assign,
pledge or transfer this Agreement or sell, assign, transfer or grant
participations in all or any part of the obligations evidenced by the Note to
others at any time and from time to time, and the Lender may divulge to any
potential assignee, transferee or participant all information, reports,
financial statements and documents obtained in connection with this Agreement
and any other Loan Documents or otherwise; provided, however, that (a) the
Lender may not assign any of its obligations to make advances under the Loan,
and (b) the Lender may not disclose to any potential assignee, transferee or
participant any information with respect to the Borrower or the Loan unless
such Person has agreed in writing to treat such information as confidential.
No modification, release, or waiver of this Agreement shall be deemed to be
made by the Lender unless in writing signed by the Lender, and each such
waiver, if any, shall apply only with respect to the specific instance
involved. No course of dealing or conduct shall be effective to modify,
release or waive any provisions of this Agreement or any of the other Loan
Documents. This Agreement shall inure to the benefit of and be enforceable by
the Lender and the Lender's successors and assigns and any other person to
whom the Lender may grant an interest in the obligations evidenced by this
Agreement and shall be binding upon and enforceable against the Borrower and
the Borrower's successors and assigns. Whenever used herein, the singular
number shall include the plural, the plural the singular, and the use of the
masculine, feminine, or neuter gender shall include all genders. This
Agreement may be executed in any number of counterparts, all of which, when.
taken together shall constitute one Agreement.
26
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement under seal as of the date first above written.
ATTEST/WITNESS: OSIRIS THERAPEUTICS, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx (SEAL)
------------------------ -------------------------
Xxxxx X. Xxxxx
President and Chief Executive Officer
BORROWER
SIGNET BANK/MARYLAND
/s/ Xxxxx X. Xxxxxxxxx XX By: /s/ Xxxxx X. Xxxxxxx (SEAL)
------------------------- --------------------------
Xxxxx X Xxxxxxx
Vice President
LENDER
ACKNOWLEDGEMENT
STATE OF_______________ )
) to wit
CITY/COUNTY OF________ )
I HEREBY CERTIFY that on the ________ day of June, 1995, before me, the
subscriber, a Notary Public of the State of_______________ personally
appeared Xxxxx X Xxxxx, who acknowledged himself to be the Chief Executive
Officer of Osiris Therapeutics, Inc., a Delaware corporation, and that he, as
the Chief Executive Officer of Osiris Therapeutics, Inc.,
27
being authorized to do so, executed that Loan Agreement for the purposes
contained in that instrument, by signing the name of the corporation by
himself as Chief Executive Officer
IN WITNESS WHEREOF, I set my hand and official seal
[NOTARY SEAL] ________________________
Notary Public
________________________
Printed Name of Notary Public
My Commission Expires:
---------------------
28
SCHEDULE 3.07
SCHEDULE 3.08
SCHEDULE 3.09
SCHEDULE 3.10
None as to each Schedule.
