EXECUTION COPY
LOAN AGREEMENT
Dated September 15, 1998
GENAISSANCE PHARMACEUTICALS, INC.
AND
CONNECTICUT INNOVATIONS, INCORPORATED
LOCATION OF PROPERTY:
Five Science Park
New Haven, Connecticut
CONTENTS
ARTICLE Page
1 Particular Terms and Definitions 3
2 Loan Advances 7
3 Representations and Warranties of Borrower 8
4 Covenants of Borrower 10
5 Conditions Precedent to Lender's Obligation 14
to Make First Advance
6 Conditions of Lender's Obligation to Make 16
Advances after the First Advance
7 Events of Default 17
8 General Conditions 19
Exhibit A - Budget
Exhibit B - Permitted Encumbrances
Exhibit C - Schedule of Plans and Specifications
Exhibit D - Legal Description
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LOAN AGREEMENT
This Loan Agreement is dated as of the 15th day of September, 1998 by
and between CONNECTICUT INNOVATIONS, INCORPORATED with an address at 000 Xxxx
Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxxx (hereafter referred to "Lender") and GENAISSANCE
PHARMACEUTICALS, INC. with an address at Five Science Park, New Haven,
Connecticut (hereinafter referred to as "Borrower").
W I T N E S S E T H :
WHEREAS, Borrower has requested Lender to make available to it a loan
in an amount not to exceed $950,000 to construct leasehold improvements, on the
Premises (as defined herein);
WHEREAS, the obligations of Borrower to Lender are evidenced by its
promissory note in the original principal amount of $950,000 dated September 11,
1998 (referred to herein as the "Note"); and
WHEREAS, the Note is secured, INTER ALIA, by an Open-End Leasehold
Mortgage, Security Agreement and Financing Statement (Construction Mortgage) of
even date herewith from Borrower to Lender on the Premises; and
WHEREAS, in consideration for making such loan and in order to more
fully set forth the terms and conditions on which advances on account of such
loan may be made, Borrower and Lender have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lender and Borrower hereby agree as follows:
ARTICLE 1
PARTICULAR TERMS AND DEFINITIONS
As used in this Agreement, the following terms shall have the
respective meanings indicated opposite each of them:
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"Additional Available Amounts" The funds determined by Lender to be
available to Borrower from other sources to
pay for the design, engineering,
procurement and construction of
Improvements.
"Aggregate Change Order $100,000
Amount"
"Architect" Svigals Associates (or any successor
engaged by Borrower with the consent of
Lender).
"Borrower" Genaissance Pharmaceuticals, Inc., a
Delaware corporation with its principal
place of business at Xxxx Xxxxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxxxxx 00000
"Borrower's Interest" The leasehold interest of the Borrower in
the Premises and Borrower's ownership of
the Improvements.
"Budget" The budget annexed as EXHIBIT A, as amended
from time to time with Lender's approval
which includes a portion of the Landlord's
Interior Work, as defined and referred to
in the Lease.
"Change Order Amount" $10,000
"Change Orders" Any amendments or modifications to the
Budget, the Plans, the General Contract or
any Subcontract.
"Closing" The time of the execution and delivery
hereof by Borrower and Lender.
"Collateral Assignments" The several collateral assignments from
Borrower to Lender, and dated
September ___, 1998 of the agreement
between the Architect and Borrower, the
General Contractor and Borrower, and
Borrower's Permits and the related consents
by the Architect and General Contractor.
"Commitment" Letter dated April 13, 1998, from Lender to
Borrower, as amended by letter dated June
30, 1998 and July 31, 1998.
"Completion Date" June 30, 1999.
"Environmental Contractor" Enviromed Services, Inc. (or any successor
engaged by Borrower with the consent of
Lender).
"Environmental Indemnity Agreement" The Environmental Indemnity dated September
___, 1998 by Borrower in favor of Lender.
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"Event of Default" The occurrence of any one of the events in
Article 7 of this Agreement.
"General Contract" The contract having a Guaranteed
Maximum Price equal to or less than
$1,400,000, between Borrower and the
General Contractor, in substantially the
same form as the draft dated September ___,
1998 provided to Lender, as amended from
time to time with the Lender's approval.
"General Contractor" The Xxxxx Corporation (or any successor
engaged by Borrower with the consent of
Lender).
"Governmental Authority" The United States, the State of
Connecticut, the City of New Haven, and any
political subdivision thereof, and any
agency, department, commission, board,
bureau or instrumentality of any of them.
"Improvements" The leasehold improvements to be made to
the Premises as more fully described on the
Plans, EXCLUDING, HOWEVER, the Leased Lab
Equipment and the Landlord's Interior Work,
as defined and referred to in the Lease.
"Landlord" Science Park Development Corporation, a
Connecticut corporation with its principal
place of business at Xxxx Xxxxxxx Xxxx, Xxx
Xxxxx, XX 00000
"Lease" That Lease dated as of September ___,1998
between Landlord and Borrower regarding the
Premises.
"Leased Lab Equipment" The kitchen appliances, laboratory
equipment, laboratory fume hoods,
laboratory casework and the controlled
environment room, identified as such in
the Budget.
"Lender" Connecticut Innovations, Incorporated, a
body politic and corporate constituting a
public instrumentality and political
subdivision of the State of Connecticut
having a place of business at 000 Xxxx
Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxxx 00000
"Lender's Counsel Fees" The fees of Lender's counsel for services
rendered to the closing in connection with
or arising out of the Loan, up to $20,000.
"Loan" Up to $950,000
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"Loan Documents" All documents, including collateral
pledges and assignments, which
evidence or secure the Loan, including,
without limitation, the Note, Mortgage,
Collateral Assignments, Environmental
Indemnity Agreement and this Agreement.
"Local Authority" Any Governmental Authority which exercises
jurisdiction over the Premises or
construction thereon.
"Major Subcontract" Any Subcontract between the General
Contractor and a Subcontractor with
respect to work with a value in excess of
$50,000.
"Major Subcontractor" Any party, other than the General
Contractor, to a Major Subcontract.
"Mortgage" The Open-End Leasehold Mortgage, Security
Agreement and Financing Statement
(Construction Mortgage) dated September
___, 1998 made by Borrower to secure the
Note, to be recorded on the New Haven,
Connecticut Land Records.
"Mortgaged Property" The property defined as the "Mortgaged
Property" in the Mortgage.
"Note" The Note dated September ___, 1998, in the
principal amount of the Loan made by
Borrower to Lender.
"Permitted Encumbrances" Those items set forth on EXHIBIT B.
"Plans" The plans and specifications for the
construction of the Improvements prepared
by the Architect, and approved as required
herein, which plans and specifications are
set forth on EXHIBIT C, and all amendments
and modifications thereof made by approved
Change Orders. The term shall include the
final plans and specifications for segments
of the Improvements.
"Premises" The premises as described in EXHIBIT D
hereof.
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"Request for Advance" A statement of Borrower setting forth the
amount sought in such form and manner as
the Lender may request, which statement
shall contain, or if not so contained,
shall be deemed an affirmation that the
representations and warranties of Article 2
remain true and correct and that there is
no Event of Default hereunder as of the
date thereof and unless Lender is notified
to the contrary prior to the disbursement
of the requested advance, will be so on the
date thereof.
"Requirement or Local Requirement" Any law, ordinance, order, rule or
regulation of a Governmental Authority or a
Local Authority respectively.
"Soft Costs" Costs incurred by Borrower due to the
Architect or Borrower's engineer in
connection with the design, engineering,
procurement and construction of the
Improvements.
"Title Insurer" Lawyers Title Insurance Corporation (or any
other title insurance company) engaged by
Borrower with the consent of Lender).
ARTICLE 2
LOAN ADVANCES
1. AMOUNT OF ADVANCES. Subject to the provisions of this Agreement,
Lender will make and Borrower will accept, a Loan in the amount of the Note. The
proceeds of the Loan shall be advanced as construction progresses, upon
satisfaction of the conditions set forth in Articles 5 and 6 this Agreement, but
not more frequently than once a month, in amounts which shall be determined for
each trade as follows:
(a) the estimated total cost of the construction of the Improvements
attributable to the line item in question as set forth on the Budget, multiplied
by
(b) the percentage of completion of construction then attained by the
appropriate line item in question, multiplied by
(c) 90%, less
(d) amounts theretofore advanced with respect to such line item.
Notwithstanding the above, Lender agrees that (i) when the work to be
performed on any Budget line item has been, in the judgment of the Architect,
50% completed, then the amounts thereafter advanced with respect to such item
shall be determined by using 100% as a multiplier under subparagraph (c) above
and (ii) the amounts advanced with respect to the items identified in the Budget
as "General Conditions" or "Profit" shall be determined by using 100% as the
multiplier under subparagraph (c) above.
2. PERCENTAGE OF COMPLETION. The percentage of completion of
construction at any time and the estimated total cost of construction of the
Improvements shall be
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determined by the Architect, exercising professional judgment. The portion of
Loan proceeds not advanced during the course of construction shall be paid to
Borrower upon satisfaction of the conditions for the receipt of the final
advance set forth in Article 6 hereof.
3. DISBURSEMENT OF ADVANCES. All advances are to be made at the
principal office of Lender, or at such other place as Lender may designate.
Lender may, upon prior notice to Borrower, designate the Title Insurer or other
entity or person to act as disbursement agent for Loan advances. Requests for
Advances shall be submitted not less than five (5) days prior to the date of the
requested advance.
4. RESTRICTIONS ON ADVANCES. At no time shall Lender be obligated (i)
to advance to Borrower more than what Borrower is then required to fund to the
party seeking payment or, in the case of reimbursement, to the party seeking
reimbursement; or (ii) to make a Loan advance if the undisbursed portion of the
Loan plus Additional Available Amounts shall be deemed by Lender to be
insufficient to pay for the completion of the Improvements and the Landlord's
Interior Work, if Borrower elects to fund Landlord's Interior Work under the
Lease, by the Completion Date; or (iii) to advance Loan proceeds in amounts
which exceed, separately or in the aggregate, the individual line items set
forth in the Budget; or (iv) to advance for any particular component of the
Improvements unless Architect and Lender have approved the Budget for that
particular component; or (v) to advance more than the actual cost incurred by
Borrower with respect to the Improvements thus far completed; or (vi) to advance
any Loan proceeds with respect to any Change Order which serves to increase the
cost of construction above One Million Five Hundred Thousand Dollars
($1,500,000).
5. ADVANCES TO GENERAL CONTRACTOR OR ARCHITECT. Lender, at its option,
may make advances directly to the General Contractor or the Architect, upon
prior notice to Borrower, and the execution of this Agreement by Borrower shall,
and hereby does, constitute an irrevocable direction and authorization to so
advance the funds. No further direction or authorization from Borrower shall be
necessary to warrant such direct advances and all such advances shall satisfy
pro tanto the obligations of Lender hereunder and shall be secured by the
mortgage as fully as if made to Borrower, regardless of the disposition thereof
by the General Contractor or the Architect. The making of any advance by Lender
shall not be deemed an acceptance or approval by Lender (for the benefit of
Borrower or any third party) of the work done or improvements constructed or
renovated.
6. OFF-SITE MATERIALS. Lender shall have no obligation to advance any
of the Loan proceeds for materials not incorporated into the work, irrespective
of whether the same are stored on the site or otherwise procured and stored.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower represents and warrants to and agrees with Lender that:
1. EXISTENCE; LEASE. (a) Borrower has and will continue to have a valid
leasehold interest in the Lease and has or will have when acquired by Borrower
title to the Improvements, subject to no liens, encumbrances or restrictions,
other than the Permitted Encumbrances and Landlord's rights pursuant to the
Lease; (b) the Lease is in full force and effect and no default or event of
default exists under the Lease;
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(c) except as may be provided in the Lease, there is not and will not be any
contract or other obligation providing for or requiring Borrower to convey
the Borrower's Interest to any party, and no party other than Borrower has
any beneficial or equitable right, title or interest in the Premises, the
Improvements or any part thereof; and (d) Borrower is a duly organized
Delaware corporation, authorized to do business in the State of Connecticut,
and has full power and authority to consummate the transactions contemplated
in the Agreement.
2. AUTHORIZATION. Borrower has taken all the action necessary to
authorize the execution and delivery and performance of its obligations under
this Agreement and the other Loan Documents.
3. ADEQUACY OF PLANS.
(a) The Plans are, or will be, satisfactory to Borrower,
and, to the extent required by applicable law, by all appropriate Local
Authorities. To Borrower's knowledge, there are no structural defects affecting
the Premises except such as will be corrected pursuant to the Plans, and no
violation of any Requirement or Local Requirement exists with respect to
the Premises, and the anticipated use and operation of the Premises complies and
will comply with all applicable zoning ordinances, regulations, environmental
protection laws, and restrictive covenants affecting the Premises, and all
Requirements and Local Requirements for such use and operation have been or will
be satisfied.
(b) The list of preliminary plans annexed hereto as EXHIBIT C
is the same list annexed to the General Contract, and all demolition and/or
construction hereafter performed will comply with all statutes, rules and/or
regulations of any Governmental Authority or Local Authority having jurisdiction
over the same. The Improvements will be constructed and/or renovated wholly
within the perimeter of the Premises in accordance with the Plans approved by
the Architect.
4. LITIGATION. Except as disclosed in writing to Lender, there are no
actions, suits or proceedings pending with respect to Borrower, affecting the
Premises or involving the validity or enforceability of the Mortgage or the
priority of the lien thereof, at law or in equity, or before or by any
Governmental Authority. Borrower is not in default with respect to any order,
writ, judgment, decree or demand of any court or any Governmental Authority.
5. BINDING EFFECT. This Agreement and the other Loan Documents
constitute legal, valid and binding obligations of Borrower, enforceable against
it in accordance with their respective terms except in each case as
enforceability may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally.
6. NO OFFSETS. The Borrower has no offsets or defenses with respect to
the Loan, the Note or any other Loan Documents.
7. COMPLIANCE WITH AGREEMENT. The consummation of the transactions
hereby contemplated and performance of this Agreement and the other Loan
Documents will not result in any breach of, or constitute a default under, any
mortgage, deed of trust, lease, loan or credit agreement, corporate charter,
by-laws or other instrument or document to which Borrower is a party or by which
it may be bound or affected.
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8. REQUEST FOR ADVANCE. Each Request for Advance, or the receipt of the
funds requested thereby, shall have the effect stated in the definition of the
term Request for Advance.
9. ABSENCE OF LIENS.
(a) Except for the Lease and Permitted Encumbrances, Borrower
has made no contract or arrangement of any kind, the performance of which by the
other party thereto would give rise to a lien on the Premises or the
Improvements, except for its arrangements with the Architect, the General
Contractor and the Environmental Contractor.
(b) All materials and labor, if any, heretofore supplied or
performed in connection with the Premises and/or the Improvements have been paid
for in full or will be paid for out of the first advance.
10. ABSENCE OF DEFAULTS. There is no Event of Default under this
Agreement, and no event has occurred and is continuing which with notice or the
passage of time or either would constitute an Event of Default hereunder.
11. PERMITS. All authorizations, certificates and permits necessary for
the construction of Improvements in accordance with applicable building codes
and environmental protection laws have been or will be obtained and maintained
in full force and effect, and all construction work done to date has been done
in accordance with said authorizations, certificates, permits, codes and laws.
12. BUDGET. The Budget includes Borrower's best estimate of the present
cost of the Improvements, and Lender is justified in relying thereon. There have
been no material variations or deviations from the Budget, and Borrower knows of
no circumstances presently existing or reasonably likely to occur which would or
could have a materially adverse effect on the construction of the Improvements
including, but not limited to, a material variation or deviation from the
Budget.
13. USE OF PROCEEDS. Borrower will employ all of the Loan proceeds
solely to pay for the costs of the construction of the Improvements.
ARTICLE 4
COVENANTS OF BORROWER
Borrower covenants with Lender as follows:
1. DISPOSITION OF MORTGAGED PROPERTY. Except for Borrower's right to
share the Premises with an Affiliate (as defined in the Lease) pursuant to
Section 15.1C of the Lease, Borrower will not directly or indirectly, by
transfer, mortgage, conveyance or sale, or sale of any interest in Borrower
permit, do or suffer the assignment, subletting, transfer, sale, conveyance or
encumbrance of the Mortgaged Property or any part thereof or any interest
therein or interest in Borrower, nor assign this Agreement or the proceeds of
the Loan without the prior written consent of Lender, which consent shall not be
unreasonably withheld.
2. COMPLIANCE WITH LAWS. Borrower will comply promptly with any
Requirement or Local Requirement (including without limitation any relating to
the
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obtaining of all certificates of occupancy or certificates of like nature
upon completion of the Improvements) and furnish Lender, on demand, copies of
official inspections to the extent in its possession made by any Local
Authority.
3. ACCESS TO PREMISES. Upon reasonable prior notice, it will permit
Lender and the Architect to enter upon the Premises, inspect the Improvements
and all materials to be used in the construction thereof and to examine all
detailed plans and shop drawings which are or may be kept at the construction
site and will cooperate, and cause the General Contractor or Subcontractors to
cooperate with the Architect to enable it to perform its functions hereunder.
4. FEES. Borrower will pay Lender's Counsel Fees promptly upon receipt
of bills therefor submitted by Lender at the Closing, and will pay all costs and
expenses required to satisfy the conditions of this Agreement including, without
limitation, all taxes and recording expenses. To the extent Lender, after the
Closing, deems it necessary to employ counsel for whatever purpose relative to
the Loan, the reasonable fees and expenses of such counsel shall be borne by
Borrower, and Borrower hereby agrees to indemnify and hold Lender harmless with
respect to all such fees and expenses incurred by Lender in connection with the
enforcement of this Agreement.
5. CONSTRUCTION OF IMPROVEMENTS. Borrower will undertake the
construction of the Improvements with reasonable diligence, and will obtain any
necessary certificate of completion or such other permits or approvals as will
permit the operation of the Improvements, all on or before the Completion Date.
Borrower shall not commence construction until Borrower has obtained all
permits, licenses and approvals required under any Requirement or Local
Requirement for construction of the Improvements.
6. EVIDENCE OF TITLE. Borrower will deliver to Lender or Architect,
upon request, certified copies of any contracts, bills of sale, statements,
receipted vouchers or agreements, under which Borrower claims title to any
materials, fixtures or articles incorporated in the Improvements or subject to
the lien of the Mortgage.
7. CORRECTIVE ACTION. Borrower will, upon request by the Architect,
correct any material departure from the Plans not approved by the Architect in
writing. The advance of any Loan proceeds shall not constitute a waiver of
Lender's right to require compliance with this covenant with respect to any such
defects or departures from the Plans not theretofore discovered by, or called to
the attention of the Architect.
8. COMPLIANCE WITH LEASE. With respect to the Lease:
(a) Borrower will not execute, modify, or amend the Lease or
enter into any sublease or any lease for additional space (including without
limitation the "ROFR" space, as that term is defined and referred to in the
Lease) without the prior written consent of Lender;
(b) The lease of any additional space, if approved by Lender,
shall be added to the Mortgaged Property and made subject to the lien of the
Mortgage. In connection with the lease of any additional space, Borrower shall
execute and deliver to Lender such amendments to the Mortgage or such additional
mortgages, endorsements to title insurance policies, subordination and
nondisturbance agreements as Lender may reasonably request;
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(c) Borrower will, promptly following Lender's written
request, use its best efforts to obtain and deliver to Lender, in form and
substance satisfactory to Lender such other or further documents, data or
information as Lender may reasonably request.
(d) Borrower shall give Lender a copy of any notice required
to be given to Landlord of Borrower's election to exercise Borrower's option to
extend the term of the Lease simultaneously with the giving of the notice to
Landlord.
(e) Borrower will timely and fully comply with the "Tenant's"
obligations under the Lease.
9. MANDATORY PREPAYMENTS. Borrower shall prepay the unpaid principal
balance of the Loan, together with any and all unpaid interest upon the
expiration or earlier termination of the Lease.
10. CHANGE ORDERS. Borrower will not permit the performance of any work
pursuant to any Change Order in excess of the Change Order Amount nor pursuant
to any Change Order which, together with the aggregate amount of all prior
Change Orders, will result in an increase in the Guaranteed Maximum Price under
the General Contract in excess of the Aggregate Change Order Amount, unless in
either case Borrower shall have received the specific written approval of Lender
and Architect to such Change Order.
11. CONTRACTOR TERMS. Borrower will require covenants from the General
Contractor and Major Subcontractors to the same effect as the covenant made by
Borrower in the preceding paragraph; Borrower will, upon request, deliver to the
Architect and Lender the names and addresses of all persons with whom it has
contracted or intends to contract for the construction of the Improvements or
for the furnishing of labor or materials.
12. COMPLIANCE WITH PERMITS. Borrower will comply with all covenants
and agreements affecting the Premises and the Improvements, and will keep all
permits, licenses and authorizations pertaining to the Improvements that it is
obligated to maintain in full force and effect.
13. PAYMENTS BY LENDER. Lender may apply amounts due under this
Agreement to the satisfaction of the conditions hereof, and amounts so applied
shall be part of the Loan and shall be secured by the Mortgage and shall have
the same lien priority as had the Mortgage at its inception.
14. AMENDMENT OF GENERAL CONTRACT AND MAJOR SUBCONTRACT. Borrower will
not, without the prior written consent of Lender in each instance, amend or
terminate or permit to be amended or terminated any Major Subcontract or the
General Contract.
15. OCCUPANCY. Borrower will not permit occupancy of any part of the
Premises prior to completion of the Improvements without a written waiver of
approval from the insurance company issuing a builder's risk insurance policy, a
copy of which shall be delivered to Lender prior to any occupancy of the
Premises.
16. ZONING. Borrower will not, without Lender's prior written consent,
initiate, approve, participate in any change in or modification to the zoning in
effect for the Premises or any portion thereof. It will promptly notify Lender
of an anticipated or
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proposed change in the zoning for the Premises or any portion thereof
or any other property with respect to which a change in zoning would affect the
zoning or Borrower's use and enjoyment of the Premises, or any part thereof,
promptly upon its learning of any such anticipated or proposed change. Subject
to Landlord's consent, Lender shall have the right to participate in any and all
proceedings, judicial, administrative or otherwise, with respect to or in any
way affecting the Premises, including, without limitation, zoning, environmental
and other matters.
17. COMPLIANCE WITH AGREEMENTS. Borrower will cause all conditions of
the Lease, this Agreement, the Note, the Mortgage, all other Loan Documents, the
General Contract and the agreement with the Architect on Borrower's part to be
observed or performed to be satisfied. Borrower will immediately (upon
transmission or receipt) deliver to Lender copies of all notices with respect to
such documents from parties other than Lender.
18. CONNECTICUT PRESENCE. Borrower shall not relocate (as that term is
defined in Section 32-5a of the Connecticut General Statutes) outside of the
State of Connecticut and shall maintain a "Connecticut Presence". A Connecticut
Presence shall mean (a) maintaining Borrower's principal place of business
(including its executive offices and officers) in the State of Connecticut; (b)
basing a majority of its employees and those of its subsidiaries in the State of
Connecticut; (c) conducting a majority of its operations and those of its
subsidiaries, including manufacturing activities conducted directly or through
subcontactors and vendors, in the State of Connecticut; and (d) maintaining
Borrower's and each subsidiary's principal bank accounts in the State of
Connecticut.
19. EMPLOYMENT PRACTICES. With respect to employment practices:
(a) Borrower shall create jobs in the State of Connecticut and
shall use its best efforts to employ residents of Connecticut in these jobs.
(b) If Borrower is located in an enterprise zone designated
pursuant to Section 32-70 of the Connecticut General Statutes, Borrower shall
not relocate (as that term is defined in Section 32-5a of the Connecticut
General Statutes) within the State of Connecticut without first obtaining the
express written consent of Lender, which consent the Lender may withhold in its
discretion. If Borrower relocates within the State of Connecticut, it will offer
employment at its new location to its employees from the original location if
such employment is available.
(c) Borrower shall furnish to Lender copies of the quarterly
reports filed by Borrower and any of its subsidiaries with the Connecticut
Department of Labor and upon request, employment records and such other
personnel records to the extent permitted by law as Lender may reasonably
request to verify the creation or retention of Connecticut employment.
(d) Borrower hereby authorizes Lender to examine, and will at
any time at the request of the Lender provide Lender with such additional
authorization satisfactory to the Connecticut Department of Labor as may be
necessary to enable Lender to examine all records of said Department relating to
Borrower and/or any of its subsidiaries.
20. EQUAL OPPORTUNITY. Borrower is an equal opportunity employer and it
does not discriminate. Borrower further agrees and warrants that:
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(a) Borrower will not discriminate or permit discrimination
against any employee or applicant for employment because of sex, sexual
orientation, race, color, religious creed, age, marital status, mental
retardation, physical disability, national origin, or ancestry. Such action
shall include, but not be limited to, the following: Employment upgrading,
demotion or transfer; recruitment advertising; lay-off or termination; rates of
pay or other forms of compensation; and selection for training, including
apprenticeship.
(b) Borrower agrees to take affirmative action to insure that
applicants with job-related qualifications are employed.
(c) Borrower will, in its solicitation for employees, state
that it is an "affirmative action-equal opportunity employer".
(d) Borrower agrees to provide each labor union or
representative of workers with which Borrower has a collective bargaining
agreement or other contract or understanding and each vendor with which Borrower
has a contract or understanding, a notice to be provided by the Commission of
Human Rights and Opportunities (the "CHRO") and to post copies of the notice in
conspicuous places available to employees and applicants for employment.
(e) Borrower agrees to cooperate with Lender, the State of
Connecticut and/or or any of its agencies and the CHRO to insure that the
purpose of this equal opportunity clause is being carried out.
(f) Borrower agrees to comply with all relevant regulations
and orders issued by the CHRO to provide the CHRO with such information as it
may request, and to permit the CHRO access to pertinent books, records, and
accounts concerning the contractor's employment practices and procedures.
(g) Borrower agrees to comply with all of the requirements set
out by Section 4a-60 of the Connecticut General Statutes, as it may be amended.
(h) Borrower agrees to post a notice of this acceptance of the
foregoing equal employment opportunity provisions at its place of business,
clearly visible, in such form as is satisfactory to Lender.
ARTICLE 5
CONDITIONS PRECEDENT TO LENDER'S OBLIGATION
TO MAKE FIRST ADVANCE
Lender shall not be obligated to make an advance of Loan proceeds
hereunder until each of the following conditions shall have been satisfied:
1. NO EVENT OF DEFAULT. As of the date of the advance, the
representations and warranties made in Article 2 hereof shall be true and
correct, there shall be no Event of Default under this Agreement, no state of
facts shall exist which, with or without notice and/or lapse of time, would
constitute an Event of Default hereunder;
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2. NO CASUALTY. The Improvements shall not have been injured or damaged
by fire or other casualty, unless the proceeds of any insurance maintained by
Borrower have been received by Lender and the amount of such proceeds, PLUS (a)
the balance, if any, of the Loan remaining to be advanced and (b) Additional
Available Funds are sufficient to restore and complete the Improvements.
3. BORROWER'S SUBMISSIONS. Lender shall have received:
(a) Executed counterparts of each of the Loan Documents;
(b) A certificate from the Architect upon which Lender may
reply, that the Plans have been approved by the Architect and by each necessary
Local Authority, that the Improvements comply with applicable zoning ordinances,
and other regulations of Governmental Authorities, that the Budget has been
approved, and that the Improvements can be completed by the Completion Date;
(c) A true copy of the Plans;
(d) An executed copy of the contract between Borrower and
Architect certified by Borrower to be true and complete, valid and binding;
(e) An executed copy of the General Contract certified by
Borrower to be true and complete, valid and binding.
(f) Evidence that all authorizations, certificates and
permits, if any, required by any Governmental Authority for the operation of the
Premises and Improvements for the purposes contemplated by the Plans (including
any authorizations required with respect to applicable environmental protection
regulations and/or laws) which are presently procurable have been obtained and
are in full force and effect;
(g) The authorization or permit from Local Authorities to
construct the Improvements, and a list and description of any bonds or other
deposits required to be made in connection with the construction of the
Improvements;
(h) Letters from the Architect and the General Contractor
consenting to the collateral assignment of such contract to Lender, in form and
substance and satisfactory to Lender;
(i) A current title report from the Title Insurer, which shall
set forth a description of the Premises and shall have attached thereto copies
of all instruments which appear as exceptions in the report;
(j) An executed counterpart of the Lease;
(k) Evidence that either (i) Borrower has elected to fund
Landlord's Interior Work, or (ii) Landlord has closed the Connecticut Housing
Finance Authority Loan and is obligated to perform Landlord's Interior Work as
provided in Section 2.4D of the Lease;
(l) Executed counterparts of a Consent and Intercreditor
Agreement with Science Park Development Corporation and The Connecticut
Development Authority and subordination, nondisturbance and attornment
agreements from each mortgagee of the Premises in form and substance
satisfactory to Lender, except that no
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non-disturbance agreement shall be required from the United States Department
of Commerce, Economic Development Administration, with regard to the mortgage
from Science Park Development Corporation recorded in Volume 3755 at Page 206
of the New Haven Land records;
(m) An opinion of Borrower's counsel, in the form and
satisfactory to Lender;
(n) Request for Advance;
(o) Intentionally omitted
(p) The certificates of insurance, including builder's risk
coverage (non-reporting form) and flood insurance, if required, evidencing the
coverage required by the Mortgage, accompanied by evidence of the payment of the
premiums;
(q) A paid title insurance policy in the amount of the Note,
insuring the Mortgage to be a valid first lien on the Borrower's Interest in the
Premises, free and clear of all defects and encumbrances except the Permitted
Encumbrances and except such as Lender and its counsel shall approve, and which
shall contain:
(i) full coverage against mechanics' liens;
(ii) a "pending disbursement" endorsement; and
(iii) endorsements providing affirmative insurance
coverage regarding access and such other endorsements as Lender may require;
(r) A Certificate from the Architect on which Lender is
entitled to rely to the effect that the construction of the Improvements
performed to the date of such advance, was performed in accordance with the
Plans.
(s) Lender's Counsel Fees.
4. APPROVAL OF PLANS. Lender, Architect and Borrower (a) shall have
approved the Plans, the state of the title to the Premises reflected in the
title insurance policy, and such other documents and matters as Lender may
specify, and (b) shall have agreed to accept the certification of the Architect
in satisfaction of any condition requiring certification as to conformance of
the construction and completion of the Improvements in accordance with the
Plans.
5. ADDITIONAL MATERIALS. Lender shall have received such other
documents as it may deem appropriate to effect the intent of this Agreement.
6. TERMINATION OF OBLIGATIONS. This Agreement and the obligations of
Lender shall terminate, without liability to Borrower, if the first advance has
not occurred prior to December 31, 1998.
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ARTICLE 6
CONDITIONS OF LENDER'S OBLIGATION
TO MAKE ADVANCES AFTER THE FIRST ADVANCE
Lender's obligation to make any advance after the first advance shall
be subject to the satisfaction of the following conditions:
1. FIRST ADVANCE CONDITIONS PRECEDENT. All conditions of the first
advance shall have been satisfied, and those specified in paragraphs 1, 2 and
3(o) of Article 5 shall be satisfied as of the date of each advance after the
first advance.
2. REQUEST FOR ADVANCE. Lender shall have received a Request for
Advance;
3. FINAL ADVANCE. In the case of the final advance, all of the above
conditions shall have been satisfied and, in addition, Lender shall have
received:
(a) Evidence of the approval by the Local Authority of the
Improvements in their entirety for permanent occupancy to the extent any such
approval is a condition of the lawful use and occupancy of the Improvements;
(b) Advice from the Architect to the effect that the
Improvements have been completed in accordance with the Plans and that all
utilities serving the Improvements have been connected and are operating;
(c) Evidence that Borrower (beyond possibility of appeal) has
acquired all permits, approvals and/or certificates required by all Requirements
or Local Requirements (including all applicable environmental protection laws)
for the operation of the Improvements for their intended purposes;
5. ADDITIONAL CONDITIONS. Lender may insist on the performance of any
requirements set forth herein in Articles 4 and 5 which have not been performed
by the first advance or any subsequent advance, and Lender shall not be deemed
to have waived any requirement unless such waiver is expressly made in writing.
ARTICLE 7
EVENTS OF DEFAULT
1. EVENT OF DEFAULT. The following shall constitute Events of Default
hereunder:
(a) If Borrower fails to comply with any of the covenants made
by it in this Agreement and Borrower fails to cure the same within fifteen (15)
days following notice; except that a violation of paragraph 1 of Article 3 shall
be an immediate Event of Default hereunder, no notice being required;
(b) If any default or event of default shall occur under the
Lease, the General Contract, the Note, the Mortgage or any other Loan Document
in each instance, beyond any applicable notice and cure period;
(c) If at any time any representation or warranty, as updated
subsequently to its initially being made, made by Borrower in this Agreement or
in any other instrument or document delivered to Lender in connection with the
Loan shall be incorrect, in a material respect, whether or not such
representation or warranty was originally or previously incorrect and Borrower
fails to cure the same within fifteen (15) days following notice; PROVIDED,
HOWEVER, the same are capable of being be cured within such fifteen (15) day
period;
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(d) If after the date of the first advance, the construction
of the Improvements be not carried on with reasonable dispatch or at any time be
discontinued for twenty (20) consecutive days, other than as may be specifically
provided for in this Agreement;
(e) If, after prior notice, Lender or the Architect shall not
be permitted, at all reasonable times, to enter upon the Premises, inspect the
Improvements and the construction thereof and all materials, fixtures and
articles used or to be used in the construction and to examine all detailed
plans, shop drawings and specifications which relate to the Improvements, or if
Borrower shall fail to furnish to Architect, Lender or its authorized
representative, copies of such plans, drawings and specifications upon request
by Lender;
(f) If any of the materials, fixtures or articles used in the
construction of the Improvements or the appurtenances thereto, or to be used in
the operation thereof, be not in accordance with the Plans as approved by the
Architect and the condition be not corrected to the satisfaction of Lender
within thirty (30) days from its receipt of notice thereof;
(g) Other than contemplated by the Permitted Encumbrances, if
Borrower executes any conditional xxxx of sale, chattel mortgage or other
security instrument covering any materials, fixtures or articles intended to be
incorporated in the Improvements, or files a financing statement publishing
notice of such security instrument, or if any of such materials, fixtures or
articles are not purchased so that the ownership thereof will vest
unconditionally in Borrower (subject, however, to Landlord's rights pursuant to
the Lease), free from encumbrances, on incorporation into the Improvements or if
Borrower does not produce to Lender upon demand the contracts, bills of sale,
statements, receipted vouchers or agreements, or any of them under which
Borrower claims title to such materials, fixtures and articles;
(h) If the Improvements in the judgment of Architect are not
substantially completed on the Completion Date;
(i) If the Improvements in the judgment of Architect cannot
with reasonable diligence be completed on or before the Completion Date;
(j) If a lien for the performance of work or the supply of
materials is filed against the Premises and remains unsatisfied or unbonded at
the time of any Request for Advance or for a period of thirty (30) days after
the filing thereof or if the Premises or Improvements are encumbered by any
other lien or encumbrance as a result of any act or omission of Borrower not
approved by Lender; and
(k) If Borrower assigns, surrenders, terminates or sublets all
or any part of the Premises in violation of this Agreement or ceases to use and
occupy of the Premises or the Lease expires or terminates.
2. REMEDIES. Lender shall have the right, upon the happening of any
such Event of Default, in addition to any rights or remedies available to it
under the Mortgage or other Loan Documents, to enter into possession of the
Premises and perform any and all work and labor necessary to complete or to
attempt to complete the Improvements substantially in accordance with the Plans;
all sums expended by Lender for such
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purposes shall be deemed to have been paid to Borrower and secured by the
Mortgage. Lender may use any funds of Borrower including any balance which may
be held in escrow and any funds which may remain unadvanced hereunder for the
purpose of completing or attempting to complete the Improvements in the manner
called for in the Plans; to make such additions and changes and corrections in
the Plans which shall be necessary or desirable to complete or to attempt to
complete the Improvements in substantially the manner contemplated by the Plans;
to employ such contractors, subcontractors, agents, architects and inspectors as
shall be required for said purposes; to pay, settle or compromise all existing
bills and claims which are or may be liens against the Premises, or may be
necessary or desirable for the completion of the Improvements or the clearance
of title; to execute all applications and certificates in the name of Borrower
which may be required by any construction contract; and to do any and every act
with respect to the construction of the Improvements which Borrower may do on
its own behalf. Upon the happening of an Event of Default, Lender shall also
have power to prosecute and defend all actions or proceedings in connection with
the construction of the Improvements on the Premises and to take such action and
require such Performance as is deemed necessary. If Lender exercises the
remedies provided in this Section 7.2, then Borrower hereby assigns and
quit-claims to Lender all sums advanced hereunder and all sums in escrow subject
to the condition that said sums, if any, be used for the completion of the
Improvements.
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ARTICLE 8
GENERAL CONDITIONS
The following conditions shall be applicable throughout the term of
this Agreement:
1. NO WAIVER. No advance of Loan proceeds hereunder shall constitute a
waiver of any of the conditions of Lender's obligation to make further advances
nor, in the event Borrower is unable to satisfy any such condition, shall any
such waiver have the effect of precluding Lender from thereafter declaring such
inability to be an Event of Default as hereinabove provided, nor shall any
waiver of any of the provisions or conditions of this Agreement or of any other
Loan Document be construed as a waiver of any of the other provisions or
conditions hereof or thereof.
2. DOCUMENTS SATISFACTORY. All proceedings taken in connection with the
transactions provided for herein, the status of title to the Premises, all
agreements, certificates and other documents and instruments required or
contemplated by this Agreement, the Mortgage or any Loan Document, all sureties,
and insurers shall be satisfactory to Lender, and the Subcontracts, the Lease,
bonds, guaranties, policies of insurance, agreements, certificates, and other
documents and instruments shall be genuine, valid, subsisting, binding and
enforceable in all respects upon the parties thereto, and Lender's counsel shall
have received copies (or certified copies where appropriate in such counsel's
judgment) of all agreements, certificates, documents and instruments which they
may request in connection therewith.
3. LENDER'S DISCRETION. Any condition of this Agreement which requires
the submission of evidence of the existence or nonexistence of a specified fact
or facts implies as a condition the existence or nonexistence, as the case may
be, of such fact or facts and Lender shall, at all times, be free independently
to establish to its satisfaction and in its discretion such existence or
nonexistence.
4. AVAILABLE FUNDS. Borrower, if required by Lender, shall at
Borrower's option either (a) have Additional Available Funds in an amount equal
to the difference between the estimated cost (including Soft Costs) to complete
the construction of the Improvements, as determined by Lender and the amount of
the Loan which remains to be disbursed; or (b) have paid for development and
construction costs (including Soft Costs) in an amount, so that the amount of
the Loan which remains to be disbursed shall at all times be sufficient, in the
sole judgment of Lender, to complete the Improvements.
5. NO RELIANCE BY THIRD PARTIES. All conditions of the obligations of
Lender to make advances hereunder are imposed solely and exclusively for the
benefit of Lender and its assigns and no other person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make advances in the absence of
strict compliance with any or all thereof and no other person shall, under any
circumstances, be deemed to be beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender at any time if in its
sole discretion it deems it advisable to do so.
6. NOTICES. Any notice report, demand or other instrument authorized or
required to be given or furnished under this Agreement to Lender or Borrower
shall be deemed given or furnished (i) when addressed to the party, at the
address of such party
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hereinbefore set forth, and delivered at such address, for which a written
receipt is received, (ii) one (1) business day after being delivered to a
reputable overnight mail service or (iii) one (1) business day after being
transmitted by facsimile, with receipt confirmed, followed by delivery on the
next business day of a copy by the method in either clauses (i) or (ii). Either
party may change the address to which any such notice, report, demand or other
instrument is to be delivered or mailed, by furnishing written notice of such
change to the other party, but no such notice of change shall be effective
unless and until received by such other party.
7. PAROL EVIDENCE. Neither this Agreement nor any provision hereof may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
8. MERGER. This Agreement sets forth the entire agreement between the
parties hereto, and all prior understandings or communications between the
parties are merged in this Agreement.
9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts all of which taken together shall constitute one and the same
instrument, and any of the parties or signatories hereto may execute this
Agreement by signing any such counterpart.
10. WAIVER BY LENDER. The Lender shall at all times and at any time
have the right, privilege and power to waive any of the obligations of Borrower
hereunder, and such waiver shall not be deemed a modification of this Agreement.
11. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Connecticut under the substantive laws of such State and shall be
construed, interpreted, enforced and governed by and in accordance with the laws
of such State applied to contracts entered into and to be wholly performed
within such State.
12. BINDING EFFECT. This Agreement shall be binding upon Borrower, its
successors, assigns and legal representatives, and inure to the benefit of
Lender, its successors, assigns and legal representatives.
13. SEVERABILITY. Unenforceability for any reason of any provision of
this Agreement shall not limit or impair the operation or validity of any other
provision of this Agreement or any other of the Loan Documents, and this
Agreement shall be construed as if such unenforceable provision had never been
contained herein.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement the
day and year first above written.
Witnesses:
/s/ Xxxxxx X. Xxxxxxxx CONNECTICUT
--------------------------- INNOVATIONS, INCORPORATED
/s/ Xxxxxx X. Xxxxx By /s/ Xxxxxx X. Xxxxxxx
--------------------------- ---------------------------
Its President
/s/ Xxxxx Xxxxx GENAISSANCE
--------------------------- PHARMACEUTICALS, INC.
/s/ Xxxxxxxxx Xxxxxxx By /s/ Xxxxxxxxx Xxxxx
--------------------------- ---------------------------
Its President
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