LOAN AGREEMENT
Dated December 1, 1999
GENAISSANCE PHARMACEUTICALS, INC.
AND
CONNECTICUT INNOVATIONS, INCORPORATED
LOCATION OF PROPERTY:
Five Science Park
New Haven, Connecticut
CONTENTS
ARTICLE Page
1 Particular Terms and Definitions 4
2 Loan Advances 8
3 Representations and Warranties of Borrower 10
4 Covenants of Borrower 12
5 Conditions Precedent to Lender's Obligation 16
to Make First Advance
6 Conditions of Lender's Obligation to Make 18
Advances after the First Advance
7 Events of Default 19
8 General Conditions 21
Exhibit A - Budget
Exhibit B - Permitted Encumbrances
Exhibit C - Schedule of Plans and Specifications
Exhibit D - Legal Description
2
LOAN AGREEMENT
This Loan Agreement is dated as of the 1st day of December, 1999 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, Lender and Borrower entered into that loan Agreement dated
September 15, 1998 (the "First Loan Agreement") pursuant to which Lender loaned
to Borrower the principal amount of $950,000, and Borrower is indebted to Lender
for said amount, as evidenced by the promissory note of Lender dated September
15, 1998 in said principal amount (referred to herein as the "First Note");
WHEREAS, Borrower has requested Lender to make available to it an
additional loan in an amount not to exceed $2,720,000 (the "Second Loan") to
construct additional leasehold improvements on the Premises (as defined herein);
WHEREAS, Borrower will undertake the additional leasehold improvements
in Buildings 5 North and South in Science Park, New Haven, Connecticut in two
phases: (a) the first with respect to an area of approximately 7,953 rentable
square feet located on the first floor of Building 5 North (the "First Amendment
Space Improvements"), and (b) subject to Section 5 of the Second Amendment to
Lease, the second consisting of (i) the entire second floor of Building 5 South
in Science Park containing approximately 18,859 rentable square feet; (ii) the
pedestrian bridge if it is built by Borrower, which will consist of
approximately 1,180 rentable square feet; and (iii) approximately 222 rentable
square feet of space on the third floor of Building 5 South (collectively,
"Additional Space Improvements").
WHEREAS, the obligations of Borrower to Lender are evidenced by its
promissory note in the original principal amount of $2,720,000 dated December 1,
1999 (referred to herein as the "Second Note" and, together with the First Note,
the "Notes"); and
WHEREAS, the Notes are secured, INTER ALIA, by an Amended and Restated
Open-End Leasehold Mortgage, Security Agreement and Financing Statement
(Construction Mortgage) of even date herewith from Borrower to Lender on the
Premises; and
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WHEREAS, in consideration for making the Second Loan and in order to
more fully set forth the terms and conditions on which advances on account of
the Second 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:
"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"
"Additional Space Improvements The Additional Space Improvements
Completion Date" Completion Date shall be a date no later
than September 30, 2000.
"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 for First Amendment The budget annexed as EXHIBIT A, as amended
Space Improvements" from time to time with Lender's approval.
"Budget for Additional Space The preliminary budget for the Additional
Improvements" Space Improvements is attached hereto as
EXHIBIT A-1, and shall be deemed amended to
correspond to the Guaranteed Maximum Price
(as defined under the General Contract for
Additional Space) at the time
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the Guaranteed Maximum Price is
established, and to the extent that the
Guaranteed Maximum Price exceeds the
un-advanced amount of the Second Loan,
Borrower shall provide reasonable
assurances to Lender of Additional
Available Amounts that make up the
difference between the un-advanced amount
of the Second Loan and the Guaranteed
Maximum Price.
"Budgets" The Budget for First Amendment Space
Improvements and the Budget for Additional
Space Improvements
"Change Order Amount" $10,000
"Change Orders" Any amendments or modifications to the
Budgets, the Plans, the General Contracts
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 December 1,
1999 of the agreements between the
Architect and Borrower, the General
Contractor and Borrower, and Borrower's
Permits and the related consents by the
Architect and General Contractor for the
First Amendment Space Improvements and the
Additional Space Improvements.
"Commitment" Letter dated June 7, 1999, from Lender to
Borrower.
"Environmental Indemnity Agreement" The Environmental Indemnity dated December
1,1999 by Borrower in favor of Lender.
"Event of Default" The occurrence of any one of the events in
Article 7 of this Agreement.
"First Amendment Space The First Amendment Space Improvements
Improvement Completion Date" Completion Date shall be a date no later
than May 31, 2000.
"First Lease Amendment" That First Amendment to Lease dated
December 1, 1999.
"First Loan" The loan from Lender to Borrower in the
principal amount of $950,000, evidenced by
the First Note.
"General Contract for First The contract having a Maximum Price equal
Amendment Space Improvements" to or less than Guaranteed $853,232,
between Borrower and the General Contractor
for First Amendment Space Improvements
dated November 30, 1999, as amended from
time to time with the Lender's approval.
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"General Contract for Additional The contract having a preliminary
Space Improvements" Guaranteed Maximum Price, with a Guaranted
Maximum Price to be determined at a later
date, to be negotiated and entered into by
Borrower and the General Contractor for
Additional Space Improvements, dated
November 30, 1999 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).
"General Contracts" The General Contract for First Amendment
Space Improvements and the General Contract
for Additional Space Improvements.
"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 First Amendment Space Improvements and
Additional Space Improvements, 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 15, 1998,
as amended by the First Lease Amendment and
Second Lease Amendment 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 $7,500.
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"Loan Documents" All documents, including collateral pledges
and assignments, which evidence or secure
the First Loan and the Second Loan,
including, without limitation, the First
Loan Agreement, Notes, Mortgage, Collateral
Assignments, Environmental Indemnity
Agreements 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 Amended and Restated Open-End Leasehold
Mortgage, Security Agreement and Financing
Statement (Construction Mortgage) dated
December 1, 1999 made by Borrower to secure
the Notes, to both be recorded on the New
Haven, Connecticut Land Records.
"Mortgaged Property" The property defined as the "Mortgaged
Property" in the Mortgage.
"Original Premises" The approximately 20,000 rentable square
feet of space located on the second and
third floors of Building Five North in
Science Park, New Haven, Connecticut leased
by Borrower pursuant to the terms of the
Lease.
"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 for
First Amendment Space Improvements are set
forth on EXHIBIT C, and which plans and
specifications for Additional Space
Improvements will be prepared by the
architect on behalf of Borrower and
approved by Lender, and all amendments and
modifications thereof made by approved
Change Orders. The term shall include the
plans and specifications for segments of
the Improvements.
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"Premises" The Original Premises, First Amendment
Space (as defined in the Lease) and
Additional Space (as defined in the Lease)
as more fully described in EXHIBIT D
hereof.
"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.
"Second Lease Amendment" That Second Amendment to Lease dated
December 1, 1999.
"Second Loan" Up to $2,720,000
"Second Note" The Note dated December 1, 1999, in the
principal amount of the Loan made by
Borrower to Lender.
"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, the Second Loan in an amount not to
exceed the Second Note. The proceeds of the Second Loan shall be advanced as
construction progresses with respect to the First Amendment Space Improvements
and Additional Space Improvements, whether or not said improvements are being
constructed simultaneously, 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 Budgets, (which
may be modified as permitted hereunder) multiplied by
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(b) the percentage of completion of construction then attained by the
appropriate line item in question, multiplied by
(c) 92.5%, less
(d) amounts theretofore advanced with respect to such line item.
Notwithstanding the above, Lender agrees that 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 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
Second Loan plus Additional Available Amounts shall be deemed by Lender to be
insufficient to pay for the completion of the First Amendment Space Improvements
and Additional Space Improvements, and with respect to the Additional Space
Improvements, the Landlord's Interior Work, if Borrower elects to fund
Landlord's Interior Work under the Lease, by the First Amendment Space
Improvements Completion Date or Additional Space Improvements Completion Date,
respectively; or (iii) to advance Loan proceeds in amounts which exceed,
separately or in the aggregate, the individual line items set forth in the
Budgets; PROVIDED, HOWEVER, that Borrower may increase a particular line item in
either Budget by reducing a budgeted line item amount in another cost category
in either Budget, or if Borrower demonstrates a cost savings in a line item or
has unallocated funds from any cost category or contingency in either Budget,
Borrower shall be permitted to use such cost savings or contingency funds to pay
for cost overruns in other line items and cost categories in either Budget or
(iv) 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
for First Amendment Space Improvements plus the cost of construction for
Additional Space Improvements above $2,720,000 plus the Aggregate Change Order
Amount, unless otherwise approved by the Lender.
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
9
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 Second Loan proceeds for materials not incorporated into the work unless
such materials are securely stored on the site or otherwise procured and
securely 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; (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 for First Amendment Space
Improvements annexed hereto as EXHIBIT C is the same list annexed to the General
Contract for First Amendment Space Improvements. 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 for First
Amendment Space Improvements or the Plans for the Additional Pace Improvements,
as the case may be, 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
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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 First Loan, the Second Loan, the Notes 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.
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 respective Improvements
have been paid for in full or will be paid for out of the applicable 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. BUDGETS. The Budget for First Amendment Space Improvements does,
and the Budget for Additional Space Improvements will, include 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 for the First Amendment Space Improvements, 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 First
Amendment Space Improvements including, but not limited to, a material variation
or deviation from the Budget for the First Amendment Space Improvements. To the
best of Borrower's knowledge as of the date hereof, there have been no material
variations or deviations from the Budget for the Additional Space Improvements,
and, except for the revisions and refinement to the preliminary plans for the
Additional Space Improvements as
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described in the General Contract for Additional Space Improvements, 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
Additional Space Improvements including, but not limited to, a material adverse
variation or deviation from the Budget for the Additional Space Improvements.
13. USE OF PROCEEDS. Borrower will employ all of the proceeds of the
Second Loan 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 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, Borrower 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 First Loan or the Second 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 and the other Loan
Documents.
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
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construction until Borrower has obtained all permits, licenses and approvals
required under any Requirement or Local Requirement for construction of the
Improvements. Notwithstanding the foregoing, Borrower shall have no obligation
to commence or complete the Additional Space Improvements if the Second Lease
Amendment is terminated pursuant to Section 5 thereof.
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;
(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 Second 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 (a) an increase in the Guaranteed Maximum Price
under the General Contract for First Amendment Space Improvements in excess of
the Aggregate Change Order Amount, or (b) once the Guaranteed Maximum Price is
determined pursuant to the terms of the
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General Contract for Additional Space Improvements, an increase in said
Guaranteed Maximum Price under the same 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 CONTRACTS 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 Contracts.
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 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 Notes, the Mortgage, all other Loan Documents,
the General Contracts and the agreements 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
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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:
(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.
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(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 with
respect to the First Amendment Space Improvements or the Additional Space
Improvements, as the case may be, 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;
2. NO CASUALTY. The respective 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 Second Loan remaining to be
advanced and (b) Additional Available Funds are sufficient to restore and
complete the respective 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 for the First Amendment Space Improvements or the Plan for
the Additional Space Improvements, as the case may be, 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 applicable 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;
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(e) An executed copy of the applicable 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 applicable 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 contracts 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) Executed counterparts of an Amended and Restated Consent
and Intercreditor Agreement with Science Park Development Corporation, The
Connecticut Development Authority and the Connecticut Housing Finance Authority
and subordination, nondisturbance and attornment agreements from each mortgagee
of the Premises in form and substance satisfactory to Lender, except that no
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;
(l) An opinion of Borrower's counsel, in the form and
satisfactory to Lender;
(m) Request for Advance;
(n) 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;
(o) 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;
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(p) 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.
(q) Lender's Counsel Fees.
4. APPROVAL OF PLANS. Lender, Architect and Borrower (a) shall have
approved the Plans for the First Amendment Space Improvements or the Plans for
the Additional Space Improvements, as the case may be, 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 applicable 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 for
work completed under the General Contract for First Amendment Space Improvements
has not occurred prior to March 31, 2000.
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 for
either of the Improvements 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(n) 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 applicable 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;
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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 for the First Amendment Space Improvements, the
General Contract for the Additional Space Improvements, the First Note, the
Second Note, the Mortgage or any other of the Loan Documents 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
First Loan or the Second 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;
(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 or either of the General Contracts; PROVIDED,
HOWEVER, that the Borrower shall have no obligation to commence or complete the
Additional Space Improvements if the Second Lease Amendment is terminated
pursuant to Section 5 thereof.
(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 for First Amendment
Space Improvements or the Plans for Additional Space Improvements, 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;
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(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 their respective Completion Dates; PROVIDED, HOWEVER,
that the Borrower shall have no obligation to commence or complete the
Additional Space Improvements if the Second Lease Amendment is terminated
pursuant to Section 5 thereof.
(i) If the Improvements in the judgment of Architect cannot
with reasonable diligence be completed on or before their respective Completion
Dates; PROVIDED, HOWEVER, that the Borrower shall have no obligation to commence
or complete the Additional Space Improvements if the Second Lease Amendment is
terminated pursuant to Section 5 thereof.
(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 the Premises or the Lease expires or terminates; PROVIDED, HOWEVER, that
a termination of the Second Lease Amendment under Section 5 thereof shall not be
a default hereunder.
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 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
20
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.
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 First Amendment Space Improvements or the Additional
Space Improvements, as the case may be, 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 with respect to the First Amendment Space
Improvements or the Additional Space Improvements, as the case may be, 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
21
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 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 clause (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 and the other Loan Documents set forth the
entire agreement between the parties hereto, and all prior understandings or
communications between the parties are merged in this Agreement and the other
Loan Documents.
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/ Xxxxx X. Xxxx CONNECTICUT INNOVATIONS,
--------------------------- INCORPORATED
/s/ Xxxxxx X. Xxxxxx By /s/ Xxxxxx Xxxxxxx
---------------------------------- ----------------------------------
Its President & Executive Director
/s/ Xxxxx Xxxx GENAISSANCE PHARMACEUTICALS, INC.
---------------------------
/s/ Xxxx Xxxxxxxx By /s/ Xxxxx Xxxxx
---------------------------------- ----------------------------------
Its Executive Vice President
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