COLLATERAL ASSIGNMENT OF LEASE AGREEMENT
Exhibit
10.3
THIS
COLLATERAL ASSIGNMENT OF LEASE AGREEMENT (hereinafter referred to as this
“Agreement”) is dated as of this 30th day of June, 2008, by and between Beacon
Power Corporation (the “Assignor”) and Massachusetts Development Finance Agency
(the “Lender”).
WITNESSETH,
THAT WHEREAS, Assignor is indebted to the Lender in the principal amount
not to
exceed $5,000,000.00(the “Loan”); and
WHEREAS,
in order to evidence the Loan, Assignor has executed that certain Promissory
Note (the “Note”) of even date herewith, in the aggregate principal amount of
the Loan, which Note is secured by this Agreement and that certain Security
Agreement of even date herewith between Assignor and the Lender (the “Security
Agreement”); and
WHEREAS,
Assignor is the owner of a certain leasehold interest in certain premises
and
all improvements thereon located at 00 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
(collectively, the “Premises”), which Premises are more particularly described
on Exhibit A hereto, as more fully described in that certain Lease Agreement
by
and between GFI Tyngsboro, LLC, as lessor, and Assignor, as lessee, dated
July
23, 2007 (the “Lease”); and
WHEREAS,
Lender is unwilling to make the Loan on the date hereof unless Assignor,
in the
manner hereinafter set forth, assigns to Lender as additional security for
the
repayment of the Loan and the observance and performance by Assignor of the
terms, covenants and conditions of all of the loan documents evidencing and
securing the Loan (collectively, the “Loan Documents”) on the part of Assignor
to be observed and performed, all of Assignor’s right, title and interest in and
to the Lease.
NOW,
THEREFORE, in order to secure the prompt payment and performance of any and
all
amounts and obligations (collectively the “Obligations”) due under the Note and
under any Loan Documents and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto
agree
as follows:
1. Pledge,
Assignment and Grant of Lease.
The
Assignor hereby makes a present assignment and pledge to the Lender of all
of
the Assignor’s right, title and interest in the Lease, together with all rights,
powers and privileges incident to the Lease as additional security and
collateral for the prompt payment of the Note, and the observance and
performance by Assignor of the Obligations. In addition, and subject to all
applicable laws, Assignor grants Lender a security interest in the Lease.
Assignor does hereby authorize and empower Lender, and its successors and
assigns, to fully and freely exercise and enjoy all rights and enforce the
Lease
and does hereby direct each and all of the parties thereto to perform all
of
their obligations under the Lease for the benefit of Lender, its successors
and
assigns, upon demand for payment or performance thereof by Lender, its
successors and assigns, such directive to take effect upon the occurrence
and
during the continuance of an Event of Default (as hereinafter defined) under
the
Loan Documents.
2. Assignor’s
Exercise of Rights.
Until
the occurrence of an Event of Default hereunder, the Assignor shall be entitled
to exercise all of the rights held under the provisions of the subject Lease
as
if this Agreement had not been made.
3. Lender
Rights on Default.
Upon
and at any time after a default in the Assignor’s performance of any of its
Obligations hereunder or under the provisions of the Note, or any other Loan
Documents, after notice and beyond applicable grace and cure periods and
until
such default has been cured (an “Event of Default”), the Assignor’s entire
right, title and interest in and to the Lease shall, at Lender’s option, vest
absolutely in the Lender.
4. Construction.
If,
after the date hereof, the Assignor undertakes any tenant improvement or
other
construction work within or about the building located at the Premises, which
improvement or construction work involves changes to, or replacement of,
any of
the Collateral (as defined in the Security Agreement) (any such improvement
or
work as described in this paragraph being hereinafter referred to as the
“Work”), the Assignor hereby covenants and agrees to the following conditions of
the Agreement:
4.1 The
Assignor proposes and agrees to diligently complete any such Work in accordance
with (i) a construction budget to be delivered to the Lender, (ii) plans
and
specifications, as certified by the architect for the Work (the "Plans"),
to be
delivered to the Lender, and (iii) such building permits and all other
governmental permits, licenses or approvals necessary or required for the
Work.
The Assignor agrees that any materials to be used in the Work shall be of
good
quality and as called for by the Plans and that the Work shall be completed
in a
good and workmanlike manner and that both shall be reasonably satisfactory
to
the Lender and its Work inspectors.
4.2 The
Assignor agrees not to use in the Work any materials which are purchased
upon
lease or conditional xxxx of sale, nor any to which Assignor does not have
an
absolute title.
4.3 From
time
to time, the Lender shall have the right to cause a so-called title rundown
of
the Premises to be performed at the Assignor's expense. The Lender shall
not be
required to advance any sums under the Note if at any time the Assignor shall
fail to discharge any encumbrances of record (affecting the Assignor’s leasehold
interest in the Premises or the interests granted to the Lender hereby)
disclosed by such title rundown as required by the Lender or its attorneys,
nor
if at any time the Assignor shall fail to pay or bond over sums due for labor
or
materials furnished, nor if at any time there shall be any recorded statements
of mechanics' liens or any other liens or attachments by any contractor or
subcontractor or materialman on the Premises, or any part thereof, which
liens
or attachments have not been bonded over by the Assignor, nor if any
restrictions on the Premises shall be violated, nor if the applicable building
laws shall not be complied with, nor if any attachment shall be made by trustee
process or otherwise of the funds in the hands of the Lender, nor if any
materials shall be used in the Work which shall be purchased on conditional
sale
or lease, whether the same be recorded or not, nor if there shall be a
substantial, partial, or total loss or damage by fire to the building(s)
on the
Premises (except as may be otherwise provided in the Note or other Loan
Documents), nor if an Event of Default has occurred or is continuing, nor
if
there are any legal actions or other legal or administrative proceedings
pending
or threatened which could materially adversely affect the Assignor, the
Premises, or the Work, nor if representations or warranties made by the Assignor
prior to any advance are determined by the Lender to be untrue or incorrect
in
any material respect at the time made, but in all other events, the Lender
shall
advance the payments within thirty (30) days after receipt of invoices
evidencing construction of the Work.
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4.4 The
Assignor authorizes the Lender to pay and cause to be discharged any mechanics'
liens that may at any time affect the Premises and which the Assignor has
not
caused to be bonded over or otherwise provided security for, and also to
pay and
cause to be discharged any encumbrances of record which in the reasonable
opinion of the attorneys for the Lender may take priority over the security
interest of Lender provided by this Agreement, and charge the same against
such
payment or payments as said Lender may deem appropriate; in each case only
after
twenty (20) days’ prior written notice by Lender to Assignor of such lien or
encumbrance, plus an additional ten (10) days’ written notice prior to Lender
paying or causing such lien or encumbrance to be discharged.
4.5 The
Work
shall fully comply with all laws, ordinances and regulations of state, municipal
or other governmental agencies or authorities as may apply and shall not
violate
any restrictions on the Premises.
4.6 No
payment under this Agreement shall be conclusive evidence of the performance
of
its terms in whole or in part, and no advance made hereunder shall be construed
as an acceptance of improper work or material.
4.7 The
fact
that any of the payments herein mentioned shall have been suspended shall
not
qualify or affect the right of any of the conditions herein set
forth.
4.8 The
Lender shall not be required to make any advances under this Agreement except
as
set forth herein, but may, at its option, declare any advances heretofore
made
or sums due under the terms of this Agreement immediately due and payable
if the
Assignor shall fail to perform and comply with the terms and conditions set
out
in this Agreement or the Note after the expiration of all applicable grace
and
cure periods.
4.9 At
the
request of the Lender, the Assignor shall collaterally assign to the Lender
its
contracts with the architect and the general contractor for the Work and
shall
require its architect and general contractor, respectively, to consent to
such
assignments.
5. Indemnification.
This
Assignment shall not operate to place upon the Lender any responsibility
or
liability for the control, care, management or repair of the Premises under
the
Lease, unless and until Lender exercises dominion and control of the Premises
pursuant to this Assignment. If the Lender elects to exercise dominion and
control of the Premises pursuant to this Assignment, the Assignor hereby
agrees
to indemnify the Lender for, and to hold the Lender harmless from (unless
caused
by the willful misconduct, bad faith or gross negligence of Lender), any
and all
liability, loss or damage which may be incurred under the Lease or by reason
of
this Assignment, and from any and all claims and demands whatsoever which
may be
asserted against the Lender by reason of any alleged obligation or undertaking
on its part to perform or discharge any of its obligations under the Lease.
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6. Effect
of Agreement.
This
Agreement is to remain in force and effect until all Obligations of Assignor
have been fully performed. At such time, the rights assigned hereunder and
all
rights of the Lender hereunder shall terminate automatically without the
necessity of any further agreement or other writing between the
parties.
7. Representations
and Warranties.
The
Assignor represents and warrants and, so long as this Agreement is in effect,
shall be deemed continuously to represent and warrant, that, unless compliance
is waived by the Lender in writing:
7.1.
The
Assignor has full right and title to assign its interest in the Lease to
Lender
and that there is no outstanding assignment, transfer, mortgage or pledge
thereof.
7.2. The
Assignor has not executed and will not execute any assignment or security
agreement or financing statement covering its interest in the Lease except
to
the Lender.
7.3. The
Assignor is authorized to enter into this Agreement.
7.4. So
long
as this Agreement remains in force and effect, the Assignor will defend its
interest in the Lease against the claims and demands of all other parties,
and
will keep the Lease free from all future security interests and other
encumbrances, except the security interest granted hereby.
7.5. The
Assignor shall observe and perform in all respects the obligations imposed
upon
Assignor under the Lease, and not do or permit to be done anything to impair
the
security thereof.
7.6. The
Assignor shall give prompt written notice to Lender of any notice of default
received by Assignor under the Lease, together with a complete copy of any
such
notice.
8. Miscellaneous.
8.1.
The
Lender shall have no obligation to take, and the Assignor shall have the
sole
responsibility for taking, any and all steps to preserve rights against any
and
all parties to the Lease.
8.2.
The
Assignor agrees that any notice by the Lender of sale, disposition or other
intended action hereunder or in connection herewith (following an Event of
Default), shall constitute reasonable notice if such notice is mailed by
certified mail or by nationally recognized overnight delivery service, at
least
five (5) days prior to such action, to the Assignor’s address as set forth below
or to any other address which the Assignor has specified in writing to the
Lender as the address of the Assignor;
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If
to the Lender:
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Massachusetts
Development Finance Agency
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000
Xxxxxxx Xxxxxx
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Xxxxxx,
XX 00000
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Attention:
Xxxxx Xxxxxx
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with
copy to:
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Xxxx
X. Xxxxxxx, Esquire
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Sherin
& Lodgen, LLP
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000
Xxxxxxx Xxxxxx
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Xxxxxx,
XX 00000
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If
to the Assignor:
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00
Xxxxxxxxx Xxxx
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Xxxxxxxxx,
XX 00000
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Attention:
Xxxxx X. Xxxxxxx, Vice President
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of
Finance and Chief Financial Officer
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with
a copy to:
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Xxxxxxx
Xxxxxx Xxxxxx & Dodge LLP
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000
Xxxxxxxxxx Xxxxxx
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Xxxxxx,
XX 00000
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Attention:
Xxxxxx X. Xxxxx, Esquire and
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Xxxxxx
X. Xxxxxxx, Esquire
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8.3.
The
Assignor agrees to pay all costs and expenses incurred by the Lender in
enforcing this Agreement, including, without limitation, reasonable attorney’s
fees and legal expenses.
8.4.
This
Agreement shall be governed by and construed according to the laws of the
Commonwealth of Massachusetts.
8.5.
No
modifications, rescission, waiver, release or amendment of any provision
of this
Agreement shall be made, except by written agreement subscribed by the Assignor
and the Lender.
8.6.
This
Agreement benefits the Lender and its successors and assigns, and binds the
Assignor and its assigns.
8.7. This
Agreement may be recorded at the option of either the Assignor or the Lender,
however, in either regard, any and all costs of recording this Agreement
shall
be the sole responsibility of Assignor.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as
of the date first above written.
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BEACON
POWER CORPORATION
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By:
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/s/
F. Xxxxxxx Xxxx
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Name:
F. Xxxxxxx Xxxx
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Title:
President and CEO
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MASSACHUSETTS
DEVELOPMENT FINANCE AGENCY
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By:
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/s/
Xxxxx X. Xxxxxx
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Name:
Xxxxx X. Xxxxxx
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Title:
Executive Vice President
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COMMONWEALTH
OF MASSACHUSETTS )
COUNTY
OF
MIDDLESEX )
On
this
27th
day of
June, 2008, before me, the undersigned notary public, personally appeared
F.
Xxxxxxx Xxxx, the CEO of Beacon Power Corp., proved to me through satisfactory
evidence of identification, which was personally known, to be the person
whose
name is signed on the preceding or attached document and acknowledged to
me that
she/he signed it voluntarily for its stated purpose as Collateral Assignment
of
Lease Agreement.
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/s/
Xxxx Xxxx
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Notary
Public
|
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My
commission expires: 12/7/2012
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COMMONWEALTH
OF MASSACHUSETTS )
COUNTY
OF
SUFFOLK )
On
this
27th
day of
June, 2008, before me, the undersigned notary public, personally appeared
Xxxxx
X. Xxxxxx, the EVP, Finance Prog. of MassDevelopment, proved to me through
satisfactory evidence of identification, which was personal knowledge, to
be the
person whose name is signed on the preceding or attached document and
acknowledged to me that she/he signed it voluntarily for its stated purpose
as
Collateral Assignment of Lease Agreement.
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/s/
Xxxxxxxx Xxxxxxxx
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Notary
Public
|
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My
commission expires: 12/12/2008
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EXHIBIT
A
Legal
Description of Premises
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