NEXMED (U.S.A.), INC., AS MORTGAGOR
AND
THE TAIL WIND FUND LTD. AND SOLOMON STRATEGIC HOLDINGS, INC.,
COLLECTIVELY AS MORTGAGEE
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MORTGAGE, SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS
(FEE)
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DATED : AS OF JUNE 11, 2002
LOCATION: 00 XXXX XXXXXX XXXXX
XXXX XXXXXXX, XXX XXXXXX 00000
The premises described within this instrument are also known as:
Block 20.06
Xxx 0
xx xxx Xxxxxxxx Xxx Xxx xx Xxxxxx Xxxxxx.
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RECORD AND RETURN TO:
Xxxxx X. Xxxxxxx, P.C.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
MORTGAGE, SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS
THIS MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS is made as
of the 11th day of June, 2002, by NEXMED (U.S.A.), INC., a Delaware corporation
having its principal place of business at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx,
XX 00000 (the "MORTGAGOR"), to THE TAIL WIND FUND LTD., a British Virgin Islands
limited liability company having an address at c/o Tail Wind Advisory and
Management Ltd., Attn: Xxxxx Xxxxx, 1st Floor, No. 0 Xxxxxx Xxxxxx, Xxxxxx, XX0X
0XX XX ("TAIL WIND"), and SOLOMON STRATEGIC HOLDINGS, INC., a British Virgin
Islands limited liability company, (collectively, the "MORTGAGEE"), and Tail
Wind as collateral agent (including any successor collateral agent, the
"COLLATERAL AGENT").
W I T N E S S E T H
WHEREAS, the Mortgagor is the owner of a fee estate in the real
property described in Exhibit A attached hereto and made a part hereof (the
"PREMISES") and commonly known as 00 Xxxx Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxx Xxxxxx
00000;
WHEREAS, the Mortgagor is a wholly-owned subsidiary of NexMed, Inc., a
Nevada corporation ("PARENT");
WHEREAS, the Parent is executing, issuing and delivering one or more of
the Parent's 5% Secured Convertible Notes due November 2005 in the aggregate
original principal amount of Five Million ($5,000,000) Dollars, lawful money of
the United States of America, dated on or about the date hereof, to the
Mortgagee, pursuant to the terms of that certain Purchase Agreement entered into
on or about the date hereof between the Parent and the Mortgagee ("PURCHASE
AGREEMENT"); and
WHEREAS, as a condition to and as an inducement for the Mortgagee
purchasing the Notes, the Mortgagor is entering into a subsidiary guaranty
("GUARANTY") dated on or about the date hereof in favor of the Mortgagee
guaranteeing the Parent's obligations under the Notes and the agreements entered
into in connection therewith;
NOW THEREFORE, to secure the payment of an indebtedness in the
aggregate original principal sum of Five Million ($5,000,000) Dollars, lawful
money of the United States of America, to be paid with interest and with
accretions to such principal amount (said indebtedness, interest, accretions to
the principal amount due thereunder, and all other sums which may or shall
become due hereunder or under the Notes and Guaranty, collectively, the "DEBT")
pursuant to the above described 5% Secured Convertible Notes due November 2005
given by the Parent to the Mortgagee (the notes, together with all extensions,
renewals or modifications thereof, being hereinafter collectively called the
"NOTES") and pursuant to the Guaranty given by the Mortgagor to the Mortgagee,
the Mortgagor has mortgaged, given, granted, bargained, sold, aliened,
enfeoffed, conveyed, confirmed, pledged, assigned and hypothecated, and by these
presents does mortgage, give, grant, bargain, sell, alien, convey,
confirm, pledge, assign and hypothecate unto the Mortgagee forever all right,
title and interest of the Mortgagor now owned, or hereafter acquired, in and to
the following property, rights and interest (such property, rights and
interests, collectively, the "MORTGAGED PROPERTY"):
(a) The Premises;
(b) all buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or
hereafter located on the Premises, including without limitation all building
materials and any and all fixtures which may be included on Schedule A attached
hereto and any and all fixtures which are replacements of, additions to or
upgrades of such items listed on Schedule A attached hereto (the
"IMPROVEMENTS");
(c) all of the estate, right, title, claim or demand of any nature
whatsoever of the Mortgagor, either in law or in equity, in possession or
expectancy, in and to the Premises, Improvements, Easements (defined below),
Equipment (defined below), Leases (defined below), and/or Rents (defined below),
or any part thereof;
(d) all easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, waters, water courses, water rights and
powers, and all estates, rights, titles, interests, privileges, liberties,
tenements, hereditaments, and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to the Premises and/or Improvements
(including, without limitation, any and all development rights, air rights or
similar or comparable rights of any nature whatsoever now or hereafter
appurtenant to the Premises and/or Improvements or now or hereafter transferred
to the Premises and/or Improvements) and all land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining the
Premises and/or Improvements to the center line thereof ("EASEMENTS");
(e) all machinery, apparatus, equipment, fittings, fixtures (including
but not limited to all heating, air conditioning, plumbing, lighting and
communications fixtures) listed on Schedule A attached hereto, and all
machinery, apparatus, equipment, fittings, fixtures (including but not limited
to all heating, air conditioning, plumbing, lighting and communications
fixtures) which are replacements of, additions to or upgrades of such items
listed on Schedule A attached hereto (collectively, the "EQUIPMENT"). All other
equipment, including the Current Production Suite Equipment (as such term is
defined in Section 35 below), is expressly excluded from the security interest
effected hereunder, provided that all machinery and equipment fixed on or
physically attached to the Premises or Improvements shall be included within
"Improvements" or "Equipment" hereunder;
(f) all awards or payments, including interest thereon, and the right
to receive the same, which may be made with respect to the Premises,
Improvements, Easements, Equipment, Leases and/or Rents, whether from the
exercise of the right of eminent domain (including any transfer made in lieu of
the exercise of said right), or awards or refunds received as a result of a
reduction in the real estate taxes or tax assessment affecting the Premises,
Improvements, Easements, Equipment, Leases and/or Rents, or proceeds received in
connection with any tax certiorari proceeding affecting the Premises,
Improvements, Easements, Equipment, Leases and/or Rents, or for any other injury
to or decrease in the value of the Mortgaged Property;
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(g) all leases and other agreements affecting the use or occupancy of
the Premises, Improvements, Easements and/or Equipment, now or hereafter entered
into (the "LEASES") and the right to receive and apply the rents, issues and
profits of the Premises, Improvements, Easements, Equipment and/or Leases (the
"RENTS") to the payment of the Debt;
(h) all right, title and interest of the Mortgagor in and to (i) all
contracts from time to time executed by the Mortgagor or any manager or agent on
its behalf relating to the ownership, construction, maintenance, repair,
operation, occupancy, sale or financing of the Premises, Improvements,
Easements, Equipment, Leases and/or Rents, or any part thereof and all
agreements relating to the purchase or lease of any portion of the Premises,
Improvements, Easements, Equipment, Leases and/or Rents, or any property which
is adjacent or peripheral to the Premises, Improvements and/or Easements,
together with the right to exercise such options and all leases of Equipment,
(ii) all consents, licenses, building permits, certificates of occupancy and
other governmental approvals relating to construction, completion, occupancy,
use or operation of the Premises, Improvements, Easements, Equipment, Leases
and/or Rents, or any part thereof, and (iii) all drawings, plans, specifications
and similar or related items related to the Premises, Improvements, Easements,
Equipment, Leases and/or Rents;
(i) all books and records relating to or used in connection with the
operation of the Premises, Improvements, Easements, Equipment, Leases and/or
Rents, or any part thereof; all general intangibles related to the operation of
the Premises, Improvements, Easements, Equipment, Leases and/or Rents, now
existing or hereafter arising;
(j) all proceeds, both cash and non-cash, of the foregoing;
(k) all proceeds of and any unearned premiums on any insurance policies
covering the Premises, Improvements, Easements, Equipment, Leases and/or Rents,
including, without limitation, the right to receive and apply the proceeds of
any insurance, judgments, or settlements made in lieu thereof, for damage to the
Premises, Improvements, Easements, Equipment, Leases and/or Rents; and
(l) after the occurrence of an Event of Default hereunder, the right,
in the name and on behalf of the Mortgagor, to appear in and defend any action
or proceeding brought with respect to the Premises, Improvements, Easements,
Equipment, Leases and/or Rents, and to commence any action or proceeding to
protect the interest of the Mortgagee in the Premises, Improvements, Easements,
Equipment, Leases and/or Rents.
TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the use and benefit of the Mortgagee, and the successors and assigns
of the Mortgagee, forever.
AND the Mortgagor covenants and agrees with and represents and warrants
to the Mortgagee as follows:
1. Payment of Debt. The Parent or Mortgagor will pay the Debt at the
time and in the manner provided for its payment in the Notes and in this
Mortgage.
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2. Representations and Warranties. Mortgagor represents and warrants to
the Mortgagee that:
(a) Warranty of Title. Mortgagor has good title to the Mortgaged
Property and has the right to mortgage, give, grant, bargain, sell, alien,
enfeoff, convey, confirm, pledge, assign and hypothecate the same, and Mortgagor
possesses an unencumbered fee interest in the Mortgaged Property and owns the
Mortgaged Property free and clear of all liens, encumbrances and charges
whatsoever except for those exceptions shown in the title insurance policy
insuring the lien of this Mortgage. Mortgagor shall forever warrant, defend and
preserve such title and the validity and priority of the lien of this Mortgage
and shall forever warrant and defend the same to Mortgagee against the claims of
all persons whomsoever.
(b) Consideration. (i) Contemporaneously with, and in consideration
for, the execution and delivery of this Mortgage, the Mortgagor is receiving new
value from the Mortgagee, which new value is reasonably equivalent value in
exchange for this Mortgage, (ii) the execution and delivery of this Mortgage by
the Mortgagor does not constitute a "fraudulent conveyance" within the meaning
of Title 11 of the United States Code as now constituted or under any other
applicable statute, (iii) no bankruptcy or insolvency proceedings are pending or
contemplated by or, to the knowledge of Mortgagor, against the Mortgagor, and
(iv) this Mortgage is legal and valid and creates a lien on and security
interest in the Mortgaged Property.
(c) Authority. The Mortgagor (i) has full power, authority and legal
right to execute this Mortgage, and to mortgage, give, grant, bargain, sell,
alien, convey, confirm and assign the Mortgaged Property pursuant to the terms
hereof and to keep and observe all of the terms of this Mortgage on the
Mortgagor's part to be performed and (ii) is a duly organized and presently
existing corporation in good standing under the laws of the State of Delaware
and this Mortgage has been duly executed by authority of its Board of Directors.
No shareholder approval is required to authorize the execution, delivery and
performance of this Mortgage. The Mortgagor is qualified to do business in the
State of New Jersey.
(d) Priority. There are no liens on the Mortgaged Property other than
those created by this Mortgage. Upon filing of this Mortgage and a UCC-1
financing statement fixture filing with Xxxxxx County in the State of New
Jersey, the Mortgagee will have a first priority lien on the real property and
fixtures included within the Mortgaged Property. This Mortgage, upon the filing
of a UCC-1 financing statements describing the Mortgaged Property with the
Secretary of State of the State of Delaware, creates a valid, perfected (upon
filing) and first priority security interest in the personal property included
in the Mortgaged Property in favor of the Mortgagee. The Mortgagor hereby
authorizes the Collateral Agent to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the Mortgaged
Property without the signature of the Mortgagor.
(e) Bills. There are no unpaid bills for labor, materials, supplies or
services furnished upon or in connection with the Mortgaged Property more than
30 days past the due date thereof which could result in a lien on the Mortgaged
Property. As of the date the Mortgage is recorded in the public records of the
county in which the Mortgaged Property is located, there is no active "Notice of
Commencement" on record with respect to the Mortgaged Property.
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(f) Permits. Mortgagor has obtained all federal, state and local
permits, licenses, approvals and authorizations from those federal agencies and
any state or local authority charged with the enforcement or regulation of
environmental and land use matters in connection with the Mortgaged Property.
The Mortgaged Property is currently in compliance with all building, safety,
zoning and other requirements of any state, municipal or other governmental
authority pertaining to the use and occupancy of the Mortgaged Property, and
prior to commencement of manufacturing in the Premises outside the existing
production suite, the Mortgaged Property will be in compliance with all
building, safety, zoning and other requirements of any state, municipal or other
governmental authority pertaining to the use and occupancy of the Mortgaged
Property for its intended purpose. If the Mortgaged Property includes wetlands
or other areas subject to the regulatory jurisdiction of any water management
district or other regulatory body having jurisdiction over wetlands, protected
species of flora and fauna, or inland waterways, then Mortgagor has received all
necessary permits, licenses and approvals of the applicable governmental
authorities relating to such matters as may be necessary to use and occupy the
Mortgaged Property for its intended purpose.
(g) Rights of Access. The Mortgaged Property has adequate right of
access to public rights of way, directly or pursuant to insurable easements.
(h) Utilities. Prior to commencement of manufacturing on the Premises
outside the existing production suite, sewer, water, telephone, electricity and
all other necessary utilities will be physically available at the Mortgaged
Property in sufficient capacity to serve the Mortgaged Property for its intended
use, and the zoning, occupancy and land use classification(s) and designation(s)
under all laws, ordinances, rules and regulations will permit the use and
occupancy of the Mortgaged Property for its intended purpose, without the
necessity of obtaining further approvals, variances, waivers, consents or
authorizations. All easements, licenses or other interests in the property of
others or any consent of other land owners as required for drainage or other
utilities or services relating to the Mortgaged Property have been obtained.
(i) Litigation. There are no suits or proceedings pending or, to the
knowledge of Mortgagor, threatened against or affecting Mortgagor, the Mortgaged
Property, or involving the validity or enforceability of this Mortgage or
involving any risk of a judgment or a liability which, if unsatisfied, would
have a material adverse effect on the financial condition, business or
properties of Mortgagor or the validity or priority of the lien of this
Mortgage.
(j) No conflict. The execution and delivery of this Mortgage does not
conflict with or result in the breach of any regulation, order, writ,
injunction, judgment or decree of any court or governmental authority or in the
breach of or default under any agreement or other instrument to which Mortgagor
or Parent is a party or by which it or its property is bound.
(k) Location. Mortgagor's principal place of business and executive
office is located at the address set forth in the introductory paragraph of this
Mortgage. Mortgagor shall notify the Collateral Agent at least 30 days prior to
any change in such location.
(l) Mortgaged Property. The building on the Mortgaged Property consists
of not less than 31,500 square feet of space and the Mortgaged Property consists
of not less than 3.55 acres
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of land. All machinery and equipment that currently is or will be affixed to the
Premises or Improvements is or shall be owned by Mortgagor.
(m) Other Real Property. Other than the land and premises adjacent to
the Premises and commonly known as 000 Xxxxxxx Xxxx, Xxxx Xxxxxxx, Xxx Xxxxxx
00000, Mortgagor does not own any real property other than the real property
included in the Mortgaged Property. The Mortgaged Property does not include 000
Xxxxxxx Xxxx, Xxxx Xxxxxxx, Xxx Xxxxxx 00000.
3. Insurance. The Mortgagor (i) will keep the Improvements and the
Equipment insured against loss or damage by fire, standard extended coverage
perils and such other hazards in amounts not less than 100% of the full
insurable value of the Improvements and the Equipment, excluding the costs of
foundations, excavations and footings below grade, and shall be sufficient to
meet all applicable co-insurance requirements, and (ii) will maintain business
interruption insurance and such other forms of insurance coverage with respect
to the Mortgaged Property as the Collateral Agent shall from time to time
reasonably require in amounts approved by the Collateral Agent but in no event
in all such instances greater than those coverages customarily required of other
comparable buildings in the Xxxxxx County, New Jersey area by institutional
commercial lenders. All policies of insurance (the "POLICIES") shall be issued
by insurers having a minimum policy holders rating of "A" per the latest rating
publication of Property and Casualty Insurers by A.M. Best Company and who are
lawfully doing business in New Jersey and are otherwise reasonably acceptable in
all respects to the Collateral Agent in its reasonable discretion. All Policies
shall contain the standard New Jersey mortgagee non-contribution clause
endorsement or an equivalent endorsement satisfactory to the Collateral Agent
naming the Mortgagee, or the Collateral Agent on behalf of the Mortgagee, as the
person to which all payments made by the insurer thereunder shall be paid and
shall otherwise be in form and substance satisfactory in all respects to the
Collateral Agent. Blanket insurance policies shall not be acceptable for the
purposes of this paragraph unless otherwise approved to the contrary by the
Collateral Agent. The Mortgagor shall pay the premiums for the Policies as the
same become due and payable. At the request of the Collateral Agent, the
Mortgagor will deliver the Policies to the Collateral Agent. Not later than ten
(10) business days prior to the expiration date of each of the Policies, the
Mortgagor will deliver to the Collateral Agent a renewal policy or policies
accompanied by evidence of payment of premiums billed reasonably satisfactory to
the Collateral Agent. If at any time the Collateral Agent is not in receipt of
written evidence that all insurance required hereunder is in force and effect,
the Collateral Agent shall have the right upon three (3) business days notice to
the Mortgagor to take such action as the Collateral Agent deems necessary to
protect its interest in the Mortgaged Property, including, without limitation,
the obtaining of such insurance coverage as the Collateral Agent in its sole
discretion deems appropriate, and all expenses incurred by the Collateral Agent
in connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by the Mortgagor to the Collateral Agent upon demand. The
Mortgagor shall at all times comply with and shall cause the Improvements and
Equipment and the use, occupancy, operation, maintenance, alteration, repair and
restoration thereof to comply with the terms, conditions, stipulations and
requirements of the Policies.
If the Premises, or any portion of the Improvements, is located in a
Federally designated "special flood hazard area," in addition to the other
Policies required under this paragraph, a flood insurance policy shall be
delivered by the Mortgagor to the Collateral Agent.
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The Mortgagor shall also maintain such other property and liability insurance
policies with respect to the Mortgaged Property as are customary and prudent
under the circumstances, evidence of which Collateral Agent at any time may
require.
If the Mortgaged Property shall be damaged or destroyed, in whole or in
part, by fire or other property hazard or casualty, the Mortgagor shall give
prompt notice thereof to the Collateral Agent. Sums paid to the Mortgagee or the
Collateral Agent by any insurer may be retained and applied by the Mortgagee (or
the Collateral Agent on behalf of the Mortgagee) toward payment of the Debt
whether or not then due and payable in such order, priority and proportions as
the Mortgagee (or the Collateral Agent on behalf of the Mortgagee) in its
discretion shall deem proper or, at the discretion of the Collateral Agent, the
same may be paid, either in whole or in part, to the Mortgagor for such purposes
as the Collateral Agent shall designate. If the Mortgagee (or the Collateral
Agent on behalf of the Mortgagee) shall receive and retain such insurance
proceeds, the lien of this Mortgage shall be reduced only by the amount thereof
received and retained by the Mortgagee and actually applied by the Mortgagee in
reduction of the Debt.
4. Covenants.
(a) Payment of Taxes, Etc. Mortgagor shall pay all taxes, assessments,
water rates, sewer rents, ground rents, maintenance charges and other charges,
including without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Premises, now or hereafter levied
or assessed or imposed against the Mortgaged Property or any part thereof (the
"Taxes") as same become due and payable. Mortgagor will deliver to Collateral
Agent, upon request, evidence satisfactory to Collateral Agent that the Taxes
are not delinquent. Mortgagor shall not suffer and shall promptly cause to be
paid and discharged, any lien or charge whatsoever which may be or become a lien
or charge against the Mortgaged Property, and shall promptly pay for all utility
services provided to the Mortgaged Property. Mortgagor shall furnish to
Collateral Agent receipts for the payment of the Taxes prior to the date the
same shall become delinquent.
(b) Corporate Existence, Etc. The Mortgagor will preserve and keep in
force and effect its corporate existence and will cause each subsidiary and its
Parent to preserve and keep in force and effect its corporate, partnership or
other existence, except in each such case in the event of a merger as expressly
permitted herein, in accordance with the respective organizational documents of
each such subsidiary and Parent, and the rights and franchises of the Mortgagor
and its subsidiaries and Parent.
(c) Rights of the Mortgagee. The Mortgagor will not, at any time, by
any amendment of the Mortgagor's corporate charter or by-laws, or through any
consolidation, merger, reorganization, transfer of assets, dissolution, issue or
sale of securities or any other action, seek to avoid the observance or
performance hereof or under any of the other Loan Documents, but will at all
times take such actions as are necessary or appropriate in order to protect the
rights of the Mortgagee hereunder and under the other Loan Documents.
(d) Schedules. The Mortgagor will furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Mortgaged Property and such
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other reports in connection with the Mortgaged Property as the Collateral Agent
may reasonably request, all in reasonable detail.
5. Escrow Fund. At any time after the occurrence of an Event of Default
hereunder, upon the request of the Collateral Agent, the Mortgagor shall pay to
the Collateral Agent on the first day of each calendar month (a) one twelfth of
an amount which would be sufficient to pay the Taxes imposed against the
Mortgaged Property or any part thereof payable, or estimated by Collateral Agent
to be payable, during the next ensuing twelve (12) months and (b) one-twelfth of
an amount which would be sufficient to pay the premiums due for the renewal of
the coverage afforded by the Policies upon the expiration thereof (said amounts
in (a) and (b) above hereinafter called the "ESCROW FUND"). Mortgagor hereby
pledges to Mortgagee any and all monies now or hereafter deposited in the Escrow
Fund as additional security for the payment of the Debt. Collateral Agent will
apply the Escrow Fund to payments required to be made by Mortgagor pursuant to
the provisions of this Mortgage. If the amount of the Escrow Fund shall exceed
the amount due for the items described, Collateral Agent shall, in its
discretion, (1) return any excess to Mortgagor, (2) credit such excess against
the Debt in such priority and proportions as Collateral Agent in its discretion
shall deem proper, or (3) credit such excess against future payments to be made
to the Escrow Fund. If the Escrow Fund is not sufficient to pay the items set
forth in (a) and (b) above, Mortgagor shall promptly pay to Collateral Agent,
upon demand, an amount which Collateral Agent shall estimate in good faith as
sufficient to make up the deficiency. The Escrow Fund shall not constitute a
trust fund, and until expended or applied as above provided, any amounts in the
Escrow Fund may be commingled with the general funds of the Collateral Agent and
shall constitute additional security for the Debt. No earnings or interest on
the Escrow Fund shall be payable to Mortgagor.
6. Condemnation. Mortgagor shall give Collateral Agent immediate notice
of the actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Collateral Agent copies of any and all papers
served in connection with such proceedings. Notwithstanding any taking by any
public or quasi-public authority through eminent domain or otherwise, the
Mortgagor shall continue to pay the Debt at the time and in the manner provided
for its payment in the Notes and this Mortgage and the Debt shall not be reduced
until any award or payment therefor shall have been actually received and
applied by the Mortgagee to the discharge of the Debt. The Mortgagee may apply
the entire amount of any such award or payment to the discharge of the Debt
whether or not then due and payable in such order, priority and proportions as
the Mortgagee in its or his discretion shall deem proper. If the Mortgaged
Property is sold, through foreclosure or otherwise, prior to the receipt by the
Mortgagee of such award or payment, the Mortgagee shall have the right, whether
or not a deficiency judgment on the Note shall have been sought, recovered or
denied, to receive such award or payment, or a portion thereof sufficient to pay
the Debt, whichever is less. The Mortgagor shall file and prosecute its claim or
claims for any such award or payment in good faith and with due diligence and
cause the same to be collected and paid over to the Collateral Agent. The
Mortgagor hereby irrevocably authorizes and empowers the Collateral Agent, in
the name of the Mortgagor or otherwise, to collect and receipt for any such
award or payment and to file and prosecute such claim or claims. Although it is
hereby expressly agreed that the same shall not be necessary in any event, the
Mortgagor shall, upon demand of the Collateral Agent, make, execute and deliver
any and all assignments and other instruments sufficient for the
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purpose of assigning any such award or payment to the Mortgagee, free and clear
of any encumbrances of any kind or nature whatsoever.
7. Leases and Rents. Mortgagor represents that there are no leases or
tenancies with respect to the Mortgaged Property. Mortgagor has and hereby does
assign to Mortgagee the Rents and Leases and Collateral Agent, on behalf of
Mortgagee, shall have the right to enter the Mortgaged Property for the purposes
of enforcing its interests in the Leases and the Rents. Nevertheless, subject to
the terms of this paragraph 7, Collateral Agent waives the right to enter the
Mortgaged Property for the purpose of collecting the Rents, and grants Mortgagor
the right to collect the Rents. Mortgagor shall hold the Rents, or an amount
sufficient to discharge all current sums due on the Debt, in trust for use in
the payment of the Debt. The right of Mortgagor to collect the Rents may be
revoked by Collateral Agent, on behalf of Mortgagee, upon any Event of Default
(hereinafter defined). Upon or at any time after an Event or Default, Collateral
Agent, on behalf of Mortgagee, may, with or without entering upon and taking
possession of the Mortgaged Property, collect, retain and apply the Rents, less
costs of operation and collection (included but not limited to employment of
guard service and attorneys' fees), toward payment of the Debt in such priority
and proportions as Collateral Agent in its discretion shall deem proper.
Mortgagor shall furnish Collateral Agent with executed copies of all Leases. All
proposed Leases shall be subject to the prior approval of Collateral Agent.
Mortgagor shall submit to Collateral Agent all proposed Leases together with a
summary of the proposed business terms of such Lease, a description and
identification of the proposed tenant and such other information as Collateral
Agent may thereafter request concerning the proposed Lease and proposed tenant
thereunder. All Leases shall provide that they are subordinate to this Mortgage
and that the lessee attorns to Mortgagee. Mortgagor shall not, without the
consent of Collateral Agent, cancel, abridge or otherwise modify any Leases or
accept prepayments of installments of Rent under any Lease for a period of more
than one (1) month in advance or further assign the whole or any part of the
Leases or the Rents without the consent of Collateral Agent. In respect of any
Lease, Mortgagor will (a) fulfill or perform each and every provision thereof on
the lessor's part to be fulfilled or performed; (b) promptly send copies to
Collateral Agent of all notices of default which Mortgagor shall send or receive
thereunder, and (c) enforce all of the terms, covenants and conditions contained
in the Leases upon the lessee's part to be performed, short of termination
thereof. In addition to the rights which Collateral Agent, on behalf of
Mortgagee, may have herein, upon the occurrence of any Event of Default,
Collateral Agent, at its option, may require Mortgagor to pay monthly in advance
to Collateral Agent, on behalf of Mortgagee, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Mortgaged Property as may be in possession of
Mortgagor and may require Mortgagor to vacate and surrender possession of the
Mortgaged Property to Collateral Agent, or to such receiver and, in default
thereof, Mortgagor may be evicted by summary proceedings or otherwise. Nothing
contained in this paragraph shall be construed as imposing on the Mortgagee or
Collateral Agent any of the obligations of the lessor under the Leases.
8. Maintenance of the Mortgaged Property. The Mortgagor shall cause the
Mortgaged Property to be maintained in good condition and repair and will not
commit or suffer to be committed any waste of the Mortgaged Property, and
following validation or certification by the Food and Drug Administration
("FDA") the Mortgagor shall cause the Mortgaged Property to be maintained in
compliance with the Current Good Manufacturing Practice
-9-
Regulations ("CGMP") of the FDA for drug manufacture and processing. The
Improvements and the Equipment shall not be removed, demolished or materially
altered (except for normal replacement of the Equipment in the ordinary course
of business), without the consent of the Collateral Agent. The Mortgagor shall
promptly comply with all existing and future governmental laws, orders,
ordinances, rules and regulations (including without limitation the FDA and
CGMP) affecting the Mortgaged Property, or any portion thereof or the use
thereof. The Mortgagor shall promptly repair, replace or rebuild any part of the
Mortgaged Property which may be damaged or destroyed by fire or other property
hazard or casualty (including any fire or other property hazard or casualty for
which insurance was not obtained or obtainable) or which may be affected by any
taking by any public or quasi-public authority through eminent domain or
otherwise, and shall complete and pay for, within a reasonable time, any
structure at any time in the process of construction or repair on the Premises.
If such fire or other property hazard or casualty shall be covered by the
Policies, the Mortgagor's obligation to repair, replace or rebuild such portion
of the Mortgaged Property shall be contingent upon the Mortgagee paying the
Mortgagor the proceeds of the Policies, or such portion thereof as shall be
sufficient to complete such repair, replacement or rebuilding, whichever is
less. The Mortgagor will not, without obtaining the prior consent of the
Collateral Agent, initiate, join in or consent to any private restrictive
covenant, zoning ordinance, or other public or private restrictions, limiting or
affecting the uses which may be made of the Mortgaged Property or any part
thereof.
9. Environmental Provisions.
(a) For the purposes of this Section the following terms shall have the
following meanings: (i) the term "HAZARDOUS MATERIAL" shall mean any material or
substance that, whether by its nature or use, is now or hereafter defined or
regulated as a hazardous waste, hazardous substance, pollutant or contaminant
under any Environmental Requirement, or which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous or which is or contains petroleum, gasoline, diesel fuel, another
petroleum hydrocarbon product, asbestos, asbestos-containing materials or
polychlorinated biphenyls, (ii) the "ENVIRONMENTAL REQUIREMENTS" shall
collectively mean all present and future laws, statutes, common law, ordinances,
rules, regulations, orders, codes, licenses, permits, decrees, judgments,
directives or the equivalent of or by any Governmental Authority and relating to
or addressing the protection of the environment or human health, and (iii) the
term "GOVERNMENTAL AUTHORITY" shall mean the Federal government, or any state or
other political subdivision, or any agency, court or body of the Federal
government, any state or other political subdivision, exercising executive,
legislative, judicial, regulatory or administrative functions.
(b) The Mortgagor hereby represents and warrants to the Mortgagee that
(i) no Hazardous Material regulated or otherwise defined by any Governmental
Authority is currently located at, on, in, under or about the Mortgaged Property
which has not been generated, stored, handled, processed, disposed of, or
otherwise used, by Mortgagor in compliance in all material respects with the
Environmental Requirements, (ii) no releasing, emitting, discharging, leaching,
dumping, disposing or transporting of any Hazardous Material from the Mortgaged
Property onto any other property or from any other property onto or into the
Mortgaged Property has occurred while the Mortgaged Property was owned by the
Mortgagor or is occurring in violation of any Environmental Requirement and to
the Mortgagor's knowledge no releasing, emitting, discharging, leaching,
dumping, disposing or transporting of any Hazardous Material from the
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Mortgaged Property onto any other property or from any other property onto or
into the Mortgaged Property has occurred at any other time, (iii) no notice of
violation, non-compliance, liability or potential liability, lien, complaint,
suit, order or other notice with respect to the Mortgaged Property is presently
outstanding under any Environmental Requirement, nor does the Mortgagor have
knowledge or reason to believe that any such notice will be received or is being
threatened, and (iv) the Mortgaged Property and the operation thereof are and
will be in full compliance with all Environmental Requirements in all material
respects.
(c) The Mortgagor shall comply, and shall cause all tenants or other
occupants of the Mortgaged Property to comply, in all material respects with all
Environmental Requirements, and will not generate, store, handle, process,
dispose of or otherwise use, and will not permit any tenant or other occupant of
the Mortgaged Property to generate, store, handle, process, dispose of or
otherwise use, Hazardous Materials at, in, on, or about the Mortgaged Property
in a manner that could lead or potentially lead to the imposition on the
Mortgagor, the Mortgagee or the Mortgaged Property of any liability or lien of
any nature whatsoever under any Environmental Requirement. The Mortgagor shall
notify the Collateral Agent promptly in the event of any spill or other release
of any Hazardous Material at, in, on, under or about the Mortgaged Property
which is required to be reported to a Governmental Authority under any
Environmental Requirement, will promptly forward to the Collateral Agent copies
of any notices received by the Mortgagor relating to alleged violations of any
Environmental Requirement or any potential liability under any Environmental
Requirement and will promptly pay when due any fine or assessment against the
Mortgagee, the Mortgagor or the Mortgaged Property relating to any Environmental
Requirement. If at any time it is determined that the operation or use of the
Mortgaged Property is in violation of any applicable Environmental Requirement
or that there are Hazardous Materials located at, in, on, under or about the
Mortgaged Property which violates any applicable Environmental Requirement or
that there are Hazardous Materials located at, in, on, under or about the
Mortgaged Property which, under any Environmental Requirement, require special
handling in collection, storage, treatment or disposal, or any form of cleanup
or corrective action, the Mortgagor shall, within thirty (30) days after receipt
of notice thereof from any Governmental Authority or from the Collateral Agent,
take, at the Mortgagor's sole cost and expense, such actions as may be necessary
to fully comply in all respects with all Environmental Requirements, provided,
however, that if such compliance cannot reasonably be completed within such
thirty (30) day period, the Mortgagor shall commence such necessary action
within such thirty (30) day period and shall thereafter diligently and
expeditiously proceed to fully comply in all respects and in a timely fashion
with all Environmental Requirements.
(d) If the Mortgagor fails to timely take, or to diligently and
expeditiously proceed to complete in a timely fashion, any such action described
in clause (c) above, the Collateral Agent, on the Mortgagee's behalf, may, in
its sole and absolute discretion, make advances or payments toward the
performance or satisfaction of the same, but shall in no event be under any
obligation to do so. All sums so advanced or paid by the Collateral Agent
(including, without limitation, reasonable counsel and consultant fees and
expenses, investigation and laboratory fees and expenses, and fines or other
penalty payments) and all sums advanced or paid in connection with any judicial
or administrative investigation or proceeding relating thereto, will
immediately, upon demand, become due and payable from the Mortgagor and shall
bear interest at the Default Rate from the date any such sums are so advanced or
paid by the Collateral Agent until the date any such sums are repaid by the
Mortgagor to the Collateral Agent. The Mortgagor will execute
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and deliver, promptly upon request, such instruments as the Collateral Agent
reasonably may deem useful or necessary to permit the Collateral Agent to take
any such action, and such additional notes and mortgages, as the Collateral
Agent may require to secure all sums so advanced or paid by the Collateral
Agent. If a lien is filed against the Mortgaged Property by any Governmental
Authority resulting from the need to expend or the actual expending of monies
arising from an action or omission, whether intentional or unintentional, of the
Mortgagor or for which the Mortgagor is responsible, resulting in the releasing,
spilling, leaking, leaching, pumping, emitting, pouring, emptying or dumping of
any Hazardous Material into the waters or onto land located within or without
the state where the Mortgaged Property is located, then the Mortgagor will,
within thirty (30) days from the date that the Mortgagor is first given notice
that such lien has been placed against the Mortgaged Property (or within such
shorter period of time as may be specified by the Mortgagee if such Governmental
Authority has commenced steps to cause the Mortgaged Property to be sold
pursuant to such lien), either (a) pay the claim and remove the lien, or (b)
furnish a cash deposit, bond, or such other security with respect thereto as is
satisfactory in all respects to the Collateral Agent and is sufficient to effect
a complete discharge of such lien on the Mortgaged Property.
(e) The Collateral Agent may, at its option, at intervals of not less
than one year, or more frequently if the Collateral Agent reasonably believes
that a Hazardous Material or other environmental condition violates or threatens
to violate any Environmental Requirement, require Mortgagor to perform (at
Mortgagor's expense) an environmental audit and, if deemed necessary by
Collateral Agent, an environmental risk assessment, each of which must be
satisfactory to Collateral Agent, with regard to the Mortgaged Property or with
regard to the hazardous waste management practices and/or hazardous waste
disposal sites used by Mortgagor in connection with the Mortgaged Property.
Mortgagor shall cooperate in all reasonable ways with the Collateral Agent in
connection with any such audit. Such audit and/or risk assessment must be by an
environmental consultant satisfactory to Collateral Agent. Should Mortgagor fail
to perform any such environmental audit or risk assessment within thirty (30)
days of the Collateral Agent's written request, Collateral Agent shall have the
right but not the obligation to retain an environmental consultant to perform
any such environmental audit or risk assessment. All costs and expenses incurred
by Collateral Agent in the exercise of such rights shall be secured by this
Mortgage and shall be payable by Mortgagor upon demand or charged to Mortgagor's
loan balance at the discretion of Collateral Agent.
(f) If this Mortgage is foreclosed, or if the Mortgaged Property is
sold pursuant to the provisions of this Mortgage, or if the Mortgagor tenders a
deed or assignment in lieu of foreclosure or sale, the Mortgagor shall deliver
the Mortgaged Property to the purchaser at foreclosure or sale or to the
Mortgagee, its nominee, or wholly-owned subsidiary, as the case may be, in a
condition that complies in all respects with all Environmental Requirements.
(g) Except to the extent directly and solely caused by the gross
negligence or willful misconduct of the Mortgagee or Collateral Agent or their
employees, officers, directors, contractors, or authorized agents, the Mortgagor
will defend, indemnify, and hold harmless the Mortgagee and Collateral Agent and
their investors, participants, employees, agents, officers, and directors, from
and against any and all claims, demands, penalties, causes of action, fines,
liabilities, settlements, damages, costs, or expenses of whatever kind or
nature, known or unknown, foreseen or unforeseen, contingent or otherwise
(including, without limitation,
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reasonable counsel and consultant fees and expenses, investigation and
laboratory fees and expenses, court costs, and litigation expenses) arising out
of, or in any way related to, (i) any breach by the Mortgagor of any of the
provisions of this Section 9, (ii) the presence, disposal, spillage, discharge,
emission, leakage, release, or threatened release of any Hazardous Material
which is at, in, on, under, about, from or affecting the Mortgaged Property,
including, without limitation, any damage or injury resulting from any such
Hazardous Material to or affecting the Mortgaged Property or the soil, water,
air, vegetation, buildings, personal property, persons or animals located on the
Mortgaged Property or on any other property or otherwise, (iii) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to any such Hazardous Material, (iv) any lawsuit brought or
threatened, settlement reached, or order or directive of or by any Governmental
Authority relating to such Hazardous Material, (v) any violation of any
Environmental Requirement by Mortgagor, or (vi) any enforcement of this
indemnification. The aforesaid indemnification shall, notwithstanding any
exculpatory or other provision of any other document or instrument now or
hereafter executed and delivered in connection with the loan evidenced by the
Notes and secured by this Mortgage, constitute the personal recourse
undertakings, obligations and liabilities of the Mortgagor.
(h) The obligations and liabilities of the Mortgagor under this Section
9 shall survive and continue in full force and effect and shall not be
terminated, discharged or released, in whole or in part, irrespective of whether
the Debt has been paid in full and irrespective of any foreclosure of this
Mortgage, sale of the Mortgaged Property pursuant to the provisions of this
Mortgage or acceptance by the Mortgagee, its nominee or affiliate of a deed or
assignment in lieu of foreclosure or sale and irrespective of any other fact or
circumstance of any nature whatsoever.
10. Estoppel Certificates. After request by Collateral Agent,
Mortgagor, within ten (10) days and at its expense, will furnish Collateral
Agent with a statement, duly acknowledged and certified, setting forth the
amount of the original principal amount of each of the Notes, the unpaid
principal amount of each of the Notes, the rate of interest of the Notes, the
date installments of interest and/or principal were last paid, any offsets or
defenses to the payment of the Debt, and that the Notes and this Mortgage are
valid, legal and binding obligations and have not been modified or if modified,
giving particulars of such modification.
11. Transfer or Encumbrance of the Mortgaged Property. No part of the
Mortgaged Property nor any interest of any nature whatsoever therein (whether
record, beneficial, or otherwise) shall in any manner be further encumbered,
sold, transferred or conveyed, or permitted to be further encumbered, sold,
transferred, assigned or conveyed without the prior consent of the Collateral
Agent, which consent in any and all circumstances may be withheld in the sole
and absolute discretion of the Collateral Agent. The provisions of the foregoing
sentence of this paragraph shall apply to each and every such further
encumbrance, sale, transfer, assignment or conveyance, regardless of whether or
not the Collateral Agent has consented to, or waived by its action or inaction
its rights hereunder with respect to, any such previous further encumbrance,
sale, transfer, assignment or conveyance, and irrespective of whether such
further encumbrance, sale, transfer, assignment or conveyance is voluntary, by
reason of operation of law or is otherwise made. A sale, transfer or conveyance
within the meaning of this paragraph shall be deemed to include (a) an
installment sales agreement wherein Mortgagor agrees to sell the Mortgaged
Property or any part thereof for a price to be paid in installments, and (b) an
agreement
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by Mortgagor leasing all or a substantial part of the Mortgaged Property or a
sale, assignment or other transfer of, or the grant of a security interest in,
Mortgagor's right, title and interest in and to any Leases or any Rents;
12. Notice. Any notice, request, demand, statement, authorization,
approval or consent made hereunder shall be in writing and shall be hand
delivered or sent by Federal Express, or other reputable courier service, or by
postage pre-paid registered or certified mail, return receipt requested, and
shall be deemed given (i) when received at the following addresses if hand
delivered or sent by Federal Express, or other reputable courier service, and
(ii) three (3) business days after being postmarked and addressed as follows if
sent by registered or postage pre-paid certified mail, return receipt requested:
If to the Mortgagor:
NexMed (U.S.A.), Inc.
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxx, Esq.
If to the Collateral Agent or if to Mortgagee:
c/o The Tail Wind Fund Ltd.
c/o Tail Wind Advisory and Management Ltd.
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX0X 0XX XX
Attn: Xxxxx Xxxxx
Facsimile: 00-000-000-0000
With a copy to:
Xxxxx X. Xxxxxxx, P.C.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
Each party to this Mortgage may designate a change of address by notice given,
as herein
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provided, to the other party ten (10) days prior to the date such change of
address is to become effective.
13. Sale of Mortgaged Property. If this Mortgage is foreclosed, the
Mortgaged Property, or any interest therein, may, at the discretion of the
Collateral Agent, on behalf of the Mortgagee, be sold in one or more parcels or
in several interests or portions and in any order or manner.
14. Changes in Laws Regarding Taxation. In the event of the passage
after the date of this Mortgage of any law which deducts from the value of real
property for the purpose of taxation any lien or encumbrance thereon or changing
in any way the laws for the taxation of mortgages or debts secured by mortgages
for state or local purposes or the manner of the collection of any such taxes,
and imposing a tax, either directly or indirectly, on this Mortgage, the Notes
or the Debt, the Mortgagor shall pay any tax imposed as a result of any such law
within the statutory period or within fifteen (15) days after demand by the
Collateral Agent, whichever is less.
15. No Credits on Account of the Debt. The Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Taxes assessed against the Mortgaged Property or any part thereof
and no deduction shall otherwise be made or claimed from the taxable value of
the Mortgaged Property, or any part thereof, by reason of this Mortgage or the
Debt. If at any time this Mortgage shall secure less than all of the principal
amount of the Debt, it is expressly agreed that any repayment of the principal
amount of the Debt shall not reduce the amount of the lien of this Mortgage
until the lien amount shall equal the principal amount of the Debt outstanding.
16. Documentary Stamps. If at any time the United States of America,
any state thereof, or any governmental subdivision of any such state, shall
require revenue or other stamps to be affixed to the Note or this Mortgage, the
Mortgagor will pay for the same, with interest and penalties thereon, if any.
17. Right of Entry. Upon reasonable prior notice, the Collateral Agent
and its agents shall have the right to enter and inspect the Mortgaged Property
at all reasonable times during normal business hours.
18. Books and Records. The Mortgagor will keep and maintain or will
cause to be kept and maintained on a fiscal year basis in accordance with
generally accepted accounting practices consistently applied proper and accurate
books, records and accounts reflecting all of the financial affairs of the
Mortgagor relating to the Mortgaged Property and all items of income and expense
in connection with the operation of the Mortgaged Property or in connection with
any services, equipment or furnishings provided in connection with the operation
of the Mortgaged Property, whether such income or expense be realized by the
Mortgagor or by any other person whatsoever excepting lessees unrelated to and
unaffiliated with the Mortgagor who have leased from the Mortgagor portions of
the Mortgaged Property for the purpose of occupying the same. The Collateral
Agent shall have the right from time to time at all times during normal business
hours after reasonable prior notice to Mortgagor to examine such books,
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records and accounts at the office of the Mortgagor or other person maintaining
such books, records and accounts and to make copies or extracts thereof as the
Collateral Agent shall desire; provided, however, that Mortgagor shall not
provide any material non-public information to the Collateral Agent unless the
Collateral Agent consents to same in advance and, if reasonably requested by
Mortgagor, enters into a reasonable confidentiality agreement with the
Mortgagor. The Mortgagor will furnish the Collateral Agent annually, within
ninety (90) days next following the end of each fiscal year of the Mortgagor, a
certificate signed by a duly authorized representative of the Mortgagor
certifying on the date thereof either that there does or does not exist an event
which constitutes, or which upon notice or lapse of time or both would
constitute, a default or an Event of Default under this Mortgage and if such
default or Event of Default exists, the nature thereof and the period of time it
has existed.
19. Performance of Other Agreements. The Mortgagor shall observe and
perform each and every term to be observed or performed by the Mortgagor
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to the Mortgaged Property.
20. Events of Default. The occurrence of any one or more of the
following events (herein collectively referred to as "Events of Default") shall
be an Event of Default:
(a) if any portion of the Debt is not paid within three (3) days after
notice by the Collateral Agent or Mortgagee to the Mortgagor that the same is
past due;
(b) if the Mortgagor shall fail to pay on or before the due date, any
installment of any assessment against the Mortgaged Property for local
improvements heretofore or hereafter laid, which assessment is or may become
payable in annual or periodic installments and is or may become a lien on the
Mortgaged Property;
(c) if any of the Taxes are not paid when same are due and payable;
(d) if without the consent of the Collateral Agent (which consent in
any and all circumstances may be withheld in the sole and absolute discretion of
the Collateral Agent) any part of the Mortgaged Property or any interest of any
nature whatsoever therein is in any manner, by operation of law or otherwise,
whether directly or indirectly, further encumbered, sold, transferred, assigned
or conveyed, and irrespective of whether any such further encumbrance, sale,
transfer, assignment or conveyance is voluntary, by reason or operation of law
or is otherwise made;
(e) if without the consent of the Collateral Agent any Improvement or
the Equipment (except for the normal ordinary course of business replacement of
the Equipment and the normal ordinary course of business removal of obsolete
Equipment) is removed, demolished or materially altered, or if the Mortgaged
Property is not kept in good condition and repair;
(f) if the Mortgagor shall fail to comply with any requirement or order
or notice of violation of law or ordinance issued by any governmental department
claiming jurisdiction over the Mortgaged Property, which failure could
reasonably be expected to have a material adverse effect on the Mortgaged
Property, within three (3) months from the issuance thereof, or the time period
set forth therein, whichever is less;
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(g) if the Policies are not kept in full force and effect, or if the
Policies are not delivered to the Mortgagee upon request;
(h) if the Mortgagor shall fail to pay Collateral Agent or any
Mortgagee on demand for all Premiums and/or Taxes paid by the Collateral Agent
or Mortgagee pursuant to this Mortgage, together with any late payment charge
and interest thereon calculated at the Default Rate;
(i) if without the consent of the Collateral Agent any Leases are made,
cancelled or modified or if any portion of the Rents is paid for a period of
more than one (1) month in advance or if any of the Rents are further assigned;
(j) if any representation or warranty of the Mortgagor or Parent
herein, or in any certificate, report, financial statement or other instrument
furnished in connection with the making of this Mortgage, shall prove false or
misleading in any material respect;
(k) if the Mortgagor or Parent shall make an assignment for the benefit
of creditors;
(l) if a court of competent jurisdiction enters a decree or order for
relief with respect to the Mortgagor or Parent under Title 11 of the United
States Code as now constituted or hereafter amended or under any other
applicable Federal or state bankruptcy law or other similar law, or if such
court enters a decree or order appointing a receiver, liquidator, assignee,
trustee, sequestrator (or similar official) of the Mortgagor or Parent, or of
any substantial part of their respective properties, or if such court decrees or
orders the winding up or liquidation of the affairs of the Mortgagor, Parent or
any other guarantor;
(m) if the Mortgagor or Parent fails generally to pay its respective
debts as such debts become due;
(n) if the Mortgagor or Parent shall be in default under any mortgage
or deed of trust covering any part of the Mortgaged Property whether superior or
inferior in lien to this Mortgage, and including, without limitation, any such
mortgage or deed of trust now or hereafter held by the Mortgagee;
(o) if the Mortgaged Property shall become subject (i) to any tax lien,
other than a lien for local real estate taxes and assessments not due and
payable, or (ii) to any lis pendens, notice of pendency, stop order, notice of
intention to file mechanic's or materialman's lien, mechanic's or materialman's
lien or other lien of any nature whatsoever and the same shall not either be
discharged of record or in the alternative effectively subordinated and insured
over to the satisfaction of the Collateral Agent by a title company selected by
Collateral Agent that will insure the lien of this Mortgage (at Mortgagor's
expense) within a period of thirty (30) days after the same is filed or
recorded, and irrespective of whether the same is superior or subordinate in
right or other priority to the lien of this Mortgage and irrespective of whether
the same constitutes a perfected or inchoate lien or encumbered on the Mortgaged
Property or is only a matter of record or notice;
(p) if the Mortgagor or Parent shall continue to be in default or
breach under any of the other terms, covenants or conditions of this Mortgage,
the Guaranty, the Purchase
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Agreement, the Registration Rights Agreement or the Warrants (as such terms are
defined in the Purchase Agreement), for thirty (30) days after notice from the
Collateral Agent; or
(q) If an "Event of Default" occurs under any of the Notes (as defined
therein).
21. Remedies. Upon the happening of any one or more of said Events of
Default, the entire unpaid balance of the principal, and accrued interest, and
all other sums secured by this Mortgage shall at the option of Collateral Agent,
on behalf of the Mortgagee, become immediately due and payable without further
notice or demand, and in any such Event of Default, the Mortgagee or the
Collateral Agent on behalf of the Mortgagee, may forthwith undertake any one or
more of the following:
(a) Declare the debt to be immediately due and payable, and thereupon
the same shall become immediately due and payable;
(b) Recover judgment against Mortgagor for any debt; and neither the
recovery of judgment nor the levy of execution thereof on any property,
including the Premises, shall affect Mortgagee's rights hereunder or the lien
hereof;
(c) Enter upon and take possession of the Premises, or have a receiver
appointed (as more fully provided for in the following Section), without proof
of depreciation in the value of the Premises, inadequacy of the Premises, or
insolvency of Mortgagor; and Mortgagee or the receiver may lease the Premises,
in the name of Mortgagor, Collateral Agent, on behalf of the Mortgagee, or the
receiver, and may receive the rents issues and profits and apply the same:
(i) To the payment of expenses of operating, maintaining,
repairing and improving the Premises, including renting
commission and rental collection commissions paid to an
agent of Mortgagee or of the receiver; and/or
(ii) On account of the Notes, in such order and in such amounts
as Collateral Agent, on behalf of the Mortgagee, or the
receiver determines, but while in possession of the
Premises, Collateral Agent or the receiver shall be liable
to account only for the rents, issues and profits actually
received; and/or
(d) Take such other action to protect and enforce Mortgagee's rights
hereunder and the lien hereof, as Mortgagee or Collateral Agent deems advisable,
including without limitation:
(i) The foreclosure hereof, subject, at Mortgagee's option, and
upon the filing of a Complaint in Foreclosure, Mortgagee
shall be entitled to the appointment of a receiver of the
rents of the Premises without the necessity of either
inadequacy of the security or insolvency of the Mortgagor or
any person who may be legally or equitably liable to pay
money secured by this Mortgage, and the Mortgagor and each
person waive such proof and consent to the appointment of
such receiver; and in any proceeding to enforce any
liability of the debt, Mortgagor shall not assert as a
defense that Mortgagee failed to foreclosure any such
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rights or that any such rights adversely affected the value
of the Premises; and
(ii) The sale of the Premises, in a foreclosure proceeding, and
without obligation to have the Premises marshaled.
22. Right to Cure Default. If default in the performance of any of the
covenants of the Mortgagor herein occurs, the Collateral Agent, on behalf of the
Mortgagee, may, at its discretion, remedy the same and for such purpose shall
have the right to enter upon the Mortgaged Property or any portion thereof
without thereby becoming liable to the Mortgagor or any person in possession
thereof holding under the Mortgagor. If Collateral Agent shall remedy such a
default or appear in, defend, or bring any action or proceeding to protect its
interest in the Mortgaged Property or to foreclose this Mortgage or collect the
Debt, the costs and expenses thereof (including reasonable attorneys' fees to
the extent permitted by law), with interest as provided in this paragraph, shall
be paid by the Mortgagor to the Collateral Agent upon demand. All such costs and
expenses incurred by the Collateral Agent in remedying such default or in
appearing in, defending, or bringing any such action or proceeding shall be paid
by the Mortgagor to the Collateral Agent upon demand, with interest (calculated
for the actual number of days elapsed between the incurrence thereof and
Mortgagor's reimbursement thereof on the basis of a 360-day year) at a rate per
annum equal to 5% plus the rate of cash interest provided in the Notes (herein
referred to as the "DEFAULT RATE"), provided, however, that the Default Rate
shall in no event exceed the maximum interest rate which the Mortgagor may by
law pay, for the period after notice from the Collateral Agent that such costs
or expenses were incurred to the date of payment to the Collateral Agent. To the
extent any of the aforementioned costs or expenses paid by the Collateral Agent
after default by the Mortgagor shall constitute payment of (i) taxes, charges or
assessments which may be imposed by law upon the Mortgaged Property, (ii)
premiums on insurance policies covering the Mortgaged Property, (iii) expenses
incurred in upholding the lien of this Mortgage, including, but not limited to,
the costs and expenses of any litigation to collect the indebtedness secured by
this Mortgage or to prosecute, defend, protect or preserve the rights and the
lien created by this Mortgage, or (iv) any amount, cost or charge to which the
Mortgagee becomes subrogated, upon payment, whether under recognized principles
of law or equity, or under express statutory authority; then, and in each such
event, such costs, expenses and amounts, together with interest thereon at the
Default Rate, shall be added to the indebtedness secured by this Mortgage and
shall be secured by this Mortgage.
23. Appointment of Receiver. The Collateral Agent, on behalf of the
Mortgagee, in any action to foreclose this Mortgage or upon the actual or
threatened waste to any part of the Mortgaged Property or upon the occurrence of
any Event of Default hereunder, shall be at liberty, without notice, to apply
for the appointment of a receiver of the Rents, and shall be entitled to the
appointment of such receiver as a matter of right, without regard to the value
of the Mortgaged Property as security for the Debt, or the solvency or
insolvency of any person then liable for the payment of the Debt.
24. Non-Waiver. The failure of the Mortgagee or Collateral Agent to
insist upon strict performance of any term of this Mortgage shall not be deemed
to be a waiver of any term of this Mortgage. The Mortgagor shall not be relieved
of the Mortgagor's obligation to pay the Debt at the time and in the manner
provided for its payment in the Notes and this Mortgage by
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reason of (i) failure of the Mortgagee or Collateral Agent to comply with any
request of the Mortgagor to take any action to foreclose this Mortgage or
otherwise enforce any of the provisions hereof or of the Notes or any other
mortgage, instrument or document evidencing, securing or guaranteeing payment of
the Debt or any portion thereof, (ii) the release, regardless of consideration,
of the whole or any part of the Mortgaged Property or any other security for the
Debt, or (iii) any agreement or stipulation between the Mortgagee or Collateral
Agent and any subsequent owner or owners of the Mortgaged Property or other
person extending the time of payment or otherwise modifying or supplementing the
terms of the Notes, this Mortgage or any other mortgage, instrument or document
evidencing, securing or guaranteeing payment of the Debt or any portion thereof,
without first having obtained the consent of the Mortgagor, and in the latter
event, the Mortgagor shall continue to be obligated to pay the Debt at the time
and in the manner provided in the Notes and this Mortgage, as so extended,
modified and supplemented, unless expressly released and discharged from such
obligation by the Mortgagee in writing. Regardless of consideration, and without
the necessity for any notice to or consent by the holder of any subordinate
lien, encumbrance, right, title or interest in or to the Mortgaged Property, the
Mortgagee may release any person at any time liable for the payment of the Debt
or any portion thereof or any part of the security held for the Debt and may
extend the time of payment or otherwise modify the terms of the Notes or this
Mortgage, including, without limitation, a modification of the interest rate
payable on the principal balance of the Notes, without in any manner impairing
or affecting this Mortgage or the lien thereof or the priority of this Mortgage,
as so extended and modified, as security for the Debt over any such subordinate
lien, encumbrance, right, title or interest. The Mortgagee may resort for the
payment of the Debt to any other security held by the Mortgagee in such order
and manner as the Mortgagee, in its discretion, may elect. The Mortgagee or the
Collateral Agent may take action to recover the Debt, or any portion thereof, or
to enforce any covenant hereof without prejudice to the right of the Mortgagee
thereafter to foreclose this Mortgage. The Mortgagee shall not be limited
exclusively to the rights and remedies herein stated but shall be entitled to
every additional right and remedy now or hereafter afforded by law. The rights
of the Mortgagee under this Mortgage shall be separate, distinct and cumulative
and none shall be given effect to the exclusion of the others. No act of any
Mortgagee or the Collateral Agent shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision.
25. Liability. If the Mortgagor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several.
26. Security Agreement. This Mortgage constitutes both a real property
mortgage and a "security agreement" within the meaning of the Uniform Commercial
Code, and the Mortgaged Property includes both real and personal property and
all other rights and interest, whether tangible or intangible in nature, of the
Mortgagor in the Mortgaged Property. If an Event of Default shall occur under
the Notes or this Mortgage, the Mortgagee and the Collateral Agent on behalf of
the Mortgagee, in addition to any other rights and remedies which it may have,
shall have and may exercise immediately and without demand, any and all rights
and remedies granted to a secured party upon default under the Uniform
Commercial Code, including, without limiting the generality of the foregoing,
the right to take possession of the Mortgaged Property or any part thereof, and
to take such other measures as the Mortgagee or the Collateral Agent may deem
necessary for the care, protection and preservation of the Mortgaged Property.
Upon request or demand of the Collateral Agent, the Mortgagor shall at its
expense
-20-
assemble the Mortgaged Property and make it available to the Collateral Agent at
a convenient place acceptable to the Collateral Agent. The Mortgagor shall pay
to the Collateral Agent on demand any and all expenses, including reasonable
legal expenses and attorneys' fees, incurred or paid by the Collateral Agent in
enforcing or exercising its rights hereunder with respect to the Mortgaged
Property. Any notice of sale, disposition or other intended action by the
Mortgagee or Collateral Agent with respect to the Mortgaged Property sent to the
Mortgagor in accordance with the provisions of this Mortgage at least seven (7)
days prior to the date of any such sale, disposition or other action, shall
constitute reasonable notice to the Mortgagor, and the method of sale or
disposition or other intended action set forth or specified in such notice shall
conclusively be deemed to be commercially reasonable within the meaning of the
Uniform Commercial Code unless objected to in writing by the Mortgagor within
five (5) days after receipt by the Mortgagor of such notice. The proceeds of any
sale or disposition of the Mortgaged Property, or any part thereof, may be
applied by the Mortgagee to the payment of the Debt in such order, priority and
proportions as the Mortgagee in its discretion shall deem proper. If any change
shall occur in the Mortgagor's name, the Mortgagor shall promptly cause to be
filed at its own expense, new financing statements as required under the Uniform
Commercial Code to replace those on file in favor of the Mortgagee or Collateral
Agent on behalf of Mortgagee.
27. Filings. (a) Mortgagor forthwith upon the execution and delivery of
this Mortgage and thereafter, from time to time, will cause this Mortgage, and
any security instrument creating a lien or security interest or evidencing the
lien hereof upon the Mortgaged Property and each instrument of further assurance
to be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in, order to publish notice of and fully
protect and perfect the lien or security interest hereof upon, and the interest
of Mortgagee in, the Mortgaged Property. Upon such filings, the Mortgagee shall
have a perfected first priority security interest in the Mortgaged Property.
(b) The Mortgagor will pay all Federal, state, county and municipal
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of this Mortgage, any mortgage supplemental
hereto, any security instrument with respect to the Mortgaged Property or any
instrument of further assurance. The Mortgagor shall hold harmless and indemnify
the Mortgagee, its successors and assigns, against any liability incurred by
reason of the imposition of any tax on the making and recording of this
Mortgage.
28. Further Acts, etc. The Mortgagor will, at the cost of the
Mortgagor, and without expense to the Mortgagee, do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, mortgages,
assignments, notices of assignments, transfers and assurances, including without
limitation UCC-1 Financing Statements, as the Collateral Agent reasonably or any
present or future law shall, from time to time, require for the better assuring,
conveying, assigning, transferring protecting, preserving, perfecting and
confirming unto the Mortgagee the property and rights hereby mortgaged or
intended now or hereafter so to be, or which the Mortgagor may be or may
hereafter become bound to convey or assign to the Mortgagee, or for carrying out
the intention or facilitating the performance of the terms of this Mortgage or
for filing, registering or recording this mortgage and, on demand, will execute
and deliver and hereby authorizes the Collateral Agent and Mortgagee to execute
in the name of the Mortgagor to the extent the Collateral Agent or Mortgagee may
lawfully do so, one or more financing
-21-
statements, chattel mortgages or comparable security instruments, to evidence
more effectively the lien hereof upon the Mortgaged Property.
29. Headings. etc. The headings and captions of various paragraphs of
this Mortgage are for convenience of reference only and are not to be construed
as defined or limiting, in any way, the scope or intent of the provisions
hereof.
30. Usury Laws. This Mortgage and the Notes are subject to the express
condition that at no time shall the Mortgagor be obligated or required to pay
interest on the principal balance due under the Notes at a rate which could
subject the holders of the Notes to either civil or criminal liability as a
result of being in excess of the maximum interest rate which the Mortgagor is
permitted by law to contract or agree to pay. If by the terms of this Mortgage,
the Guaranty or the Notes, the Mortgagor is at any time required or obligated to
pay interest on the principal balance due under the Notes at a rate in excess of
such maximum rate, the rate of interest under the Notes shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been payments in
reduction of the principal balance of the Notes.
31. Sole Discretion of Mortgagee/Collateral Agent. Except as may
otherwise be expressly provided to the contrary, wherever pursuant to the Notes,
this Mortgage, or any other document or instrument now or hereafter executed and
delivered in connection therewith or otherwise with respect to the loan secured
hereby, the Mortgagee or the Collateral Agent exercises any right given to it or
him to consent or not consent, or to approve or disapprove, or any arrangement
or term is to be satisfactory to the Mortgagee or Collateral Agent, the decision
of the Mortgagee or Collateral Agent to consent or not consent, or to approve or
disapprove, or to decide that arrangements or terms are satisfactory or not
satisfactory, shall be in the sole and absolute discretion of the Mortgagee and
Collateral Agent and shall be final and conclusive, except as is otherwise
required by applicable law.
32. Recovery of Sums Required To Be Paid. The Mortgagee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of the Mortgagee thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by the Mortgagor existing at the time such
earlier action was commenced.
33. Actions and Proceedings. The Collateral Agent shall have the right,
at the expense of Mortgagor, to appear in and defend any action or proceeding
brought with respect to the Mortgaged Property and to bring any action or
proceeding, in the name and on behalf of the Mortgagor, which the Collateral
Agent, in its reasonable discretion, determines should be brought to protect its
interest in the Mortgaged Property.
34. Execution. This Mortgage may be executed in any number of duplicate
originals and each such duplicate original shall be deemed to constitute but one
and the same instrument. This Mortgage, once executed by the Mortgagor, may be
delivered by facsimile transmission,
-22-
and a facsimile signature shall have the same force and effect as an original
signature, provided that an original shall also be delivered to the Mortgagee.
35. Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form; the word
"MORTGAGOR" shall mean "each Mortgagor and/or any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein;" the word
"MORTGAGEE" shall mean "Mortgagee or any subsequent holder of any of the Notes"
and shall included each Mortgagee individually and collectively; the word
"NOTES" shall mean "the Notes or any other evidence of indebtedness secured by
this Mortgage;" the word "PERSON" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority or other entity; the words "MORTGAGED PROPERTY" shall include any
portion of the Mortgaged Property or interest therein; the word "DEBT" shall
mean the principal balance of the Notes with interest thereon as provided in the
Notes and this Mortgage and all other sums due pursuant to the Notes, the
Guaranty and this Mortgage and secured by this Mortgage; and "COLLATERAL AGENT"
shall mean the initial Collateral Agent and any subsequent person appointed by
the Collateral Agent to act as Collateral Agent, provided such subsequent person
accepts such appointment and the Mortgagor is notified of such appointment.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa. "CURRENT PRODUCTION
SUITE EQUIPMENT" shall mean the machinery and equipment currently located in the
currently occupied and utilized production suite within the Premises, which
machinery and equipment is listed by item on Exhibit B attached hereto and which
the Mortgagor represents has an aggregate current fair market value of no more
than $450,000.
36. Waiver of Notice. The Mortgagor shall not be entitled to any
notices of any nature whatsoever from the Mortgagee or Collateral Agent except
with respect to matters for which this Mortgage specifically and expressly
provides for the giving of notice by the Mortgagee or Collateral Agent to the
Mortgagor, and the Mortgagor hereby expressly waives the right to receive any
notice from the Mortgagee or Collateral Agent with respect to any matter for
which this Mortgage does not specifically and expressly provide for the giving
of notice by the Mortgagee or Collateral Agent to the Mortgagor, except as is
otherwise required by applicable law.
37. No Verbal Change. This Mortgage may only be modified, amended or
changed by an agreement in writing signed by the Mortgagor and the Collateral
Agent on behalf of the Mortgagee, and may only be released, discharged or
satisfied of record by an agreement in writing signed by the Mortgagee or the
Collateral Agent on behalf of the Mortgagee. No waiver of any term, covenant or
provision of this Mortgage shall be effective unless given in writing by the
Mortgagee or the Collateral Agent on behalf of the Mortgagee and if so given by
the Mortgagee shall only be effective in the specific instance in which given.
The Mortgagor acknowledges that the Notes, this Mortgage, and the other
documents and instruments executed and delivered in connection therewith or
otherwise in connection with the loan secured hereby set forth the entire
agreement and understanding of the Mortgagor and the Mortgagee with respect to
the loan secured hereby and that no oral or other agreements, understanding,
representation or warranties exist with respect to the loan secured hereby other
than those set forth in the Notes, this Mortgage and such other executed and
delivered documents and
-23-
instruments. In order for the Collateral Agent to act on behalf of the Mortgagee
under this Section, it must obtain the prior consent of each person constituting
Mortgagee.
38. Absolute and Unconditional Obligation. The Mortgagor acknowledges
that the Mortgagor's and Parent's obligation to pay the Debt in accordance with
the provisions of the Notes, the Guaranty and this Mortgage is and shall at all
times continue to be absolute and unconditional in all respects, and shall at
all times be valid and enforceable irrespective of any other agreements or
circumstances of any nature whatsoever which might otherwise constitute a
defense to the Notes, the Guaranty or this Mortgage or the obligation of the
Mortgagor thereunder to pay the Debt or the obligations of any other person
relating to the Notes, the Guaranty or this Mortgage or the obligations of the
Mortgagor under the Notes, the Guaranty or this Mortgage or otherwise with
respect to the loan secured hereby, and the Mortgagor absolutely,
unconditionally and irrevocably waives any and all right to assert any defense,
offset, setoff, counterclaim (except mandatory counterclaims which must be
asserted to avoid being deemed to have been waived in any separate action) or
crossclaim of any nature whatsoever with respect to the obligation of the
Mortgagor to pay the Debt in accordance with the provisions of the Notes, the
Guaranty and this Mortgage or the obligations of any other person relating to
the Notes, the Guaranty or this Mortgage or obligations of the Mortgagor under
the Notes, the Guaranty or this Mortgage or otherwise with respect to the loan
secured hereby in any action or proceeding brought by the Mortgagee to collect
the Debt, or any portion thereof, or to enforce, foreclose and realize upon the
lien and security interest created by this Mortgage or any other document or
instrument securing repayment of the Debt, in whole or in part, and the
Mortgagor agrees that it shall not interpose or assert any such defense, offset,
setoff, counterclaim (except such mandatory counterclaims as described above) or
crossclaim in any action or proceeding.
39. Release. At such time as the amounts outstanding under the Notes
and the Debt are zero, and no further amounts are due the Mortgagee hereunder,
this Mortgage or any of the other Loan Documents (x) any additional proceeds
received by the Mortgagor on account of the sale of the Mortgaged Property shall
be retained by the Mortgagor and (y) the Mortgaged Property shall be released
from the lien created under this Mortgage and the Mortgagee shall deliver to the
Mortgagor, upon reasonable request therefor, and, at the Mortgagor's expense,
releases and satisfactions (to be prepared by the Mortgagor) of all financing
statements related to such Mortgaged Property, and this Mortgage shall
terminate.
40. Disposition of Proceeds. The proceeds of any sale or disposition of
all or any part of the Mortgaged Property shall be applied by the Mortgagee in
the following order: (i) to the payment in full of the costs and expenses of
such sale or sales, collections, and the protection, declaration and enforcement
of the mortgage granted hereunder, and to the payment in full of all other
expenses, liabilities and advances made or incurred by the Mortgagee in
connection therewith, all amounts for which the Mortgagee is entitled to
indemnification hereunder, and all advances made by the Mortgagee hereunder for
the account of the Mortgagor, including the reasonable compensation of or
reimbursement of the Mortgagee's agents and attorneys, including without
limitation the Collateral Agent; (ii) to the payment of the Debt for the benefit
of the holder thereof; and (iii) to the payment to the Mortgagor of any surplus
then remaining from such proceeds, subject to the rights of any permitted holder
of a lien on the Mortgaged Property of which the Mortgagee has received actual
written notice. In the event that the proceeds of any sale or other disposition
of the Mortgaged Property are insufficient to cover the
-24-
principal of, and premium, if any, and interest on, and expenses and fees with
respect to, the Debt secured thereby, plus costs and expenses of the sale or
other disposition, the Mortgagor shall remain liable for any deficiency.
41. Expenses. The Mortgagor agrees that it shall pay all costs and
expenses hereafter incurred in amending, implementing, perfecting, collecting,
defending, declaring and enforcing and otherwise relating to the Mortgagee's
rights and security interests in the Mortgaged Property hereunder or under the
Notes or any other instrument or agreement delivered in connection herewith or
therewith, including, but not limited to, searches and filings after the date
hereof, and the Mortgagee's reasonable attorneys' fees (regardless of whether
any litigation is commenced, whether default is declared hereunder, and
regardless of tribunal or jurisdiction); provided, however, that the Mortgagor
shall not be responsible for any costs and expenses (including attorneys fees)
incurred by the Mortgagee in connection with negotiating, execution and delivery
of this Mortgage or any other Loan Document, except as may be provided elsewhere
herein or therein. Further, the Mortgagor shall pay the costs of all title, UCC,
judgment, lien and similar searches in connection with this Mortgage and the
other Loan Documents, and shall pay all title insurance premiums on the
Mortgaged Property in connection with Mortgagee's title insurance policy. The
Mortgagor shall obtain and deliver to the Collateral Agent an updated title
survey of the Premises within 30 days following the date hereof.
42. Waiver of Statutory Rights. The Mortgagor shall not and will not
apply for or avail itself of any appraisement, valuation, stay, extension or
exemption laws, or any so-called "Moratorium Laws," now existing or hereafter
enacted, in order to prevent or hinder the enforcement or foreclosure of this
Mortgage, but hereby waives the benefit of such laws to the full extent that the
Mortgagor may do so under applicable law. The Mortgagor for itself and all who
may claim through or under it waives any and all right to have the property and
estates comprising the Mortgaged Property marshaled upon any foreclosure of the
lien of this Mortgage and agrees that any court having jurisdiction to foreclose
such lien may order the Mortgaged Property sold as an entirety. The Mortgagor
hereby waives for itself and all who may claim through or under it, and to the
full extent the Mortgagor may do so under applicable law, any and all rights of
redemption from sale under any order of decree of foreclosure of this Mortgage
or granted under any statute now existing or hereafter enacted.
43. Indemnity. Anything in this Mortgage or the other Loan Documents
(as defined below) to the contrary notwithstanding, the Mortgagor shall
indemnify and hold the Mortgagee and the Collateral Agent harmless and defend
the Mortgagee and the Collateral Agent at the Mortgagor's sole cost and expense
against any loss or liability, cost or expense (including, without limitation,
reasonable attorneys' fees and disbursements of the Mortgagee's and the
Collateral Agent's counsel), and all claims, actions, procedures and suits
arising out of or in connection with (i) any default by the Mortgagor or the
Parent in connection with the transaction contemplated hereby, the Debt, this
Mortgage, the Guaranty, the Purchase Agreement, the Registration Rights
Agreement, any of the other document or instrument now or hereafter executed
and/or delivered in connection with the Debt or the Purchase Agreement (the
"LOAN DOCUMENTS") and/or the Mortgaged Property, including, but not limited to,
all costs of reappraisal of the Mortgaged Property or any part thereof after the
date hereof, whether required by law, regulation, the Mortgagee the Collateral
Agent, or any governmental or quasi-governmental authority, (ii) any amendment
to, or restructuring of, the Debt and this Mortgage,
-25-
the Notes or any of the other Loan Documents, (iii) any and all lawful action
that may be taken by the Mortgagee or the Collateral Agent in connection with
the enforcement of the provisions of this Mortgage or the Notes or any of the
other Loan Documents, whether or not suit is filed in connection with the same,
or in connection with the Mortgagor or the Parent becoming a party to a
voluntary or involuntary federal or state bankruptcy, insolvency or similar
proceeding, (iv) any violation of any Environmental Requirements, any
investigation or study with respect to Hazardous Materials or Environmental
Requirements, and any costs, fees or expenses related to any of the foregoing,
and (v) any enforcement of this indemnification. All sums so expended by the
Mortgagee or Collateral Agent shall be payable on demand and, until reimbursed
by the Mortgagor pursuant hereto, shall be deemed additional principal of the
Debt and secured hereby and shall bear interest at the Default Rate. The
obligations of the Mortgagor under this paragraph shall, notwithstanding any
exculpatory or other provisions of any nature whatsoever set forth in the Loan
Documents, constitute the personal recourse undertakings, obligations and
liabilities of the Mortgagor.
44. Enforceability. Matters of construction, validity and performance,
this Mortgage and the obligations arising hereunder shall be governed by, and
construed in accordance with, the laws of the State of New Jersey applicable to
contracts made and performed in such State and any applicable laws of the United
State of America. Whenever possible, each provision of this Mortgage shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Mortgage shall be unenforceable or prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such unenforceability, prohibition or invalidity, without invalidating the
remaining provisions of this Mortgage.
45. Marshalling and Other Matters. Mortgagor hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Mortgaged
Property or any part thereof or any interest therein. Further, Mortgagor hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of this Mortgage on behalf of Mortgagor, and on behalf of
each and every person acquiring any interest in or title to the Mortgaged
Property subsequent to the date of this Mortgage and on behalf of all persons to
the extent permitted by applicable law.
46. Waiver of Jury Trial. Mortgagor hereby waives any right to trial by
jury in connection with any and all litigation involving the subject matter of
this Mortgage.
47. Receipt of Mortgage. Mortgagor hereby acknowledges receipt of a
true copy of this Mortgage without charge.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Mortgagor has duly executed this Mortgage the
day and year first above written.
NEXMED (U.S.A.), INC.
By: /s/
-------------------------------
Name: X. Xxxxxx Mo, Ph.D.
Title: Chairman, President and CEO
ACKNOWLEDGMENT
STATE OF )
) ss.:
COUNTY OF )
On this ________ day of June, 2002, before me, the undersigned, personally
appeared X. Xxxxxx Mo, Ph.D, the Chairman, President and Chief Executive Officer
of NEXMED (U.S.A.), INC., a Nevada corporation, who, I am satisfied, is the
person who signed the foregoing instrument, and he did acknowledge under oath
that he signed, sealed with the corporate seal, and delivered the same in his
capacity as such officer and that the foregoing instrument is the voluntary act
and deed of such corporation, made by virtue of the authority of its board of
directors.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
-------------------------
Notary Public
-27-
EXHIBIT A
All the real property located in the Township of East Windsor, County of Xxxxxx,
State of New Jersey and more particularly described as follows:
BEGINNING at a point situated along the southerly right of way line of Twin
Rivers Drive (66 feet wide), said point being located 25.00 feet from the
intersection of the westerly prolongation of the same and the northerly
prolongation of the easterly right of way line of Milford Road (66 feet wide);
thence running
1. South 85(degree)22' 26" East along the southerly right of way line of Twin
Rivers Drive, 208.27 feet to a point; thence
2. Easterly along the same, along a curve to the right having a radius of
967.00 feet and an arc length of 242.60 feet to a point; thence
3. South 06(degree)55' 34" West along the common line of Lots 6 and 190 Block
20.06, 371.02 feet to a point; thence
4. North 80(degree)46' 41" West along the common line of Lots 4 and 6 Block
20.06, 293.02 feet to a point; thence
5. North 04(degree)37' 34" East along the common line of Lots 5 and 6 Block
20.06, 150.00 feet to a point; thence
6. North 80(degree)46' 41" West along the same, 166.90 feet to a point; thence
7. North 04(degree)37' 34" East along the easterly line of Milford Road,
189.14 feet to a point; thence
8. Easterly along the same, along a curve to the right having a radius of
25.00 feet and an arc length of 39.27 feet to the point and place of
beginning.
NOTE: BEING Xxx 0, Xxxxx 20.06, Tax Map of the Township of East Windsor,
Xxxxxx County, New Jersey,
BEING commonly known as 00 Xxxx Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxx Xxxxxx
00000,
BEING the same premises conveyed to the Mortgagor herein by deed dated
October 17, 2000 and recorded on November 1, 2000 in the Xxxxxx County
Register's Office in Deed Book 3937, page 254.
-28-
EXHIBIT B
CURRENT PRODUCTION SUITE EQUIPMENT
ITEM VALUE
---- -----
Pouching Machine $224,245.47
Filling Machine $ 54,925.00
Bench Top Applicator $ 16,133.25
Cold Room $ 9,708.00
Duchless Encosure $ 9,632.86
Misc. Equip less than $5,000 $ 32,398.02
-----------
TOTAL $347,042.60
===========
-29-
SCHEDULE A
EQUIPMENT (INCLUDING CERTAIN FIXTURES, CONSTRUCTIONS COSTS AND IMPROVEMENTS)
ITEM DESCRIPTION COST
---- ----------- ----
Legal Fees 42,546.75
Legal Fees 7,022.55
Legal Fees 12,135.10
Legal Fees 2,384.17
Legal Fees 630.00
Legal Fees 332.25
Legal Fees 319.75
Legal Fees 666.00
Water Analysis 245.00
Water Analysis 55.00
Environ Test 800.00
Environ Test 2,260.00
Architect/ Engin 267,337.05
Architect/ Engin 130,877.13
Architect/ Engin 765.91
Architect/ Engin 625.28
Architect/ Engin 228.99
Lighting 801.36
Lighting 1,172.61
Asbestos Samp 1,000.00
Water Analysis 515.00
Credit (19,125.00)
Electric 324.36
Plumbing Piping 20,000.00
Permits 983.00
Construction 54,824.00
Construction 100,000.00
Plumbing Piping 48,200.00
Permits 233.00
Excavation 4,675.00
Zoning Fee 35.00
Construction 18,000.00
Piping Plumbing 52,000.00
Fire Protection 3,780.00
Permits 35.00
Permits 33,374.00
Permits 3,610.00
Construction 3,320.00
Plumbing Piping 39,800.00
Plumbing Piping 5,950.00
Shop Drawing 5,004.10
----------
SUB TOTAL Balance at 12/31/01 847,742.36
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Misc 1436.36
Partitions 10,918.00
Water Heater 161.51
Engineering 4,575.49
Construction 1,870.90
Lab Casework Will Lease 6,985.00
Lab Casework Will Lease 5,407.20
Travel 2,057.27
Misc (0.20)
Construction 2,700.00
Construction 1,980.00
Plumbing Piping 16,500.00
Plumbing Piping 9,052.50
Plumbing Piping (2.50)
Plumbing Piping (100.00)
Partitions (618.00)
Awning 1,250.00
Misc 26.63
Construction 11,314.75
Electric 1,800.00
Construction 1,140.00
Construction 9,075.60
Vent Piping 3,572.00
Construction 1,300.00
Construction 750.00
Construction 750.00
Construction 50.00
Plumbing Piping 13,947.00
Electric 1,600.00
Electric 600.00
Electric 7,000.00
Electric 2,200.00
Electric 680.00
Water Testing 850.00
Misc 650.00
Construction 703.00
Gas Process 94,930.74
Misc (67.95)
Misc (75.00)
Misc 571.47
HVAC 8,845.00
Faucets 345.46
Faucets 443.08
Misc 20.73
Doors 1,115.00
Doors 4,515.00
Cabinets 7,209.93
Construction 9,132.00
Construction 765.00
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Construction 1,420.00
Construction 20,740.00
Engineering 4,481.32
Walk In Refrig 8,700.00
Reception Area 990.00
HVAC 7,895.00
Construction 1,500.00
Paging System 2,057.10
Cabinets 7,209.93
Furniture Will Lease 5,496.00
Engineering 3,700.41
Lab Casework 16,221.60
Cabinets 28,895.68
Misc 0.11
Light Fixtures 2,140.00
Misc (3.98)
Construction 2,392.25
Flagpoles 2,545.65
Flagpoles 2,545.65
--------
Balance 6/3/02 1,216,602.05
Less Leased (17,888.20)
-----------
SUB TOTAL 1,198,713.85
Sprinkler System 80,623.81
Kohler Generator 600 KVA 1310-03 75,000.00
Roof Coating 5,000.00
USP Water System Water Filtration System 125,569.00
Design of Instrumentation 2,266.00
Design of Sanitary Piping 1,609.00
Design of Sampling Room 3,482.80
Design of Microlab 29,261.24
Chillers York Airpack Air Handler
for chillers 36,000.00
HVAC Controls Furnish & Install Digital
Controls for entire
HVAC system 289,000.00
Gas Piping 17,100.00
Conceptual Design Fee 134,109.71
CW Line Outside Clean Room 1,583.64
Installation of front door 4,195.00
Lighting Package Labor & Material for All
wiring in the facility 362,946.00
Louver 2,339.42
Diamond Sawcut & Remove 4,470.00
Tranformer Transfer pad 819.30
Process Chillers Model CP-10A (SP) Chiller 14,875.00
Housekeeping Pads 9,000.50
Chillers PD Construction 12,000.00
Mezz Construction 996.75
Hinged Door Surface Mat 245.14
Two Xxxxx Model 2 Xxxxx Model CL150 -S-15-FDG
low pressure steam boilers 78,669.20
Carpentry & Drywall 270,201.60
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Site Sanitary Manhole 6,000.00
Concrete & Crushed Stone 1,490.28
Furnish & Install 4,349.83
Mold Maint Repair 101.76
Diamond Core Drilling 250.00
Install Security System 9,875.43
Installation 374.00
Relocate D-Xxxx 3,460.00
2 5HP Refrig. Systems A 2 5HP Hotpack Model 17344 16,500.00
HVAC System Labor & Material for
installing entire HVAC 744,798.85
Rotary Screw Compressor Model RCOF Oil-Less 3 phase
460 volt 75 HP 57,453.00
Network & Phone Wiring 7,742.30
Handrails, Stairs, Safety Ladder 11,070.00
Refrigeration System A 2 5HP Hotpack Model 17344 67,500.00
VFD and Chillers 2 York Model YCAS liquid
chillers 460 volt, 3 phase 122,003.00
Flooring, Tiling Lobby & Conf 29,389.74
2 Webco Air Handlers Model XXX-00, Xxxxxx # 0000
& 37 96,360.00
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TOTAL 3,938,795.15
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