AXIOM PARTNERS, LP
Exhibit 10.33
 
 
 
COMMERCIAL REAL ESTATE
PROMISSORY NOTE
 
 
$800,000.00
 
Boston, Massachusetts
July 7, 2011
 

FOR VALUE RECEIVED, ADVANSOURCE BIOMATERIALS CORPORATION, a Delaware corporation
(“Borrower”) having a principal place of business located at 229 Andover Street,
Wilmington, Massachusetts 01887, promises to pay to the order of AXIOM PARTNERS,
LP, a Delaware limited liability company (together, with any successors,
assigns, participants or any other subsequent holder or holders, “Lender”), at
21 Custom House Street, Suite 910, Boston, Massachusetts 02110, the original
principal amount of Eight Hundred Thousand and 00/100 Dollars ($800,000.00),
together with interest accruing on the outstanding principal balance of this
Commercial Real Estate Promissory Note (as the same may be amended, restated,
supplemented or otherwise modified from time to time, this “Note”) at the
Interest Rate (as defined in Schedule I).  After the occurrence of an Event of
Default (as defined in Schedule I), the Interest Rate shall immediately increase
to the lesser of:  (i) five percent (5.0%) per annum greater than the Interest
Rate; or (ii) the Maximum Legal Rate (as defined in Schedule I) (hereinafter,
the “Default Rate”).
 
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in Schedule I attached hereto and made a part hereof.
 
1. Security.  The payment of this Note and all interest, fees and charges herein
is evidenced and/or secured by, among other things, (a) a certain Mortgage,
Security Agreement and Assignment of even date (as amended, restated, amended
and restated or otherwise modified from time to time, the “Mortgage”) granted by
Borrower to Lender, encumbering certain real property commonly known as and
located at 229 Andover Street, Wilmington, Massachusetts, as more particularly
described in the Mortgage (the “Property”), and (b) all other mortgages,
security agreements, documents, and agreements now or hereafter executed which
by their terms evidence or recite that they have been executed in connection
with and/or to secure this Note as the same may be amended, restated, amended
and restated or otherwise modified from time to time (collectively, the “Loan
Documents”).
 
2. Interest Rate.
 
(a) Except as otherwise expressly set forth herein, interest on the outstanding
principal balance of this Note shall accrue at the Interest Rate or as otherwise
set forth in this Note from (and including) the Funding Date until the entire
outstanding principal amount of this Note has been repaid in full.
 
(b) The monthly payments of interest due under this Note shall be computed by
using the actual number of days elapsed in the relevant payment period based on
a three hundred sixty (360) day year.  Borrower understands and acknowledges
that such interest accrual requirement results in more interest accruing on this
Note than if either a thirty (30) day month and a three hundred sixty (360) day
year or the actual number of days and a three hundred sixty-
 
 
 

--------------------------------------------------------------------------------

 
 
five (365) day year were used to compute the accrual of interest on this Note.
 
3. Loan Payments.
 
(a) Borrower shall pay to Lender payments of principal and interest due under
this Note as follows:
 
(i) on the Funding Date, Borrower shall make a payment to Lender of an amount
equal to interest only on the outstanding principal balance of this Note from
the Funding Date up to and including the last day of the calendar month in which
the Funding Date occurs;
 
(ii) on the First Monthly Payment Date, and on the last day of each calendar
month thereafter until all principal amounts outstanding under the Loan are paid
in full in cash, Borrower shall make a payment to Lender of any and all interest
that has accrued on the outstanding principal balance of this Note; and
 
(iii) Borrower shall pay Lender on the Maturity Date, or any earlier date on
which the indebtedness may become due, by acceleration or otherwise, the entire
outstanding principal balance of this Note, all accrued and unpaid interest, the
Minimum Interest Recovery, the Exit Fee, and all other amounts due hereunder and
under the other Loan Documents.
 
(b) For purposes of making payments hereunder, but not for purposes of
calculating interest accrual periods, if the day on which such payment is due is
not a Business Day, then amounts due on such date shall be due on the
immediately preceding Business Day and with respect to payments of principal due
on the Maturity Date, or any earlier date on which the indebtedness may become
due, by acceleration or otherwise, interest shall be payable at the Interest
Rate or the Default Rate, as the case may be, through and including the day
immediately preceding such Maturity Date or such earlier date.
 
(c) All amounts due under this Note and the other Loan Documents shall be
payable without setoff, counterclaim, defense or any other deduction whatsoever.
 
(d) Except as otherwise specifically provided herein, all payments and
prepayments under this Note shall be made to Lender not later than 3:00 P.M.,
Boston, Massachusetts time, on the date when due and shall be made in lawful
money of the United States of America in immediately available funds at Lender’s
office (such address being 21 Custom House Street, Suite 910, Boston,
Massachusetts 02110) or as otherwise directed by Lender, and any funds received
by Lender after such time shall, for all purposes hereof, be deemed to have been
paid on the next succeeding Business Day.
 
(e) Borrower agrees that if Borrower makes a tender of a payment but does not
simultaneously tender any Late Charge, the Minimum Interest Recovery, the Exit
Fee, and all other amounts outstanding under this Note and the other Loan
Documents, and such payment shall be accepted by Lender, with or without
protest, such acceptance shall not:
 
 
 
-2-

--------------------------------------------------------------------------------

 
 
(i)           constitute any waiver of Lender’s rights to receive such Late
Charge, the Minimum Interest Recovery, the Exit Fee, or any other amount due and
owing by Borrower to Lender under this Note and the other Loan Documents; and
 
(ii)           constitute payment in full of the Loan unless and until such Late
Charge, the Minimum Interest Recovery, the Exit Fee, any and all other fees, or
any other amount due and owing under this Note and/or the other Loan Documents,
as the case may be, shall be paid in full.
 
Notwithstanding anything to the contrary contained in this Note or in the other
Loan Documents, Lender shall have no obligation to accept any payments made
hereunder not accompanied by any Late Charge, the Minimum Interest Recovery, the
Exit Fee, all other applicable fees, or any other amount due and owing under
this Note and/or the other Loan Documents.
 
4. Prepayments; Minimum Interest Recovery; Exit Fee.
 
(a) Upon not less than seven (7) days written notice to Lender, Borrower may,
from time to time, prepay this Note, in whole or in part.
 
(b) Upon the payment in full of the Loan (whether on the Maturity Date or on any
other date including the date of any voluntary or involuntary prepayment
hereunder) or upon acceleration of the Loan by Lender as provided in the Loan
Documents, Borrower shall pay both the Exit Fee and the Minimum Interest
Recovery to Lender.  Both the Minimum Interest Recovery and the Exit Fee shall
be deemed earned upon execution of this Note.
 
(c) Borrower acknowledges and agrees that the Minimum Interest Recovery and the
Exit Fee are all (i) bargained for consideration, (ii) a material inducement to
Lender’s making the Loan, and (iii) not a penalty.
 
5. Application of Payments.  Prior to the occurrence of an Event of Default, all
monthly payments made as scheduled under this Note shall be applied to the
payment of interest computed at the Interest Rate.  All voluntary and
involuntary prepayments on the Note shall be applied, to the extent thereof, to
accrued but unpaid interest on the amount prepaid, to the remaining principal
amount, and any other sums due and unpaid to Lender in connection with the Loan,
in such manner and order as Lender may elect in its sole and absolute
discretion, including, but not limited to, application to principal installments
in inverse order of maturity.  Following the occurrence and during the
continuance of an Event of Default, any payment on this Note shall be applied to
accrued but unpaid interest, Late Charges, accrued fees, the unpaid principal
amount of this Note, and any other sums due and unpaid to Lender in connection
with the Loan, in such manner and order as Lender may elect in its sole and
absolute discretion, including, but not limited to, application to principal
installments in inverse order of maturity.
 
6. Late Payment Charges.  Borrower shall pay a late charge (the “Late Charge”)
equal to five (5.0%) percent of any amount not paid within five (5) days after
the due date.
 
7. Acceleration.    Upon the occurrence of an Event of Default, Lender may, at
its
 
 
 
-3-

--------------------------------------------------------------------------------

 
 
option, without notice or demand or protest (which is hereby waived by
Borrower), and in addition to any other remedies to which it may be entitled,
declare the total unpaid principal balance of the indebtedness evidenced hereby
and the other Loan Documents, together with all accrued but unpaid interest
thereon, and all other sums owing (including, without limitation, the Minimum
Interest Recovery and the Exit Fee), immediately due and payable and all such
amounts shall thereafter bear interest at the Default Rate (provided, however,
the Default Rate shall not accrue on any Late Charges).  All such interest shall
be paid at the time of and as a condition precedent to the curing of any Event
of Default should Lender, in its sole discretion, allow such default to be
cured.  TIME IS OF THE ESSENCE IN THIS NOTE.
 
8. Usury Savings.  This Note is subject to the express condition that at no time
shall Borrower be obligated or required to pay interest on the principal balance
of this Note at a rate which could subject Lender to either civil or criminal
liability as a result of being in excess of the Maximum Legal Rate.  If, by the
terms of this Note or the other Loan Documents, Borrower is at any time required
or obligated to pay interest on the principal balance due hereunder at a rate in
excess of the Maximum Legal Rate, the Interest Rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate
and all previous payments in excess of the Maximum Legal Rate shall be deemed to
have been payments in reduction of principal and not on account of the interest
due hereunder.  All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.
 
9. Miscellaneous.
 
(a) Any Event of Default shall also constitute a default under all other
agreements between Lender and Borrower and under all other instruments and
papers given to Lender by Borrower.
 
(b) Any and all deposits or other sums at any time credited by, or due to
Borrower from, Lender or any of its banking or lending affiliates or any lender
acting as a participant under any loan arrangement between Lender and Borrower,
and any cash, securities, instruments, or other property of Borrower in the
possession of Lender, or any of its banking or lending affiliates, or any lender
acting as a participant under any loan arrangement between Lender and Borrower,
whether for safekeeping, or otherwise, or in transit to or from Lender or any of
its banking or lending affiliates or any such participant, or in the possession
of any third party acting on Lender’s behalf (regardless of the reason Lender
had received same or whether Lender has conditionally released the same) shall
at all times constitute security for any and all Liabilities, and may be applied
or set off against such Liabilities at any time after the occurrence of an Event
of Default, whether or not other collateral is available to Lender.
 
(c) No delay or omission by Lender in exercising or enforcing any of Lender’s
powers, rights, privileges, remedies, or discretions hereunder shall operate as
a waiver thereof on that occasion nor on any other occasion.  No waiver of any
default hereunder shall
 
 
 
-4-

--------------------------------------------------------------------------------

 
 
operate as a waiver of any other default hereunder, nor as a continuing waiver.
 
(d) Lender may from time to time, without notice to or the consent of Borrower
(and Borrower hereby waiving any right to notice), sell, transfer, pledge,
assign and convey this Note, the Loan and the other Loan Documents (or any
interest therein), and any and all servicing rights with respect thereto, and
may grant participations in the Loan.  In connection with any such sale,
transfer, assignment, conveyance or participation, Lender may, acting for this
purpose as an agent of Borrower, maintain at its offices a register for the
recordation of the names and addresses of Lender’s participants or assignees,
and the amount and terms of Lender’s sales, transfers, assignments, conveyances
and participations including specifying any such participant's or assignee's
entitlement to payments of principal and interest, and any payments made, with
respect to each such sale, transfer, assignment, conveyance or
participation.  Upon the occurrence of a transfer of this Note, Lender shall
thereafter forever be relieved and fully discharged from any liability or
responsibility in the matter arising from events thereafter occurring; but
Lender shall retain all rights hereby given to it with respect to any
liabilities and the collateral not so transferred.
 
(e) At the request of Lender or other holder of this Note, Borrower, at
Borrower’s sole cost and expense, agrees to provide information and to otherwise
cooperate in order to satisfy the market standards to which Lender or the holder
of this Note customarily adheres or which may be reasonably required in the
marketplace in connection with the sale or participation of the Loan, or any
portion thereof.
 
(f) Borrower, and each endorser and guarantor of this Note, shall indemnify,
defend, and hold Lender harmless against any claim brought or threatened against
Lender by Borrower, by any endorser or guarantor, or by any other person (as
well as from attorneys’ reasonable fees and expenses in connection therewith) on
account of Lender’s relationship with Borrower or any endorser or guarantor
hereof (each of which may be defended, compromised, settled, or pursued by
Lender with counsel of Lender’s selection, but at the expense of Borrower and
any endorser and/or guarantor).
 
(g) Borrower will pay on demand all attorneys’ reasonable fees and out-of-pocket
expenses incurred by Lender in the administration of all Liabilities of Borrower
to Lender, including, without limitation, costs and expenses associated with
travel on behalf of Lender.  Borrower will also pay on demand, all attorneys’
reasonable fees, out-of-pocket expenses incurred by Lender’s attorneys and all
costs incurred by Lender, including, without limitation, costs and expenses
associated with travel on behalf of Lender, which costs and expenses are
directly or indirectly related to the preservation, protection, collection or
enforcement of any of Lender’s rights against Borrower or any such endorser or
guarantor and against any collateral given Lender to secure this Note or any
other Liabilities of Borrower or such endorser and guarantor to Lender (whether
or not suit is instituted by or against Lender).
 
(h) Borrower, and each endorser and guarantor of this Note, respectively waives
presentment, demand, notice, and protest, and also waives any delay on the part
of the holder hereof.  Each assents to any extension or other indulgence
(including, without limitation, the release or substitution of collateral)
permitted Borrower or any endorser or guarantor by
 
 
 
-5-

--------------------------------------------------------------------------------

 
 
Lender with respect to this Note and/or any collateral given to secure this Note
or any extension or other indulgence, as described above, with respect to any
other liability or any collateral given to secure any other liability of
Borrower or any endorser or guarantor to Lender.
 
(i) This Note shall be binding upon Borrower and each endorser and guarantor
hereof and upon their respective heirs, successors, assigns, and
representatives, and shall inure to the benefit of Lender and its successors,
endorsees, and assigns.
 
(j) The liabilities of Borrower and any endorser or guarantor of this Note are
joint and several; provided, however, the release by Lender of any Borrower or
any one or more endorsers or guarantors shall not release any other person
obligated on account of this Note.  Each reference in this Note to Borrower, any
endorser, and any guarantor, is to such person individually and also to any such
persons jointly.  No person obligated on account of this Note may seek
contribution from any other person also obligated unless and until all
liabilities, obligations and indebtedness to Lender of the person from whom
contribution is sought have been satisfied in full.
 
(k) Borrower makes the following waiver knowingly, voluntarily, and
intentionally, and understands that Lender, in the establishment and maintenance
of Lender’s relationship with Borrower contemplated by this Note, is relying
thereon. BORROWER, TO THE EXTENT ENTITLED THERETO, WAIVES ANY PRESENT OR FUTURE
RIGHT OF BORROWER, OR OF ANY GUARANTOR OR ENDORSER OF BORROWER OR OF ANY OTHER
PERSON LIABLE TO LENDER ON ACCOUNT OF OR IN RESPECT TO THE INDEBTEDNESS, TO A
TRIAL BY JURY IN ANY CASE OR CONTROVERSY IN WHICH LENDER IS OR BECOMES A PARTY
(WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST LENDER OR IN WHICH
LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF,
OR IS IN RESPECT TO, ANY RELATIONSHIP AMONGST OR BETWEEN BORROWER, ANY SUCH
PERSON, AND LENDER.
 
(l) Borrower and each endorser and guarantor hereof each authorize Lender to
complete this Note if delivered incomplete in any respect.
 
(m) This Note is delivered to Lender at its office in Massachusetts, shall be
governed by the laws of The Commonwealth of Massachusetts, and shall take effect
as a sealed instrument.
 
(n) Borrower and each endorser and guarantor of this Note each submit to the
jurisdiction of the courts of The Commonwealth of Massachusetts for all purposes
with respect to this Note, any collateral given to secure their respective
liabilities, obligations and indebtedness to Lender, and their respective
relationships with Lender.
 
(o) This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
 
 
 
-6-

--------------------------------------------------------------------------------

 
 
(p) Upon receipt of an affidavit of any officer of Lender as to the loss, theft,
destruction or mutilation of this Note, Borrower shall promptly issue a
replacement note, in form and substance identical to this Note.  In no event
shall Lender be required to indemnify Borrower or any other person or entity in
connection with Borrower’s issuance of such a replacement note.
 
(q) THE OBLIGATIONS SET FORTH IN THIS NOTE ARE COMMERCIAL OBLIGATIONS AND DO NOT
REPRESENT A LOAN USED FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES AND IS NOT A
CONSUMER TRANSACTION OR OTHERWISE SUBJECT TO THE PROVISIONS OF THE FEDERAL TRUTH
IN LENDING ACT OR FEDERAL RESERVE BOARD REGULATION Z, M.G.L. C 140D OR ANY OTHER
CONSUMER STATUTES OR REGULATIONS OR RESTRICTIONS.
 

 

 
<The remainder of this page is left intentionally blank.>
 

 
 
-7-

--------------------------------------------------------------------------------

 

EXECUTED as a sealed document as of the day and year first above written.
 

 
 
 
Witness:
BORROWER:
 
ADVANSOURCE BIOMATERIALS CORPORATION
a Delaware corporation
 
 
/s/ David E. Dryer_______
Print Name:_David E. Dryer
 
 
 
By:        /s/ Michael F.
Adams                                                       
Name:  Michael F. Adams
Title:  President and Treasurer
 

 
 
 
-8-

--------------------------------------------------------------------------------

 

SCHEDULE I

DEFINITIONS

“Business Day” means any day other than Saturday, Sunday, and any other day on
which banks are required or authorized to close in Massachusetts.
 
“Exit Fee” means an exit  fee equal to Sixteen Thousand and 00/100 Dollars
($16,000.00).

“Event of Default” shall have the meaning ascribed to it in the Mortgage.
 
“First Monthly Payment Date” means August 31, 2011.

“Funding Date” means July 8, 2011.

“Interest Rate” means a fixed rate of interest equal to fifteen percent (15%)
per annum.

“Liabilities” shall have the meaning ascribed to it in the Mortgage.
 
“Loan” means the loan made by Lender to Borrower, as evidenced by this Note.
 
“Maturity Date” means July 8, 2013.

“Maximum Legal Rate” means the maximum nonusurious interest rate, if any, that
at any time or from time to time may be contracted for, taken, reserved, charged
or received on the indebtedness evidenced by this Note and as provided for
herein or the other Loan Documents, under the laws of such state or states whose
laws are held by any court of competent jurisdiction to govern the interest rate
provisions of the Loan.

“Minimum Interest Recovery” means a minimum interest recovery equal to One
Hundred Fifty Thousand and 00/100 Dollars ($150,000.00), minus the amount of
interest (excluding interest at the Default Rate) actually paid to Lender.
 
 

 
 
 
-9-

--------------------------------------------------------------------------------