Document:

Exhibit
10.8

 

HPSC, INC.

 

LIMITED RECOURSE
NOTE AND SECURITY AGREEMENT

 

	
  Principal amount $870,732.12

  	
   

  	
  Date: 
  October 28, 2003

  

 

 

FOR VALUE RECEIVED, the undersigned, HPSC, Inc.
(“HPSC”), hereby promises to pay to the order of DOLLIE A. COLE (the “Payee”), the
sum of EIGHT HUNDRED SEVENTY THOUSAND SEVEN HUNDRED THIRTY TWO DOLLARS AND
TWELVE CENTS ($870,732.12).  This
Limited Recourse Note and Security Agreement (“this Note”) shall be payable
upon the terms and conditions and entitled to the security and benefits, all as
set forth in the HPSC Gloucester Funding 2003-1 LLC I and HPSC Gloucester
Funding 2003-1 LLC II 13.947% Asset Backed Note, Series 2003-1, Class F (the
“Class F Note”) issued pursuant to an Indenture, dated as of March 31,
2003, by and among HPSC Gloucester Funding 2003-1 LLC I and HPSC Gloucester
Funding 2003-1 LLC II, as Issuers, HPSC, Inc., as Servicer and Originator and
BNY Midwest Trust Company, as Indenture Trustee (the “Indenture”).  An interest in the Class F Note, equal to
$965,000, was transferred to, and paid for in full by, HPSC (the “HPSC Interest
in the Class F Note”).  Such transfer
was made through the book-entry facilities of DTC as required by the Class F
Note.  The HPSC Interest in the Class F
Note is held in book entry form in the name of HPSC in the Oppenheimer Account,
as described below.  The remaining
principal balance of such interest is $868,032.80.  The Form of Class F Note is attached hereto as Exhibit A.

 

Contemporaneously with the execution of this Note,
funds in the amount of $870,732.12 have been wired to HPSC by Payee.

 

This Note shall be payable solely from the proceeds of
the HPSC Interest in the Class F Note. 
The Payee shall have no recourse to any assets of HPSC with respect to
any amounts due on this Note except for the Collateral described below and HPSC
shall have no obligations under this Note, except to the extent of such
Collateral.

 

This Note is a secured note with the Payee having all
the benefits and rights of a secured creditor under applicable law.  As security for the payment and performance
of the obligations under this Note, HPSC hereby grants the Payee a security
interest in and lien on all of HPSC’s right, title and interest in and to in
the following described property now owned by HPSC (hereinafter called the
“Collateral”):

 

•                  All HPSC’s
right, title and interest in that certain HPSC Gloucester Funding 2003-1 LLC I
and HPSC Gloucester Funding 2003-1 LLC II 13.947% Asset Backed Note, Series
2003-1, Class F Note, dated as of March 31, 2003, Cusip No. 40429DAG5,
said interest having been transferred to HPSC, Inc. and held in book-entry form
through DTC in the Oppenheimer Account as defined below; and

 

•                  HPSC Account No.
G38-1619522, Oppenheimer & Co, Inc., One Federal Street, 22nd Floor,
Boston, MA 02110 (the “Oppenheimer Account”) which holds all HPSC’s right,
title and interest in the Class F Note in book entry form, and all proceeds of
the HPSC interest in the Class F Note contained in such account, now existing
or hereafter arising.

 

 

HPSC has taken all necessary actions to authorize this
Note and the execution, delivery and performance of this Note, and this Note
has been duly executed and delivered by HPSC. 
This Note constitutes the legal, valid and binding obligation of HPSC
enforceable against HPSC in accordance with its terms.  HPSC does not require the consent or
approval of any third party to execute, deliver or perform the Note nor will
HPSC thereby default under the terms of any other agreement to which it is a
party.

 

The Collateral will be held by Oppenheimer & Co.,
Inc., subject to that certain Pledged Collateral Account Agreement, dated as of
the date hereof, among HPSC, the Payee and Oppenheimer & Co., Inc. (the
“Pledged Collateral Account Agreement”).

 

HPSC will execute and deliver any further instruments
and documents and take such further actions as the Payee may reasonably request
from time to time to preserve and perfect the Payee’s rights hereunder.

 

HPSC will not sell, transfer, grant a security
interest to any other party in, or otherwise dispose of, in each case, any of
its interest in the Collateral.

 

HPSC will notify the Payee at least 30 days in advance
of any change in HPSC’s chief executive office, state of entity formation, name
of entity, form of entity, or legal identity, as applicable.

 

This Note shall, at the option of the Payee, be
immediately due and payable upon the (i) the Class F Note becoming due and
payable or (ii) filing by HPSC of an assignment for the benefit of creditors,
or pursuant to any bankruptcy or insolvency law, or the suffering by HPSC of an
involuntary petition under any such law or for receivership to exist, which is
not vacated within thirty (30) days (each, an “Event of Default”).

 

If an Event of Default shall have occurred then, or at
any time thereafter while such Event of Default is continuing, the Payee (a)
shall be entitled to the rights and remedies set forth in the Pledged
Collateral Account Agreement; (b) may declare the principal balance hereof and
all accrued interest due and payable, whereupon it shall become immediately due
and payable without notice or demand; (c) shall be entitled to all of the
rights and remedies of a secured creditor under the Uniform Commercial Code as
it may be in effect from time to time in the Commonwealth of Massachusetts (the
“UCC”) in addition to all other rights and remedies available to the Payee
hereunder and by law; (d) shall have the right to take possession of the
Collateral; and (e) may take any other action which it deems necessary or
desirable to protect the Collateral or the security interest.  HPSC agrees that if notice of sale is
required by law to be given, seven (7) days’ notice shall constitute reasonable
notice.  HPSC shall have no liability
for any deficiency if the net proceeds of any sale or disposition of Collateral
are less than the total outstanding amounts due under this Note.  All rights of the Payee with respect to the
HPSC Interest in the Class F Note upon an Event of Default shall be subject to
the terms of the Indenture.

 

This Note shall be prepayable in whole but not in part
at the option of HPSC, provided that upon prepayment HPSC shall pay all
outstanding principal and interest plus an additional amount as follows:  if the Note is prepaid prior to the first
anniversary hereof, HPSC shall pay an additional amount equal to 4% of the
outstanding principal balance at the time of prepayment; if the Note is prepaid
after the first anniversary but prior to the second anniversary hereof, HPSC
shall pay an

 

2

 

additional amount equal to 3% of the outstanding
principal balance at the time of prepayment; if the Note is prepaid after the
second anniversary but prior to the third anniversary hereof, HPSC shall pay an
additional amount equal to 2% of the outstanding principal balance at the time
of prepayment; if the Note is prepaid after the third anniversary but prior to
the fourth anniversary hereof, HPSC shall pay an additional amount equal to 1%
of the outstanding principal balance at the time of prepayment.  This Note shall be deemed to have been paid
in full when all payments due and/or payable under the HPSC Interest in the
Class F Note, and any additional payments as described above, have been deposited
in the Oppenheimer Account and thereafter transmitted to the Payee.

 

HPSC hereby waives demand, presentment and protest and
all notices hereto.  No modification or
indulgence or waiver hereof shall be binding unless in writing and signed by
the Payee and HPSC.

 

Except as otherwise specified herein, all notices
hereunder shall be in writing, shall be sent to the addresses set forth below
or at such other address as any party hereto may hereafter specify to the other
in writing: 

 

	
  If to the Secured Party:

  	
  Dollie A. Cole

  
	
   

  	
  Briarpatch Ranch

  
	
   

  	
  Country Road 179,

  
	
   

  	
  West Mendoza

  
	
   

  	
  Lockhart, Texas 78644

  
	
   

  	
   

  
	
  If to the undersigned:

  	
  HPSC, Inc.

  
	
   

  	
  60 State Street

  
	
   

  	
  Boston, MA 02109

  
	
   

  	
  Fax: 617-723-4786

  
	
   

  	
  Attention: 
  John W. Everets, Chairman and CEO

  
	
   

  	
   

  
	
  with copy to:

  	
  Day, Berry & Howard LLP

  
	
   

  	
  260 Franklin Street

  
	
   

  	
  Boston, MA 02110

  
	
   

  	
  Fax: 617-345-4745

  
	
   

  	
  Attention: Dennis W. Townley, Esq.

  

 

This Note shall be binding upon and inure to the
benefit of HPSC, the Payee and their respective heirs, successors and assigns,
except that HPSC may not assign or transfer its rights or obligations hereunder
without the prior written consent of the Payee.

 

This Note shall be governed by the substantive laws of
the Commonwealth of Massachusetts, without regard to conflicts of law
rules.  Any dispute arising under this
Note shall be decided in the jurisdiction of any state or Federal court located
within Massachusetts.  ANY RIGHTS TO A
TRIAL BY JURY ARE EXPRESSLY WAIVED.

 

*      *     
*

 

3

 

IN WITNESS WHEREOF, the undersigned has duly executed
this Note under seal as of the day and year first above written.

 

	
   

  	
  HPSC, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John W. Everets

  
	
   

  	
   

  	
  Name: 
  John W. Everets

  
	
   

  	
   

  	
  Title: 
  Chairman and CEO

  
	
   

  	
   

  	
   

  
	
  Agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Dollie A. Cole

  	
   

  	
   

  	
   

  
	
  Dollie A. Cole

  	
   

  	
   

  
				

 

4EXHIBIT 10.36

 

CUMMINGS PROPERTIES, LLC

STANDARD FORM

 

LEASE EXTENSION

 

In connection with a lease
currently in effect between the parties at 233, 234, 236, 238, 240, 252 and 254
West Cummings Park, Woburn, Massachusetts, *executed on March 10, 1995 and terminating
February 28, 2004, and in consideration of the mutual benefits to be derived
herefrom , Cummings Properties, LLC, LESSOR, and Anika Therapeutics, Inc.,
LESSEE, hereby agree, effective March 1, 2004, to amend said lease as follows:    *fully

 

1.                 The lease is
hereby extended for an additional term of five (5) years ending at noon on
February 28, 2009.

 

2.                 Base rent is
hereby changed to five hundred ninety eight thousand nine hundred eighteen
(598,918) dollars per year or  
$49,909.83 per month.

 

3.                 The base month
from which to determine the amount of each annual increase in the “Cost of
Living” shall be November 2002, which figure shall be compared with the figure
for November 2003, and each November thereafter to determine the percentage
increase (if any) in the base rent to be paid during the following calendar
year except that the first such adjustment shall take place with rent due March
1, 2004.

 

4.                 Upon execution
of this Lease Extension, the security deposit shall be increased by $8,400 from
$91,600 to a new total of $100,000. LESSOR shall transfer to this lease the
$8,400 security deposit held by LESSOR under a separate lease between the
parties at 230 West Cummings Park as payment of this increase.

 

5.                 The lease,
including all terms, conditions, escalations, etc. shall be automatically
extended for additional successive periods of five (5) years each unless LESSOR
or LESSEE shall serve written notice, either party to the other, of either
party’s desire not to so extend the lease. The time for serving such written
notice shall be not more than twelve months or less than six months prior to
the expiration of the then current lease period. Time is of the essence.

 

6.                 Notwithstanding
Section 19 of the lease, in the event the entire balance of rent due under the
lease becomes due and payable as liquidated damages, said amount shall be
discounted to its net present value as of the date of LESSOR’s notice of
default, using the published prime rate then in effect. Furthermore, LESSEE’s
covenants under the lease shall be independent of LESSOR’s covenants, and
LESSOR’s failure to perform any of its covenants under the lease, including a
covenant constituting a significant inducement to LESSEE to enter into the
lease, shall not excuse the payment of rent or any other charges by LESSEE or
allow LESSEE to terminate the lease.

 

7.                 In the event
either party has employed a real estate broker, tenant representative, or other
third party on its behalf in connection with this Lease Extension and/or any
further extension, renewal, or expansion of the lease, then payment of any and
all fees or commissions shall be the sole responsibility of the party engaging
any such broker, representative, or third party. LESSEE and LESSOR agree that
the party who so engages any broker, representative, or other third party shall
indemnify the other against any and all claims for any such fees or
commissions.

 

8.                 To the extent
any inconsistency exists between this Lease Extension and the lease, including
any prior amendments, the conditions contained herein shall control and
supersede any earlier provisions. Neither the submission of this Lease
Extension, nor the prospective acceptance of any increase in the security
deposit, shall constitute a reservation of or option for the leased premises,
it being expressly understood and agreed that this Lease Extension shall not
bind either party in any manner whatsoever until it has been executed by both
parties.

 

9.                 *
Notwithstanding monthly rent as provided in Section 2 above, LESSEE may deduct
$1,497 per month from each monthly rental payment due from March 1, 2004
through August 30, 2006 (only), provided LESSOR receives each such monthly
payment on or before the first day of the month for which that rent is due and
LESSEE is not otherwise in default of the lease or in arrears of any rent or
invoice payments. Time is of the essence.

 

10.           The size of
the leased premises is hereby increased to a new total of approximately 34,546
square feet with the addition of 230 West Cummings Park (“Suite 230”).

 

11.           LESSEE
acknowledges that it is currently occupying Suite 230 under a separate lease
between the parties that expires February 28, 2004. Notwithstanding anything in
Section 26 of the within lease to the contrary, upon termination of the within
lease, LESSEE shall deliver Suite 230 in the same condition as it was at the
commencement of said separate lease and otherwise as provided in the within
lease.

 

12.           As a result of
the addition of Suite 230 to this lease, Section 3 of Amendment to Lease #3 is
hereby deleted and of no further force or effect.

 

 

[ILLEGIBLE]  LESSOR

 

[ILLEGIBLE]  LESSEE

 

 

13.           In the event
LESSOR elects to terminate LESSEE’s use of a cluster sign pursuant to Section 8
of Amendment to Lease #2, the annual base rent for the then remaining term of
the lease shall be decreased by $3,000, and not $1,759.53 as set forth in said
amendment.

 

14.           *LESSOR
consents to LESSEE’s access to the roof of the building for maintenance of its
non-standard equipment serving the leased premises (only).  LESSEE further agrees that no other work
shall be carried on or any other equipment installed on the roof without the
prior written consent of LESSOR.  LESSEE
shall be fully responsible for, and agrees to indemnify and hold LESSOR
harmless from, any and all property damage and personal injury associated in
any way with the activities of LESSEE and LESSEE’s agents, employees and
contractors on the roof and/or the location, installation or maintenance of
LESSEE’s equipment on the roof including, but not limited to, damage to the
watertight integrity of the roof and the roof membrane from whatever cause.

 

15.           Paragraph G of
the Rider to Lease is hereby deleted and replaced by the following. Prior to
the termination date of the lease, LESSEE, at LESSEE’s sole expense, shall
engage an independent and certified industrial hygienist (“the CIH”) to prepare
a decontamination work plan of the leased premises in accordance with all CIT
professional standards and all applicable laws to address all conditions
arising out of LESSEE’s tenancy.  LESSEE
shall submit said plan to LESSOR for LESSOR’s review and consent, which consent
shall not be unreasonably withheld, conditioned or delayed.  LESSOR’s consent shall be deemed given if
LESSOR does not respond within five days after LESSOR’s receipt of said
plan.  LESSEE shall then complete all
measures specified in said plan, including, to the extent required by the plan,
testing and cleaning of all surfaces, HVAC equipment, ductwork, and other
building components recommended therein. The CIH shall certify that as of the
termination date of the lease, the entire leased premises and any extension
thereof used in any way by the LESSEE is free from any harmful chemical,
biological, radioactive or other contamination arising out of LESSEE’s tenancy,
in accordance with all applicable CIH professional standards and all applicable
laws.  Said certification shall confirm
the clean condition of all HVAC equipment, ductwork, plumbing fixtures, drains,
tanks, mechanical systems, cabinetry, casework, pH adjustment tanks, acid
neutralization equipment, all other surfaces, and the indoor air quality at the
leased premises, and shall specify that there are no restrictions on future use
and occupation by others.  This
certification and any required and recommended cleaning shall be completed
prior to the termination of the lease. 
Time is of the essence.

 

16.           LESSEE shall
notify LESSOR in writing upon LESSOR’s request and 30 days prior to the
expiration of the lease term of LESSEE’s compliance with its inspection and
maintenance obligations as set forth in Section 4 of Amendment to Lease
#3.  In addition, the reference in said
Section 4 to “Section 9 of the lease” is hereby changed to “Section 8 of the
lease.”

 

17.           The two
preceding paragraphs regarding the condition of the leased premises are a key
consideration of this Lease Extension.

 

18.           In
consideration of this Lease Extension, Sections 8 and 9 of the Lease Extension
dated November 23, 1998 are hereby deleted and of no further force or effect.

 

19.           LESSOR, if
requested to do so by LESSEE and at LESSEE’s sole expense, shall build a
handicap ramp at LESSEE’s main entrance. 
The charges for said ramp to be completed by LESSOR or LESSOR’s agents
may be incorporated into the lease by separate amendment to be attached hereto,
amortized without interest, and then paid for by LESSEE in the same manner as
base rent which shall otherwise be due.

 

All
other terms, conditions and covenants of the lease shall continue to
apply.  In Witness Whereof, LESSOR and
LESSEE have hereunto set their hands and common seals this 8th day
of October, 2003.

 

 

	
  LESSOR: CUMMINGS PROPERTIES, LLC

  	
   

  	
   

  	
  LESSEE: ANIKA
  THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Douglas Stephens

  	
   

  	
  By:
  

  	
  /s/ William J. Knight as
  CFO

  
	
  Duly Authorized

  10-10-03

  	
   

  	
   

  	
  Duly Authorized

  
	
   

  	
   

  	
  Print
  Name: William J. Knight

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