Document:

exhibit_10-4.htm

    Exhibit
10.4

     

    

     

    

     

    

     

    

     

     

     

    MORTGAGE AND SECURITY
AGREEMENT

    (Including
Collateral Assignment of Rents and Leases)

     

    
      Property
Address: 50 Old Webster Road, Oxford, MA

      

    

    This
Mortgage and Security Agreement (Including Collateral Assignment of Rents and
Leases) (hereinafter referred to as the “Mortgage”) is made as
of the 4th day of
June, 2008 by IPG PHOTONICS
CORPORATION, a Delaware corporation with a principal place of business at
50 Old Webster Road, Oxford, Massachusetts 01540 (together with any successors
in title to the Mortgaged Property hereinafter defined, other than the Bank,
sometimes herein referred to as the “Borrower”).

     

    
      	
              1.  

            	
              Mortgage, Security
      Agreement and Assignment of Rents and
  Leases.

            

    

     

          1.1 Mortgage and Security Agreement.
 For
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower hereby grants, with MORTGAGE COVENANTS, to BANK OF AMERICA, N.A., a
national banking association with an office at 100 Front Street, Worcester,
Massachusetts  01608 (together with any other holder or holders from
time to time of the Note hereinafter defined, sometimes herein referred to as
the “Bank”), so
much of the “Mortgaged
Property” as constitutes the “Premises”, and grants
to the Bank a first security interest in so much of the Mortgaged Property as
constitutes the “Collateral” all as
hereinafter defined, in all proceeds of insurance from any damage to the
Mortgaged Property and in all awards for condemnations or takings of all or any
portion of the Mortgaged Property or any interest therein by eminent domain, all
to secure the following obligations of the Borrower to the Bank, which
obligations are collectively referred to herein as the “Mortgage Debt,”
namely:

     

    (a) the
payment of amounts from time to time due pursuant to the terms of a certain Term
Note of even date made by the Borrower to the order of the Bank in the principal
amount of Twenty Million and 00/100 Dollars ($20,000,000.00) (the “Note”), at the times,
in the manner and with interest all as more fully provided therein (including
any and all renewals, extensions, amendments and rewritings thereof and advances
thereunder, all now or hereafter made); and

     

    (b) the
performance of all covenants and agreements contained in the Note and this
Mortgage; and

     

    (c) the
payment and performance of all obligations of the Borrower under any interest
rate swap agreement, foreign exchange contract, any cap, floor or hedging
agreement or other similar agreement, or other financial agreement or
arrangement designed to protect the Borrower against fluctuations in any
interest rate charged by the Bank under the Note (a “Swap
Contract”).

     

    The
“Mortgaged
Property” shall mean: real estate with all buildings and improvements
thereon located at 50 Old Webster Road, Oxford, Massachusetts, as more fully
described on Exhibit
A attached hereto, together with all rights of way or uses, servitudes,
licenses, tenements, rents, leases, hereditaments, appurtenances, easements and
other rights now or hereafter existing, belonging or pertaining thereto; all
fixtures and other articles of every kind and nature whatsoever now or hereafter
owned or leased by the Borrower and used or procured for use in connection with
the operation and maintenance of the Premises, insofar as the same are, or can
by agreement of the parties be made, a part of the real estate, including,
without limiting the generality of the foregoing, any and all boilers, pumps,
tanks, electric panel switchboards, lighting equipment and wiring, heating,
plumbing and ventilating apparatus, sprinklers, if any, elevators, escalators,
refrigerating, air conditioning and air-cooling equipment and other building
service equipment (said real estate, improvements, rights, fixtures and other
articles being collectively called the “Premises”); and all
fixtures owned or leased by the Borrower and now or hereafter placed in or on
and used in connection with the operation or maintenance of the Premises and all
contract rights, accounts, leases, rents and general intangibles pertaining to
the Premises, whether now owned or hereafter acquired; all additions,
replacements, improvements and accessions with respect to the foregoing; all
products of the foregoing; all proceeds of the foregoing; and all judgments,
awards of damage, settlements, takings or payments of insurance covering any of
the foregoing (collectively called the “Collateral”).

     

    1.2 Assignment of Rents and
Leases.

     

    (a) For the
purpose of further securing the payment of the Mortgage Debt and the performance
of all of the Borrower’s obligations under the Note, this Mortgage and any Swap
Contract, the Borrower assigns to the Bank all of the Borrower’s right, title
and interest in, to and under all leases covering any portion of the Mortgaged
Property and the right to collect rents under any other oral or written
occupancy agreement covering any portion of the Mortgaged Property.

     

    (b) This
Assignment is made on the following terms and conditions with respect to the
Mortgaged Property, namely:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (1) So long
as there shall exist no Event of Default as defined in the Loan Agreement by and
between the Bank and the Borrower dated of even date herewith, as from time to
time amended or restated (the “Loan Agreement”), the
Borrower shall be entitled to collect all rents under all leases and occupancy
agreements; provided, however, that the Borrower shall not collect any rental or
other payment under a lease or occupancy agreement more than one (1) month in
advance of the time that it is due under the terms of the lease or occupancy
agreement.  The Borrower shall not enter into any lease or occupancy
agreement covering any portion of the Mortgaged Property without the Bank’s
prior written consent and no change or modification may be made in the terms of
any leases without the Bank’s prior written consent.  The Borrower
agrees that both before and after any Event of Default it will fully perform all
of its obligations under any lease or occupancy agreement and will do nothing to
impair its or their value as security for the Mortgage Debt.

     

    (2) Upon or
at any time after an Event of Default the Bank, without in any way waiving such
Event of Default, at the Bank’s option, without notice and without regard to the
adequacy of any other security held by it, may collect all rents under any
leases and occupancy agreements and exercise all of the Borrower’s rights under
any lease or occupancy agreement.  The Bank shall not be required to
take possession of any portion of the Mortgaged Property to entitle it to the
rents and profits emanating therefrom or payable with respect
thereto.

     

    (3) The Bank
shall not be liable for any loss sustained by the Borrower by reason of the
Bank’s exercise of its rights under this Assignment nor shall the Bank be deemed
to have assumed any of the Borrower’s obligations under any lease or occupancy
agreement covering any portion of the Mortgaged Property.

     

    (4) The
Borrower agrees to defend, indemnify and hold harmless the Bank from any and all
liability, loss or damage which may or might be incurred by the Bank by virtue
of this Assignment or any action taken by the Bank in exercise of its rights
conferred by this Assignment.

     

    (5) The
affidavit, certificate or statement of any officer, agent or attorney of the
Bank shall be and constitute conclusive evidence of the validity, effectiveness
and continuing force of this Assignment and any person may and is hereby
authorized to rely thereon.  The Borrower hereby directs all lessees
and tenants under any leases and occupancy agreements to rely conclusively on
any notice received from any officer, agent or attorney of the Bank to the
effect that an Event of Default as described in this Mortgage exists and/or that
the Bank has the right to exercise the rights of the Borrower under any lease or
occupancy agreement.

     

    (6) The
Borrower agrees that it will not make any further assignment or other transfer
of its right, title and interest under any lease or occupancy
agreement.

     

    
      	
              2.  

            	
              Representations of the
      Borrower.

            

    

     

    2.1 Legal
Proceedings.  There
is no action, suit, proceeding (including, without limitation, any condemnation
proceeding and any proceeding in the nature of bankruptcy or for reorganization
or arrangement) or investigation at law or in equity before or by any court or
public board or body pending or, to the knowledge of the Borrower, threatened
against the Borrower or the Mortgaged Property, or to the knowledge of the
Borrower, any basis therefor, wherein an unfavorable decision, ruling or finding
would have a material adverse effect on the business, assets or financial
condition of the Borrower or its subsidiaries, taken as a whole, or the
Mortgaged Property, or the transactions contemplated by the Note and this
Mortgage, or which in any way would adversely affect the validity of the Note
and this Mortgage.

     

    2.2 Compliance with Law;
Consents.  The
Borrower is not in violation of any term or provision of any mortgage, lease,
agreement or other instrument which is material to its business or assets, or of
any judgment, decree, governmental order, statute, rule or regulation by which
it is bound or to which it or any of its assets is subject.  The
execution, delivery and performance of and compliance with this Mortgage will
not violate or constitute a default under any term or provision of any mortgage,
lease, agreement or other instrument, or any judgment, decree, governmental
order, statute, rule or regulation by which the Borrower is bound or to which
any of its assets is subject.  No approval by, authorization of, or
filing with any federal, state, or municipal or other governmental commission,
board, or agency or other governmental authority is necessary in connection with
the execution and delivery of this Mortgage by the Borrower.

     

    2.3 Mortgaged
Property

     

    .  The
Borrower has good and marketable title to the Mortgaged Property and none of the
Mortgaged Property is subject to any mortgage, pledge, lien, security interest,
charge or encumbrance except a lien in favor of the Bank and as stated in the
title insurance policy being issued to the Bank in conjunction with this
Mortgage.

     

    
      	
              3.  

            	
              Certain Agreements of
      the Borrower.

            

    

     

    3.1 Payments.  The
Borrower shall pay when due all principal, interest and late charges which may
be payable, at the times and in the manner specified in the Note and this
Mortgage.

     

    3.2 Financial and Other
Information.  The
Borrower shall furnish to the Bank such information regarding the financial
condition and operations of the Borrower as set forth in the Loan Agreement, and
shall bear the reasonable cost and expense of any appraisal of the Mortgaged
Property conducted on behalf of the Bank to comply with applicable banking
regulations requiring periodic appraisals of real estate mortgaged to secure
borrowing or as otherwise deemed appropriate by the Bank.

     

    3.3 Maintenance of and
Modifications to Mortgaged Property by the Borrower; Restrictions on Prior
Liens.  The
Borrower will maintain the Mortgaged Property in good repair, working order and
condition and will from time to time make or cause to be made all necessary and
proper repairs, replacements and renewals.  All such repairs,
replacements and renewals shall be free of all liens and encumbrances (other
than this Mortgage and as set forth in the title insurance policy being issued
to the Bank in conjunction with this Mortgage) and shall become a part of the
Mortgaged Property.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    The
Borrower will not permit the Mortgaged Property to be used in violation of any
law, by-law, ordinance or regulation of any governmental authority or for any
unlawful or improper purpose and will not commit, permit or suffer any waste,
impairment or deterioration of the Mortgaged Property or any part
thereof.

     

    The
Mortgaged Property and any use thereof by the Borrower shall conform with all
applicable zoning, planning, building, environmental, condominium and other
laws, ordinances, by-laws and regulations of governmental authorities having
jurisdiction over the Mortgaged Property, and the Borrower shall not permit a
nuisance thereon.

     

    Except as
expressly permitted hereunder, the Borrower will not sell, lease, convey, assign
or transfer or permit to be sold, leased, conveyed, assigned or transferred all
or any part of any legal or beneficial interest in the Mortgaged Property or
create, incur, assume or permit to exist any encumbrance, lien or charge of any
kind on the Mortgaged Property (except this Mortgage and as set forth in the
title insurance policy being issued to the Bank in conjunction with this
Mortgage) without the written consent of the Bank.  The Borrower will
not suffer or permit any mechanics’ lien or other encumbrance to remain against
the Mortgaged Property by reason of work, labor, services or materials supplied
or claimed to be supplied in connection with the Mortgaged Property; provided,
however, that after notice to the Bank, the Borrower may contest promptly the
validity or the amount of any such lien or encumbrance by appropriate
proceedings timely instituted, provided that if such lien or encumbrance has
priority over the lien of this Mortgage, the Borrower, upon the request of the
Bank, shall either discharge such lien or encumbrance or provide the Bank with a
sum sufficient to discharge such lien or encumbrance to be deposited in escrow
as security therefor, and provided further, that if the Bank shall notify the
Borrower that, in the opinion of its counsel, by nonpayment of any such items
the lien of this Mortgage as to any part of the Mortgaged Property could be
subject to loss or forfeiture, then the Borrower will promptly discharge such
lien or encumbrance.

     

    3.4 Taxes and Governmental
Charges.  Upon
written request therefor by the Bank after the occurrence of an Event of
Default, the Borrower shall thereafter pay to the Bank on each payment date
under the Note, in addition to the payments therein required, a monthly
apportionment of one-twelfth (1/12th) of the sum estimated by the Bank to be
sufficient to make all payments of all real estate taxes and governmental
charges and assessments upon the Mortgaged Property as they become due and any
balance due for any such payments shall be paid by the Borrower to the Bank upon
demand.  The Bank is hereby specifically authorized to pay when due or
at any time thereafter all of said payments and to charge the same to the
account of the Borrower.  No interest shall be paid or credited with
respect to any amounts paid by the Borrower under this Section.

     

    3.5 Right of
Access.  The
Borrower agrees that upon reasonable notice, the Bank and its representatives
may at all reasonable times examine and inspect the Mortgaged
Property.

     

    3.6 Instruments of Further
Assurance; Recordings and Filing.  The
Borrower will do, execute, acknowledge and deliver or cause to be so performed
such supplemental mortgages and such further acts, instruments and transfers as
the Bank may reasonably require for the better assuring, transferring, pledging,
assigning and conferring unto the Bank the Mortgaged Property and rights herein
described and the income and revenue pledged hereby.

     

    The
Borrower will cause or cooperate with the Bank in causing this Mortgage and all
financing statements and other records, and similar instruments (and supplements
and amendments to any of the foregoing) to be signed, authenticated, recorded
and filed as may be required by law, or as the Bank deems appropriate, in order
to fully perfect, preserve and protect the security and rights of the Bank
hereunder.

     

    The
Borrower shall cause to be filed any continuation statements or instruments of a
similar character which, in the Bank’s opinion, are required by law in order to
preserve and protect the security of the Bank.

     

    3.7 Insurance
Coverage.  The
Borrower shall keep the improvements now existing or hereafter installed in or
erected on the Mortgaged Property insured against loss by fire, flood, hazards
included within the term “extended coverage” as
approved by the Commissioner of Insurance of The Commonwealth of Massachusetts
and such other hazards or perils as the Bank shall reasonably request in such
amounts as shall be satisfactory to the Bank, all insurance to be for the
benefit of and payable in case of loss to the Bank and the Borrower as their
interests may appear.

     

    All
insurance policies and renewals thereof shall be in form acceptable to the Bank,
shall include a standard mortgage clause in favor of and in form acceptable to
the Bank, and shall contain a provision that such policies shall not be
cancelled or modified without at least twenty (20) days prior written notice to
the Bank.  The Borrower shall deposit copies of such policies and
renewals or duplicates of certificates thereof with the Bank, or may effect such
insurance under a blanket policy covering the Mortgaged Property and other
locations and deliver a certificate thereof to the Bank.  In the event
of loss, the Borrower shall give prompt notice to the insurance carrier and the
Bank.  The Bank may make proof of loss if not made promptly by the
Borrower.

     

    The
Borrower shall pay or cause to be paid all premiums for such insurance when
due.

     

    3.8 Borrower’s Indemnification
of the Bank.  Notwithstanding
its insurance agreements, the Borrower hereby indemnifies and saves harmless the
Bank and its directors, officers, employees, attorneys and agents against and
from (a) all claims by or on behalf of any person arising out of (i) any
condition of the Mortgaged Property, or (ii) the construction, reconstruction,
improvement, use, occupancy, conduct or management of or from any work or
anything done or omitted to be done in or about the Mortgaged Property, or (iii)
any accident, injury or damage to any person occurring in or about the Mortgaged
Property, or (iv) any breach or default beyond any applicable grace period by
the Borrower of any of its obligations hereunder or under the Note or any Swap
Contract, or (v) any act or omission of the Borrower or any of its agents,
contractors, servants, employees or licensees, and (b) all costs, counsel fees,
expenses or liability reasonably incurred in connection with any such claim or
action or proceeding brought thereon.  This indemnity shall survive
payment of the Mortgage Debt and cancellation, discharge or foreclosure of this
Mortgage, shall be in addition to and not in lieu of other rights of
indemnification which the Bank may possess under this Mortgage or any instrument
or document related to the Mortgage Debt and shall survive the transfer of any
or all of the right, title and interest in and to the Mortgaged
Property.  If any action or proceeding is brought against the Bank
with respect to any matter covered by the foregoing indemnification, the
Borrower shall resist or defend such action or proceeding through counsel
reasonably acceptable to the Bank.  Subject to the foregoing, the Bank
shall cooperate and join with the Borrower at the expense of the Borrower as may
be required in connection with any action taken or defended by the
Borrower.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.9 Commercial
Transaction.  This
Mortgage evidences a commercial transaction and not a consumer, family,
household or agricultural transaction.

     

    3.10 Hazardous
Waste.

     

    (a) For the
purpose of this Mortgage, the term “Hazardous Materials”
shall mean any “oil”, “hazardous material”,
“hazardous
wastes” or “hazardous substances”
as defined in any federal, state or local law governing the existence, release,
generation, storage or disposal of any hazardous materials, and the regulations
adopted pursuant thereto (collectively, the “Hazardous Waste
Laws”), and shall include, without limitation (whether or not included in
the definition contained in said statutes), asbestos, petroleum products and
chemicals which would be materially dangerous to the environment or to human
beings.

     

    (b) The
Borrower does hereby warrant and represent to the Bank that (i) the Borrower has
never released, generated, stored (except in compliance with Hazardous Waste
Laws) or disposed of any Hazardous Materials on the Mortgaged Property, (ii) the
Borrower is not aware of the existence, release or threat of release of any
Hazardous Materials on the Mortgaged Property or on any properties adjacent to
the Mortgaged Property, and (iii) the Borrower has not received any notice,
order, claim or demand from any governmental authority with respect to the
existence, release or threat of release of any Hazardous Materials on or about
the Mortgaged Property.

     

    (c) (1)           The
Borrower shall not release, generate or dispose of any Hazardous Materials in,
to or on the Mortgaged Property or in, to or on any properties adjacent to the
Mortgaged Property; and

     

           (2)           In
the event that any Hazardous Materials are found on the Mortgaged Property, the
Borrower shall immediately contain and remove the same in compliance with all
Hazardous Waste Laws.

     

    (d) If the
Borrower is a potentially responsible party, the Borrower agrees to indemnify
and hold the Bank harmless from and against any and all claims, liabilities,
costs and expenses incurred by the Bank, other than claims directly and
proximately resulting from the conduct of the Bank (but not any omission of the
Bank), including attorneys’ fees and costs of litigation, arising from the
release, existence or removal, whether now or hereafter and whether before or
after payment in full of the Mortgage Debt, of any Hazardous Materials on the
Mortgaged Property or on any properties adjacent to the Mortgaged
Property.  This indemnification shall survive the loan secured hereby,
notwithstanding any cancellation or discharge of this Mortgage.

     

    (e) If deemed
reasonably necessary after the occurrence of an Event of Default or if required
by applicable banking regulations, the Bank, at its election and in its sole
discretion and with notice to the Borrower, may at any time and from time to
time, cause one or more environmental site assessments of the Mortgaged Property
to be undertaken at the Borrower’s cost and expense.  Environmental
site assessments may include a detailed visual inspection of the Mortgaged
Property, including, without limitation, all storage areas, storage tanks,
drains, dry wells, and leaching areas, as well as the taking of soil samples,
surface water samples, and ground water samples and such other investigation or
analysis as is necessary or appropriate for a complete assessment of the
compliance of the Mortgaged Property and the use and operation thereof with all
Hazardous Waste Laws.

     

    (f) The Bank,
at its election and in its sole discretion and with initial notice only to the
Borrower, may (but shall not be obligated to) cure any failure on the part of
the Borrower, or any occupant of the Mortgaged Property to comply with the
Hazardous Waste Laws, including, without limitation the following:

     

    (1) arrange
for the cleanup or containment of Hazardous Materials found in or on the
Mortgaged Property and pay for such cleanup and containment costs and costs
associated therewith;

     

    (2) pay on
behalf of the Borrower or any occupant of the Mortgaged Property, any fines or
penalties imposed on the Borrower or any occupant by any federal, state, or
local governmental agency or authority in connection with such Hazardous
Materials; and

     

    (3) make any
other payment or perform any other act which may prevent a release of Hazardous
Materials, facilitate the cleanup thereof, and/or prevent a lien from attaching
to the Mortgaged Property.

     

    Any partial exercise by the Bank of the
remedies hereinabove set forth or any partial undertaking on the part of the
Bank to cure the failure of the Borrower or any occupant of the Mortgaged
Property to comply with the Hazardous Waste Laws, shall not obligate the Bank to
complete the actions taken or require the Bank to expend further sums to cure
the Borrower’s or any such occupant’s noncompliance; neither shall the exercise
of any such remedies operate to place upon the Bank any responsibility for the
operation, control, care, management or repair of the Mortgaged Property or make
the Bank the “owner” or “operator” of the
Mortgaged Property or a “responsible party”
within the meaning of the Hazardous Waste Laws.

     

    Any amounts paid or costs incurred by
the Bank as a result of any of the above, together with interest thereon at the
rate set forth in the Note from the date of payment, shall be immediately due
and payable by the Borrower to the Bank, and until paid shall be added to and
become a part of the Mortgage Debt, and the same may be collected as part of
said obligations in any suit herein or upon the Note or any other instrument
included in the Collateral or upon a foreclosure of this Mortgage; and the Bank,
by making any such payment or incurring any such costs, shall be subrogated to
any rights of the Borrower or any occupant of the Mortgaged Property to seek
reimbursement from any third parties, including, without limitation, a
predecessor in interest to the Borrower’s title or a predecessor to the
occupant’s use of the Mortgaged Property, who may be a “responsible party”
under the Hazardous Waste Laws, in connection with the presence of such
Hazardous Materials in, on or near the Mortgaged Property.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
              4.  

            	
              Events of Default;
      Defaults.

            

    

     

    This
Mortgage is on the STATUTORY CONDITION and upon the further condition that there
shall exist no Event of Default under the Loan Agreement or the Note, the
occurrence of any of which, beyond any applicable grace period, shall constitute
an “Event of
Default” hereunder. The Borrower agrees to notify the Bank promptly in
writing of the occurrence of any Event of Default.

     

    
      	
              5.  

            	
              Acceleration.

            

    

     

    Upon the
occurrence of any Event of Default, the Bank may, at its option and without
notice declare the entire Mortgage Debt then outstanding to be due and payable
immediately, and, upon such declaration, all principal and interest accrued
thereon shall automatically be and become immediately due and
payable.

     

    
      	
              6.  

            	
              Surrender of
      Possession of Mortgaged Property;
  Foreclosure.

            

    

     

    Upon
demand by the Bank after the occurrence of an Event of Default under this
Mortgage, the Borrower shall forthwith surrender the possession of, and the
Bank, by such officer or agent as it may appoint, may lawfully take possession
of, all or part of the Mortgaged Property together with the related books,
papers and accounts of the Borrower.  The Bank may (but is under no
obligation to do so) then hold, operate and manage the same and make such
repairs and improvements as the Bank shall deem advisable; the Bank may lease
the Mortgaged Property or any part thereof and collect, receive and sequester
the rents, and other income, charges and moneys therefrom or received from any
receiver; and set up proper reserves or pay all proper costs and expenses,
including reasonable compensation to the Bank, its agents, and counsel, and any
charges of the Bank hereunder, and any taxes and assessments and other charges
prior or subordinate to the lien of this Mortgage which the Bank may deem it
advisable to pay.

     

    Upon the
occurrence of an Event of Default, the lien of this Mortgage may be foreclosed
in the manner provided by law, including without limitation the STATUTORY POWER
OF SALE and the exercise of all rights of a secured party under the Uniform
Commercial Code.  The Bank may become the purchaser of the Mortgaged
Property at any foreclosure sale where it is the highest bidder.

     

    The
Borrower agrees that if the Bank in the exercise of the statutory power of sale
elects to sell the Mortgaged Property in parcels, such sales may be held from
time to time and that the power of sale shall not be exhausted until all the
Mortgaged Property, not previously released, shall have been sold.

     

    Notice
mailed to the Borrower at least ten (10) days before any sale shall constitute
reasonable notification of such sale.

     

    
      	
              7.  

            	
              Other Remedies; Rights
      of the Bank.

            

     

    Upon the
occurrence of an Event of Default, the Bank may pursue any available remedy to
enforce the payment of principal and interest and late charges, if any, on the
Note and/or the payment or performance of the Borrower’s obligations with
respect to any other part of the Mortgage Debt.

     

    No remedy
under this Mortgage is intended to be exclusive, and each remedy shall be
cumulative and in addition to any other remedy hereunder now or hereafter
existing.

     

    No delay
or omission to exercise any right or power shall impair such right or power or
constitute a waiver of any Event of Default or acquiescence therein; and each
such right and power may be exercised as often as deemed expedient.

     

    No waiver
by the Bank of any Event of Default shall extend to any subsequent Event of
Default.

     

    The
Borrower, to the fullest extent that the Borrower may do so, hereby waives all
rights to a marshalling of the assets of the Borrower, including the Mortgaged
Property, or to a sale in inverse order of alienation in the event of a sale
hereunder of the Mortgaged Property, and agrees not to assert any right under
any statute or rule of law pertaining to the marshalling of assets, sale in
inverse order of alienation, or other matters whatever to defeat, reduce or
affect the rights of the Bank under the terms of this Mortgage or the Note to a
sale of the Mortgaged Property for the collection of the indebtedness evidenced
by the Note without any prior or different resort for collection, or the right
of the Bank to the payment of such indebtedness out of the proceeds of sale of
the Mortgaged Property in preference to every other claimant
whatever.

     

    
      	
              8.  

            	
              Setoff.

            

    

     

    Upon
notice of an Event of Default, the Bank may, regardless of the adequacy of and
without being required to first look to anything by which the Mortgage Debt is
secured, apply to or set off against the Mortgage Debt any deposit or other sum
from time to time credited by or due from the Bank to the Borrower.

     

    
      	
              9.  

            	
              Agreement to Pay
      Attorneys’ Fees and
Expenses.

            

    

     

    If the
Bank should employ attorneys or incur other expenses for the enforcement or
performance or observance of any obligation, right or agreement herein
contained, the Borrower agrees that it will on demand therefor reimburse the
Bank for the reasonable fee of such attorneys and such other expenses so
incurred.  If not paid immediately upon demand, such expenses or costs
shall bear interest at the Default Rate provided in the Note.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    
      	
              10.  

            	
              Protection of the
      Bank’s Security.

            

    

     

        If the Borrower
shall fail to perform any obligation hereunder or if any action or proceeding is
commenced which materially affects the Bank’s interest in the Mortgaged
Property, including but not limited to proceedings with respect to eminent
domain, insolvency, code enforcement, or arrangements and proceedings involving
a bankrupt or decedent, then the Bank, at the Bank’s option, may disburse funds
for the performance of such obligations or the making of such appearances and/or
taking such action as the Bank shall deem necessary or appropriate to protect
its interest in the Mortgaged Property, including, but not limited to, repair
and maintenance of the Mortgaged Property, obtaining insurance for the Mortgaged
Property, paying real estate taxes or other municipal charges or assessments on
the Mortgaged Property and engaging attorneys, appraisers and expert witnesses;
and any amounts disbursed by the Bank for the purpose of protecting its interest
in the Mortgaged Property shall become part of the Mortgage Debt secured by this
Mortgage and unless the Borrower and the Bank otherwise agree, all amounts so
disbursed to protect the Bank’s interest in the Mortgaged Property shall be
payable on demand and shall bear interest from the date of disbursement at the
rate from time to time applicable to the Note.

     

    Notwithstanding
the provisions of this Section, the Bank shall never be required to incur any
expense or to take any action hereunder.

     

    The
performance by the Bank of any obligation of the Borrower which the Borrower has
failed to perform shall not be deemed a waiver or cure of the Default and the
Event of Default shall be deemed to continue.

     

    
      	
              11.  

            	
              Late
      Charges.

            

    

     

    In the
event that any installment of principal and/or interest remains unpaid for
fifteen (15) days after the date it is due, the Borrower shall pay a late charge
equal to two (2%) percent of the late payment.

     

    
      	
              12.  

            	
              Transfer of Mortgaged
      Premises.

            

    

     

    If the
legal or beneficial ownership of the Mortgaged Property, or any part thereof,
becomes vested in anyone other than the Borrower, the whole sum of principal and
interest then remaining unpaid shall become immediately due and payable without
notice at the option of the Bank and/or the Bank may, without notice to the
Borrower, deal with such successors in interest with reference to the Mortgage
and the Mortgage Debt hereby secured, and in the same manner as with the
Borrower, without in any way altering or discharging the Borrower’s liability
hereunder or upon the Mortgage Debt.  The Borrower agrees that upon
any such transfer, the Borrower shall remain permanently liable for the Mortgage
Debt and hereby waives any defense available to sureties and consents to the
exchange or release of any Collateral, extensions for time of payment, the
release of one or more persons liable for the Mortgage Debt and changes in the
amount of the Mortgage Debt, the terms of payment and/or the interest rate and
agrees that all or any such events to which such consent is herein given may
occur on one or more occasions.

     

    The
Borrower assigns to the Bank and directs that there shall be paid to the Bank
the proceeds of any awards for damages in connection with any condemnation or
other taking of the Mortgaged Property or any part thereof or for conveyance in
lieu of condemnation.  The Bank, in its sole discretion, shall use
such proceeds as it shall deem necessary or appropriate to protect its
interest.  If the Mortgaged Property is abandoned by the Borrower or
if the Borrower fails after thirty (30) days’ prior written notice from the Bank
to negotiate a reasonable settlement with the condemnor or an offer to make an
award, the Bank may collect and apply the proceeds of such an award at the
Bank’s option either to the restoration or repair of the Mortgaged Property or
to satisfaction of the Mortgage Debt.

     

    
      	
              13.  

            	
              General.

            

    

     

    13.1 Severability.  In
the event that any provision of this Mortgage shall be held to be invalid in any
circumstance, such invalidity shall not affect any other provision or
circumstance.

     

    13.2 Notices.  All
notices, certificates or other communications hereunder shall be sufficiently
given and shall be deemed given two (2) days after mailing by registered or
certified mail, postage prepaid, or when delivered by a nationally recognized
overnight courier, addressed to the following addresses:

     

    Bank:  

       

      
        	 BANK OF
      AMERICA, N.A.
	 100 Front
      Street
	 Worcester,
      MA  01608
	 Attention:  Senior
      Commercial Loan Officer

      

       

    

    With a
copy to:    

    
       

      
        	 George W.
      Tetler III, Esquire
	 Bowditch &
      Dewey, LLP
	 311 Main
      Street
	 P.O.
      Box 15156
	 Worcester,
      MA  01615-0156

      

                            

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

    Borrower:   

     

    
      
        	 IPG PHOTONICS
      CORPORATION
	 Attention:  Angelo
      P. Lopresti, Esquire
	 50 Old Webster
      Road
	 Oxford,
      MA  01540
	 

      

                 

    

    With a
copy to:  

     

    
      
        	 John G.
      Kalyvas, Esquire
	 Winston &
      Strawn LLP
	 200 Park
      Avenue
	 New York, NY
      10166

      

                              

    

    Any party
may change the address to which notices are to be sent to it by giving written
notice of such change of address to the other party in the manner herein
provided for giving notice.

    

    13.3 Captions.  The
captions and headings in this Mortgage are for convenience only and in no way
define or describe the scope or content of any provision of this
Mortgage.

     

    13.4 Counterparts.  This
Mortgage may be executed simultaneously in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
Mortgage.

     

    13.5 Law.  The
validity and interpretation of this Mortgage shall be governed by the laws of
The Commonwealth of Massachusetts.

     

    13.6 JURY TRIAL
WAIVER.
THE BORROWER WAIVES ITS RIGHTS TO A TRIAL BY JURY WITH RESPECT TO ANY SUIT,
ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY
ANY PARTY TO THIS MORTGAGE OR ANY OF ITS SUCCESSORS AND ASSIGNS, WHICH RELATES
DIRECTLY OR INDIRECTLY TO THIS MORTGAGE, THE MORTGAGE DEBT OR THE RELATIONSHIP
BETWEEN THE BANK AND THE BORROWER.

     

    This
Mortgage is upon the STATUTORY CONDITION and the further condition that all
covenants, agreements and obligations of the Borrower contained herein or in any
other instrument or statement given by the Borrower to the Bank in connection
with the Mortgage Debt shall be kept and fully performed, for any breach of
which the Bank shall have the STATUTORY POWER OF SALE.

     

    THIS
SPACE INTENTIONALLY LEFT BLANK;

    SIGNATURE
APPEARS ON THE FOLLOWING PAGE

     

    
      7

      
        

      

    

    

    

    Executed
as a sealed instrument as of the date first above mentioned.

     

                IPG PHOTONICS
CORPORATION

    

    
      	
              /s/ TARA
      PINKOS                                                      

              Witness

            	
              By:        /s/ TIMOTHY P.V. MAMMEN      

              Name:  Timothy
      P.V. Mammen

              Title:   Chief
      Financial Officer and Vice
President

            

    

    

    

    

    

     

    THE
COMMONWEALTH OF MASSACHUSETTS

     

    Worcester,
ss.

    

    On this
4th day of June, 2008, before
me, the undersigned notary public, personally appeared Timothy P.V. Mammen,
Chief Financial Officer and Vice President of IPG PHOTONICS CORPORATION, proved
to me through satisfactory evidence of identification, which was photographic identification with signature issued by a federal or
state governmental agency, oath or affirmation of a credible
witness, X
personal knowledge of the undersigned, to be the person whose name is signed on
the preceding document, and acknowledged to me that he signed it voluntarily for
its stated purpose as the Chief Financial Officer and Vice President of IPG
PHOTONICS CORPORATION.

     

    

    

    
      	
              /s/ CORNELIA J.
      COUTURE

              Notary
      Public

              My
      Commission Expires: Jan. 2, 2015

            

    

    

    

    

    
      
        
           

        

         

      

      
        8

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    Tract 1

    

    The land in Oxford, Worcester County,
Massachusetts situated on the easterly side of Old Webster Road and being shown
as two (2) parcels of land on a plan entitled "Boundary Plan prepared for Elmar
Realty Trust, by CME Associates, Inc., Engineers & Planners, Southbridge,
Massachusetts, Scale 1" = 100', dated October 1, 1999", recorded with the
Worcester Registry of Deeds in Plan Book 748, Plan 89, and shown as "N/F Elmar
Realty Trust, area = 2.4 acres" and "N/F Elmar Realty Trust, area = 34.0 Acres,
more or less".

    

    Together with all rights of the
Mortgagor, if any, in and to the French River.

    

    BEING the same premises conveyed to the
Mortgagor by deed of Elmar Realty Trust dated November 11, 1999, and recorded
with the Worcester District Registry of Deeds in Book 22042,
Page 324.

    

    SUBJECT to a perpetual right and
easement to Massachusetts Electric Company to install an "overhead system" and
an "underground system" dated August 14, 2000, and recorded in said Deeds Book
23206, Page 20, as affected by First Amendment to Easement Deed recorded in said
Deeds Book 39918, Page 289.

    

    TOGETHER with the benefit of and
subject to any conditions in a Grant of Easement Agreement from Massachusetts
Electric Company to IPG Photonics Corporation for access driveway recorded in
said Deeds Book 23719, Page 14, as amended by First Amendment to Grant of
Easement Agreement recorded in said Deeds Book 37389, Page 209.

    

    Tract 2

    

    A certain parcel of land located in
Oxford, Worcester County, Massachusetts, bounded and described as
follows:

    

    The land in the southerly part of
Oxford, Worcester County, Massachusetts, containing twenty-two (22) acres, more
or less, bounded and described as follows:

    

    BEGINNING at the southwesterly corner
of the granted premises at a stonewall intersection with the Boston & Albany
Railroad right of way;

    

    THENCE about N. 2° 15' E. by said
Railroad right of way, six hundred fifteen (615) feet to a point;

    

    THENCE westerly sixteen (16) feet to a
point;

    

    THENCE northerly by said Railroad right
of way, seven hundred nine (709) feet to a corner marking the intersection of
said Railroad right of way and a stone wall;

    

    THENCE N. 83° 15' E. by said stonewall
fence and land formerly of Abel Davis, seven hundred ninety-two (792) feet, more
or less, to a point on the bank of the French River;

    

    THENCE southerly, southwesterly and
southeasterly by the said French River, one thousand two hundred and twenty
(1220) feet, more or less, to the southeasterly corner of the granted
premises;

    

    THENCE S. 75° 50' W. by the remains of
a fence line and a stonewall nine hundred fifty-seven (957) feet, more or less,
to the point of beginning.

    

    And however described, being all of the
land located easterly of the Railroad right of way, as shown on a plan entitled
"Plan of Land belonging to Mendillo-Kubic Cet. Co., Oxford, Mass. Scale 1" =
200', April 10, 1956, V.F. Kubic, Reg. Land Surveyor," Recorded in Plan Book
215, Plan 16.  Together with a right of way from the Old Worcester
Road, so-called, across land now or formerly of Michael Jagiello to the granted
premises as laid out on a separate plan entitled "Plan of Right of Way Belonging
to Mendillo-Kubic Const. Co., Oxford, Mass., Scale 1" = 40', Feb. 23, 1956,
V.F. Kubic Reg. Land Surveyor", Plan Book 215, Plan 17, with a right to maintain
the same at all times.

    

    TOGETHER with a temporary right of way
over the existing way from the said Old Worcester Road to the granted premises
until such time as the Boston & Albany Railroad Company approves the
relocation of the railroad crossing.

    

    SUBJECT to rights that may have been
conveyed by a prior owner of the granted premises to Samuel Slater and Sons to
flow a part of said premises and also such rights as may have been acquired by
the former Webster, Providence & Springfield RR., and subsequently
assigned.

    

    BEING the same premises described in
deed of Buduo Diversified, Inc. to IPG Photonics, Inc. dated October 30, 2000,
and recorded in the Worcester District Registry of Deeds Book 23152, Page
255.

    

    Tract 3

    

    The land in Oxford, Worcester County,
Massachusetts, bounded and described as follows:

    

    BEGINNING at an iron pipe at the
southwest corner of the tract herein described on the easterly side of the 1968
Worcester County Highway layout of Old Webster Road at the northwest corner of
Parcel 1-C;

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    THENCE North 15° 49' 15" West along the
easterly side of Old Webster Road a distance of 340.89 feet to a Worcester
County Highway bound and opposite station 86+26.16;

    

    THENCE running northerly along the
easterly side of Old Webster Road, on a curve to the right having a radius of
1970.00 feet and length of 587.18 feet to an iron pipe;

    

    THENCE North 1° 15' 25" East along the
easterly side of Old Webster Road a distance of 169.80 feet to an iron
pipe;

    

    THENCE North 73° 20' 15" East along a
fence and land now or formerly of Earle N. Hunter a distance of 186.47 feet to
an iron pipe;

    

    THENCE North 72° 09' 58" East along a
fence of Hunter 34.16 feet to an iron pipe;

    

    THENCE South 10° 49' 59" East along
Massachusetts Electric, formerly Providence/Webster/Springfield Railroad, a
distance of 278.39 feet to an iron pipe;

    

    THENCE running southerly along
Massachusetts Electric on a curve to the right having a radius of 11426.16 feet
and a length of 631.51 feet to an iron pipe;

    

    THENCE South 7° 39' 50" East along
Massachusetts Electric, a distance of 150.02 feet to an iron pipe;

    

    THENCE South 66° 26' 19" West along
Parcel 1-C a distance of 241.78 feet to an iron pipe at the point of
beginning.

    

    CONTAINING an area of 6.638 acres, more
or less, in Plan Book 493, Plan 19.

    

    SUBJECT to a 30 foot Right of Way for
the benefit of land described in deed recorded in Book 23152, Page 255, from the
Old Webster Road to land of Massachusetts Electric, the centerline more
particularly described as now traveled:

    

    BEGINNING at an iron pipe on the
easterly side of Old Webster Road, said pipe being 55.35 feet southerly of a
Worcester County Highway bound opposite station 86+26.16;

    

    THENCE North 66° 21' 10" East along the
centerline of said Right of Way, 78.66 feet;

    

    THENCE North 57° 10' 42" East along the
centerline of said Right of Way 216.53 feet to land of Massachusetts Electric
Company.

    

    BEING the same premises described in
deed of Melvyn Glickman and Daniel M. Prouty, Trustees of Elmar Realty Trust, to
IPG Photonics Corporation dated February 14, 2001, and recorded in the Worcester
District Registry of Deeds Book 23552, Page 326.

    

    EXCEPTING from Tract 2 and Tract 3 the
property described in deed of IPG Photonics Corporation to 10 Webster Road, LLC,
dated September 14, 2005, and recorded in the Worcester District Registry of
Deeds Book 37329, Page 71.

    

    THE
FOLLOWING EASEMENTS AND APPURTENANCES are applicable to the remaining portions
of both Tract 2
and Tract 3
owned by Mortgagor:

    

    SUBJECT to a Roadway Maintenance
Covenant with the Oxford Planning Board dated August 22, 2005, recorded in said
Deeds Book 37142, Page 335, so far as still in force and effect but without
reimposing the same.

    

    SUBJECT to a Covenant with the Oxford
Planning Board dated August 22, 2005, recorded in said Deeds Book 37142, Page
338, so far as still in force and effect but without reimposing the
same.

    

    SUBJECT to and with the benefit of a
Definitive Subdivision Plan approval with conditions by the Oxford Planning
Board dated August 3, 2005, recorded in said Deeds Book 37142,
Page 342.

    

    SUBJECT to an Order of Conditions from
the Oxford Conservation Commission dated July 6, 2005, recorded in said
Deeds Book 37253, Page 48.

    

    SUBJECT to a perpetual right and
easement for the benefit of Lot 1 on Plan Book 831, Plan 85, as described in
Deed dated September 14, 2005, recorded in said Deeds Book 37329, Page
71.

    

    TOGETHER with the benefit of a grant of
easement and other easement rights described in a Grant of Easement Agreement
from Massachusetts Electric Company to IPG Photonics Corporation dated September
14, 2005, and recorded in Book 37329, Page 52, as affected by assignment of
easement and assumption by 10 Webster Road, LLC by Assignment and Assumption of
Easement dated September 14, 2005, recorded in Book 37329, Page 76.

    

    MEANING
and intending to describe and mortgage all of the property of IPG Photonics
Corporation shown on a plan entitled "ALTA Survey Plan Prepared for
Owner:  IPG Photonics Corporation, 50 Old Webster Road, Oxford, MA"
prepared by CME Associates, Inc. dated May 22, 2008, Scale 1" = 100', recorded
or to be recorded in Worcester District Registry of Deeds Plan Book ___________,
Plan ___________.

     

    
      
        
           

        

         

      

      
        10ex10_1.htm

    
      

    

    Exhibit
10.1

    
 

    AMENDMENT TO ASSET PURCHASE
AGREEMENT

     

    

     

    This
Agreement effective the ____ day of June, 2008 (the “Amendment”) is to
Amend the Asset Purchase Agreement by and among Rick’s Cabaret International,
Inc., a Texas corporation (“Rick’s”), its wholly owned subsidiary, RCI
Entertainment (Las Vegas), Inc., a Nevada corporation (the “Purchaser”), DI Food
and Beverage of Las Vegas, LLC, a Nevada limited liability company (“DI Food” or
“Seller”) and Harold Danzig (“Danzig”), Frank Lovaas (“Lovaas”) and Dennis
DeGori (“DeGori”), who are all members of DI Food. Messrs. Danzig, Lovaas and
DeGori are hereinafter collectively referred to herein as
“Members.”

     

    RECITALS

     

    WHEREAS,
Purchaser, Rick’s, Seller and the Members entered into an Asset Purchase
Agreement dated April 17, 2008, (“Purchase Agreement”) for (i) the acquisition
by Purchaser of all of the assets owned by the Seller which are associated or
used in connection with the operation of an adult entertainment cabaret known as
“SCORES” located at 3355 Procyon Street, Las Vegas, Nevada 89102 (the “Real
Property” or the “Premises”), all as set forth in the Purchase Agreement; and
(ii) the entering into an Option Agreement pursuant to which either the
Purchaser or Seller may exercise the option to purchase the Real Property where
SCORES is located; and

     

    WHEREAS,
Purchaser, Rick’s, Seller and the Members wish to amend Section 4.1 of the
Purchase Agreement to change the Closing Date; and

     

    WHEREAS,
Purchaser, Rick’s, Seller and the Members wish to amend Section 11.1 of the
Purchase Agreement to change the Termination Date.

     

    NOW,
THEREFORE, in consideration of the foregoing, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

     

    1.           All
capitalized terms used herein shall have the meanings assigned to them in the
Purchase Agreement unless expressly defined otherwise in this
Amendment.

     

    2.           Except
as otherwise specifically provided herein, all terms and conditions of the
Purchase Agreement shall apply to the interpretation and enforcement of this
Amendment as if explicitly set forth herein.

    
      
         

      

      
        
          - 1
-

          Amendment to Purchase Agreement

        

        
          

        

      

      
         

      

    

    3.           Amendment
to Section 4.1 of the Purchase Agreement.

     

    Purchaser,
Rick’s, Seller and Members hereby amend Section 4.1 of the Purchase Agreement in
its entirety to read as follows:

     

    “The
Closing.  The closing of the transactions contemplated by this
Agreement shall take place on or before July 2, 2008 (the “Closing Date”), at
the offices of Shimon & Lovaas, a Professional Corporation, 3016 W.
Charleston Blvd., Suite 210, Las Vegas, Nevada 89102, or at such other time and
place as agreed upon among the parties hereto (the “Closing”).”

    

    4.           Amendment
to Section 11.1 of the Purchase Agreement.

    

    Purchaser,
Rick’s, Seller and Members hereby amend Section 11.1 of the Purchase Agreement
in its entirety to read as follows:

    

    “Termination of
Agreement.  This Agreement shall terminate and be of no force
and effect and all other agreements executed herewith shall be of no force and
effect if:  (i) the transactions contemplated by this Agreement,
including the sale of the Purchased Assets are not consummated on or before July
2, 2008, unless all of the parties hereto agree in writing to extend the
Agreement or (ii) all of the parties agree in writing to terminate this
Agreement sooner.”

    

    5.           This
Amendment shall be of no force and effect until receipt and execution of this
Amendment by Purchaser, Rick’s, Seller and the Members.  This
Amendment may be executed in counterparts, each of which shall be deemed an
original, but all of which shall be deemed one instrument, by facsimile
signature of any of the parties, each of which shall be deemed an original for
all purposes.

     

    6.           Except
as expressly amended hereby, the Purchase Agreement remains in full force and
effect.  Any references to the Purchase Agreement shall refer to the
Purchase Agreement as amended hereby.

     

    [signature
page follows]

    
      
         

      

      
        
          - 2
-

          
            Amendment to Purchase Agreement

          

        

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the undersigned
have executed this Amendment effective as of the date first set forth
above.

     

    
      	 
      	
              RICK’S
      CABARET INTERNATIONAL, INC.

               

            
	 
      	
              /s/ Eric Langan

            
	 
      	
              By:   Eric Langan,
      President

            
	 
      	 
      
	 
      	
              RCI
      ENTERTAINMENT (LAS VEGAS), INC.

               

            
	 
      	
              /s/ Eric Langan

            
	 
      	
              By:  Eric Langan,
      President

            
	 
      	 
      
	 
      	
              DI
      FOOD AND BEVERAGE OF LAS VEGAS, LLC

               

            
	 
      	
              /s/
      Dennis DeGori

            
	 
      	
              By:  Dennis DeGori,
      Manager

            
	 
      	 
      
	 
      	
              /s/ Harold Danzig

            
	 
      	
              Harold
      Danzig, Individually,

            
	 
      	
              Member
      of DI Food and Beverage of Las Vegas, LLC

            
	 	 
	 
      	
              /s/ Frank Lovaas

            
	 
      	
              Frank
      Lovaas, Individually,

            
	 
      	
              Member
      of DI Food and Beverage of Las Vegas, LLC

            
	 	 
	 
      	
              /s/
      Dennis DeGori

            
	 
      	
              Dennis
      DeGori, Individually,

            
	 
      	
              Member
      of DI Food and Beverage of Las Vegas,
LLC

            

    

    

     

    - 3
-

    
      Amendment to Purchase Agreement

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