Document:

Exhibit 10.17

 

101 HARTWELL AVENUE
 LEXINGTON, MASSACHUSETTS

 

LEASE SUMMARY SHEET

 

	
Execution Date:
    	
 
    	
August 6, 2010
    
	
 
    	
 
    	
 
    
	
Tenant:
    	
 
    	
T2 Biosystems, Inc., a Delaware corporation
    
	
 
    	
 
    	
 
    
	
Tenant’s Mailing Address Prior to Occupancy:
    	
 
    	
286 Cardinal Medeiros Avenue Cambridge, MA 02141
    
	
 
    	
 
    	
 
    
	
Landlord:
    	
 
    	
King 101 Hartwell LLC, a Massachusetts limited liability company
    
	
 
    	
 
    	
 
    
	
Building:
    	
 
    	
101 Hartwell Avenue, Lexington, Massachusetts. The Building consists   of approximately 41,269 rentable square feet. The land on which the Building   is located (the “Land”)   is more particularly described in Exhibit 2 attached hereto and   made a part hereof (such land, together with the Building, are hereinafter   collectively referred to as the “Property”).
    
	
 
    	
 
    	
 
    
	
Premises:
    	
 
    	
Approximately Twenty Thousand One Hundred Thirty-Five (20,135)   rentable square feet of space in the Building, as more particularly shown as   hatched, highlighted or outlined on the plan attached hereto as Exhibit 1   and made a part hereof (the “Lease Plan”).
    
	
 
    	
 
    	
 
    
	
Term Commencement Date:
    	
 
    	
The date on which Landlord delivers exclusive possession of the   Premises to Tenant in the condition required by Section 3.1 below, with   Landlord’s Work substantially complete. The Term Commencement Date is   estimated to occur on or about January 1, 2011.
    
	
 
    	
 
    	
 
    
	
Rent Commencement Date:
    	
 
    	
Subject to Section 3.6, the date on which Landlord delivers   exclusive possession of the Premises to Tenant in the condition required by   Section 3.1 below, with Landlord’s Work substantially complete;   provided, however, if there are any Tenant Delays, the Rent Commencement Date   shall occur on the date on which Landlord would have delivered exclusive   possession of the Premises to Tenant in such condition but for any Tenant   Delays.
    
	
 
    	
 
    	
 
    
	
Expiration Date:
    	
 
    	
Unless earlier extended or terminated pursuant to the terms hereof,   the last day of the fifth (5th) Rent Year (hereinafter   defined)
    
	
 
    	
 
    	
 
    
	
Extension Term:
    	
 
    	
Subject to Section 1.2 below, one (1) extension term of two   (2) years.
    
	
 
    	
 
    	
 
    
	
Permitted Uses:
    	
 
    	
Subject to Legal Requirements, general office, research, development   and laboratory use, including without limitation a BL-2 laboratory for   diagnosing blood and other human products, a radiation lab, and other   ancillary uses related to the foregoing.
    

 

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Base Rent:
    	
 
    	
RENT YEAR(1)
    	
 
    	
ANNUAL BASE RENT
    	
 
    	
MONTHLY PAYMENT
    	
 
    
	
 
    	
 
    	
1
    	
 
    	
$
    	
520,000.00
    	
 
    	
$
    	
43,333.33
    	
 
    
	
 
    	
 
    	
2
    	
 
    	
$
    	
540,000.00
    	
 
    	
$
    	
45,000.00
    	
 
    
	
 
    	
 
    	
3
    	
 
    	
$
    	
560,000.00
    	
 
    	
$
    	
46,666.67
    	
 
    
	
 
    	
 
    	
4
    	
 
    	
$
    	
580,000.00
    	
 
    	
$
    	
48,333.33
    	
 
    
	
 
    	
 
    	
5
    	
 
    	
$
    	
600,000.00
    	
 
    	
$
    	
50,000.00
    	
 
    

 

	
Operating Costs and Taxes:
    	
 
    	
See Sections 5.2 and 5.3
    
	
 
    	
 
    	
 
    
	
Tenant’s   Share:
    	
 
    	
A fraction, the numerator of which is the number of rentable square   feet in the Premises, and the denominator of which is the number of rentable   square feet in the Building. As of the Execution Date, Tenant’s Share is   48.79%
    
	
 
    	
 
    	
 
    
	
Security Deposit/ Letter of Credit:
    	
 
    	
$400,000.00
    

 

	
EXHIBIT 1
    	
 
    	
LEASE PLAN
    
	
EXHIBIT 2
    	
 
    	
LEGAL DESCRIPTION
    
	
EXHIBIT 3
    	
 
    	
LANDLORD’S WORK
    
	
EXHIBIT 3A
    	
 
    	
EXTERIOR WORK
    
	
EXHIBIT 4
    	
 
    	
SITE PLAN
    
	
EXHIBIT 5
    	
 
    	
FORM OF LETTER OF CREDIT
    
	
EXHIBIT 6
    	
 
    	
TENANT’S HAZARDOUS MATERIALS
    
	
EXHIBIT 6A
    	
 
    	
LIST OF ENVIRONMENTAL REPORTS
    
	
EXHIBIT 7
    	
 
    	
RULES AND REGULATIONS
    
	
EXHIBIT 8
    	
 
    	
LANDLORD’S SERVICES
    

 

(1) For the purposes of this Lease, the first “Rent Year” shall be defined as the period commencing as of the Commencement Date and ending on the fast day of the month in which the first (lst) anniversary of the Commencement Date occurs; provided, however, that if the Commencement Date occurs on the first day of a calendar month, then the first Rent Year shall expire on the day immediately preceding the first (lst) anniversary of the Commencement Date. Thereafter, “Rent Year” shall be defined as any subsequent twelve (12) month period during the term of this Lease,

 

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THIS INDENTURE OF LEASE (this “Lease”) is hereby made and entered into on the Execution Date by and between Landlord and Tenant.

 

Each reference in this Lease to any of the terms and titles contained in any Exhibit attached to this Lease shall be deemed and construed to incorporate the data stated under that term or title in such Exhibit. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them as set forth in the Lease Summary Sheet which is attached hereto and incorporated herein by reference.

 

1.                                      LEASE GRANT; TERM; APPURTENANT RIGHTS; EXCLUSIONS

 

1.1                               Lease Grant.  Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises upon and subject to terms and conditions of this Lease, for a term of years commencing on the Term Commencement Date and, unless earlier terminated or extended pursuant to the terms hereof, ending on the Expiration Date (the “Initial Term”; the Initial Term and the Extension Term, if duly exercised, are hereinafter collectively referred to as the “Term”).

 

1.2                               Extension Term.

 

(a)                                 Provided (i) Tenant, an Affiliated Entity (hereinafter defined) and/or a Successor (hereinafter defined) is/are then occupying one hundred percent (100%) of the Premises; and (ii) no Event of Default nor an event which, with the passage of time and/or the giving of notice would constitute an Event of Default has occurred (1) as of the date of the Extension Notice (hereinafter defined), and (2) at the commencement of the applicable Extension Term (hereinafter defined), Tenant shall have the option to extend the Term for one (1) additional term of two (2) years (the “Extension Term”), commencing as of the expiration of the Initial Term. Tenant must exercise such option to extend by giving Landlord written notice (the “Extension Notice”) on or before the date that is nine (9) months prior to the expiration of the then-current term of this Lease, time being of the essence. Upon the timely giving of such notice, the Term shall be deemed extended upon all of the terms and conditions of this Lease, except that Base Rent during the Extension Term shall be calculated in accordance with this Section 1.2, Landlord shall have no obligation to construct or renovate the Premises and Tenant shall have no further right to extend the Term. If Tenant fails to give timely notice, as aforesaid, Tenant shall have no further right to extend the Term. Notwithstanding the fact that Tenant’s proper and timely exercise of such option to extend the Term shall be self-executing, the parties shall promptly execute a lease amendment reflecting such Extension Term after Tenant exercises such option. The execution of such lease amendment shall not be deemed to waive any of the conditions to Tenant’s exercise of its rights under this Section 1.2.

 

(b)                                 The Base Rent during the Extension Term (the “Extension Term Base Rent”)  shall be determined in accordance with the process described hereafter. Extension Term Base Rent shall be the fair market rental value of the Premises then demised to Tenant as of the commencement of the Extension Term as determined in accordance with the process described below, for renewals of combination laboratory and office space in the Lexington/Bedford area of equivalent quality, size, utility and location, with the length of the Extension Term and the credit standing of Tenant to be taken into account. Within thirty (30) days after receipt of the Extension Notice, Landlord shall deliver to Tenant written notice of its determination of the Extension Term Base Rent for the Extension Term, Tenant shall, within thirty (30) days after receipt of such notice, notify Landlord in writing whether Tenant accepts or rejects Landlord’s determination of the Extension Term Base Rent (“Tenant’s Response Notice”).  If Tenant fails timely to deliver Tenant’s Response Notice, Landlord’s determination of the Extension Term Base Rent shall be binding on Tenant.

 

(c)                                  If and only if Tenant’s Response Notice is timely delivered to Landlord and indicates both that Tenant rejects Landlord’s determination of the Extension Term Base Rent and desires

 

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to submit the matter to arbitration, then the Extension Term Base Rent shall be determined in accordance with the procedure set forth in this Section 1.2(c). In such event, within ten (10) days after receipt by Landlord of Tenant’s Response Notice indicating Tenant’s desire to submit the determination of the Extension Term Base Rent to arbitration, Tenant and Landlord shall each notify the other, in writing, of their respective selections of an appraiser (respectively, “Landlord’s Appraiser” and “Tenant’s Appraiser”). Landlord’s Appraiser and Tenant’s Appraiser shall then jointly select a third appraiser (the “Third Appraiser”) within ten (10) days of their appointment. All of the appraisers selected shall be individuals with at least five (5) consecutive years’ commercial appraisal experience in the area in which the Premises are located, shall be members of the Appraisal Institute (M.A.I.), and, in the case of the Third Appraiser, shall not have acted in any capacity for either Landlord or Tenant within five (5) years of his or her selection. The three appraisers shall determine the Extension Term Base Rent in accordance with the requirements and criteria set forth in Section 1.2(b) above, employing the method commonly known as Baseball Arbitration, whereby Landlord’s Appraiser and Tenant’s Appraiser each sets forth its determination of the Extension Term Base Rent as defined above, and the Third Appraiser must select one or the other (it being understood that the Third Appraiser shall be expressly prohibited from selecting a compromise figure). Landlord’s Appraiser and Tenant’s Appraiser shall deliver their determinations of the Extension Term Base Rent to the Third Appraiser within five (5) days of the appointment of the Third Appraiser and the Third Appraiser shall render his or her decision within ten (10) days after receipt of both of the other two determinations of the Extension Term Base Rent. The Third Appraiser’s decision shall be binding on both Landlord and Tenant. Each party shall bear the cost of its own appraiser and shall share equally in the cost of the Third Appraiser.

 

1.3                               No recording.  Tenant shall not record this Lease or any portion hereof, a memorandum of this Lease and/or a notice of this Lease.

 

1.4                               Appurtenant Rights.

 

(a)                                 Common Areas. Subject to the terms of this Lease and the Rules and Regulations (hereinafter defined), Tenant shall have, as appurtenant to the Premises, rights to use in common with others entitled thereto, the following areas (such areas are hereinafter referred to as the “Common Areas”): (i) common rooftop areas within which the Rooftop Premises (hereinafter defined) are located and other common rooftop areas necessary for access thereto, and (ii) areas designated by Landlord for common use of the tenants of the Building which areas are exterior to the Building but within the Land, such as landscaped areas, parking areas, driveways and walkways necessary for access to the Premises; and no other appurtenant rights or easements.

 

(b)                                 Parking. During the Term, Landlord shall, subject to the terms hereof, make available four parking spaces per 1,000 rentable square feet of the Premises for Tenant’s use in the parking areas serving the Building. The number of parking spaces in the parking areas reserved for Tenant, as modified pursuant to this Lease or as otherwise permitted by Landlord, are hereinafter referred to as the “Parking Spaces.”  The number of Parking Spaces as of the Execution Date is eighty (80). Other than with respect to ten (10) Parking Spaces that Landlord shall designate as being reserved for Tenant’s visitors, which spaces are more particularly shown on the site plan attached hereto as Exhibit 4 and made a part hereof (the “Site Plan”), Tenant shall have no right to hypothecate or encumber the Parking Spaces, and shall not sublet, assign, or otherwise transfer the Parking Spaces other than to employees of Tenant occupying the Premises or to a Successor (hereinafter defined), an Affiliated Entity (hereinafter defined) or a transferee pursuant to an approved Transfer under Section 13 of this Lease. Said Parking Spaces will be on an unassigned, non-reserved basis, and shall be subject to such reasonable rules and regulations as may be in effect for the use of the parking areas from time to time.

 

(c)                                  Dumpster. During the Term, Tenant shall have the right, at Tenant’s sole cost and expense, to use, maintain and replace a dumpster or trash compactor reasonably approved by

 

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Landlord, which dumpster or trash compactor shall be located as shown on the Site Plan, Such dumpster or trash compactor shall be dedicated to Tenant’s exclusive use for trash and garbage. In no event shall any Hazardous Materials (including without limitation any biohazards) be placed in such dumpster or trash compactor. Tenant shall cause any such dumpster to be emptied by a reputable trash removal company reasonably approved by Landlord on a weekly basis or more frequently if reasonably necessary. Tenant shall cause any such trash compactor to be emptied, as necessary, by a reputable trash removal company reasonably approved by Landlord.

 

(d)                                 Rooftop Premises. During the Term, Tenant shall have the right to use a portion of the rooftop of the Building designated by Landlord (the “Rooftop Premises”) for (i) certain equipment purchased and installed by Landlord as part of Landlord’s Work (the “Provided Rooftop Equipment”) and (ii) the installation of certain equipment approved by Landlord and purchased and installed by Tenant in accordance with Section 11 (“Tenant’s Additional Rooftop Equipment” and collectively with the Provided Rooftop Equipment, as the same may be modified, altered or replaced during the Term, is collectively referred to herein as “Tenant’s Rooftop Equipment”). Landlord’s approval of Tenant’s Additional Rooftop Equipment shall not be unreasonably withheld, conditioned or delayed provided Tenant demonstrates to Landlord’s reasonable satisfaction that the proposed equipment (i) does not interfere with any base building equipment operated by Landlord on the roof; (ii) will not affect the structural integrity of the Building or impact the roof or the roof membrane in any manner; (iii) shall be adequately screened so as to minimize the visibility of such equipment; and (iv) shall be adequately sound-proofed to meet all Legal Requirements. Tenant shall not install or operate Tenant’s Additional Rooftop Equipment until Tenant has obtained and submitted to Landlord copies of all required governmental permits, licenses, and authorizations necessary for the installation and operation thereof. Landlord shall have no obligation to provide any services including, without limitation, electric current or gas service, to Tenant’s Additional Rooftop Equipment. Tenant shall be responsible for the cost of repairing and maintaining Tenant’s Rooftop Equipment and the cost of repairing any damage to the Building, or the cost of any necessary improvements to the Building, caused by or as a result of the installation, replacement and/or removal of Tenant’s Additional Rooftop Equipment and/or the replacement and/or removal of Tenant’s Rooftop Equipment. Landlord makes no warranties or representations to Tenant as to the suitability of the Rooftop Premises for the installation and operation of Tenant’s Additional Rooftop Equipment. If any of Tenant’s Work on the roof of the Building, including without limitation the installation of Tenant’s Additional Rooftop Equipment and the maintenance, repair or replacement of Tenant’s Rooftop Equipment, damages the roof or invalidates or adversely affects any warranty, Tenant shall be fully responsible for the cost of repairs (and any subsequent repairs to the roof to the extent that any warranty is invalidated or adversely affected); it being acknowledged and agreed that, notwithstanding anything to the contrary contained herein, Landlord’s waiver contained in Section 14.5 below shall not apply to the cost of any such repairs. In the event that at any time during the Term, Landlord determines, in its sole but bona fide business judgment, that the operation and/or periodic testing of Tenant’s Additional Rooftop Equipment interferes with the operation of the Building or the business operations of any of the occupants of the Building, then Tenant shall, upon notice from Landlord, cease operation of Tenant’s Additional Rooftop Equipment and cause testing thereof to occur after normal business hours (hereinafter defined). In the event that at any time during the Term, Landlord determines, in its sole but bona fide business judgment, that, as a result of the misuse of the Provided Rooftop Equipment by any of the Tenant Parties or the failure of Tenant to maintain the Provided Rooftop Equipment in good order, condition and repair, the operation and/or periodic testing of the Provided Rooftop Equipment interferes with the operation of the Building or the business operations of any of the occupants of the Building, then Tenant shall, upon notice from Landlord, cease operation of the Provided Rooftop Equipment and cause testing thereof to occur after normal business hours (hereinafter defined). Tenant shall have the right to access the Rooftop Premises and shall maintain an access log which shall list all Tenant Parties who access the roof, the dates and times of such access, and the purpose therefor.

 

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1.5                               Tenant’s Access.

 

(a)                                 From and after the Term Commencement Date and until the end of the Term, Tenant shall have access to the Premises twenty-four (24) hours a day, seven (7) days a week, subject to Legal Requirements, the Rules and Regulations, the terms of this Lease and matters of record.

 

(b)                                 Subject to Section 11, Tenant shall have the right to access the Premises, at Tenant’s sole risk, after December 10, 2010 but prior to the Term Commencement Date for purposes of moving Tenant’s Property (hereinafter defined) into the Premises, subject to reasonable coordination with Landlord to ensure that such moving in will not interfere with inspections of Landlord’s Work and does not materially interfere with the preparation for or performance of Landlord’s Work (hereinafter defined). Tenant shall, prior to the first entry to the Premises pursuant to this Section 1.5(b), provide Landlord with certificates of insurance evidencing that the insurance required in Section 14 hereof is in full force and effect and covering any person or entity entering the Building. Except to the extent caused by the negligence or willful misconduct of any of the Landlord Parties, Tenant shall defend, indemnify and hold the Landlord Parties (hereinafter defined) harmless from and against any and all Claims (hereinafter defined) for injury to persons or property resulting from or relating to Tenant’s access to and use of the Premises prior to the Term Commencement Date as provided under this Section 1.5(b). Tenant shall coordinate any access to the Premises prior to the Term Commencement Date with Landlord’s designee.

 

1.6                               Exclusions.  The following are expressly excluded from the Premises and reserved to Landlord: all the perimeter walls of the Premises (except the inner surfaces thereof), the Common Areas, and any space in or adjacent to the Premises used for shafts, stacks, pipes, conduits, wires and appurtenant fixtures, fan rooms, ducts, electric or other utilities, or other Building facilities, and the use of all of the foregoing, except as expressly permitted pursuant to Section 1.4(a) above.

 

2.                                      RIGHTS RESERVED TO LANDLORD

 

2.1                               Additions and Alterations.  Landlord reserves the right, at any time and from time to time, to make such changes, alterations, additions, improvements, repairs or replacements in or to the Property and the fixtures and equipment therein, as well as in or to the street entrances and/or the Common Areas (but for purposes of this Section 2.1 expressly excluding the Premises) as it may deem necessary or desirable, provided, however, that there be no material obstruction of access to, or material interference with the use and enjoyment of, the Premises by Tenant. If any such changes, alterations, additions, improvements, repairs or replacements affect the entrance to the Premises, Landlord shall provide Tenant with as much advance notice as reasonably practicable; provided, however, that no notice shall be required in the event of an emergency. Subject to the foregoing provisions of this Section 2.1, Landlord expressly reserves the right to temporarily close any portion, of the Common Areas for the purposes of making repairs or changes thereto.

 

2.2                               Additions to the Property.  Upon reasonable prior written notice to Tenant (except that no notice shall be required in an emergency), Landlord may at any time or from time to time construct additional improvements in all or any part of the Property outside of the Premises, including, without limitation, adding additional buildings or changing the location or arrangement of any improvement in or on the Property or all or any part of the Common Areas, or add or deduct any land to or from the Property; provided that in connection with the exercise of the foregoing reserved rights, there shall be no material increase in Tenant’s obligations (including without limitation Operating Costs or Taxes charged to Tenant under Section 5) or material interference with Tenant’s rights under this Lease, including, without limitation, with Tenant’s access to or use and enjoyment of the Premises.

 

2.3                               Name and Address of Building.  Landlord reserves the right at any time and from time to time to change the name or address of the Building and/or the Property, provided Landlord gives

 

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Tenant at least twelve (12) months’ prior written notice thereof.

 

2.4                               Landlord’s Access.  Subject to the terms hereof; Tenant shall (a) upon as much advance notice as is practical under the circumstances, and in any event at least two (2) business days’ prior written notice (except that no notice shall be required in emergency situations), permit Landlord and any holder of a Mortgage (hereinafter defined) (each such holder, a “Mortgagee”), and their agents, employees and contractors, to have reasonable access to the Premises at all reasonable hours for the purposes of inspection, making repairs, replacements or improvements in or to the Premises or the Building or equipment therein (including, without limitation, sanitary, electrical, heating, air conditioning or other systems), complying with all applicable laws, ordinances, rules, regulations, statutes, by-laws, court decisions and orders and requirements of all public authorities (collectively, “Legal Requirements”), accessing the Building electrical room and the internal ladder to the Building’s roof hatch, or exercising any right reserved to Landlord under this Lease (including without limitation the right to take upon or through, all necessary materials, tools and equipment); (b) upon as much advance notice as is practical under the circumstances, and in any event at least two (2) business days’ prior written notice (except that no notice shall be required in emergency situations), permit Landlord, any Mortgagee and any other occupant of the Building (so long as such occupant shall be accompanied by a representative of Landlord), and their agents, employees and contractors, to have reasonable access to the Premises at all reasonable hours for the purposes of accessing the internal ladder to the Building’s roof hatch; (c) permit Landlord and its agents and employees, at reasonable times, upon reasonable advance notice, to show the Premises during normal business hours (i.e. Monday — Friday 8 A.M. - 6 P.M., Saturday 8 A.M. — 1 P.M., excluding holidays) to any prospective Mortgagee or purchaser of the Building and/or the Property or of the interest of Landlord therein, and during the last nine (9) months of the Term, prospective tenants; and (d) upon reasonable prior written notice from Landlord, permit Landlord and its agents, at Landlord’s sole cost and expense, to perform environmental audits, environmental site investigations and environmental site assessments (“Site Assessments”) in, on, under and at the Premises and the Land, it being understood that Landlord shall repair any damage arising as a result of the Site Assessments, and such Site Assessments may include both above and below the ground testing and such other tests as may be necessary or appropriate to conduct the Site Assessments. Tenant shall have the right to have a representative present during any such access pursuant to this Section 2.4. Landlord and any other party accessing the Premises pursuant to this Section 2.4 shall be required to comply with Tenant’s reasonable security and safety protocols of which Landlord has received reasonable prior notice, provided in no event shall such protocols prohibit access to any portion of the Premises. The parties agree and acknowledge that, despite reasonable and customary precautions (which Landlord agrees it shall exercise), any property or equipment in the Premises of a delicate, fragile or vulnerable nature may nevertheless be damaged in the course of performing Landlord’s obligations. Accordingly, Tenant shall take reasonable protective precautions with unusually fragile, vulnerable or sensitive property and equipment.

 

2.5                               Pipes, Ducts and Conduits.  Tenant shall permit Landlord to use, maintain and relocate the pipes, ducts and conduits located as of the Term Commencement Date in and through the Premises. Landlord shall use all commercially reasonable efforts to avoid the need to erect new pipes, ducts and conduits in the Premises, but if Landlord determines that it is necessary to erect the same, Landlord shall permit Landlord to erect, use, maintain and relocate new pipes, ducts and conduits in and through the Premises provided the same do not materially reduce the floor area or materially adversely affect the appearance thereof.

 

2.6                               Minimize Interference.  Except in the event of an emergency, Landlord shall use commercially reasonable efforts to minimize any interference with Tenant’s business operations and use and occupancy of the Premises in connection with the exercise any of the foregoing rights under this Section 2. In connection with the exercise of Landlord’s rights set forth in this Section 2, (i) Landlord shall promptly return the Premises to broom-clean condition following the completion of any work

 

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conducted in the Premises; (ii) subject to Section 14.5 below, Landlord shall be responsible for the prompt and complete repair of any damage caused to the Premises as a result of Landlord’s exercise of its rights in this Section 2, and (iii) the provisions of Section 5.6 shall specifically apply.

 

3.                                      CONDITION OF PREMISES; CONSTRUCTION.

 

3.1                               Condition of Premises.  Landlord shall deliver the Premises to Tenant in broom-clean condition with the Landlord’s Work substantially complete, the Building roof and structure (including without limitation exterior windows), Common Areas, and mechanical, electrical, plumbing, HVAC and life/safety systems serving the Building, and equipment provided by Landlord in good working order, condition and repair. Subject to the foregoing and Section 3.5 below, and subject further to Landlord’s obligation to perform Landlord’s Work (hereinafter defined), Tenant acknowledges and agrees that Tenant is leasing the Premises in their “AS IS,” “WHERE IS” condition and with all faults on the Execution Date, without representations or warranties, express or implied, in fact or by law, of any kind, and without recourse to Landlord.

 

3.2                                    Landlord’s Work.

 

(a)                                 Subject to delays due to governmental regulation, unusual scarcity of or inability to obtain labor or materials, labor difficulties, casualty or other causes reasonably beyond Landlord’s control (collectively “Landlord’s Force Majeure”) and subject to any act or omission by Tenant and/or Tenant’s agents, servants, employees, consultants, contractors, subcontractors, licensees and/or subtenants (collectively with Tenant, the “Tenant Parties”) which causes an actual delay in the performance of Landlord’s Work, and with respect to which Landlord has provided Tenant with written notice that such act or omission is likely to result in an actual delay, and within five (5) days after its receipt of such notice Tenant has failed to alter its actions in such a manner as to avoid the actual delay in the performance of Landlord’s Work, (a “Tenant Delay”), Landlord, at Landlord’s sole cost and expense, shall diligently perform the work (“Landlord’s Work”) more particularly described in Exhibit 3 attached hereto and will substantially complete Landlord’s Work prior to the Term Commencement Date. Landlord’s Work will be deemed substantially complete if it is complete except for Punchlist Items (hereinafter defined). After completion of Landlord’s Work, Landlord shall provide Tenant with “as built” drawings of Landlord’s Work (in CAD format and one paper set).

 

(b)                                 Tenant shall have the right, in accordance herewith, to submit for Landlord’s approval (which approval shall not be unreasonably withheld) change proposals to increase the scope of Landlord’s Work (each, a “Change Proposal”). Landlord agrees to respond to any such Change Proposal within three (3) business days after the submission thereof by Tenant (unless Landlord has previously advised Tenant that a longer time period for such response is reasonably necessary due to the nature and scope of the Change Proposal, together with Landlord’s good faith estimate as to the amount of additional time that will be necessary, or the fact that the information provided by Tenant in the Change Proposal is insufficient for the purposes of enabling Landlord to make the determination set forth herein), and if approved by Landlord, advising Tenant of any anticipated increase in costs associated with such Change Proposal (“Anticipated Costs”), as well as an estimate of any delay which would likely result in the completion of Landlord’s Work if a Change Proposal is made pursuant thereto (“Landlord’s Change Order Response”). Tenant shall have the right to then approve or withdraw such Change Proposal within five (5) business days after receipt of Landlord’s Change Order Response. If Tenant fails to respond to Landlord’s Change Order Response within such five (5) business day period, such Change Proposal shall be deemed withdrawn. If Tenant approves Landlord’s Change Order Response, then (a) such Change Proposal shall be deemed a “Change Order” hereunder, (b) Tenant shall reimburse Landlord for the actual increase in costs associated with the Change Order within thirty (30) days after demand therefor, as Additional Rent, provided, however, that in the event that the Anticipated Costs associated with such Change Order, when added to the costs of previously approved Change Proposals, exceeds Ten Thousand

 

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Dollars ($10,000) (the “Maximum Amount”), then Tenant shall pay to Landlord, as Additional Rent, at the time that Tenant approves Landlord’s Change Order Response, the Anticipated Costs in excess of the Maximum Amount, (c) any delay in the substantial completion of Landlord’s Work due to such Change Order shall be deemed a Tenant Delay, and (d) Landlord shall perform the work described in the Change Order as part of Landlord’s Work on all the terms and conditions applicable to Landlord’s Work except as expressly set forth herein with respect to Tenant’s payment obligation.

 

3.3                                    Punchlist Items. Promptly following delivery of the Premises to Tenant with Landlord’s Work substantially complete, Landlord and Tenant shall inspect the Premises and mutually prepare a list (the “Punchlist”) of outstanding items which do not materially interfere with Tenant’s use and occupancy of the Premises but which need to be performed to complete Landlord’s Work (the “Punchlist Items”). Subject to Landlord’s Force Majeure and Tenant Delays, Landlord shall, unless otherwise specified on the Punchlist, complete all Punchlist Items at Landlord’s sole cost and expense within sixty (60) days of the date of the Punchlist.

 

3.4                                    Exterior Work. Subject to Landlord’s Force Majeure and Tenant Delays, Landlord, at Landlord’s sole cost and expense, shall diligently perform the work (“Exterior Work”) more particularly described in Exhibit 3A attached hereto. Landlord shall use commercially reasonable efforts to substantially complete the Exterior Work on or before May 31, 2011. From and after the Term Commencement Date, Landlord shall use commercially reasonable efforts to minimize any interference with Tenant’s business operations and use and occupancy of the Premises in connection with the performance of the Exterior Work.

 

3.5                                    Landlord’s Warranty. Subject to the terms of this Section 3.5, Landlord warrants that the materials and workmanship comprising Landlord’s Work will be free from defects or deficiencies. Any portion of Landlord’s Work not conforming to the previous sentence may be considered defective. Landlord’s warranty excludes remedy for damage caused by abuse by any of the Tenant Parties or modifications not made by Landlord or any Landlord Party or improper or insufficient maintenance to the extent that such maintenance is not the responsibility of Landlord hereunder, it being understood and agreed that normal wear and tear and normal usage are not deemed defects or deficiencies. Landlord agrees that it shall, without cost to Tenant, correct any portion of Landlord’s Work which is found to be defective promptly following the date that Tenant gives Landlord written notice (a “Defect Notice”) of such defective condition, provided that the Defect Notice is delivered to Landlord on or before the date (the “Warranty Expiration Date”) that is ninety (90) days following the Term Commencement Date, time being of the essence. Landlord’s obligations under this Section 3.5 shall expire on the Warranty Expiration Date and be of no further force and effect except with respect to any defects or deficiencies in Landlord’s Work disclosed in any Defect Notice delivered before the Warranty Expiration Date. In addition to and notwithstanding the foregoing, Landlord hereby agrees, at no cost to Tenant, to enforce its warranties against any contractor performing any portion of Landlord’s Work.

 

3.6                               Delays.

 

(a)                                 Subject to Landlord’s Force Majeure and Tenant Delays, (i) if Landlord’s Work is not substantially complete on or before January 7, 2011, the Rent Commencement Date shall be delayed one (1) day for each one (1) day after such date that Landlord’s Work is not substantially complete, and (ii) if Landlord’s Work is not substantially complete on or before February 1, 2011, the Rent Commencement Date shall be delayed two (2) days for each one (1) day after such date that Landlord’s Work is not substantially complete. The remedies set forth in this Section 3.6 are Tenant’s sole and exclusive right and remedy based upon any delay in the performance of Landlord’s Work.

 

(b)                                 In the event that Landlord anticipates that Landlord’s Work may not be substantially complete by January 1, 2011 for reasons other than Landlord’s Force Majeure or Tenant

 

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Delays, then at Landlord’s request Tenant shall use commercially reasonable efforts to determine if arrangements or alternative plans may be made or implemented so as to minimize the impact on Tenant of such delayed substantial completion, which efforts shall include exploring the possibility of remaining in Tenant’s current location beyond January 1, 2011 without penalty. If such arrangements or alternative plans may be implemented in a manner that reduces the cost to Tenant resulting from the delayed substantial completion of Landlord’s Work, then Landlord and Tenant shall negotiate in good faith appropriate modifications to Section 3.6(a) above.

 

3.7                               Wiring and Cabling Reimbursement. Within thirty (30) days after Landlord’s receipt of a reasonably detailed invoice from Tenant, Landlord shall reimburse Tenant for up to Twenty-Five Thousand Dollars ($25,000) of the reasonable out of pockets costs and expenses incurred by Tenant in connection with the purchase and installation of Tenant’s wiring and cabling in the Premises; provided, however, that such invoice must be delivered to Landlord no later than the date which is ninety (90) days after the Term Commencement Date.

 

4.                                      USE OF PREMISES

 

4.1                               Permitted Uses.  During the Term, Tenant shall use the Premises only for the Permitted Uses and for no other purposes. Service and utility areas (whether or not a part of the Premises) shall be used only for the particular purpose for which they are designed.

 

4.2                               Prohibited Uses.

 

(a)                                 Notwithstanding any other provision of this Lease, Tenant shall not use the Premises or the Building, or any part thereof, or suffer or permit the use or occupancy of the Premises or the Building or any part thereof by any of the Tenant Parties (i) in a manner which would violate any of the covenants, agreements, terms, provisions and conditions of this Lease or otherwise applicable to or binding upon the Premises; (ii) for any unlawful purposes or in any unlawful manner; (iii) which, in the reasonable judgment of Landlord (taking into account the use of the Building as a combination laboratory, research and development and office building and the Permitted Uses) shall (a) impair the appearance or reputation of the Building; (b) impair, interfere with or otherwise diminish the quality of any of the Building services or the proper and economic heating, cleaning, ventilating, air conditioning or other servicing of the Building or Premises, or the use or occupancy of any of the Common Areas; (c) occasion discomfort, inconvenience or annoyance in any material respect (and Tenant shall not install or use any electrical or other equipment of any kind which, in the reasonable judgment of Landlord, will cause any such impairment, interference, discomfort, inconvenience, annoyance or injury), or cause any injury or damage to any occupants of the Premises or other tenants or occupants of the Building or their property; or (d) cause harmful air emissions, laboratory odors or noises or any unusual or other objectionable odors, noises or emissions to emanate from the Premises; (iv) in a manner which is inconsistent with the operation and/or maintenance of the Building as a first-class combination office, research, development and laboratory facility; or (v) in a manner which shall increase such insurance rates on the Building or on property located therein over that applicable when Tenant first took occupancy of the Premises hereunder (which initial insurance rates were set with due consideration for the Permitted Uses).

 

(b)                                                         With respect to the use and occupancy of the Premises and the Common Areas, Tenant will not: (i) place or maintain any signage (except as set forth in Section 12.2 below), trash, refuse or other articles (other than an access card reader installed in accordance with the terms hereof and a rug during inclement weather) in any vestibule or entry of the Premises, on the footwalks or corridors adjacent to the Premises or elsewhere on the exterior of the Premises, nor obstruct any driveway, corridor, footwalk, parking area, mall or any other Common Areas; (ii) permit undue accumulations of or burn garbage, trash, rubbish or other refuse within or without the Premises; (iii) permit the parking of vehicles so as to interfere with the use of any driveway, corridor, footwalk, parking

 

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area, or other Common Areas; (iv) receive or ship articles of any kind outside of those areas reasonably designated by Landlord; (v) conduct or permit to be conducted any auction, going out of business sale, bankruptcy sale (unless directed by court order), or other similar type sale in or connected with the Premises; or (vi) except in connection with Alterations (hereinafter defined) approved by Landlord or the hanging of pictures, white boards and the like, cause or permit any hole to be drilled or made in any part of the Building.

 

5.                                      RENT; ADDITIONAL RENT

 

5.1                            Base Rent. Commencing on the Rent Commencement Date and thereafter throughout the Term, Tenant shall pay to Landlord Base Rent in equal monthly installments, in advance and without demand on the first day of each month for and with respect to such month. The payment of Base Rent, additional rent and other charges reserved and covenanted to be paid under this Lease with respect to the Premises (collectively, “Rent”) shall be prorated for any partial months based on a 365-day year. Rent shall be payable to Landlord or, if Landlord shall so direct in writing, to Landlord’s agent or nominee, in lawful money of the United States which shall be legal tender for payment of all debts and dues, public and private, at the time of payment.

 

5.2                               Operating Costs.

 

(a)                                 “Operating Costs” shall mean all costs incurred and expenditures of whatever nature made by Landlord in the operation, management, repair, replacement, maintenance and insurance of the Property or allocated to the Property, including without limitation any costs for utilities supplied to the Common Areas, any costs for repair and replacements, cleaning and maintenance of the Common Areas, related equipment, facilities, appurtenances and HVAC equipment and the Back-up Generator, the cost of personnel, including, without limitation, the property manager, if any, staff, office rentals, wages, unemployment taxes, social security taxes and benefits, personal property taxes and assessments, fees for required licenses and permits, the cost of Property inspections required by Legal Requirements, a management fee paid to Landlord’s property manager (which management fee shall not exceed four (4%) of gross revenues for the Property) and the costs of Landlord’s management office for the Property. Operating Costs shall not include Excluded Costs (hereinafter defined).

 

(b)                                 “Excluded Costs” shall be defined as (i) any mortgage charges (including interest, principal, points and fees); (ii) brokerage commissions; (iii) salaries of executives and owners not directly employed in the management/operation of the Property and salaries of personnel above the grade of senior property manager; (iv) the cost of work done by any of the Landlord Parties for a particular tenant, including without limitation the costs of relocating a tenant or renovating or otherwise improving or decorating space for another tenant (which shall include without limitation the cost of utilities expended during any such renovation); (v) subject to Subsection 5.2(h) below, such portion of expenditures as are not properly chargeable against income; (vi) the costs of Landlord’s Work, repairing any defects in Landlord’s Work pursuant to Section 3.5 above, and any contributions made by Landlord to any tenant of the Property in connection with the build-out of its premises; (vii) franchise or income taxes imposed on Landlord; (viii) electricity, telephone and other utility costs, including without limitation, water, for any portion of the Property other than the Common Areas; (ix) increases in premiums for insurance or increases in real estate taxes when such increase is caused by the use of the Building by Landlord or any other tenant of the Building; (x) maintenance, repair and replacement of capital items not a part of the Building or the Property; (xi) depreciation of the Building; (xii) costs relating to maintaining Landlord’s existence as a corporation, partnership or other entity; (xiii) advertising, legal and other fees and costs incurred in procuring tenants and/or in selling the Property; (xiv) the cost of any items for which Landlord is reimbursed by insurance, condemnation awards, refund, rebate or otherwise, and any expenses for repairs, replacements or maintenance to the extent covered by warranties, guaranties and service contracts (Landlord hereby agreeing to use commercially reasonable

 

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efforts to adjust insurance proceeds and enforce warranties, guaranties and service contracts); (xv) costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Building management, or between Landlord and other tenants or occupants; (xvi) the proportionate share of the costs of any personnel not dedicated exclusively to the Property, (xvii) legal fees and expenses incurred in connection with enforcing leases with tenants in the Building; (xviii) costs and expenses arising from the negligence or willful misconduct of the Landlord Parties; (xix) subject to Section 15.1 regarding the insurance deductible, costs and expenses arising from a Casualty or Taking (as such terms are defined in Section 15); (xx) the cost of testing, remediation or removal, transportation or storage of Hazardous Materials (hereinafter defined) in the Building or on the Property required by Environmental Laws (hereinafter defined), provided however, that with respect to the testing, remediation or removal that may not be lawfully delayed beyond the Expiration Date of (A) any material or substance located in, on, at or under the Building or the Property on the Execution Date and which, as of the Execution Date, is not considered, as a matter of law, to be a Hazardous Material, but which is subsequently determined to be a Hazardous Material as a matter of law, and (B) any material or substance located in, on, at or under the Building or the Property after the Execution Date and which, when placed in the Building or Property, was not considered, as a matter of law, to be a Hazardous Material, but which is subsequently determined to be a Hazardous Material as a matter of law, the costs thereof may be included in Operating Costs, subject, however, to Section 5.2(h), to the extent that such cost is treated as a capital expenditure; (xxi) expense reserves; (xxii) payments for rented equipment, the cost of which equipment would constitute a capital expenditure if the equipment were purchased, to the extent that such payments exceed the amount which otherwise could have been included in Operating Costs had Landlord purchased such equipment rather than leasing such equipment; and (xxiii) costs of repairs or alterations to the Building structural system, including without limitation costs of correcting defects in the design and construction of, or latent defects in, the Building.

 

(c)                                  “Capital Interest Rate” shall be defined as an annual rate of either one percentage point over the AA Bond rate (Standard & Poor’s corporate composite or, if unavailable, its equivalent) as reported in the financial press at the time the capital expenditure is made or, if the capital item is acquired through third-party financing, then the actual (including fluctuating) rate paid by Landlord in financing the acquisition of such capital item,

 

(d)                                 “Annual Charge-Off” shall be defined as the annual amount of principal and interest payments which would be required to repay a loan (“Capital Loan”) in equal monthly installments over the Useful Life (hereinafter defined), of the capital item in question on a direct reduction basis at an annual interest rate equal to the Capital Interest Rate, where the initial principal balance is the cost of the capital item in question.

 

(e)                                  “Useful Life” shall be reasonably determined by Landlord in accordance with generally accepted accounting principles.

 

(f)                                   Payment of Operating Costs. Tenant .shall pay to Landlord, as additional rent, Tenant’s Share of Operating Costs, Landlord may make a good faith estimate of Tenant’s Share of Operating Costs for any fiscal year or part thereof during the term, and Tenant shall pay to Landlord, on the Rent Commencement Date and on the first (1st) day of each calendar month thereafter, an amount equal to Tenant’s Share of Operating Costs for such fiscal year and/or part thereof divided by the number of months therein. Landlord may re-estimate Tenant’s Share of Operating Costs once each Rent Year and deliver a copy of the re-estimate to Tenant. Thereafter, the monthly installments of Tenant’s Share of Operating Costs shall be appropriately adjusted in accordance with the estimations so that, by the end of the fiscal year in question, Tenant shall have paid all of Tenant’s Share of Operating Costs as estimated by Landlord. Any amounts paid based on such an estimate shall be subject to adjustment as herein provided when actual Operating Costs are available for each fiscal year. As of the Execution Date, the Property’s fiscal year is January 1 — December 31.

 

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(g)                                  Annual Reconciliation. Landlord shall, within one hundred twenty (120) days after the end of each fiscal year, deliver to Tenant a reasonably detailed statement of the actual amount of Operating Costs for such fiscal year, which statement shall include line-item detail consistently applied throughout the Term (“Year End Statement”). Failure of Landlord to provide the Year End Statement within the time prescribed shall not relieve Tenant from its obligations hereunder. If the total of such monthly remittances on account of any fiscal year is greater than Tenant’s Share of Operating Costs actually inclined for such fiscal year, then, provided no Event of Default has occurred nor any event which, with the passage of time and/or the giving of notice would constitute an Event of Default, Tenant may credit the difference against the next installment of additional rent on account of Operating Costs due hereunder (provided, however, if Tenant cures any default prior to the expiration of applicable cure periods set forth in Section 20 below, then Tenant shall then be entitled to take such credit), except that if such difference is determined after the end of the Term, Landlord shall refund such difference to Tenant within thirty (30) days after such determination to the extent that such difference exceeds any amounts then due from Tenant to Landlord. If the total of such remittances is less than Tenant’s Share of Operating Costs actually incurred for such fiscal year, Tenant shall pay the difference to Landlord, as additional rent hereunder, within sixty (60) days of Tenant’s receipt of an invoice therefor. Landlord’s estimate of Operating Costs for the next fiscal year shall be based upon the Operating Costs actually incurred for the prior fiscal year as reflected in the Year-End Statement plus a reasonable adjustment based upon estimated increases in Operating Costs. The provisions of this Section 5.2(g) shall survive the expiration or earlier termination of this Lease.

 

(h)                                 Capital Expenditures. If, during the Term, Landlord shall replace any capital items (collectively, “Capital Expenditures”) the total amount of which is properly capitalized in accordance with generally accepted accounting principles in effect at the time of such replacement or purchase, the price of such Capital Expenditure shall be excluded from Operating Costs. There shall nevertheless be included in such Operating Costs (and in Operating Costs for each succeeding fiscal year) the amount, if any, by which the Annual Charge-Off (determined as hereinafter provided) of such Capital Expenditure (less insurance proceeds, if any, collected by Landlord by reason of damage to, or destruction of the capital item being replaced) exceeds the Annual Charge-Off of the Capital Expenditure for the item being replaced. If a new capital item is acquired which does not replace another capital item, and such new capital item will be utilized within or serve any portion of the Building which includes the Premises and is either (i) required by any Legal Requirements enacted after the Execution Date or (ii) reasonably projected (based on engineering design and analysis) to reduce Operating Costs, then there shall be included in Operating Costs for each fiscal year in which and after such capital expenditure is made the Annual Charge-Off of such capital expenditure.

 

(i)                                     Part Years. If the Rent Commencement Date or the Expiration Date occurs in the middle of a fiscal year, Tenant shall be liable for only that portion of the Operating Costs with respect to such fiscal year within the Term.

 

(j)                                    Audit Right. Provided no Event of Default has occurred nor any event which, with the passage of time and/or the giving of notice would constitute an Event of Default, Tenant may, upon at least ten (10) days’ prior written notice, inspect or audit Landlord’s records relating to Operating Costs for any periods of time within the previous fiscal year before the audit or inspection. Landlord shall provide Tenant with access to such records in accordance with this Section 5.2(j) within ten (10) days after receipt of notice from Tenant. However, no audit or inspection shall extend to periods of time before the Term Commencement Date. If Tenant fails to object to the calculation of Tenant’s Share of Operating Costs on the Year-End Statement within thirty (30) days after such statement has been delivered to Tenant and/or fails to complete any such audit or inspection within ninety (90) days after receipt of the Year End Statement, then Tenant shall be deemed to have waived its right to object to the calculation of Tenant’s Share of Operating Costs for the year in question and the calculation thereof as set forth on such statement shall be final. Tenant’s audit or inspection shall be conducted only at Landlord’s offices or the offices of Landlord’s property manager during business hours reasonably designated by

 

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Landlord. Tenant shall pay the cost of such audit or inspection, provided, however, that if such audit discloses that Tenant has been overcharged by more than five percent (5%), Landlord shall reimburse Tenant for up to $5,000 of Tenant’s reasonable out-of pocket costs incurred in connection with such audit. Tenant may not conduct an inspection or have an audit performed more than once during any fiscal year. If such inspection or audit reveals that an error was made in the calculation of Tenant’s Share of Operating Costs previously charged to Tenant, then, provided no Event of Default has occurred nor an event which, with the passage of time and/or the giving of notice would constitute an Event of Default, Tenant may credit the difference against the next installment of additional rent on account of Operating Costs due hereunder (provided, however, if Tenant cures any default prior to the expiration of applicable cure periods set forth in Section 20 below, then Tenant shall then be entitled to take such credit), except that if such difference is determined after the end of the Term, Landlord shall refund such difference to Tenant within thirty (30) days after such determination to the extent that such difference exceeds any amounts then due from Tenant to Landlord. If such inspection or audit reveals an underpayment by Tenant, then Tenant shall pay to Landlord, as additional rent hereunder, any underpayment of any such costs, after deducting the reasonable out of pocket costs of such inspection or audit, within thirty (30) days after such underpayment is determined. Tenant shall maintain the results of any such audit or inspection confidential and shall not be permitted to use any third party to perform such audit or inspection, other than an independent firm of certified public accountants (A) reasonably acceptable to Landlord, (B) which is not compensated on a contingency fee basis or in any other manner which is dependent upon the results of such audit or inspection, and (C) which executes Landlord’s standard confidentiality agreement whereby it shall agree to maintain the results of such audit or inspection confidential. The provisions of this Section 5.2(j) shall survive the expiration or earlier termination of this Lease.

 

5.3                               Taxes.

 

(a)                                 “Taxes” shall mean the real estate taxes and other taxes, levies and assessments imposed upon the Property, and upon any personal property of Landlord used exclusively in the operation of the Property, or on Landlord’s interest in the Property or such personal property; charges, fees and assessments for transit, housing, police, fire or other services or purported benefits to the Property (including without limitation any community preservation assessments); service or user payments in lieu of taxes; and any and all other taxes, levies, betterments, assessments and charges arising from the ownership, leasing, operation, use or occupancy of the Property or based upon rentals derived therefrom, which are or shall be imposed by federal, state, county, municipal or other governmental authorities. Taxes shall not include any inheritance, estate, succession, gift, franchise, rental, income or profit tax, capital stock tax, capital levy or excise, or any income taxes arising out of or related to the ownership and operation of the Property, provided, however, that any of the same and any other tax, excise, fee, levy, charge or assessment, however described, that may in the future be levied or assessed as a substitute for or an addition to, in whole or in part, any tax, levy or assessment which would otherwise constitute Taxes, whether or not now customary or in the contemplation of the parties on the Execution Date of this Lease, shall constitute Taxes, but only to the extent calculated as if the Property were the only real estate owned by Landlord. “Taxes” shall also include reasonable expenses (including without limitation legal and consultant fees) of tax abatement or other proceedings contesting assessments or levies. Taxes shall also not include any interest, fines or penalties incurred as a result of the late payment of Taxes. In the case of any special or betterment assessment, Landlord shall elect to pay such assessment in installments, over the longest period permitted by law, and only such installments as are due and payable during the applicable Tax Period shall be included in Taxes.

 

(b)                                 “Tax Period” shall be any fiscal/tax period in respect of which Taxes are due and payable to the appropriate governmental taxing authority (i.e., as mandated by the governmental taxing authority), any portion of which period occurs during the Term of this Lease.

 

(c)                                  Payment of Taxes. Tenant shall pay to Landlord, as additional rent, Tenant’s

 

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Share of Taxes. Landlord may make a good faith estimate of the Taxes to be due by Tenant for any Tax Period or part thereof during the Term, and Tenant shall pay to Landlord, on the Rent Commencement Date and on the first (1st) day of each calendar month thereafter, an amount equal to Tenant’s Share of Taxes for such Tax Period or part thereof divided by the number of months therein. Landlord may re-estimate Tenant’s Share of Taxes once per Rent Year and deliver a copy of the re-estimate to Tenant. Thereafter, the monthly installments of Tenant’s Share of Taxes shall be appropriately adjusted in accordance with the estimations so that, by the end of the Tax Period in question, Tenant shall have paid all of Tenant’s Share of Taxes as estimated by Landlord. Upon Tenant’s reasonable request, Landlord shall provide Tenant with copies of the tax bills and other documents, if any, reasonably evidencing the amount of Taxes. Any amounts paid based on such an estimate shall be subject to adjustment as herein provided when actual Taxes are available for each Tax Period. If the total of such monthly remittances is greater than Tenant’s Share of Taxes actually due for such Tax Period, then, provided no Event of Default has occurred nor any event which, with the passage of time and/or the giving of notice would constitute an Event of Default, Tenant may credit the difference against the next installment of additional rent on account of Taxes due hereunder (provided, however, if Tenant cures any default prior to the expiration of applicable cure periods set forth in Section 20 below, then Tenant shall then be entitled to take such credit), except that if such difference is determined after the end of the Term, Landlord shall refund such difference to Tenant within thirty (30) days after such determination to the extent that such difference exceeds any amounts then due from Tenant to Landlord. If the total of such remittances is less than Tenant’s Share of Taxes actually due for such Tax Period, Tenant shall pay the difference to Landlord, as additional rent hereunder, within thirty (30) days of Tenant’s receipt of an invoice therefor. Landlord’s estimate for the next Tax Period shall be based upon actual Taxes for the prior Tax Period plus a reasonable adjustment based upon estimated increases in Taxes. The provisions of this Section 5.3(c) shall survive the expiration or earlier termination of this Lease.

 

(d)                                 Effect of Abatements. Appropriate credit against Taxes shall be given for any refund obtained by reason of a reduction in any Taxes by the assessors or the administrative, judicial or other governmental agency responsible therefor after deduction of Landlord’s expenditures for reasonable legal fees and for other reasonable expenses incurred in obtaining the Tax refund.

 

(e)                                  Part Years. If the Rent Commencement Date or the Expiration Date occurs in the middle of a Tax Period, Tenant shall be liable for only that portion of the Taxes, as the case may be, with respect to such Tax Period within the Term.

 

5.4                                   Late Payments.

 

(a)                                 Any payment of Rent due hereunder not paid when due shall bear interest for each month or fraction thereof from the due date until paid in full at the annual rate of ten percent (10%), or at any applicable lesser maximum legally permissible rate for debts of this nature (the “Default Rate”). Landlord agrees to waive the interest due hereunder for the first late payment by Tenant under this Lease in any twelve (12) month period, provided that Landlord receives such payment from Tenant within five (5) business days from the due date (but if payment is not received within said 5-business day period, interest shall accrue as of the due date).

 

(b)                                 Additionally, if Tenant fails to make any payment within five (5) days after the due date therefor, Landlord may charge Tenant a fee, which shall constitute liquidated damages, equal to One Thousand and NO/100 Dollars ($1,000.00) for each such late payment. Landlord agrees to waive the late charge due hereunder for the first late payment by Tenant under this Lease in any twelve (12) month period, provided that Landlord receives such payment from Tenant within ten (10) days from the due date (but if payment is not received within said 10-day period, such late fee shall be payable by Tenant).

 

(c)                                  For each Tenant payment check to Landlord that is returned by a bank for any reason, Tenant shall pay a returned check charge equal to the amount as shall be customarily charged by

 

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Landlord’s bank at the time.

 

(d)                                 Money paid by Tenant to Landlord shall be applied to Tenant’s account in the following order: first, to any unpaid additional rent, including without limitation late charges, returned check charges, legal fees and/or court costs chargeable to Tenant hereunder; and then to unpaid Base Rent.

 

(e)                                  The parties agree that the late charge referenced in Section 5.4(b) represents a fair and reasonable estimate of the costs that Landlord will incur by reason of any late payment by Tenant, and the payment of late charges and interest are distinct and separate in that the payment of interest is to compensate Landlord for the use of Landlord’s money by Tenant, while the payment of late charges is to compensate Landlord for Landlord’s processing, administrative and other costs incurred by Landlord as a result of Tenant’s delinquent payments. Acceptance of a late charge or interest shall not constitute a waiver of Tenant’s default with respect to the overdue amount or prevent Landlord from exercising any of the other rights and remedies available to Landlord under this Lease or at law or in equity now or hereafter in effect.

 

(f)                                   If Tenant during any six (6) month period shall be more than ten (10) days delinquent in the payment of any undisputed installment of Rent on three (3) or more occasions, then, notwithstanding anything herein to the contrary, Landlord may, by written notice to Tenant, elect to require Tenant to pay all Base Rent and Additional Rent on account of Operating Costs and Taxes quarterly in advance. Such right shall be in addition to and not in lieu of any other right or remedy available to Landlord hereunder or at law on account of Tenant’s default hereunder.

 

5.5                               No Offset; Independent Covenants; Waiver. Rent shall be paid without notice or demand, and without setoff, counterclaim, defense, abatement, suspension, deferment, reduction or deduction, except as expressly provided herein. TENANT WAIVES ALL RIGHTS (I) TO ANY ABATEMENT, SUSPENSION, DEFERMENT, REDUCTION OR DEDUCTION OF OR FROM RENT, AND (II) TO QUIT, TERMINATE OR SURRENDER THIS LEASE OR THE PREMISES OR ANY PART THEREOF, EXCEPT AS EXPRESSLY PROVIDED HEREIN. TENANT HEREBY ACKNOWLEDGES AND AGREES THAT THE OBLIGATIONS OF TENANT HEREUNDER SHALL BE SEPARATE AND INDEPENDENT COVENANTS AND AGREEMENTS, THAT RENT SHALL CONTINUE TO BE PAYABLE IN ALL EVENTS AND THAT THE OBLIGATIONS OF TENANT HEREUNDER SHALL CONTINUE UNAFFECTED, UNLESS THE REQUIREMENT TO PAY OR PERFORM THE SAME SHALL HAVE BEEN TERMINATED PURSUANT TO AN EXPRESS PROVISION OF THIS LEASE. LANDLORD AND TENANT EACH ACKNOWLEDGES AND AGREES THAT THE INDEPENDENT NATURE OF THE OBLIGATIONS OF TENANT HEREUNDER REPRESENTS FAIR, REASONABLE, AND ACCEPTED COMMERCIAL PRACTICE WITH RESPECT TO THE TYPE OF PROPERTY SUBJECT TO THIS LEASE, AND THAT THIS AGREEMENT IS THE PRODUCT OF FREE AND INFORMED NEGOTIATION DURING WHICH BOTH LANDLORD AND TENANT WERE REPRESENTED BY COUNSEL SKILLED IN NEGOTIATING AND DRAFTING COMMERCIAL LEASES IN MASSACHUSETTS, AND THAT THE ACKNOWLEDGEMENTS AND AGREEMENTS CONTAINED HEREIN ARE MADE WITH FULL KNOWLEDGE OF THE HOLDING IN WESSON V. LEONE ENTERPRISES, INC., 437 MASS. 708 (2002). SUCH ACKNOWLEDGEMENTS, AGREEMENTS AND WAIVERS BY TENANT ARE A MATERIAL INDUCEMENT TO LANDLORD ENTERING INTO THIS LEASE.

 

5.6                               Rent Abatement for Interruptions. Notwithstanding anything to the contrary in this Lease contained, if the Premises or a portion thereof are substantially untenantable such that, for the duration of the Interruption Cure Period (hereinafter defined), the continued operation in the ordinary course of Tenant’s business in any portion of the Premises is materially and adversely affected, and if

 

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Tenant ceases to use the affected portion of the Premises (the “Affected Portion”) during the period of untenantability then, provided that such untenantability and Landlord’s inability to cure such condition is not caused by the fault or neglect of any of the Tenant Parties, Base Rent, Operating Costs and Taxes shall thereafter be abated in proportion to such untenantability until the day such condition is completely corrected. For purposes hereof; the “Interruption Cure Period” shall be defined as five (5) consecutive business days after Landlord’s receipt of written notice from Tenant of the condition causing untenantability in the Affected Portion. The provisions of this Section 5.6 shall not apply in the event of untenantability caused by fire or other casualty, or Taking (hereinafter defined), which shall be governed by Section 15 below, or in the event of untenantability caused by causes beyond Landlord’s control or, so long as such untenantability was not caused by the negligence or willful misconduct of any of the Landlord Parties, if Landlord is unable to cure such condition as the result of causes beyond Landlord’s control.

 

5.7                               Survival.  Any obligations under this Section 5 which shall not have been paid at the expiration or earlier termination of the Term shall survive such expiration or earlier termination and shall be paid when and as the amount of same shall be determined and be due.

 

6.                                      INTENTIONALLY OMITTED.

 

7.                                      LETTER OF CREDIT

 

7.1                                Amount.

 

(a)                                 Contemporaneously with the execution of this Lease, Tenant shall deliver either (i) cash in the amount of Four Hundred Thousand Dollars ($400,000) (the “Cash Security Deposit”), which shall be held by Landlord in accordance with Section 7.5 below, or (ii) an irrevocable letter of credit to Landlord which shall (a) be in the amount of Four Hundred Thousand Dollars ($400,000) and otherwise in the form attached hereto as Exhibit 5; (b) issued by a bank with a rating of A or better and otherwise reasonably acceptable to Landlord upon which presentment may be made in Boston, Massachusetts; and (c) be for a term of one (1) year, subject to extension in accordance with the terms hereof (the “Letter of Credit”). The Letter of Credit shall be held by Landlord, without liability for interest, as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease by the Tenant to be kept and performed during the Term. In no event shall the Letter of Credit be deemed to be a prepayment of Rent nor shall it be considered a measure of liquidated damages. Unless the Letter of Credit is automatically renewing, at least thirty (30) days prior to the maturity date of the Letter of Credit (or any replacement Letter of Credit), Tenant shall deliver to Landlord a replacement Letter of Credit which shall have a maturity date no earlier than the next anniversary of the Term Commencement Date or one (1) year from its date of delivery to Landlord, whichever is later.

 

(b)                                 If, as of the effective date of each reduction of the face amount of the Letter of Credit as herein described, no Event of Default has occurred and no event has occurred which, with the passage of time and/or the giving of notice, would constitute an Event of Default then (i) if Tenant receives an aggregate of Twenty Million Dollars ($20,000,000) from equity sales and/or partnering transactions and/or license grants, as evidenced by a written certification (in form and substance reasonably acceptable to Landlord) from Tenant’s Chief Financial Officer, Treasurer or Controller to Landlord, the face amount of the Letter of Credit may be reduced by $80,000 on or after the first day of the third Rent Year, (ii) if at the end of the third Rent Year, Tenant has cash available to fund its operations for a minimum of two (2) years (based on Tenant’s operating expenses during the third (3rd) Rent Year), as evidenced by a written certification (in form and substance reasonably acceptable to Landlord) from Tenant’s Chief Financial Officer, Treasurer or Controller to Landlord, to which certification shall be attached Tenant’s audited financial statements for the previous fiscal year, the face amount of the Letter of Credit may be reduced by $80,000, and (iii) if at the end of the fourth Rent Year, Tenant has cash available to fund its operations for a minimum of one (1) year (based on Tenant’s operating expenses during the fourth (4th) Rent Year), as

 

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evidenced by a written certification (in form and substance reasonably acceptable to Landlord) from Tenant’s Chief Financial Officer, Treasurer or Controller to Landlord, to which certification shall be attached Tenant’s audited financial statements for the previous fiscal year, the face amount of the Letter of Credit may be reduced by $80,000. For clarity, if the conditions necessary for Tenant to make all of the reductions described in Sections 7.1(b)(i)(ii) and (iii) are met, the face amount of the Letter of Credit for the 5th Rent Year shall be $160,000. Landlord shall, at no cost to Landlord, cooperate with Tenant and the issuer of the Letter of Credit in connection with such reduction(s). If any such reduction is effectuated by delivery of a new Letter of Credit rather than an amendment, then upon receipt of a replacement Letter of Credit in the reduced face amount, Landlord shall return the Letter of Credit in the previous amount to the issuer thereof, with a copy to Tenant.

 

(c)                                  If Tenant delivers a Cash Security Deposit, then the amount of the Cash Security Deposit shall be reduced to the amounts and upon satisfaction of the conditions set forth in Section 7.1(b) above. Within thirty (30) days following the effective date of any reduction in the amount of the Cash Security Deposit, Landlord shall return to Tenant such portion of the Cash Security Deposit then in excess of the required amount.

 

7.2                               Application of Proceeds of Letter of Credit. Upon an Event of Default, or if any proceeding shall be instituted by or against Tenant pursuant to any of the provisions of any Act of Congress or State law relating to bankruptcy, reorganizations, arrangements, compositions or other relief from creditors (and, in the case of any proceeding instituted against it, if Tenant shall fail to have such proceedings dismissed within thirty (30) days) or if Tenant is adjudged bankrupt or insolvent as a result of any such proceeding, Landlord at its sole option may draw down all or a part of the Letter of Credit. The balance of any Letter of Credit cash proceeds shall be held in accordance with Section 7.5 below. Should the entire Letter of Credit, or any portion thereof, be drawn down by Landlord, Tenant shall, upon the written demand of Landlord, deliver a replacement Letter of Credit in the amount drawn, and Tenant’s failure to do so within ten (10) days after receipt of such written demand shall constitute an additional Event of Default hereunder. The application of all or any part of the cash proceeds of the Letter of Credit to any obligation or default of Tenant under this Lease shall not deprive Landlord of any other rights or remedies Landlord may have nor shall such application by Landlord constitute a waiver by Landlord.

 

7.3                               Transfer of Letter of Credit. In the event that Landlord transfers its interest in the Premises, Tenant shall upon notice from and at no cost to Landlord, deliver to Landlord an amendment to the Letter of Credit or a replacement Letter of Credit naming Landlord’s successor as the beneficiary thereof. If Tenant fails to deliver such amendment or replacement within ten (10) days after written notice from Landlord, Landlord shall have the right to draw down the entire amount of the Letter of Credit and hold the proceeds thereof in accordance with Section 7.5 below.

 

7.4                               Credit of Issuer of Letter of Credit. In event of a material adverse change in the financial position of any bank or institution which has issued the Letter of Credit or any replacement Letter of Credit hereunder, Landlord reserves the right to require that Tenant change the issuing bank or institution to another bank or institution reasonably approved by Landlord. Tenant shall, within ten (10) days after receipt of written notice from Landlord, which notice shall include the basis for Landlord’s reasonable belief that there has been a material adverse change in the financial position of the issuer of the Letter of Credit, replace the then-outstanding letter of credit with a like Letter of Credit from another bank or institution approved by Landlord.

 

7.5                               Cash Proceeds of Letter of Credit. Landlord shall hold the Cash Security Deposit and/or the balance of proceeds remaining after a draw on the Letter of Credit (each hereinafter referred to as the “Security Deposit”) as security for Tenant’s performance of all its Lease obligations. After an Event of Default, Landlord may apply the Security Deposit, or any part thereof, to Landlord’s damages without prejudice to any other Landlord remedy. Landlord has no obligation to pay interest on the Security Deposit and may co-mingle the Security Deposit with Landlord’s funds. If Landlord conveys its

 

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interest under this Lease, the Security Deposit, or any part not applied previously, may be turned over to the grantee in which case Tenant shall look solely to the grantee for the proper application and return of the Security Deposit.

 

7.6                               Return of Security Deposit or Letter of Credit. Should Tenant comply with all of such terms, covenants and conditions and promptly pay all sums payable by Tenant to Landlord hereunder, the Security Deposit and/or Letter of Credit or the remaining proceeds therefrom, as applicable, shall be returned to Tenant within forty-five (45) days after the end of the Term, less any portion thereof which may have been utilized by Landlord to cure any default or applied to any actual damage suffered by Landlord.

 

8.                                      RIGHT OF FIRST OFFER.

 

8.1                               Right of First Offer. Subject to the provisions of this Section 8, from and after the Term Commencement Date, and provided that as of the date of the ROFO Notice (hereinafter defined) (i) there has been no Event of Default nor an event which, with the passage of time and/or the giving of notice would constitute an Event of Default hereunder (it being understood that if Tenant cures a default prior to the expiration of any applicable grace period, Tenant shall then be entitled to exercise its rights under this Section 8, so long as the condition in subsection (ii) hereafter is met), and (ii) Tenant is in occupancy of at least twenty thousand (20,000) rentable square feet in the Building, Tenant shall have a one-time right of first offer to lease other space in the Building (the “ROFO Space”) if, as and when the same shall become available for lease upon the expiration of a lease to a third party, upon the terms and conditions specified in the ROFO Notice. For clarification purposes, if the balance of the Building is leased to two (2) or more different tenants, then Tenant’s rights under this Section 8 shall apply once to each of the separate premises. It is understood and agreed that Base Rent for any ROFO Space shall be fair market rent.

 

8.2                               Offer and Acceptance Procedures for Right of First Offer.

 

(a)                                 Within fifteen (15) business days after Landlord determines, in its reasonable judgment, that any ROFO Space is available for lease and all of the preconditions to the right of first offer granted to Tenant in this Section 8 have been met, Landlord shall deliver to Tenant a written notice offering to lease the ROFO Space to Tenant upon the terms and conditions set forth therein (the “ROFO Notice”). Tenant then shall have ten (10) days after receipt of the ROFO Notice to notify Landlord in writing whether Tenant will exercise its right to lease the ROFO Space upon the terms and conditions described in the ROFO Notice (which may include a term that extends beyond the Expiration Date).

 

(b)                                 If Tenant fails to notify Landlord in writing within such 10-day period that Tenant accepts the offer contained in the ROFO Notice, or if Tenant refuses in writing the offer contained in the ROFO Notice, Landlord shall have the right to lease the ROFO Space to any third party tenant on whatever terms and conditions Landlord may decide in its sole discretion, provided that such terms are not less than ninety percent (90%) of the net effective rent (hereinafter defined) set forth in the ROFO Notice. As used herein, the term “net effective rent” shall mean the net present value of the rent, additional rent, and other charges that would be payable to Landlord under the terms of any proposed lease, taking into account any construction allowance, the cost of any leasehold improvements proposed to be performed by Landlord, any free rent, and any other monetary inducements payable by Landlord under such proposed lease.

 

(c)                                  If Tenant timely notifies Landlord of its desire to lease the ROFO Space pursuant to this Section 8.2, Landlord shall submit to Tenant, and Tenant shall execute and deliver to Landlord within thirty (30) days of receipt thereof, a lease amendment which incorporates all of the terms and conditions set forth in the ROFO Notice. Landlord and Tenant shall reasonably diligently negotiate such lease amendment in good faith. If Tenant fails to execute and deliver the lease amendment within said

 

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thirty (30) day period, subject to reasonable extensions of time if the parties are negotiating significant terms in good faith, then subject to the provisions of Section 8.2(b) above, Tenant’s right to lease the ROFO Space in question shall terminate and shall be null and void, and Landlord shall have no further obligation to lease such ROFO Space to Tenant and may lease any or all of such ROFO Space to another party upon such terms and conditions as Landlord may deem appropriate, free and clear of any rights in favor of Tenant contained herein.

 

8.3                               Termination of Rights. All rights of Tenant under this Section 8 shall terminate upon the expiration or earlier termination of the Term of this Lease.

 

8.4                               Rights Personal to Tenant. Except in connection with a Transfer (hereinafter defined) pursuant to Section 13 below, Tenant may not assign, mortgage, pledge, encumber or otherwise transfer its interest or rights under this Section 8, and any such purported transfer or attempt to transfer shall be void and without effect, shall terminate Tenant’s rights under this Section 8, and shall constitute an Event of Default under this Lease.

 

8.5                               Time is of the Essence. Time is of the essence with respect to all aspects of this  Section 8.

 

9.                                      UTILITIES, LANDLORD’S SERVICES

 

9.1                               Electricity and Gas. Commencing on the Term Commencement Date, Tenant shall pay all charges for electricity and gas furnished to the Premises and any equipment exclusively serving the Premises, together with any governmental or third party fees, surcharges or taxes thereon, As part of Landlord’s Work, Landlord shall, at Landlord’s sole cost and expense, cause to be installed metering equipment to measure electricity and gas furnished to the Premises and any equipment exclusively serving the Premises. Landlord shall, at Tenant’s sole cost and expense, maintain and keep in good order, condition and repair such metering equipment. Tenant shall pay the full amount of any charges attributable to such meters on or before the due date therefor directly to the supplier thereof.

 

9.2                               Water. Tenant shall pay all charges for water furnished to the Premises and/or any equipment exclusively serving the Premises as additional rent, based on Landlord’s reasonable estimates or any applicable metering equipment. At Tenant’s request, Landlord shall provide Tenant with reasonable back-up documentation regarding the total charges and the method of allocating the charges to Tenant. If not separately metered, Landlord may elect to furnish and install in a location approved by Landlord in or near the Premises any necessary metering equipment reasonably acceptable to Landlord and the supplier thereof to be used to measure water furnished to the Premises and any equipment exclusively serving the same, If applicable, Tenant shall, at Tenant’s sole cost and expense, maintain and keep in good order, condition and repair the metering equipment used to measure water furnished to the Premises and any equipment exclusively serving the same. Tenant shall pay the full amount of any charges attributable to such meter on or before the due date therefor either to Landlord or directly to the supplier thereof, at Landlord’s election.

 

9.3                             Other Utilities. Subject to Landlord’s resonable rules and regulations governing the same, Tenant shall obtain and pay, as and when due, for all other utilities and services consumed in and/or furnished to the Premises, together with all taxes, penalties, surcharges and maintenance charges pertaining thereto.

 

9.4                               Interruption or Curtailment of Utilities. When necessary by reason of accident or emergency, or for repairs, alterations, replacements or improvements which in the reasonable judgment of Landlord are desirable or necessary to be made, Landlord reserves the right, upon as much prior notice to Tenant as is practicable under the circumstances and no less than five (5) days’ notice except in the

 

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event of an emergency, to interrupt, curtail, or stop (i) the furnishing of hot and/or cold water, and (ii) the operation of the plumbing and electric systems. Landlord shall exercise reasonable diligence to eliminate the cause of any such interruption, curtailment, stoppage or suspension, but, subject to Section 5.6 above, there shall be no diminution or abatement of Rent or other compensation due from Landlord to Tenant hereunder, nor shall this Lease be affected or any of Tenant’s obligations hereunder reduced, and Landlord shall have no responsibility or liability for any such interruption, curtailment, stoppage, or suspension of services or systems.

 

9.5                               Landlord’s Services. Subject to reimbursement pursuant to Section 5.2 above, Landlord shall provide the services described in Exhibit 8 attached hereto and made a part hereof (“Landlord’s Services”).

 

10.                               MAINTENANCE AND REPAIRS

 

10.1                        Maintenance and Repairs by Tenant. Tenant shall keep neat and clean and free of trash, insects, rodents, vermin and other pests and in good repair, order and condition the Premises, including without limitation the entire interior of the Premises, all electronic, phone and data cabling and related equipment (collectively, “Cable”) that is installed by or for the exclusive benefit of the Tenant and located in the Premises, all fixtures, equipment and lighting therein, electrical equipment wiring, doors, non structural walls, windows and floor coverings, reasonable wear and tear and damage by Casualty excepted. Tenant shall be solely responsible, at Tenant’s sole cost and expense, for the proper maintenance of all building systems, life-safety, sanitary, electrical, heating, air conditioning, plumbing, security or other systems and of all equipment and appliances exclusively serving the Premises. Tenant agrees to provide regular maintenance by contract with a reputable qualified service contractor reasonably approved by Landlord for the heating and air conditioning equipment servicing the Premises, Landlord hereby agreeing to respond to any request for such approval within ten (10) days. Such maintenance contract shall be subject to Landlord’s reasonable approval. Tenant, at Landlord’s request, shall at reasonable intervals provide Landlord with copies of such contracts and maintenance and repair records and/or reports. In addition, Tenant shall maintain in good repair, order and condition the Movable Benches (as defined in Exhibit 3), reasonable wear and tear and damage by Casualty excepted.

 

10.2                        Maintenance and Repairs by Landlord. Except as otherwise provided in Section 15, and subject to Tenant’s obligations in Section 10.1 above, Landlord shall (a) maintain and keep in good and watertight repair, order and condition the Building foundation, the roof, Building structure, structural floor slabs and columns in good repair, order and condition, and (b) maintain and keep in good repair, order and condition the Building systems (including without limitation the life-safety, sanitary, electrical, heating, air conditioning, plumbing and security systems) not exclusively serving the Premises. In addition, Landlord shall operate and maintain the Common Areas (including without limitation the landscaping and parking areas) in substantially the same manner as comparable combination office and laboratory facilities in the vicinity of the Premises. Without limiting the generality of the foregoing, Landlord shall use commercially reasonable efforts to clear snow from the parking areas and walkways and entrances servicing the Building prior to eight o’clock in the morning (8:00 am).

 

10.3                        Accidents to Sanitary and Other Systems. Tenant shall give to Landlord prompt notice of any fire or accident in the Premises or in the Building and of any damage to, or defective condition in, any part or appurtenance of the Building including, without limitation, sanitary, electrical, ventilation, heating and air conditioning or other systems located in, or passing through, the Premises, Except as otherwise provided in Section 15, and subject to Tenant’s obligations in Section 10.1 above, such damage or defective condition shall be remedied by Landlord with reasonable diligence, but, subject to Section 14.5 below, if such damage or defective condition was caused by any of the Tenant Parties, the cost to remedy the same shall be paid by Tenant,

 

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10.4                             Floor Load—Heavy Equipment. Tenant shall not place a load upon any floor of the Premises exceeding the floor load per square foot of area which such floor was designed to carry and which is allowed by Legal Requirements. Landlord reserves the right to prescribe the weight and position of all safes, heavy machinery, heavy equipment, freight, bulky matter or fixtures (collectively, “Heavy Equipment”), which shall be placed so as to distribute the weight. Heavy Equipment shall be placed and maintained by Tenant at Tenant’s expense in settings sufficient in Landlord’s reasonable judgment to absorb and prevent vibration, noise and annoyance. Tenant shall not move any Heavy Equipment into or out of the Building without giving Landlord prior written notice thereof and observing all of Landlord’s Rules and Regulations with respect to the same. If such Heavy Equipment requires special handling, Tenant agrees to employ only persons holding a Master Rigger’s License to do said work, and that all work in connection therewith shall comply with Legal Requirements. Any such moving shall be at the sole risk and hazard of Tenant and Tenant will defend, indemnify and save Landlord and Landlord’s agents (including without limitation its property manager), contractors and employees (collectively with Landlord, the “Landlord Parties”) harmless from and against any and all claims, damages, losses, penalties, costs, expenses and fees (including without limitation reasonable legal fees) (collectively, “Claims”) resulting directly or indirectly from such moving. Proper placement of all Heavy Equipment in the Premises shall be Tenant’s responsibility.

 

11.                               ALTERATIONS AND IMPROVEMENTS BY TENANT

 

11.1                        Landlord’s Consent Required. Tenant shall not make any alterations, decorations, installations, removals, additions or improvements (collectively, “Alterations”) in or to the Premises without Landlord’s prior written approval of the contractor(s), written plans and specifications and a time schedule therefor. Landlord reserves the right to require that Tenant use Landlord’s designated vendor(s) for any Alterations that involve roof penetrations or the sprinkler system. Tenant shall not make any material amendments or material additions to plans and specifications approved by Landlord without Landlord’s prior written consent. Landlord’s approval of non-structural Alterations shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Landlord may withhold its consent in its sole discretion (a) to any Alteration to or affecting the fixed lab benches, fume hoods, roof and/or building systems, (b) with respect to matters of aesthetics relating to Alterations to or affecting the exterior of the Building, and (c) to any Alteration affecting the Building structure. Notwithstanding the foregoing, Landlord’s consent shall not be required with respect to any Alterations that are purely decorative in nature (including without limitation, painting, carpeting and the hanging of pictures and the like that are not visible from outside the Premises) (each, a “Decorative Alteration”) nor with respect to non-structural Alterations costing less than $75,000 in any one instance (and $125,000 in the aggregate per year) so long as such Alterations do not materially adversely affect the roof, Building systems or Building exterior (each, a “Permitted Alteration”), provided Tenant shall provide Landlord with reasonably detailed prior written notice of any Permitted Alteration. Tenant shall be responsible for all elements of the design of Tenant’s plans (including, without limitation, compliance with Legal Requirements, functionality of design, the structural integrity of the design, the configuration of the Premises and the placement of Tenant’s furniture, appliances and equipment), and Landlord’s approval of Tenant’s plans shall in no event relieve Tenant of the responsibility for such design, Landlord shall have no liability or responsibility for any claim, injury or damage alleged to have been caused by the particular materials (whether building standard or non-building standard), appliances or equipment selected by Tenant in connection with any work performed by or on behalf of Tenant. Except as otherwise expressly set forth herein, all Alterations shall be done at Tenant’s sole cost and expense and at such times and in such manner as Landlord may from time to time reasonably designate. If Tenant shall make any Alterations (other than Decorative Alterations), then Landlord may elect to require Tenant at the expiration or sooner termination of the Term to restore the Premises to substantially the same condition as existed immediately prior to the Alterations, provided, however, if Tenant’s request for approval of such plans also requests that Landlord make such election, or if Tenant’s notice of any Permitted Alterations also requests that Landlord make such election, then Landlord shall make such election at the time of

 

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Landlord’s approval of the plans for the Alteration in question or reasonably promptly after receipt of the reasonably detailed notice of the Permitted Alteration, as the case may be, If reasonably requested by Landlord, Tenant shall provide Landlord with reproducible record drawings (in CAD format) of all Alterations (other than Decorative Alterations) within sixty (60) days after completion thereof. Landlord agrees to respond to any request for approval of any Alterations within twenty (20) business days after receipt thereof; provided, however, that Landlord agrees to respond to any request for approval of any of Alterations within ten (10) business days after receipt thereof if such request is accompanied by (A) a certification from a licensed code engineer that the plans for such Alterations submitted with such request are code compliant, and (B) a certification from Landlord’s MEP engineer that such plans are compatible with the base building design.

 

11.2                        After-Hours. Landlord and Tenant recognize that to the extent Tenant elects to perform some or all of the Alterations during times other than normal construction hours (i.e., Monday-Friday, 7:00 a.m. to 3:00 p.m., excluding holidays) and such Alterations include work outside the Premises, Landlord may need to make arrangements to have supervisory personnel on site. Accordingly, Landlord and Tenant agree as follows: Tenant shall give Landlord at least two (2) business days’ prior written notice of any time outside of normal construction hours when Tenant intends to perform any Alterations that include work outside the Premises (the “After-Hours Work”). Tenant shall reimburse Landlord, within ten (10) days after demand therefor, for the cost of Landlord’s supervisory personnel overseeing the After-Hours Work. In addition, if construction during normal construction hours unreasonably disturbs other tenants of the Building, in Landlord’s sole discretion, Landlord may require Tenant to stop the performance of Alterations during normal construction hours and to perform the same after hours, subject to the foregoing requirement to pay for the cost of Landlord’s supervisory personnel, if applicable.

 

11.3                        Harmonious Relations. Tenant agrees that it will not, either directly or indirectly, use any contractors and/or materials if their use will create any difficulty, whether in the nature of a labor dispute or otherwise, with other contractors and/or labor engaged by Tenant or Landlord or others in the construction, maintenance and/or operation of the Building, the Property or any part thereof. In the event of any such difficulty, upon Landlord’s request, Tenant shall cause all contractors, mechanics or laborers causing such difficulty to leave the Property immediately.

 

11.4                        Liens. No Alterations shall be undertaken by Tenant until (i) Tenant has made provision for written waiver of liens from all contractors for such Alteration and taken other appropriate protective measures approved and/or required by Landlord; and (ii) Tenant has procured appropriate surety payment and performance bonds which shall name Landlord as an additional obligee and has filed lien bond(s) (in jurisdictions where available) on behalf of such contractors. Any mechanic’s lien filed against the Premises or the Building for work claimed to have been done for, or materials claimed to have been furnished to, Tenant shall be discharged by Tenant within ten (10) days thereafter, at Tenant’s expense by filing the bond required by law or otherwise.

 

11.5                        General Requirements. Unless Landlord and Tenant otherwise agree in writing, Tenant shall (a) procure or cause others to procure on its behalf all necessary permits before undertaking any Alterations in the Premises (and provide copies thereof to Landlord); (b) perform all of such Alterations in a good and workmanlike manner, employing materials of good quality and in compliance with Landlord’s construction rules and regulations, all insurance requirements of this Lease, and Legal Requirements; and (c) defend, indemnify and hold the Landlord Parties harmless from and against any and all Claims occasioned by or growing out of such Alterations. Tenant shall cause contractors employed by Tenant to (i) carry Worker’s Compensation Insurance in accordance with statutory requirements, (ii) carry Automobile Liability Insurance and Commercial General Liability Insurance (A) naming Landlord as an additional insured, and (B) covering such contractors on or about the Premises in the amounts stated in Section 14 hereof or in such other reasonable amounts as Landlord shall require, and (iii) submit binders evidencing such coverage to Landlord prior to the commencement of any such

 

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Alterations.

 

12.                               SIGNAGE

 

12.1                        Restrictions. Tenant shall have the right to install Building standard signage identifying Tenant’s business at the entrance to the Premises, which signage shall be subject to Landlord’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed). Subject to the foregoing, and subject to Section 12.2 below, Tenant shall not place or suffer to be placed or maintained on the exterior of the Premises, or any part of the interior visible from the exterior thereof, any sign, banner, advertising matter or any other thing of any kind (including, without limitation, any hand-lettered advertising), and shall not place or maintain any decoration, letter or advertising matter on the glass of any window or exterior of the door of the Premises without first obtaining Landlord’s written approval. No signs or blinds may be put on or in any window or elsewhere if visible from the exterior of the Building.

 

12.2                        Exterior Signage. Provided that and for so long as Tenant is then occupying at least forty percent (40%) of the rentable square feet of the Building, Tenant shall have the right to erect and maintain one (1) sign on the exterior of the Building and one (1) sign on the exterior door to the Premises, the aggregate size of which shall not exceed fifty percent (50%) of the exterior Building signage allowed by Legal Requirements (the “Exterior Signage”), provided (i) the Exterior Signage complies with all Legal Requirements (and Tenant shall have obtained any necessary permits prior to erecting the Exterior Signage), (ii) the location of the Exterior Signage shall be subject to Landlord’s reasonable approval, (iii) the materials, design, lighting and method of installation of the Exterior Signage, and any requested changes thereto, shall be subject to Landlord’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed, and (iv) Tenant shall at all times maintain the Exterior Signage in good order, condition and repair and shall remove the Exterior Signage at the expiration or earlier termination of the Term hereof or upon Landlord’s written demand after the failure of Tenant to comply with the provisions of this Section 12.2, and shall repair any damage to the Building caused by the Exterior Signage or the installation or removal thereof. Tenant shall have the right, from time to time throughout the term of this Lease, to replace its signage (if any) with signage which is equivalent to the signage being replaced, subject to all of the terms and conditions of this Section 12.2.

 

13.                               ASSIGNMENT, MORTGAGING AND SUBLETTING

 

13.1                        Landlord’s Consent Required. Except as expressly otherwise set forth herein, Tenant shall not, without Landlord’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), assign, sublet, mortgage, license, transfer or encumber this Lease or the Premises in whole or in part, whether at one time or at intervals, or permit the occupancy of all or any portion of the Premises by any person or entity other than Tenant’s employees (each of the foregoing, a “Transfer”). Any purported Transfer made without Landlord’s consent, if required hereunder, shall be void and confer no rights upon any third person, provided that if there is a Transfer, Landlord may collect rent from the transferee without waiving the prohibition against Transfers, accepting the transferee, or releasing Tenant from full performance under this Lease. In the event of any Transfer in violation of this Section 13, Landlord shall have the right to terminate this Lease upon thirty (30) days’ written notice to Tenant given within sixty (60) days after the later of (i) receipt of written notice from Tenant to Landlord of such Transfer, or (ii) the date on which Landlord first learns of the Transfer if no notice is given. No Transfer shall relieve Tenant of its primary obligation as party-Tenant hereunder, nor shall it reduce or increase Landlord’s obligations under this Lease.

 

13.2                        Landlord’s Recapture Right

 

(a)                                 Tenant shall, prior to offering or advertising the Premises or any portion thereof

 

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for a Transfer to any entity other than an Affiliated Entity or a Successor, give a written notice (the “Recapture Notice”) to Landlord which: (i) states that Tenant desires to make a Transfer, (ii) identifies the affected portion of the Premises (the “Recapture Premises”), (iii) identifies the period of time (the “Recapture Period”) during which Tenant proposes to sublet the Recapture Premises, or indicates that Tenant proposes to assign its interest in this Lease, and (iv) offers to Landlord to terminate this Lease with respect to the Recapture Premises (in the case of a proposed assignment of Tenant’s interest in this Lease or a subletting for the remainder of the term of this Lease) or to suspend the Term for the Recapture Period (i.e. the Term with respect to the Recapture Premises shall be terminated during the Recapture Period and Tenant’s rental obligations shall be proportionately reduced). Landlord shall have fifteen (15) business days within which to respond to the Recapture Notice.

 

(b)                                 If Tenant does not enter into a Transfer on the terms and conditions contained in the Recapture Notice on or before the date which is one hundred eighty (180) days after the earlier of: (x) the expiration of the 15-business day period specified in Section 13.2(a) above, or (y) the date that Landlord notifies Tenant that Landlord will not accept Tenant’s offer contained in the Recapture Notice, time being of the essence, then prior to entering into any Transfer after such 180-day period, Tenant must deliver to Landlord a new Recapture Notice in accordance with Section 13.2(a) above

 

(c)                                  Notwithstanding anything to the contrary contained herein, if Landlord notifies Tenant that it accepts the offer contained in the Recapture Notice or any subsequent Recapture Notice, Tenant shall have the right, for a period of fifteen (15) days following receipt of such notice from Landlord, time being of the essence, to notify Landlord in writing that it wishes to withdraw such offer and this Lease shall continue in full force and effect.

 

13.3                      Standard of Consent to Transfer.  If Landlord does not timely give written notice to Tenant accepting a Recapture Offer or declines to accept the same, then Landlord agrees that, subject to the provisions of this Section 13, Landlord shall not unreasonably withhold, condition or delay its consent to a Transfer on the terms contained in the Recapture Notice to an entity which will use the Premises for the Permitted Uses and, in Landlord’s reasonable opinion: (a) has a tangible net worth and other financial indicators sufficient to meet the Transferee’s obligations under the Transfer instrument in question; (b) has a business reputation compatible with the operation of a first-class combination laboratory, research, development and office building; and (c) the intended use of such entity does not violate any restrictive use provisions then in effect with respect to space in the Building.

 

13.4                      Listing Confers no Rights. The listing of any name other than that of Tenant, whether on the doors of the Premises or on the Building directory, or otherwise, shall not operate to vest in any such other person, firm or corporation any right or interest in this Lease or in the Premises or be deemed to effect or evidence any consent of Landlord, it being expressly understood that any such listing is a privilege extended by Landlord revocable at will by written notice to Tenant.

 

13.5                      Profits In Connection with Transfers. Tenant shall, within thirty (30) days of receipt thereof, pay to Landlord fifty percent (50%) of any rent, sum or other consideration to be paid or given in connection with any Transfer, either initially or over time (after deducting reasonable actual out-of-pocket marketing, legal, brokerage and construction expenses and any improvement allowance and cash concession incurred by Tenant in connection therewith) in excess of Rent hereunder as if such amount were originally called for by the terms of this Lease as additional rent.

 

13.6                      Prohibited Transfers. Notwithstanding any contrary provision of this Lease, Tenant shall have no right to make a Transfer unless on both (i) the date on which Tenant notifies Landlord of its intention to enter into a Transfer and (ii) the date on which such Transfer is to take effect, Tenant is not in default of any of its obligations under this Lease (provided, however, if Tenant cures any default prior to the expiration of applicable cure periods set forth in Section 20 below, then Tenant shall then be entitled

 

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to make such Transfer). Notwithstanding anything to the contrary contained herein, Tenant agrees that in no event shall Tenant make a Transfer to (a) any government agency; (b) any tenant, subtenant or occupant of other space in the Building unless Landlord does not have any comparable space available to lease to such tenant, subtenant or occupant directly; or (c) any entity other than Tenant’s Affiliated Entity or Successor to whom Landlord has an outstanding proposal (that has not been rejected) for space in the Property.

 

13.7                        Exceptions to Requirement for Consent. Notwithstanding anything to the contrary herein contained, Tenant shall have the right, without obtaining Landlord’s consent and without giving Landlord a Recapture Notice, to make a Transfer to (a) an Affiliated Entity (hereinafter defined) so long as such entity remains in such relationship to Tenant, and (b) a Successor, provided that prior to or simultaneously with any such Transfer, such Affiliated Entity or Successor, as the case may be, and Tenant execute and deliver to Landlord an assignment and assumption agreement in form and substance reasonably acceptable to Landlord whereby such Affiliated Entity or Successor, as the case may be, shall agree to be independently bound by and upon all the covenants, agreements, terms, provisions and conditions set forth in the Lease on the part of Tenant to be performed, and whereby such Affiliated Entity or Successor, as the ease may be, shall expressly agree that the provisions of this Section 13 shall, notwithstanding such Transfer, continue to be binding upon it with respect to all future Transfers. For the purposes hereof, an “Affiliated Entity” shall be defined as any entity (a) that has a net worth and other financial indicators demonstrating such entity’s ability to perform all of Tenant’s obligations hereunder, as evidenced by audited financial statements; and (b) which is controlled by, is under common control with, or which controls Tenant. For the purposes hereof, a “Successor” shall be defined as any entity into or with which Tenant is merged or with which Tenant is consolidated or which acquires all or substantially all of Tenant’s stock or assets, provided that the surviving entity shall have a net worth and other financial indicators sufficient to meet Tenant’s obligations hereunder.

 

14.                               INSURANCE; INDEMNIFICATION; EXCULPATION  

 

14.1                        Tenant’s Insurance.

 

(a)                                 Tenant shall procure, pay for and keep in force throughout the Term (and for so long thereafter as Tenant remains in occupancy of the Premises) commercial general liability insurance insuring Tenant on an occurrence basis against all claims and demands for personal injury liability (including, without limitation, bodily injury, sickness, disease, and death) or damage to property which may be claimed to have occurred from and after the time any of the Tenant Parties shall first enter the Premises, of not less than One Million Dollars ($1,000,000) per occurrence, Two Million ($2,000,000) aggregate, and during the Extension Term shall be not less than such higher amounts, if procurable, as may be reasonably required by Landlord. Tenant shall also carry umbrella liability coverage in an amount of no less than Five Million Dollars ($5,000,000). Such policy shall also include contractual liability coverage covering Tenant’s liability assumed under this Lease, including without limitation Tenant’s indemnification obligations. Such insurance policy(ies) shall name Landlord, Landlord’s managing agent and persons claiming by, through or under them, if any, as additional insureds.

 

(b)                                 Tenant shall take out and maintain throughout the Term a policy of fire, vandalism, malicious mischief, extended coverage and so-called “all risk” coverage insurance in an amount equal to one hundred percent (100%) of the replacement cost insuring (i) all items or components of Alterations made by or on behalf of Tenant other than the Base Building Work, including without limitation the Tenant Fitout (collectively, the “Tenant-Insured Improvements”), and (ii) all of Tenant’s furniture, equipment, fixtures and property of every kind, nature and description related or arising out of Tenant’s leasehold estate hereunder, which may be in or upon the Premises or the Building, including without limitation Tenant’s Rooftop Equipment (collectively, “Tenant’s Property”) and the Movable Benches (as defined in Exhibit 3). Such insurance with respect to the Tenant-Insured Improvements shall

 

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insure the interests of both Landlord and Tenant as their respective interests may appear from time to time.

 

(c)                                  Intentionally Omitted.

 

(d)                                 Tenant shall procure and maintain at its sole expense such additional insurance as may be necessary to comply with any Legal Requirements.

 

(e)                                  The insurance required pursuant to Sections 14.1(a), (b), (c) and (d) (collectively, “Tenant’s Insurance Policies”) shall be effected with insurers approved by Landlord, with a rating of not less than “A-XI” in the current Best’s Insurance Reports, and authorized to do business in the Commonwealth of Massachusetts under valid and enforceable policies. Tenant’s Insurance Policies shall each provide that it shall not be canceled or modified in a manner such that it no longer complies with the requirements set forth herein without at least thirty (30) days’ prior written notice to each insured named therein. Tenant’s Insurance Policies may include deductibles in an amount no greater than the greater of $25,000 or commercially reasonable amounts. On or before the date on which any of the Tenant Parties shall first enter the Premises and thereafter not less than fifteen (15) days prior to the expiration date of each expiring policy, Tenant shall deliver to Landlord binders of Tenant’s Insurance Policies issued by the respective insurers setting forth in full the provisions thereof together with evidence satisfactory to Landlord of the payment of all premiums for such policies. In the event of any claim, and upon Landlord’s request, Tenant shall deliver to Landlord complete copies of Tenant’s Insurance Policies. Upon request of Landlord, Tenant shall deliver to any Mortgagee copies of the foregoing documents.

 

14.2                     Indemnification. Except to the extent caused by the negligence or willful misconduct of any of the Landlord Parties, Tenant shall defend, indemnify and save the Landlord Parties harmless from and against any and all Claims (as defined in Section 10.4) asserted by or on behalf of any person, firm, corporation or public authority arising from:

 

(a)                                 Tenant’s breach of any covenant or obligation under this Lease;

 

(b)                                 Any injury to or death of any person, or loss of or damage to property, sustained or occurring in, upon, at or about the Premises;

 

(c)                                  Any injury to or death of any person, or loss of or damage to property arising out of the use or occupancy of the Premises by or the negligence or willful misconduct of any of the Tenant Parties; and

 

(d)                                 On account of or based upon any work or thing whatsoever done (other than by Landlord or any of the Landlord Parties) at the Premises during the Term and during the period of time, if any, prior to the Term Commencement Date that any of the Tenant Parties may have been given access to the Premises.

 

14.3                        Property of Tenant. Tenant covenants and agrees that, to the maximum extent permitted by Legal Requirements, all of Tenant’s Property at the Premises shall be at the sole risk and hazard of Tenant, and that if the whole or any part thereof shall be damaged, destroyed, stolen or removed from any cause or reason whatsoever, no part of said damage or loss shall be charged to, or borne by, Landlord, except, subject to Section 14.5 hereof, to the extent such damage or loss is due to the negligence or willful misconduct of any of the Landlord Parties.

 

14.4                        Limitation of Landlord’s Liability for Damage or Injury. Landlord shall not be liable for any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, air contaminants or emissions, electricity, electrical or electronic emanations or disturbance, water, rain or

 

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snow or leaks from any part of the Building or from the pipes, appliances, equipment or plumbing works or from the roof, street or sub-surface or from any other place or caused by dampness, vandalism, malicious mischief or by any other cause of whatever nature, except in all cases to the extent caused by or due to the negligence or willful misconduct of any of the Landlord Parties, and then, where notice and an opportunity to cure are appropriate (i.e., where (i) Landlord does not know of such condition and (ii) Tenant knows of such condition sufficiently in advance of the occurrence of any such injury or damage resulting therefrom and can enable Landlord to prevent such damage or loss by notifying Landlord of such condition) only after (i) notice to Landlord of the condition claimed to constitute negligence or willful misconduct, and (ii) the expiration of a reasonable time after such notice has been received by Landlord without Landlord having commenced to take all reasonable and practicable means to cure or correct such condition; and pending such cure or correction by Landlord, Tenant shall take all reasonably prudent temporary measures and safeguards to prevent any injury, loss or damage to persons or property. Notwithstanding the foregoing, in no event shall any of the Landlord Parties be liable for any loss which is covered by insurance policies actually carried or required to be so carried by this Lease; nor shall any of the Landlord Parties be liable for any such damage caused by other tenants or persons in the Building or caused by operations in construction of any private, public, or quasi-public work by any entity or person other than the Landlord Parties.

 

14.5                        Waiver of Subrogation; Mutual Release. Landlord and Tenant each hereby waives on behalf of itself and its property insurers (none of which shall ever be assigned any such claim or be entitled thereto due to subrogation or otherwise) any and all rights of recovery, claim, action, or cause of action against the other and its agents, officers, servants, partners, shareholders, or employees (collectively, the “Related Parties”) for any loss or damage that may occur to or within the Premises or the Building or any improvements thereto, or any personal property of such party therein which is insured against under any properly insurance policy actually being maintained by the waiving party from time to time, even if not required hereunder, or which would be insured against under the terms of any insurance policy required to be carried or maintained by the waiving party hereunder, whether or not such insurance coverage is actually being maintained, including, in every instance, such loss or damage that may be caused by the negligence of the other party hereto and/or its Related Parties. Landlord and Tenant each agrees to cause appropriate clauses to be included in its property insurance policies necessary to implement the foregoing provisions.

 

14.6                        Tenant’s Acts—Effect on Insurance. Tenant shall not do or permit any Tenant Party to do any act or thing upon the Premises or elsewhere in the Building which Tenant knows will invalidate or be in conflict with any insurance policies covering the Building and the fixtures and property therein. If by reason of the failure of Tenant to comply with the provisions hereof the insurance rate applicable to any policy of insurance shall at any time thereafter be higher than it otherwise would be, Tenant shall reimburse Landlord upon demand for that part of any insurance premiums which shall have been charged because of such failure by Tenant, together with interest at the Default Rate until paid in full, within ten (10) days after receipt of an invoice therefor.

 

15.                               CASUALTY; TAKING

 

15.1                        Damage. If the Premises are damaged in whole or part because of fire or other insured casualty  (“Casualty”),  or if the Premises are subject to a taking in connection with the exercise of any power of eminent domain, condemnation, or purchase under threat or in lieu thereof (any of the foregoing, a “Taking”), then unless this Lease is terminated in accordance with Section 15.2 below, Landlord shall commence and proceed diligently to restore (a) the Building and/or the Premises to substantially the same condition as existed on the Execution Date and (b) the Base Building Work, or in the event of a partial Taking which affects the Building and the Premises, restore the remainder of the Building and the Premises not so Taken to substantially such condition as is reasonably feasible. Subject to rights of Mortgagees, Tenant Delays, Legal Requirements then in existence and to delays for

 

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adjustment of insurance proceeds or Taking awards, as the case may be, and instances of Landlord’s Force Majeure, Landlord shall substantially complete such restoration within one (1) year after Landlord’s receipt of all required permits therefor with respect to substantial reconstruction of at least 50% of the Building, or, within one hundred eighty (180) days after Landlord’s receipt of all required permits therefor in the case of restoration of less 50% of the Building. Upon substantial completion of such restoration by Landlord, Tenant shall use diligent efforts to complete restoration of the Premises to substantially the same condition as existed immediately prior to such Casualty or Taking, as the case may be, as soon as reasonably possible. Tenant agrees to cooperate with Landlord in such manner as Landlord may reasonably request to assist Landlord in collecting insurance proceeds due in connection with any Casualty which affects the Premises or the Building. In no event shall Landlord be required to expend more than the Net (hereinafter defined) insurance proceeds Landlord receives for damage to the Premises and/or the Building or the Net Taking award attributable to the Premises and/or the Building. “Net” means the insurance proceeds or Taking award actually paid to Landlord (and not paid over to a Mortgagee) less all costs and expenses, including adjusters and attorney’s fees, of obtaining the same. In the Operating Year in which a Casualty occurs, there shall be included in Operating Costs Landlord’s deductible under its property insurance policy. Landlord shall not be required to repair any damage to, or make any repairs to or replacements of, any Tenant-Insured Improvements.

 

15.2                        Termination Rights.

 

(a)                                 Landlord’s Termination Rights. Landlord may terminate this Lease upon thirty (30) days’ prior written notice delivered to Tenant on or before the date which is ninety (90) days after the Casualty or Taking, as the case may be, if:

 

(i)                                     any material portion of the Building or any material means of access thereto is taken;

 

(ii)                                  more than thirty-five percent (35%) of the Building is damaged by Casualty; or

 

(iii)                               if the estimated time to complete restoration exceeds the timeframes set forth in Section 15.1 above.

 

If Landlord elects to exercise its right of termination under this Section 15.2(a), then Tenant’s obligation to pay Rent hereunder shall cease as of the earlier of the effective date of such termination, or the date on which Tenant is deprived of possession of all or a substantial portion of the Premises as a result of such Casualty or Taking.

 

(b)                                 Tenant’s Termination Right. If Landlord is so required but fails to complete restoration of the Premises within the time frames and subject to the conditions set forth in Section 15.1 above, then Tenant may terminate this Lease upon thirty (30) days’ written notice to Landlord; provided, however, that if Landlord completes such restoration within thirty (30) days after receipt of any such termination notice, such termination notice shall be null and void and this Lease shall continue in full force and effect. The remedies set forth in this Section 15.2(b) and in Section 15.2(c) below are Tenant’s sole and exclusive rights and remedies based upon Landlord’s failure to complete the restoration of the Premises as set forth herein.

 

(c)                                  Either Party May Terminate. In the case of any Casualty or Taking affecting the Premises and occurring during the last six (6) months of the Term, then (1) if such Casualty or Taking results in more than twenty-five percent (25%) of the floor area of the Premises being unsuitable for the Permitted Uses, or (ii) the damage to the Premises costs more than $100,000 to restore, then either

 

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Landlord or Tenant shall have the option to terminate this Lease upon thirty (30) days’ written notice to the other.

 

(d)                                 Automatic Termination. In the case of a Taking of the entire Premises, then this Lease shall automatically terminate as of the date of possession by the Taking authority.

 

15.3                        Taking for Temporary Use. If the Premises are Taken for temporary use, this Lease and Tenant’s obligations hereunder shall continue, provided, however, all obligations of Tenant incapable of performance in the absence of possession of the Premises shall be suspended during such temporary Taking. For purposes hereof, a “Taking for temporary use” shall mean a Taking of ninety (90) days or less.

 

15.4                        Disposition of Awards. Except for any separate award for Tenant’s movable trade fixtures, relocation expenses, and unamortized leasehold improvements paid for by Tenant (provided that the same may not reduce Landlord’s award), all Taking awards to Landlord or Tenant shall be Landlord’s property without Tenant’s participation, and Tenant hereby assigns to Landlord Tenant’s interest, if any, in such award. Tenant may pursue its own claim against the Taking authority.

 

15.5                        Assignment of Insurance Proceeds. Tenant shall assign to Landlord all of its right, title and interest in and to the insurance proceeds for the Tenant-Insured Improvements (a) if the Lease Term shall expire prior to the completion of Tenant’s restoration obligations set forth in Section 15.1 above, or (b) if the Lease shall be terminated pursuant to any provision of this Lease prior to the completion of Tenant’s restoration obligations set forth in Section 15.1 above, or (c) if Tenant terminates this Lease pursuant to this Section 15.

 

15.6                        Abatement. If all or any portion of the Premises are damaged by a Casualty or subject to a Taking, (a) Tenant shall use good faith efforts to collect proceeds of its business interruption insurance if it has procured such insurance; and (b) to the extent Tenant does not have such insurance or Tenant’s business interruption insurance does not fully cover Base Rent, Additional Rent on account of Operating Costs and Additional Rent on account of Taxes, then Base Rent, Additional Rent on account of Operating Costs and Additional Rent on account of Taxes shall be equitably abated for the period from the date of such Casualty or Taking until the date that Landlord substantially completes Landlord’s restoration work relating to the Premises (provided that if Landlord would have completed Landlord’s restoration work on an earlier date but for Tenant Delays, including without limitation Tenant having failed to reasonably cooperate with Landlord in effecting such work or collecting insurance proceeds, then the Premises shall be deemed to have been repaired and restored on such earlier date). In the event of a permanent Taking where the Lease is not terminated, a just proportion of the Rent shall be abated for the duration of the Term.

 

16.                               ESTOPPEL CERTIFICATE. Tenant shall at any time and from time to time upon not less than ten (10) business days’ prior written notice from Landlord, execute, acknowledge and deliver to Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), and the dates to which Rent has been paid in advance, if any, stating whether or not Landlord is in default in performance of any covenant, agreement, term, provision or condition contained in this Lease and, if so, specifying each such default, and such other facts as Landlord may reasonably request, it being intended that any such statement delivered pursuant hereto may be relied upon by any prospective purchaser of the Building or of any interest of Landlord therein, any Mortgagee or prospective Mortgagee thereof, any lessor or prospective lessor thereof, any lessee or prospective lessee thereof, or any prospective assignee of any mortgage thereof. Time is of the essence with respect to any such requested certificate, Tenant hereby acknowledging the importance of such certificates in mortgage financing arrangements, prospective sales and the like.

 

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17.                               HAZARDOUS MATERIALS

 

17.1                        Prohibition. Tenant shall not, without the prior written consent of Landlord, bring or permit to be brought or kept in or on the Premises or elsewhere in the Building or the Property (i) any inflammable, combustible or explosive fluid, material, chemical or substance (except for standard office supplies stored in proper containers); and (ii) any Hazardous Material (hereinafter defined), other than the types and quantities of Hazardous Materials which are used in the ordinary course of Tenant’s business and listed by class on Exhibit 6 attached hereto (“Tenant’s Hazardous Materials”), provided that the same shall at all times be brought upon, kept or used in so-called ‘control areas’ (the number and size of which shall be reasonably determined by Landlord) and in accordance with all applicable Environmental Laws (hereinafter defined) and prudent environmental practice and (with respect to medical waste and so-called “biohazard” materials) good medical practice. Tenant shall be responsible for assuring that all laboratory uses are adequately and properly vented. On or before each anniversary of the Term Commencement Date, and upon Landlord’s request (which request may be made no more often than once per year), Tenant shall submit to Landlord an updated list of Tenant’s Hazardous Materials for Landlord’s review and approval, which approval shall not be unreasonably withheld, conditioned or delayed. In addition, Tenant shall obtain Landlord’s reasonable approval of any additional Hazardous Materials for which Tenant must obtain any permit, license or other governmental approval. Landlord shall have the right, from time to time, to inspect the Premises for compliance with the terms of this Section 17.1. Notwithstanding the foregoing, with respect to any of Tenant’s Hazardous Materials which Tenant does not properly handle, store or dispose of in compliance with all applicable Environmental Laws (hereinafter defined), prudent environmental practice and (with respect to medical waste and so-called “biohazard materials) good medical practice, Tenant shall, upon written notice from Landlord, no longer have the right to bring such material into the Building or the Property until Tenant has demonstrated, to Landlord’s reasonable satisfaction, that Tenant has implemented programs to thereafter properly handle, store or dispose of such material.

 

17.2                        Environmental Laws. For purposes hereof, “Environmental Laws” shall mean all laws, statutes, ordinances, rules and regulations of any local, state or federal governmental authority having jurisdiction concerning environmental, health and safety matters, including but not limited to any discharge by any of the Tenant Parties into the air, surface water, sewers, soil or groundwater of any Hazardous Material (hereinafter defined) whether within or outside the Premises, including, without limitation (a) the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., (b) the Federal Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., (c) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., (d) the Toxic Substances Control Act of 1976, 15 U.S.C. Section 2601 et seq., and (e) Chapter 21E of the General Laws of Massachusetts. Tenant, at its sole cost and expense, shall comply with (i) Environmental Laws, and (ii) any rules, requirements and safety procedures of the Massachusetts Department of Environmental Protection, the Town of Lexington and any insurer of the Building or the Premises with respect to Tenant’s use, storage and disposal of any Hazardous Materials.

 

17.3                        Hazardous Material Defined. As used herein, the term “Hazardous Material” means asbestos, oil or any hazardous, radioactive or toxic substance, material or waste or petroleum derivative which is or becomes regulated by any Environmental Law. The term “Hazardous Material” includes, without limitation, oil and/or any material or substance which is (i) designated as a “hazardous substance,” “hazardous material,” “oil,” “hazardous waste” or toxic substance under any Environmental Law.

 

17.4                        Testing. If any Mortgagee or governmental authority requires testing to determine whether there has been any release of Hazardous Materials and such testing is required as a result of the acts or omissions of any of the Tenant Parties, then Tenant shall reimburse Landlord upon demand, as additional rent, for the reasonable costs thereof, together with interest at the Default Rate until paid in full.

 

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Tenant shall execute affidavits, certifications and the like, as may be reasonably requested by Landlord from time to time concerning Tenant’s best knowledge and belief concerning the presence of Hazardous Materials in or on the Premises, the Building or the Property.

 

17.5                        Indemnity by Tenant. Tenant hereby covenants and agrees to indemnify, defend and hold the Landlord Parties harmless from and against any and all Claims against any of the Landlord Parties arising out of contamination of any part of the Property or other adjacent property, which contamination arises as a result of: (i) the presence of Hazardous Material in the Premises, the presence of which is caused by any act or omission of any of the Tenant Parties, or (ii) from a breach by Tenant of its obligations under this Section 17. This indemnification of the Landlord Parties by Tenant includes, without limitation, reasonable costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of Hazardous Material present in the soil or ground water on or under the Building based upon the circumstances identified in the first sentence of this Section 17.5. The indemnification and hold harmless obligations of Tenant under this Section 17.5 shall survive the expiration or any earlier termination of this Lease. Without limiting the foregoing, if the presence of any Hazardous Material in the Building or otherwise in the Property is caused by any of the Tenant Parties and results in any contamination of any part of the Property or any adjacent property, Tenant shall promptly take all reasonable actions at Tenant’s sole cost and expense as are necessary to return the Property and/or the Building or any adjacent property to their condition as of the date of this Lease, provided that Tenant shall first obtain Landlord’s approval of such actions, which approval shall not be unreasonably withheld, conditioned or delayed so long as such actions, in Landlord’s reasonable discretion, would not potentially have any adverse effect on the Property, and, in any event, Landlord shall not withhold its approval of any proposed actions which are required by applicable Environmental Laws. The provisions of this Section 17.5 shall survive the expiration or earlier termination of the Lease.

 

17.6                        Disclosures. Prior to bringing any Hazardous Material into any part of the Property, Tenant shall deliver to Landlord the following information with respect thereto: (a) a description of handling, storage, use and disposal procedures; (b) all plans or disclosures and/or emergency response plans which Tenant has prepared, including without limitation Tenant’s Spill Response Plan, and all plans which Tenant is required to supply to any governmental agency or authority pursuant to any Environmental Laws; (c) copies of all Required Permits relating thereto (provided, however, if Tenant is verbally authorized by applicable governmental authorities to bring any Hazardous Material into any part of the Property pending the issuance of a Required Permit, then Tenant shall notify Landlord thereof prior to bringing such Hazardous Material into any part of the Property and Tenant shall provide Landlord with such Required Permit promptly after receipt thereof); and (d) other information reasonably requested by Landlord.

 

17.7                        Removal. Tenant shall be responsible, at its sole cost and expense, for Hazardous Material and other biohazard disposal services for Hazardous Materials brought in, on, at, under or about the Premises by or on behalf of any of the Tenant Parties. Such services shall be performed by contractors reasonably acceptable to Landlord and on a sufficient basis to ensure that the Premises are at all times kept neat, clean and free of Hazardous Materials and biohazards except in appropriate, specially marked containers reasonably approved by Landlord.

 

17.8                        Landlord’s Knowledge; Pre-Existing Contamination. Landlord represents and warrants to Tenant that Landlord has no knowledge of (a) any Hazardous Materials at or affecting the Property other than as set forth in the documents listed on Exhibit 6A attached hereto and made a part hereof; (b) any underground storage tanks on the Property other than as may be set forth in the documents listed on said Exhibit 6A; nor (c) any action, proceeding or claim pending or threatened regarding the Property concerning any Hazardous Materials or pursuant to any Environmental Laws. Landlord shall, at its sole cost and expense, comply with all Environmental Laws with respect to the existence of Hazardous Materials in, on or at the Property as of the Execution Date. Except with respect to environmental costs

 

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which expressly may be included in Operating Costs under Section 5.2(c) above, Landlord hereby covenants and agrees to indemnify, defend and hold the Tenant Parties harmless from and against any and all Claims against any of the Tenant Parties arising out of the existence of Hazardous Materials in, on, under or at the Property as of the Execution Date except to the extent that any of the Tenant Parties caused a release of the same or exacerbates a release of the same that occurred prior to the Execution Date.

 

18.                          RULES AND REGULATIONS.

 

18.1                        Rules and Regulations. Tenant will faithfully observe and comply with all  reasonable rules and regulations promulgated from time to time with respect to the Building, the Property and construction within the Property (collectively, the “Rules and Regulations”). The current version of the Rules and Regulations is attached hereto as Exhibit 7. In the case of any conflict between the provisions of this Lease and any future rules and regulations, the provisions of this Lease shall control. Nothing contained in this Lease shall be construed to impose upon Landlord any duty or obligation to enforce the Rules and Regulations or the terms, covenants or conditions in any other lease as against any other tenant and Landlord shall not be liable to Tenant for violation of the same by any other tenant, its servants, employees, agents, contractors, visitors, invitees or licensees.

 

18.2                        Energy Conservation. Landlord may institute upon written notice to Tenant such policies, programs and measures as may be necessary, required, or expedient for the conservation and/or preservation of energy or energy services (collectively, the “Conservation Program”), provided however, that the Conservation Program does not, by reason of such policies, programs and measures, reduce the level of energy or energy services being provided to the Premises below the level of energy or energy services then being provided in comparable combination laboratory, research and development and office buildings in the vicinity of the Premises, or as may be necessary or required to comply with Legal Requirements or standards or the other provisions of this Lease. Upon receipt of such notice, Tenant shall comply with the Conservation Program.

 

18.3                        Recycling. Upon written notice, Landlord may establish policies, programs and measures for the recycling of paper, products, plastic, tin and other materials (a “Recycling Program”).  Upon receipt of such notice, Tenant will comply with the Recycling Program at Tenant’s sole cost and expense.

 

19.                          LAWS AND PERMITS.

 

19.1                        Legal Requirements. Tenant shall be responsible at its sole cost and expense for complying with (and keeping the Premises in compliance with) all Legal Requirements which are applicable to Tenant’s particular use or occupancy of, or Alterations made by or on behalf of Tenant (other than the Base Building Work) to, the Premises. Landlord shall be responsible for complying with Legal Requirements in effect as of the Term Commencement Date that are applicable to the performance and construction of the Tenant Fitout, and Tenant shall be responsible for complying with Legal Requirements enacted after the Term Commencement Date with respect to the Tenant Fitout. Tenant shall furnish all data and information to governmental authorities, with a copy to Landlord, as required in accordance with Legal Requirements as they relate to Tenant’s use or occupancy of the Premises or the Building. If Tenant receives notice of any violation of Legal Requirements applicable to the Premises or the Building, it shall give prompt notice thereof to Landlord. Nothing contained in this Section 19.1 shall be construed to expand the uses permitted hereunder beyond the Permitted Uses. Landlord shall comply with any Legal Requirements and with any direction of any public office or officer relating to the maintenance or operation of the Building as a combination laboratory, research and development and office building, and the costs so incurred by Landlord shall be included in Operating Costs in accordance with the provisions of Section 5.2.

 

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19.2                        Required Permits. Tenant shall, at Tenant’s sole cost and expense, use diligent good faith efforts to apply for, seek and obtain all necessary state and local licenses, permits and approvals needed for the operation of Tenant’s business and/or Tenant’s Additional Rooftop Equipment (collectively, the “Required Permits”), as soon as reasonably possible. Tenant shall thereafter maintain all Required Permits. Tenant, at Tenant’s expense, shall at all times comply with the terms and conditions of each such Required Permit. Landlord shall cooperate with Tenant, at Tenant’s sole cost and expense, in connection with its application for Required Permits.

 

19.3                        Traffic Management. Tenant acknowledges that the Property may become subject to a traffic mitigation and/or management plan required by the Town of Lexington. Tenant agrees not to violate the terms of any such traffic mitigation and/or management plan. The costs incurred by Landlord in connection with any such traffic mitigation and/or management plan shall be included in Operating Costs.

 

20.                               DEFAULT

 

20.1                        Events of Default. The occurrence of any one or more of the following events shall constitute an “Event of Default” hereunder by Tenant:

 

(a)                                 If Tenant fails to make any payment of Rent or any other payment required hereunder, as and when due, and such failure shall continue for a period of five (5) business days after notice thereof to Tenant; provided, however, an Event of Default shall occur hereunder without any obligation of Landlord to give any notice if (i) Tenant fails to make any payment within five (5) business days after the due date therefor, and (ii) Landlord has given Tenant written notice under this Section 20.1(a) on more than three (3) occasions during the twelve (12) month interval preceding such failure by Tenant;

 

(b)                                 intentionally omitted;

 

(c)                                  If Tenant shall fail to execute and deliver to Landlord an estoppel certificate pursuant to Section 16 above or a subordination and attornment agreement pursuant to Section 22 below, within the timeframes set forth therein;

 

(d)                                 If Tenant shall fail to maintain any insurance required hereunder;

 

(e)                                  If Tenant shall fail to restore the Security Deposit to its required original or reduced amount or deliver a replacement Letter of Credit as required under Section 7 above and such failure continues for five (5) business days after written notice thereof to Tenant;

 

(f)                                   If Tenant causes or suffers any release of Hazardous Materials in or near the Property in excess of Reportable Quantities or Reportable Concentrations (as such terms are defined in Environmental Laws);

 

(g)                                  If Tenant shall make a Transfer in violation of the provisions of Section 13 above, or if any event shall occur or any contingency shall arise whereby this Lease, or the term and estate thereby created, would (by operation of law or otherwise) devolve upon or pass to any person, firm or corporation other than Tenant, except as expressly permitted under Section 13 hereof;

 

(h)                                 The failure by Tenant to observe or perform any of the covenants or provisions of this Lease to be observed or performed by Tenant, other than as specified above, and such failure continues for more than thirty (30) days after notice thereof from Landlord; provided, further, that if the nature of Tenant’s default is such that more than thirty (30) days are reasonably required for its cure, then

 

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Tenant shall not be deemed to be in default if Tenant shall commence such cure within said thirty (30) day period and thereafter diligently prosecute such cure to completion, which completion shall occur not later than ninety (90) days from the date of such notice from Landlord;

 

(i)                                     Tenant shall be involved in financial difficulties as evidenced by an admission in writing by Tenant of Tenant’s inability to pay its debts generally as they become due, or by the making or offering to make a composition of its debts with its creditors;

 

(j)                                    Tenant shall make an assignment or trust mortgage, or other conveyance or transfer of like nature, of all or a substantial part of its property for the benefit of its creditors,

 

(k)                                 an attachment on mesne process, on execution or otherwise, or other legal process shall issue against Tenant or its property and a sale of any of its assets shall be held thereunder;

 

(l)                                     any judgment, attachment or the like in excess of $100,000 shall be entered, recorded or filed against Tenant in any court, registry, etc. and Tenant shall fail to pay such judgment within thirty (30) days after the judgment shall have become final beyond appeal or to discharge or secure by surety bond such lien, attachment, etc. within thirty (30) days of such entry, recording or filing, as the case may be;

 

(m)                             the leasehold hereby created shall be taken on execution or by other process of law and shall not be revested in Tenant within thirty (30) days thereafter;

 

(n)                                 a receiver, sequesterer, trustee or similar officer shall be appointed by a court of competent jurisdiction to take charge of all or any part of Tenant’s Property and such appointment shall not be vacated within thirty (30) days; or

 

(o)                                 any proceeding shall be instituted by or against Tenant pursuant to any of the provisions of any Act of Congress or State law relating to bankruptcy, reorganizations, arrangements, compositions or other relief from creditors, and, in the case of any proceeding instituted against it, if Tenant shall fail to have such proceedings dismissed within thirty (30) days or if Tenant is adjudged bankrupt or insolvent as a result of any such proceeding.

 

Wherever “Tenant “ is used in subsections (i), (j), (k), (1), (n) or (o) of this Section 20.1, it shall be deemed to  include any parent entity of Tenant and any guarantor of any of Tenant’s obligations under this Lease.

 

20.2                        Remedies. Upon an Event of Default, Landlord may, by notice to Tenant, elect to terminate this Lease; and thereupon (and without prejudice to any remedies which might otherwise be available for arrears of Rent or preceding breach of covenant or agreement and without prejudice to Tenant’s liability for damages as hereinafter stated), upon the giving of such notice, this Lease shall terminate as of the date specified therein as though that were the Expiration Date. Upon such termination, Landlord shall have the right to utilize the Security Deposit or draw down the entire Letter of Credit, as applicable, and apply the proceeds thereof to its damages hereunder. Without being taken or deemed to be guilty of any manner of trespass or conversion, and without being liable to indictment, prosecution or damages therefor, Landlord may, by lawful process, enter into and upon the Premises (or any part thereof in the name of the whole); repossess the same, as of its former estate; and expel Tenant and those claiming under Tenant. The words “re-entry” and “re-enter” as used in this Lease are not restricted to their technical legal meanings,

 

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20.3                        Damages - Termination.

 

(a)                                 Upon the termination of this Lease under the provisions of this Section 20, Tenant shall pay to Landlord Rent up to the time of such termination, shall continue to be liable for any preceding breach of covenant, and in addition, shall pay to Landlord as damages, at the election of Landlord, either:

 

(i)                                the amount (discounted to present value at the rate of five percent (5%) per annum) by which, at the time of the termination of this Lease (or at any time thereafter if Landlord shall have initially elected damages under Section 20.3(a)(ii) below), (x) the aggregate of Rent projected over the period commencing with such termination and ending on the Expiration Date, exceeds (y) the aggregate projected rental value of the Premises for such period, taking into account a reasonable time period during which the Premises shall be unoccupied, plus all Reletting Costs (hereinafter defined); or

 

(ii)                             amounts equal to Rent which would have been payable by Tenant had this Lease not been so terminated, payable upon the due dates therefor specified herein following such termination and until the Expiration Date, provided, however, if Landlord shall re-let the Premises during such period, that Landlord shall credit Tenant with the net rents received by Landlord from such re-letting, such net rents to be determined by first deducting from the gross rents as and when received by Landlord from such re-letting the expenses incurred or paid by Landlord in terminating this Lease, as well as the expenses of re-letting, including altering and preparing the Premises for new tenants, brokers’ commissions, and all other similar and dissimilar expenses properly chargeable against the Premises and the rental therefrom (collectively, “Reletting Costs”), it being understood that any such re-letting may be for a period equal to or shorter or longer than the remaining Term; and provided, further, that (x) in no event shall Tenant be entitled to receive any excess of such net rents over the sums payable by Tenant to Landlord hereunder and (y) in no event shall Tenant be entitled in any suit for the collection of damages pursuant to this Section 20.3(a)(ii) to a credit in respect of any net rents from a re-letting except to the extent that such net rents are actually received by Landlord prior to the commencement of such suit. If the Premises or any part thereof should be re-let in combination with other space, then proper apportionment on a square foot area basis shall be made of the rent received from such re-letting and of the expenses of re-letting.

 

(b)                                 In calculating the amount due under Section 20.3(a)(i), above, there shall be included, in addition to the Base Rent, all other considerations agreed to be paid or performed by Tenant, including without limitation Tenant’s Share of Operating Costs and Taxes, on the assumption that all such amounts and considerations would have increased at the rate of five percent (5%) per annum for the balance of the full term hereby granted.

 

(c)                                  Suit or suits for the recovery of such damages, or any installments thereof, may be brought by Landlord from time to time at its election, and nothing contained herein shall be deemed to require Landlord to postpone suit until the date when the Term would have expired if it had not been terminated hereunder.

 

(d)                                 Nothing herein contained shall be construed as limiting or precluding the recovery by Landlord against Tenant of any sums or damages to which, in addition to the damages particularly provided above, Landlord may lawfully be entitled by reason of any Event of Default hereunder.

 

(e)                                  In lieu of any other damages or indemnity and in lieu of full recovery by Landlord of all sums payable under all the foregoing provisions of this Section 20.3, Landlord may, by written notice to Tenant, at any time after this Lease is terminated under any of the provisions herein contained or is otherwise terminated for breach of any obligation of Tenant and before such full recovery, elect to recover, and Tenant shall thereupon pay, as liquidated damages, an amount equal to the aggregate of (x) an amount equal to the lesser of (1) Rent accrued under this Lease in the twelve (12) months

 

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immediately prior to such termination, or (2) Rent payable during the remaining months of the Term if this Lease had not been terminated, plus (y) the amount of Rent accrued and unpaid at the time of termination, less (z) the amount of any recovery by Landlord under the foregoing provisions of this Section 20.3 up to the time of payment of such liquidated damages.

 

(f)                                   Landlord shall use reasonable efforts to mitigate any damages hereunder following any termination of this Lease or any termination of Tenant’s possession of the Premises. The obligation of Landlord to use reasonable efforts to mitigate damages shall not be construed to require Landlord to rent all or any portion of the Premises for a use which, or to a tenant who, would not qualify pursuant to Section 13, or to prioritize the renting of the Premises over other space which Landlord may have available in the Building or in other properties owned by Landlord or its affiliates.

 

20.4                        Landlord’s Self-Help; Fees and Expenses. If Tenant shall default in the performance of any covenant on Tenant’s part to be performed in this Lease contained, including without limitation the obligation to maintain the Premises in the required condition pursuant to Section 10.1 above, Landlord may, upon reasonable advance notice, except that no notice shall be required in an emergency, immediately, or at any time thereafter, perform the same for the account of Tenant. Tenant shall pay to Landlord upon demand therefor any costs incurred by Landlord in connection therewith, together with interest at the Default Rate until paid in full. In addition, Tenant shall pay all of Landlord’s costs and expenses, including without limitation reasonable attorneys’ fees, incurred (i) in enforcing any obligation of Tenant under this Lease or (ii) as a result of Landlord or any of the Landlord Parties, without its fault, being made party to any litigation pending by or against any of the Tenant Parties.

 

20.5                        Waiver of Redemption, Statutory Notice and Grace Periods. Tenant does hereby waive and surrender all rights and privileges which it might have under or by reason of any present or future Legal Requirements to redeem the Premises or to have a continuance of this Lease for the Term hereby demised after being dispossessed or ejected therefrom by process of law or under the terms of this Lease or after the termination of this Lease as herein provided. Except to the extent prohibited by Legal Requirements, any statutory notice and grace periods provided to Tenant by law are hereby expressly waived by Tenant.

 

20.6                        Landlord’s Remedies  Not Exclusive. The specified remedies to which Landlord may resort hereunder are cumulative and are not intended to be exclusive of any remedies or means of redress to which Landlord may at any time be lawfully entitled, and Landlord may invoke any remedy (including the remedy of specific performance) allowed at law or in equity as if specific remedies were not herein provided for.

 

20.7                        No Waiver. The failure of either party to seek redress for violation, or to insist upon the strict performance, of any covenant or condition of this Lease, or any of the Rules and Regulations promulgated hereunder, shall not prevent a subsequent act, which would have originally constituted a violation, from having all the force and effect of an original violation. The receipt by Landlord of Rent with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach. The failure of Landlord to enforce any of such Rules and Regulations against Tenant and/or any other tenant in the Building shall not be deemed a waiver of any such Rules and Regulations. No provisions of this Lease shall be deemed to have been waived by either party unless such waiver be in writing signed by such party. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent herein stipulated shall be deemed to he other than on account of the stipulated Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy in this Lease provided.

 

20.8                        Restrictions on Tenant’s Rights. During the continuation of any Event of Default, (a)

 

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Landlord shall not be obligated to provide Tenant with any notice pursuant to Section 2.4 above; and (b) Tenant shall not have the right to make, nor to request Landlord’s consent or approval with respect to, any Alterations or Transfers.

 

20.9                        Landlord Default. Notwithstanding anything to the contrary contained in the Lease, Landlord shall in no event be in default in the performance of any of Landlord’s obligations under this Lease unless Landlord shall have failed to perform such obligations within thirty (30) days (or such additional time as is reasonably required to correct any such default, provided Landlord commences cure within 30 days) after notice by Tenant to Landlord properly specifying wherein Landlord has failed to perform any such obligation. Except as expressly set forth in this Lease, Tenant shall not have the right to terminate or cancel this Lease or to withhold rent or to set-off or deduct any claim or damages against rent as a result of any default by Landlord or breach by Landlord of its covenants or any warranties or promises hereunder, except in the case of a wrongful eviction of Tenant from the Premises (constructive or actual) by Landlord, unless same continues after notice to Landlord thereof and a opportunity for Landlord to cure the same as set forth above. In addition, Tenant shall not assert any right to deduct the cost of repairs or any monetary claim against Landlord from rent thereafter due and payable under this Lease.

 

21.                               SURRENDER; ABANDONED PROPERTY; HOLD-OVER

 

21.1                          Surrender

 

(a)                                 Upon the expiration or earlier termination of the Term, Tenant shall (i) peaceably quit and surrender to Landlord the Movable Benches in good order, repair and condition excepting only ordinary wear and tear and damage by fire or other insured Casualty, (ii) peaceably quit and surrender to Landlord the Premises (including without limitation all fixed lab benches, fume hoods, electric, plumbing, heating and sprinkling systems, fixtures and outlets, vaults, paneling, molding, shelving, radiator enclosures, cork, rubber, linoleum and composition floors, ventilating, silencing, air conditioning and cooling equipment therein) broom clean, in good order, repair and condition excepting only ordinary wear and tear and damage by fire or other insured Casualty; (iii) remove all of Tenant’s Property, all autoclaves and cage washers and, to the extent specified by Landlord in accordance with Section 11, Alterations made by Tenant; and (iv) repair any damages to the Premises or the Building caused by the installation or removal of Tenant’s Property and/or such Alterations. Tenant’s obligations under this Section 21.1(a) shall survive the expiration or earlier termination of this Lease.

 

(b)                                 At least sixty (60) days prior to the expiration of the Term (or, if applicable, within five (5) business days after any earlier termination of this Lease), Tenant shall deliver to Landlord a narrative description of the actions proposed (or required by any Legal Requirements, including without limitation any requirements of the Massachusetts Department of Public Health and/or other governmental bodies with respect to any radioactive materials) to be taken by Tenant in order to render the Premises (including any Alterations permitted or required by Landlord to remain therein) free of Hazardous Materials and otherwise released for unrestricted use and occupancy (the “Surrender Plan”). The Surrender Plan (i) shall be accompanied by a current list of (A) all Required Permits held by or on behalf of any Tenant Party with respect to Hazardous Materials in, on, under, at or about the Premises, and (B) Tenant’s Hazardous Materials, and (ii) shall be subject to the review and approval of Landlord’s environmental consultant. In connection with review and approval of the Surrender Plan, upon request of Landlord, Tenant shall deliver to Landlord or its consultant such additional non-proprietary information concerning the use of and operations within the Premises as Landlord shall request. Landlord shall use commercially reasonable efforts to provide comments on or approval of the Surrender Plan within seven (7) business days after receipt of the entire Surrender Plan, which approval shall not be unreasonably withheld. In the event that Tenant has not received a response from the Landlord with respect to the Surrender Plan within ten (10) business days after request therefor, then the Surrender Plan shall be

 

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deemed to be accepted by Landlord. On or before the expiration of the Term (or within thirty (30) days after any earlier termination of this Lease, during which period Tenant’s use and occupancy of the Premises shall be governed by Section 21.3 below), Tenant shall deliver to Landlord a certification from an industrial hygienist reasonably acceptable to Landlord certifying that the Premises do not contain any Hazardous Materials and evidence that the approved Surrender Plan shall have been satisfactorily completed by a contractor acceptable to Landlord, and Landlord shall have the right, subject to reimbursement at Tenant’s expense as set forth below, to cause Landlord’s environmental consultant to inspect the Premises and perform such additional procedures as may be deemed reasonably necessary to confirm that the Premises are, as of the expiration of the Term (or, if applicable, the date which is thirty (30) days after any earlier termination of this Lease), free of Hazardous Materials and otherwise available for unrestricted use and occupancy. Landlord shall have the unrestricted right to deliver the Surrender Plan and any report by Landlord’s environmental consultant with respect to the surrender of the Premises to third parties. Such third parties and the Landlord Parties shall be entitled to rely on the Surrender Report. If Tenant shall fail to prepare or submit a Surrender Plan approved by Landlord, or if Tenant shall fail to complete the approved Surrender Plan, or if such Surrender Plan, whether or not approved by Landlord, shall fail to adequately address the use of Hazardous Materials by any of the Tenant Parties in, on, at, under or about the Premises, Landlord shall have the right to take any such actions as Landlord may deem reasonable or appropriate to assure that the Premises and the Property are surrendered in the condition required hereunder, the cost of which actions shall be reimbursed by Tenant as Additional Rent upon demand. Tenant’s obligations under this Section 20.1(b) shall survive the expiration or earlier termination of the Term.

 

(c)                                  No act or thing done by Landlord during the Term shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such surrender shall be valid, unless in writing signed by Landlord. Unless otherwise agreed by the parties in writing, no employee of Landlord or of Landlord’s agents shall have any power to accept the keys of the Premises prior to the expiration or earlier termination of this Lease. The delivery of keys to any employee of Landlord or of Landlord’s agents shall not operate as a termination of this Lease or a surrender of the Premises.

 

(d)                                 Notwithstanding anything to the contrary contained herein, Tenant shall, at its sole cost and expense, remove from the Premises, prior to the end of the Term, any item installed by or for Tenant and which, pursuant to Legal Requirements, must be removed therefrom before the Premises may be used by a subsequent tenant.

 

21.2                        Abandoned Property. After the expiration or earlier termination hereof, if Tenant fails to remove any property from the Building or the Premises which Tenant is obligated by the terms of this Lease to remove within five (5) business days after written notice from Landlord, such property (the “Abandoned Property”) shall be conclusively deemed to have been abandoned, and may either be retained by Landlord as its property or sold or otherwise disposed of in such manner as Landlord may see fit. If any item of Abandoned Property shall be sold, Tenant hereby agrees that Landlord may receive and retain the proceeds of such sale and apply the same, at its option, to the expenses of the sale, the cost of moving and storage, any damages to which Landlord may be entitled under Section 20 hereof or pursuant to law, and to any arrears of Rent.

 

21.3                        Holdover. If any of the Tenant Parties holds over after the end of the Term, Tenant shall be deemed a tenant-at-sufferance subject to the provisions of this Lease; provided that whether or not Landlord has previously accepted payments of Rent from Tenant, (i) Tenant shall pay Base Rent at 150% of the highest rate of Base Rent payable during the Term, (ii) Tenant shall continue to pay to Landlord all additional rent, and (iii) Tenant shall be liable for all damages, including without limitation consequential damages, incurred by Landlord as a result of such holding over, Tenant hereby acknowledging that Landlord may need the Premises after the end of the Term for other tenants and that the damages which Landlord may suffer as the result of Tenant’s holding over cannot be determined as of the Execution

 

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Date. Nothing contained herein shall grant Tenant the right to holdover after the expiration or earlier termination of the Term.

 

22.                               MORTGAGEE RIGHTS

 

22.1                        Subordination. Tenant’s rights and interests under this Lease shall be (i) subject and subordinate to any ground lease, overleases, mortgage, deed of trust, or similar instrument covering the Premises, the Building and/or the Land and to all advances, modifications, renewals, replacements, and extensions thereof (each of the foregoing, a “Mortgage”), or (ii) if any Mortgagee elects, prior to the lien of any present or future Mortgage. Tenant further shall attorn to and recognize any successor landlord, whether through foreclosure or otherwise, as if the successor landlord were the originally named landlord. Notwithstanding anything to the contrary in this Section 22 contained, the herein provided subordination and attornment shall be effective only if the Mortgagee agrees, by a duly executed commercially reasonable instrument in recordable form (“Non-disturbance Agreement”) that, so long as Tenant shall not be in default of the obligations on its part to be kept and performed under the terms of this Lease beyond any applicable notice and cure periods, this Lease will not be affected and Tenant’s possession and rights hereunder will not be disturbed by any default in, termination, and/or foreclosure of, such Mortgage. Within twenty (20) days of request therefor, Tenant agrees to execute, acknowledge and deliver such a Non-disturbance Agreement.

 

22.2                        Notices. Tenant shall give each Mortgagee for which Tenant has received contact information the same notices given to Landlord concurrently with the notice to Landlord, and each Mortgagee shall have a reasonable opportunity thereafter to cure a Landlord default, and Mortgagee’s curing of any of Landlord’s default shall be treated as performance by Landlord.

 

22.3                        Mortgagee Consent. Tenant acknowledges that, where applicable, any consent or approval hereafter given by Landlord may be subject to the further consent or approval of a Mortgagee; and the failure or refusal of such Mortgagee to give such consent or approval shall, notwithstanding anything to the contrary in this Lease contained, constitute reasonable justification for Landlord’s withholding its consent or approval.

 

22.4                        Mortgagee Liability. Tenant acknowledges and agrees that if any Mortgage shall be foreclosed, (a) the liability of the Mortgagee and its successors and assigns shall exist only so long as such Mortgagee or purchaser is the owner of the Premises, and such liability shall not continue or survive after further transfer of ownership; and (b) such Mortgagee and its successors or assigns shall not be (i) liable for any act or omission of any prior lessor under this Lease; (ii) liable for the performance of Landlord’s covenants pursuant to the provisions of this Lease which arise and accrue prior to such entity succeeding to the interest of Landlord under this Lease or acquiring such right to possession; (iii) subject to any offsets or defense which Tenant may have at any time against Landlord; (iv) bound by any base rent or other sum which Tenant may have paid previously for more than one (1) month other than payments on account of estimated Operating Costs and Taxes; or (v) liable for the performance of any covenant of Landlord under this Lease which is capable of performance only by the original Landlord.

 

23.                               QUIET ENJOYMENT. Landlord covenants that so long as there is no Event of Default, Tenant shall peaceably and quietly hold, occupy and enjoy the Premises during the Term from and against the claims of all persons lawfully claiming by, through or under Landlord subject, nevertheless, to the covenants, agreements, terms, provisions and conditions of this Lease, any matters of record of which Tenant has knowledge and to any Mortgage to which this Lease is subject and subordinate, as hereinabove set forth.

 

24.                               NOTICES. Any notice, consent, request, bill, demand or statement hereunder (each, a “Notice”)

 

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by either party to the other party shall be in writing and shall be deemed to have been duly given when either delivered by hand or by nationally recognized overnight courier (in either case with evidence of delivery or refusal thereof) addressed as follows:

 

If to Landlord:                                                                    King 101 Hartwell LLC

c/o King Street Properties

255 Bear Hill Road

Waltham, MA 02451

Attention: Stephen D. Lynch

 

With a copy to:                               Goulston & Storrs, P.C.

400 Atlantic Avenue

Boston, MA 02110

Attention: Colleen P. Hussey, Esquire

 

if to Tenant:                                                                                 T2 Biosystems, Inc.

101 Hartwell Avenue

Lexington, MA 02421

Attention: Chief Executive Officer

 

Notwithstanding the foregoing, any notice from Landlord to Tenant regarding ordinary business operations (e.g., exercise of a right of access to the Premises, maintenance activities, invoices, etc.) may also be given by written notice delivered by facsimile to any person at the Premises whom Landlord reasonably believes is authorized to receive such notice on behalf of Tenant without copies as specified above. Either party may at any time change the address or specify an additional address for such Notices by delivering or mailing, as aforesaid, to the other party a notice stating the change and setting forth the changed or additional address, provided such changed or additional address is within the United States. Notices shall be effective upon the date of receipt or refusal thereof.

 

25.                               MISCELLANEOUS

 

25.1                        Separability. If any provision of this Lease or portion of such provision or the application thereof to any person or circumstance is for any reason held invalid or unenforceable, the remainder of this Lease (or the remainder of such provision) and the application thereof to other persons or circumstances shall not be affected thereby.

 

25.2                        Captions. The captions are inserted only as a matter of convenience and for reference, and in no way define, limit or describe the scope of this Lease nor the intent of any provisions thereof. Unless the context otherwise requires, the term “hereof” shall refer to this Lease and not to any specific provision, section or paragraph hereof.

 

25.3                        Broker. Tenant and Landlord each warrants and represents that it has dealt with no broker in connection with the consummation of this Lease other than FHO Partners (“Broker”). Tenant and Landlord each agrees to defend, indemnify and save the other harmless from and against any Claims arising in breach of the representation and warranty set forth in the immediately preceding sentence. Landlord shall be solely responsible for the payment of any brokerage commissions to Broker.

 

25.4                        Entire Agreement. This Lease, Lease Summary Sheet and Exhibits 1-8 attached hereto and incorporated herein contain the entire and only agreement between the parties and any and all statements and representations, written and oral, including previous correspondence and agreements between the parties hereto, are merged herein. Each party acknowledges that all representations and statements upon which it relied in executing this Lease are contained herein and that such party in no way

 

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relied upon any other statements or representations, written or oral. This Lease may not be modified orally or in any manner other than by written agreement signed by the parties hereto.

 

25.5                        Governing Law. This Lease is made pursuant to, and shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts and any applicable local municipal rules, regulations, by-laws, ordinances and the like.

 

25.6                        Representation of Authority. By his or her execution hereof, each of the signatories on behalf of the respective parties hereby warrants and represents to the other that he or she is duly authorized to execute this Lease on behalf of such party. Upon Landlord’s request, Tenant shall provide Landlord with evidence that any requisite resolution, corporate authority and any other necessary consents have been duly adopted and obtained.

 

25.7                        Expenses Incurred by Landlord Upon Tenant Requests. Tenant shall, upon demand, reimburse Landlord for all reasonable expenses, including, without limitation, legal fees, incurred by Landlord in connection with all  requests by Tenant for consents, approvals or execution of collateral documentation related to this Lease, including, without limitation, costs incurred by Landlord in connection with any reduction in the face amount of the Letter of Credit pursuant to Section 7.1(b) above and costs incurred by Landlord in connection with the review and approval of Tenant’s plans and specifications in connection with proposed Alterations to be made by Tenant to the Premises or in connection with requests by Tenant for Landlord’s consent to make a Transfer. Such costs shall be deemed to be additional rent under this Lease.

 

25.8                        Survival. Without limiting any other obligation of either party which may survive the expiration or prior termination of the Term, (a) all obligations to indemnify, defend, or hold harmless, as set forth in Section 17 of this Lease shall survive the expiration or prior termination of the Term for a period of five (5) years after the last day of the Term, and (b) all  other obligations to indemnify, defend, or hold harmless, as set forth in this Lease shall survive the expiration or prior termination of the Term for a period of three (3) years.

 

25.9                        Limitation of Liability. Tenant shall neither assert nor seek to enforce any claim against Landlord or any of the Landlord Parties, or the assets of any of the Landlord Parties, for breach of this Lease or otherwise, other than against Landlord’s interest in the Property and in the uncollected rents, issues and profits thereof, and Tenant agrees to look solely to such interest for the satisfaction of any liability of Landlord under this Lease. This Section 25.9 shall not limit any right that Tenant might otherwise have to obtain injunctive relief against Landlord. Landlord and Tenant specifically agree that in no event shall any officer, director, trustee, employee or representative of Landlord, Tenant or any of the other Landlord Parties or Tenant Parties ever be personally liable for any obligation under this Lease, nor shall Landlord or any of the other Landlord Parties be liable for consequential or incidental damages or for lost profits whatsoever in connection with this Lease. Landlord and Tenant specifically agree that, subject to Section 21 above, neither Tenant nor any of the other Tenant Parties shall be liable for consequential or incidental damages or for lost profits whatsoever in connection with this Lease.

 

25.10                 Binding Effect. The covenants, agreements, terms, provisions and conditions of this Lease shall bind and benefit the successors and assigns of the parties hereto with the same effect as if mentioned in each instance where a party hereto is named or referred to, except that no violation of the provisions of Section 13 hereof shall operate to vest any rights in any successor or assignee of Tenant.

 

25.11                 Landlord Obligations upon Transfer. Upon any sale, transfer or other disposition of the Building, Landlord shall be entirely freed and relieved from the performance and observance thereafter of all covenants and obligations hereunder on the part of Landlord to be performed and

 

40

 

observed, it being understood and agreed in such event (and it shall be deemed and construed as a covenant running with the land) that the person succeeding to Landlord’s ownership of said reversionary interest shall thereupon and thereafter assume, and perform and observe, any and all of such covenants and obligations of Landlord, except as otherwise agreed in writing.

 

25.12                 No Grant of Interest. Tenant shall not grant any interest whatsoever in any fixtures within the Premises or any item paid in whole or in part by Landlord.

 

25.13.              Use of Names. Neither Tenant nor Landlord shall use the name of the other party or affiliate of the other party in any publicity, promotion, trailer, press release, advertising, printed or display materials without such party’s prior written consent.

 

25.14                 Confidentiality.

 

(a)                                 From time to time Landlord has delivered and may deliver to Tenant certain information about the Property, including without limitation environmental reports and other title, zoning, geotechnical, permitting, environmental and operational materials relating to the Property (such information, whether furnished before or after the date hereof, whether oral or written, and regardless of the manner in which it is furnished, is collectively hereinafter referred to as “Landlord’s Proprietary Information”). Landlord’s Proprietary Information does not include, however, information which (a) is or becomes generally available to the public other than as a result of a disclosure by Tenant or Tenant’s Engaged Persons, as defined below; (b) was available to Tenant on a non-confidential basis prior to its disclosure by Landlord; or (c) becomes available to Tenant on a non-confidential basis from a person other than Landlord who is not otherwise bound by a confidentiality agreement with Landlord, or is otherwise not under an obligation to Landlord not to transmit the information to Tenant.

 

(b)                                 Tenant hereby covenants and agrees (a) to keep all Landlord’s Proprietary Information strictly confidential; (b) not to disclose or reveal any Landlord’s Proprietary Information to any person other than those persons who are actively and directly engaged by Tenant in connection with the Lease of the Property (such persons are hereinafter referred to as “Tenant’s Engaged Persons”); (c) to cause Tenant’s Engaged Persons to observe the terms of this Section 25.14; and (d) not to use any Landlord’s Proprietary Information for any purpose other than in connection with this Lease. Tenant will be responsible for any breach of the terms of this Section 25.14 by it and/or its employees, agents, representatives or any other of Tenant’s Engaged Persons.

 

(c)                                  In the event that Tenant is requested pursuant to, or required by, any Legal Requirements to disclose any Landlord’s Proprietary Information or any other information concerning the Property, Tenant agrees that it will provide Landlord with prompt notice of such request or requirement in order to enable Landlord to seek an appropriate protective order or other remedy, to resist or narrow the scope of such request or legal process, or to waive compliance, in whole or in part, with the terms of this Section 25.14. In any such event Tenant will use best efforts to ensure that all Landlord’s Proprietary Information and other information that is so disclosed will be accorded confidential treatment.

 

(d)                                 From time to time Tenant has delivered and may deliver to Landlord certain information about Tenant’s business operations, including without limitation financial information (such information, whether furnished before or after the date hereof, whether oral or written, and regardless of the manner in which it is furnished, is collectively hereinafter referred to as “Tenant’s Proprietary Information”). Tenant’s Proprietary Information does not include, however, information which (a) is or becomes generally available to the public other than as a result of a disclosure by Landlord or Landlord’s Engaged Persons, as defined below; (b) was available to Landlord on a non-confidential basis prior to its disclosure by Tenant; or (c) becomes available to Landlord on a non-confidential basis from a person

 

41

 

other than Tenant who is not otherwise bound by a confidentiality agreement with Tenant, or is otherwise not under an obligation to Tenant not to transmit the information to Landlord.

 

(e)                                  Landlord hereby covenants and agrees (a) to keep all Tenant’s Proprietary Information strictly confidential; (b) not to disclose or reveal any Tenant’s Proprietary Information to any person other than its attorneys, accountants, consultants and those persons who are actively and directly engaged in connection with the ownership, management, financing of, or investment in, the Property (such persons are hereinafter referred to as “Landlord’s Engaged Persons”); (c) to cause Landlord’s Engaged Persons to observe the terms of this Section 25.14; and (d) not to use any Tenant’s Proprietary Information for any purpose other than in connection with this Lease. Landlord will be responsible for any breach of the terms of this Section 25.14 by it and/or its employees, agents, representatives or any other of Landlord’s Engaged Persons.

 

(f)                                   In the event that Landlord is requested pursuant to, or required by, any Legal Requirements to disclose any Tenant’s Proprietary Information, Landlord agrees that it will provide Tenant with prompt notice of such request or requirement in order to enable Tenant to seek an appropriate protective order or other remedy, to resist or narrow the scope of such request or legal process, or to waive compliance, in whole or in part, with the terms of this Section 25.14. In any such event Landlord will use best efforts to ensure that all Tenant’s Proprietary Information and other information that is so disclosed will be accorded confidential treatment.

 

(g)                                  Each party agrees that, except as provided by law or unless compelled by an order of a court of competent jurisdiction, it shall keep the contents of this Lease confidential and shall not disclose such information to any third parties other than its Engaged Persons.

 

(h)                                 Without prejudice to the rights and remedies otherwise available at law or in  equity, each party agrees that the other shall be entitled to seek equitable relief by way of injunction or otherwise if such party or any of its agents, employees, representatives or any other Engaged Persons breach or threaten to breach any of the provisions of this Section 25.14.

 

(i)                                     The provisions of this Section 25.14 shall survive the expiration or earlier termination of this Lease for three (3) years.

 

[SIGNATURES ON FOLLOWING PAGE]

 

42

 

IN WITNESS WHEREOF the parties hereto have executed this Lease as a sealed instrument as of the Execution Date.

 

	
LANDLORD
    	
 
    
	
 
    	
 
    
	
KING 101 HARTWELL LLC
    	
 
    
	
By:
    	
King Berra LLC, its manager
    	
 
    
	
 
    	
By:
    	
King Street Properties Investments LLC, its manager
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Stephen D. Lynch
    	
 
    
	
 
    	
 
    	
 
    	
Stephen D. Lynch, manager
    	
 
    

 

 

	
TENANT
    	
 
    
	
 
    	
 
    
	
T2 BIOSYSTEMS, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ John McDonough
    	
 
    
	
Name:
    	
John McDonough
    	
 
    
	
Title:
    	
CEO
    	
 
    

 

43

 

EXHIBIT I

 

LEASE PLAN

 

[see attached]

 

1

 

 

 

EXHIBIT 2

 

LEGAL DESCRIPTION

 

A certain parcel of land situated in Lexington, County of Middlesex, Massachusetts, bounded and described as follows:

 

	
Southeasterly
    	
by Hartwell Avenue, three hundred and ninety-five feet;
    
	
 
    	
 
    
	
Southwesterly
    	
by Lot 5 as shown on plan hereinafter mentioned, four hundred and   seventy-five feet; and
    
	
 
    	
 
    
	
Northwesterly
    	
four hundred eighteen and 82/100 feet;
    
	
 
    	
 
    
	
Northeasterly
    	
four hundred and fifty feet, and
    
	
 
    	
 
    
	
Northeasterly
    	
again, thirty-nine and 27/100 feet, all by Lot 8 on said plan.
    

 

Said parcel is shown as Lot 7 on said plan, (Plan No. 31330C).

 

All of said boundaries are determined by the Court to be located as shown on a subdivision plan, as approved by the Court, filed in the Land Registration Office, a copy of which is filed in the Registry of Deeds for the South Registry District of Middlesex County in Registration Book 791, Page 36, with Certificate 132186.

 

Said premises are conveyed together with the rights in:

 

Grant of easement to Wilbur C. Nylander and Alfred P. Tropeano, Trustees et als. filed as Document No. 479842.

 

Grant of easement to Michael Campanelli et als. Trustees filed as Document No. 479843

 

1

 

EXHIBIT 3

 

LANDLORD’S WORK

 

Landlord’s Work shall consist of the following items listed herein and as described on the Perkins and Will plan dated July 27, 2010 (the “Plan”). Reference is also made to the T2 Biosystems Equipment Schedule which is part of the Plan.

 

Landlord’s architect to provide finish selections from the Landlord’s building standard materials. All finishes subject to Tenant’s final approval.

 

Office Area:

 

Landlord to construct partitions, walls, doors, glazing and painting per the Plan.

 

Landlord to provide locks to doors as specified on the Door Schedule.

 

Landlord to supply and install one divider/folding wall in large meeting room.

 

Landlord to provide open office space for 40 or more Tenant supplied office cubicles as shown on the Plan.

 

Landlord to provide batt insulation in the partitions of offices 2, 3, 4, 5, and 6.ord to provide a workout room and an allowance for up to $10,000 for the purchase of exercise equipment to be located in the workout room.

 

Landlord to provide general bathroom facilities with water closets, urinals, and lavatories, ,one locker and one shower in each room as shown on the Plan.

 

Landlord to provide one kitchenette/lunch room with sink, laminate countertop and base and wall cabinets and electrical outlets to accommodate Tenant supplied appliances.

 

Landlord will furnish and install 28 oz. nylon textured loop carpet in the office areas and sealed concrete in the loading, shipping and receiving area as shown on the Plan.

 

Landlord will install 2’ x 4’ acoustical ceiling tile throughout the office portion of the Premises. The ceiling will be open to the underside of the deck in the loading, shipping and receiving areas.

 

The Landlord will install shades (Vinyl/Fiberglass Phifer Shear Weave) for windows.

 

Lab:

 

Landlord to construct a BSL2 lab with controlled access and 100% outside air with a minimum of six air changes per hour.

 

Landlord will provide the following one small glass wash area with Landlord-supplied under counter glass washer (Model Labconco Steam Scrubber Catalog # 440321)

 

Landlord to supply and install one new wall-mounted RO-DI point of use system, Barnstead Model 8611.

 

Landlord to disconnect tenant’s existing RODI system at the 286 Cardinal Medeiros facility two days prior to move. . Landlord to re-install Tenant’s existing RO-DI system in a mutually agreed-upon

 

1

 

location within the lab at the Premises.

 

Landlord to furnish and install two 6’ fume hoods. Hoods will be New England Lab’s 72” Pro Series Fume Hood Catalog # 7421040 with epoxy work surface; 36” solvent base cabinet # 1412011; 36” acid base cabinet 314110111.

 

Landlord will install VCT flooring in the laboratory and support spaces as defined on the Plan

 

Landlord will furnish and install 2’ x 4’ acoustic ceiling in an aluminum grid system with vinyl faced tile

 

HVAC:

 

In the BSL2 lab area comprised of Tenant’s Molecular Biology, Chemistry, Assay Development functions, the system will provide 100% outside air with a minimum of 6 air changes per hour. The lab area HVAC unit(s) will have the capacity to allow for two additional exhaust hoods to be added by the Tenant at its cost at a future date. BSL2 lab area will be balanced as negative to the office portion of the facility. Balance report will be provided upon completion of the project and will be included with the Project closeout materials provided to Tenant.

 

The balance of the Premises, including the Systems Development Room, (“Non-Lab Areas”) will be designed to ASHRAE standards for office space.

 

Systems Development lab will be balanced as negative to the office portion of the facility. Balance report will be provided upon completion of the project and will be included with the Project closeout materials provided to Tenant.

 

The Non-Lab Areas will be serviced by roof top gas fired for heating and electric direct expansion units for cooling to provide for a minimum of 7 zones. Heating in the Non-Lab Areas will be provided by hot water reheat and baseboard units where needed. The boiler will be located in the Tenant’s boiler room. The heating and cooling will be monitored by an automatic control system that allows for control by zone. The system will include an energy management system that has night setback capability.

 

The Landlord will also furnish and install in the IT Server room a wall mounted ductless split system providing up to 18,000 BTUs of cooling.

 

Plumbing:

 

Landlord is to provide a gravity-based tank PH System with a capacity of 16 GPM, the installation of which shall comply with applicable building and plumbing codes and MWRA regulations. Tenant is responsible for commissioning of the PH system and for obtaining all necessary permits, including the MWRA discharge permit. Landlord will cooperate to provide the necessary documentation for the Tenant’s MWRA permit application. Landlord will allow inspections by the MWRA as part of the permitting process as it pertains to the application and inspection of the pH system prior to the Term Commencement Date.

 

Landlord to furnish and install 7 sinks (in addition to kitchen and bathroom sinks) connected to the pH system. Sinks to be set in sink cabinets New England Lab #1418022 — 36” painted steel sink base cabinets; with black epoxy resin countertops; with lipped epoxy resin sinks (24” X 16” X 15.5”) New England Lab Catalog #D70C; and H/C Mixing Faucets, 8” gooseneck, deck mounted, vacuum breaker, catalog # L424-8VB. Color of sink cabinets to match color of tenant and landlord supplied moveable benches.

 

Landlord to furnish and install four (4) emergency showers/eyewash stations with tepid water in

 

2

 

Molecular Biology, Chemistry/Assay Development, and Systems Development as shown on the Plan (3 stations in lab and 1 in Systems)

 

Electrical:

 

Landlord to provide electrical capacity of up to 20 watts/SF for the Premises. Landlord will furnish and install 2’ x 4’ parabolic light fixtures in the office areas to provide a minimum of 40 foot candles of light and acrylic lensed fixtures in lab areas to provide a minimum of 60 foot candles of light. Bulbs to be cool white in both office and lab areas. The Landlord will provide emergency lighting, an addressable fire alarm system and associated devices as required by applicable codes.

 

Landlord will furnish and install 1 quad outlet and 1 duplex outlet per office or room as shown on the Plan. Boardroom to contain 7 duplex outlets, 1 ceiling junction box and 1 floor junction box. Large meeting room to contain 7 Wall duplex outlets, 2 floor junction boxes and 1 ceiling junction box.

 

Landlord will furnish and install outlets or connections as shown on the Plan for Tenant furnished equipment in accordance with the plan and the tenant equipment list.

 

Landlord will hard wire the Tenant-supplied electric whips for tenant-supplied cubicles.

 

Landlord to furnish 20 KW of connected standby power via existing generator to equipment outlined on the tenant equipment list.

 

Landlord will provide alarm point wiring to equipment as outlined on the tenant equipment list. Landlord will install wires from the NAE to the equipment.

 

Fire Protection:

 

Landlord will provide a fire protection system as shown on the Plan in accordance with applicable codes.

 

Lab Casework:

 

Provided that Tenant has delivered its existing lab casework to the Premises in accordance with an agreed-upon schedule, Landlord will provide power and data cabling to locations specified on the electrical plan and further defined by the location of benches/casework shown on the equipment and furniture plan.

 

In addition, Landlord to furnish and install the following additional benches for Tenant’s use during the term of the lease:

 

Systems Lab

 

Global Industries (Manufacturer)

 

4 — Wood Benches- 2.5’ x 5.0’ with shelving & single file drawer (no power Strip, no light)

 

4 - Wood Benches — 2.5 x 5.0’ (no shelving, no file drawer, no power Strip, no light)

 

Symbiote Ergostat Model

 

4- Ergostat Gray Benches- with shelving, light, power strip & 3 drawer file

 

3

 

4- Ergostat Gray benches — with Shelving, light, power strip, no file drawer

 

Main Lab

New England Lab

 

20- 72” Cambridge Series Laboratory Tables — Catalog # T100-7230-RR Half of these have task Lights; Drawers — half have 3 drawer cabinets and Half have 2 drawer cabinets; Electrical Strips; P Lam Shelves (2) and ends

 

7 – 48” Cambridge Series Laboratory Tables — Catalog # T100-4830-RR Half of these have task lights; No drawers; electrical strip; P-Lam Shelves (2)

 

Other Landlord Work:

 

Landlord will refurbish the existing loading dock and its canopy which serves the Premises.

 

Landlord will furnish a bike rack at the exterior of the building for use by Tenant.

 

Landlord will furnish and install a card access system with 3 exterior locations as shown on the Plan. The card access system will have the capacity for Tenant to add readers at its cost on interior locations.

 

Landlord will designate 10 parking spaces as Tenant’s visitor parking spaces and will be marked with T2 visitor signs.

 

4

 

 

 

EXHIBIT 3A

 

EXTERIOR WORK

 

At its sole cost and expense Landlord shall:

 

Renovate the existing main entry to the Premises, located on the eastern (front) side of the Building. Said renovation will include the creation of a new glass exterior entry supported by structural steel.

 

Conduct site work including drainage as required by the Town of Lexington and re-surface and re-stripe the existing parking lots and driveways serving the Property.

 

Pursuant to the Plan, Landlord shall renovate the exterior loading facilities serving the Premises as follows. Currently, two (2) existing loading doors serve the Premises. Landlord shall refurbish the southern-most loading dock. It will be served by the existing overhead door which will remain in service. Landlord will refurbish the existing canopy over this loading dock.

 

Landlord shall eliminate the dock leveler associated with the second loading door and make repairs as-needed to the surrounding concrete.

 

Install one (1) new personnel door with overhead canopy along the western side of the Building per the Plan.

 

Landlord to remove the existing landscaping adjacent to the eastern side of the Building and replace with new plantings and landscaping.

 

Will install monument signage identifying the address of the Building and directional signage on the Property.

 

Install a new fence enclosing the generator and transformer located along the northern side of the Building.

 

Install exterior site lighting in the rear (western) portion of the parking lot.

 

Create a common dumpster area with concrete pad and fenced enclosure in the western portion of the Property.

 

1

 

	
Room
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
#/ Eqt
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Size (wxdxh)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Currently on
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
#
    	
 
    	
Description
    	
 
    	
QTY
    	
 
    	
inches
    	
 
    	
Manufacturer
    	
 
    	
Volt.
    	
 
    	
Phase
    	
 
    	
IIZ
    	
 
    	
Amps
    	
 
    	
own circuit
    	
 
    	
Compressed   Air
    	
 
    	
Vacuum (scfm)
    	
 
    	
Nitrogen N2
    	
 
    	
Alarm Point
    	
 
    	
Cart
    	
 
    	
Other
    	
 
    	
Comments
    	
 
    
	
Molecular
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
Freezer -20
    	
 
    	
1
    	
 
    	
32x28.5x70.5
    	
 
    	
Fisher
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
5
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
STBYPW
    	
 
    	
n/a
    	
 
    
	
2
    	
 
    	
Refridgerator 2-8c
    	
 
    	
1
    	
 
    	
30x33x79
    	
 
    	
Fisher
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
8.5
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
STBYPW
    	
 
    	
n/a
    	
 
    
	
3
    	
 
    	
Tetrad2
    	
 
    	
1
    	
 
    	
18.5x24x8
    	
 
    	
BioRad
    	
 
    	
200-240Vac
    	
 
    	
UA
    	
 
    	
50-60
    	
 
    	
20 min
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
Twist Lock
    	
 
    	
Fitted w/NEMA L6-20P Plug
    	
 
    
	
4
    	
 
    	
Light Cycler
    	
 
    	
1
    	
 
    	
23x21.5x20.5
    	
 
    	
Roche
    	
 
    	
200-240Vac
    	
 
    	
UA
    	
 
    	
50-60
    	
 
    	
UA
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
Fitted w/NEMA 6-20P Plug
    	
 
    
	
5
    	
 
    	
Incubator
    	
 
    	
1
    	
 
    	
26.5x24.5x40
    	
 
    	
Forma
    	
 
    	
115V
    	
 
    	
1
    	
 
    	
50-60
    	
 
    	
3.6
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    
	
6
    	
 
    	
4ft BSC
    	
 
    	
1
    	
 
    	
51x28x89
    	
 
    	
Forma
    	
 
    	
120
    	
 
    	
1
    	
 
    	
50-60
    	
 
    	
8
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    
	
7
    	
 
    	
6ft BSC
    	
 
    	
1
    	
 
    	
 
    	
 
    	
TBD
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
n/a
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
8
    	
 
    	
6ft BSC
    	
 
    	
1
    	
 
    	
 
    	
 
    	
TBD
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
n/a
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Hot Lab
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
Scintillation Counter
    	
 
    	
1
    	
 
    	
53x33x49
    	
 
    	
Perkin
    	
 
    	
100-120v
    	
 
    	
UA
    	
 
    	
50-60
    	
 
    	
3
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    
	
2
    	
 
    	
Gel Dryer
    	
 
    	
1
    	
 
    	
19x20x2
    	
 
    	
Labconco
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
50-60
    	
 
    	
13
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
Fitted w/NEMA 5-20P
    	
 
    
	
3
    	
 
    	
Typhoon
    	
 
    	
1
    	
 
    	
35.5x31.5xl4.5
    	
 
    	
GE
    	
 
    	
125V
    	
 
    	
UA
    	
 
    	
50-60
    	
 
    	
13
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Chemistry
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
Freezer-80
    	
 
    	
1
    	
 
    	
42x37x78
    	
 
    	
Revco
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
16
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
Y
    	
 
    	
N
    	
 
    	
STBYPW
    	
 
    	
Fitted w/NEMA 5-20P Plug
    	
 
    
	
2
    	
 
    	
Freezer -20
    	
 
    	
1
    	
 
    	
28.5x34.5x79
    	
 
    	
Revco
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
13.5
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
STBYPW
    	
 
    	
n/a
    	
 
    
	
3
    	
 
    	
Refridgerator 2-8c
    	
 
    	
1
    	
 
    	
32x31x70.5
    	
 
    	
Fisher
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
5
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
STBYPW
    	
 
    	
n/a
    	
 
    
	
4
    	
 
    	
Autoclave
    	
 
    	
1
    	
 
    	
23x28x18
    	
 
    	
Tattnauer
    	
 
    	
230V
    	
 
    	
2
    	
 
    	
50-60
    	
 
    	
7.8
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
Fitted w/NEMA 6-15P
    	
 
    
	
5
    	
 
    	
Centerfuge
    	
 
    	
1
    	
 
    	
28x24x12.5
    	
 
    	
Beckman
    	
 
    	
120V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
12
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
Lid opens up to 32’
    	
 
    
	
6
    	
 
    	
Oven
    	
 
    	
1
    	
 
    	
24x23.5x39.5
    	
 
    	
Thermo
    	
 
    	
120V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
11
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    
	
7
    	
 
    	
Ice Machine
    	
 
    	
1
    	
 
    	
24x24x38
    	
 
    	
Scottsman
    	
 
    	
100-120v
    	
 
    	
UA
    	
 
    	
50-60
    	
 
    	
UA
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
Requires Water Connection
    	
 
    
	
8
    	
 
    	
Easy Pure II
    	
 
    	
1
    	
 
    	
12x19x18
    	
 
    	
Barnstead
    	
 
    	
100-240V
    	
 
    	
1
    	
 
    	
50-60
    	
 
    	
UA
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
Requires RO Connection
    	
 
    

 

 

	
Assay Development
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

	
1
    	
 
    	
Refridgerator 2-8c
    	
 
    	
1
    	
 
    	
32x29x65.5
    	
 
    	
Kenmore
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
5
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
STBYPW
    	
 
    	
n/a
    	
 
    
	
2
    	
 
    	
Freezer -80
    	
 
    	
1
    	
 
    	
53x36x79
    	
 
    	
SoLow
    	
 
    	
208V
    	
 
    	
1
    	
 
    	
60
    	
 
    	
20
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
Y
    	
 
    	
n
    	
 
    	
STBYPW
    	
 
    	
Fitted w/NEMA 6-20P Plug
    	
 
    
	
3
    	
 
    	
Tecan
    	
 
    	
1
    	
 
    	
57x33x70
    	
 
    	
Tecan
    	
 
    	
100-120
    	
 
    	
UA
    	
 
    	
50-60
    	
 
    	
UA
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    
	
4
    	
 
    	
Landlord supplied water   system
    	
 
    	
1
    	
 
    	
 
    	
 
    	
TBD
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
n/a
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
High Throughput
    	
 
    	
1
    	
 
    	
48x50x83
    	
 
    	
Epson
    	
 
    	
208V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
5
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
Twist Lock
    	
 
    	
Fitted w/NEMA L6-20P Plug
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Systems Lab
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
High Throughput
    	
 
    	
1
    	
 
    	
48x50x83
    	
 
    	
Epson
    	
 
    	
208V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
5
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
Twist Lock
    	
 
    	
Fitted w/NEMA L6-20P Plug
    	
 
    
	
2
    	
 
    	
Humidity Chamber
    	
 
    	
1
    	
 
    	
37x52x73
    	
 
    	
Test Equity
    	
 
    	
230V
    	
 
    	
1
    	
 
    	
60
    	
 
    	
30
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
Twist Lock
    	
 
    	
Fitted w/NEMA L6-30P Plug
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Machine Shop
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
CNC
    	
 
    	
1
    	
 
    	
49x38x74
    	
 
    	
Syil
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    
	
2
    	
 
    	
Lathe
    	
 
    	
1
    	
 
    	
78x24x50
    	
 
    	
Rockwell
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
20
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
Twist Lock
    	
 
    	
Fitted w/NEMA L5-20P
    	
 
    
	
3
    	
 
    	
Ban Saw
    	
 
    	
1
    	
 
    	
24x18x66
    	
 
    	
Enco
    	
 
    	
220
    	
 
    	
1
    	
 
    	
60
    	
 
    	
15
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
Fitted w/NEMA 6-15P
    	
 
    
	
4
    	
 
    	
Mill
    	
 
    	
1
    	
 
    	
38x30x78
    	
 
    	
Rockwell
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
9.5
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Server Room
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
STBYPW
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
Server Rack
    	
 
    	
1
    	
 
    	
25x40x79
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
20
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
Twist Lock
    	
 
    	
Fitted w/NEMA L5-20P
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Kitchen
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
Coffee Machine
    	
 
    	
1
    	
 
    	
10x14x13
    	
 
    	
Kurig
    	
 
    	
120V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
11.6
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
Microwave
    	
 
    	
1
    	
 
    	
22.5x17x14
    	
 
    	
GE
    	
 
    	
120 VAC
    	
 
    	
UA
    	
 
    	
80
    	
 
    	
8.3
    	
 
    	
Y
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
Toaster Oven
    	
 
    	
1
    	
 
    	
15x11x10
    	
 
    	
Classic
    	
 
    	
No Info
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
UA
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
Refridgerator
    	
 
    	
1
    	
 
    	
31x32x65.5
    	
 
    	
Kenmore
    	
 
    	
115V
    	
 
    	
UA
    	
 
    	
60
    	
 
    	
4.5
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
Water Bubbler
    	
 
    	
1
    	
 
    	
12x12x40
    	
 
    	
Spectrum
    	
 
    	
115V
    	
 
    	
1
    	
 
    	
60
    	
 
    	
6
    	
 
    	
N
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n/a
    	
 
    	
n
    	
 
    	
n/a
    	
 
    	
 
    	
 
    

 

Exhaust Fans for Fume hoods on stand by power if possible

** UA=Unavailable

 

EXHIBIT 4

SITE PLAN

[see attached]

 

1

 

 

 

EXHIBIT 5

 

FORM OF LETTER OF CREDIT

 

	
BENEFICIARY:
    	
ISSUANCE DATE:
    
	
 
    	
 
    
	
< >
    	
 
    
	
[LANDLORD]
    	
 
    
	
 
    	
IRREVOCABLE STANDBY
    
	
 
    	
LETTER OF CREDIT NO.
    
	
 
    	
 
    
	
ACCOUNTEE/APPLICANT:
    	
MAXIMUM/AGGREGATE
    
	
 
    	
CREDIT AMOUNT:
    
	
< >
    	
USD: $        .    
    
	
[TENANT]
    	
 
    

 

LADIES AND GENTLEMEN:

 

We hereby establish our irrevocable letter of credit in your favor for account of the applicant up to an aggregate amount not to exceed                              and     /100 US Dollars ($          .     ) available by your draft(s) drawn on ourselves at sight bearing the clause “Drawn under Irrevocable Standby Letter of Credit Number            ” and indicating the amount to be drawn down and whether payment should be made by wire transfer (including wiring instructions) or by certified check (including mailing address) accompanied by the original of this Letter of Credit and all amendments, if any. The original Letter of Credit and all amendments, if any, shall be returned to you unless fully utilized.

 

Unless otherwise stated, all correspondence, documents and sight drafts are to be sent via facsimile to (     )        -          with originals to follow by hand delivery with receipted delivery, nationally recognized overnight courier with receipted delivery or certified mail, return receipt requested to our counters at                              <address>. The date of presentment of any draw shall be the date copies of the Letter of Credit and sight draft are faxed by Beneficiary to           <bank>.

 

You shall have the right to make partial draws against this Letter of Credit, from time to time.

 

You shall be entitled to assign your interest in this Irrevocable Standby Letter of Credit from time to time to your lender(s) and/or your successors in interest without our approval and without charge. In the event of an assignment, we reserve the right to require reasonable evidence of such assignment as a condition to any draw hereunder.

 

Except as otherwise expressly stated herein, this Letter of Credit is subject to the “Uniform Customs and practice for Documentary Credits, International Chamber of Commerce, Publication No. 500 (1993 Revision)”.

 

This Letter of Credit shall expire at our office on                   , 20      (the “Stated Expiration Date”).  It is a condition of this Letter of Credit that the Stated Expiration Date shall be deemed automatically extended without amendment for successive one (1) year periods from such Stated Expiration Date, unless at least sixty (60) days prior to such Stated Expiration Date (or any anniversary

 

1

 

thereof) we shall send a written notice to you, with a copy to Goulston & Storrs, 400 Atlantic Avenue, Boston, MA 02110, Attention: Colleen P. Hussey and to the Accountee/Applicant, by hand delivery, nationally recognized overnight courier with receipted delivery or by certified mail (return receipt requested) that we elect not to consider this Letter of Credit extended for any such additional one (1) year period. In the event that this Letter of Credit is not extended for an additional period as provided above, you may draw the entire amount available hereunder.

 

If at any time prior to presentation of documents for payment hereunder, we receive a notarized certificate signed by one who purports to be a duly authorized representative on your behalf to execute and deliver such certificate, stating that this Letter of Credit has been lost, stolen, damaged or destroyed, we will mail you a “Certified True Copy” of this Letter of Credit, which shall be treated by us as an original.

 

In order to cancel this Letter of Credit prior to expiration, you must return this original Letter of Credit and any amendments hereto to our counters with a statement signed by you stating that the Letter of Credit is no longer required and is being returned to the issuing bank for cancellation.

 

We hereby agree with the drawers, endorsers and bonafide holders that the drafts drawn under and in accordance with the terms and condition of this Letter of Credit shall he duly honored upon presentation.

 

2

 

EXHIBIT 6

 

TENANT’S HAZARDOUS MATERIALS

 

[to be provided prior to the Term Commencement Date]

 

1

 

EXHIBIT 6A

 

LIST OF ENVIRONMENTAL REPORTS

 

1.                                 Asbestos and Regulated Materials Survey Report dated May 20, 2010 and prepared by Boston Environmental.

2.                                 Phase I Environmental Site Assessment dated June 17, 2010 and prepared by Boston Environmental.

3.                                 16 page excerpt provided to Landlord by the prior owner of the Property and dated February 13, 1998.

 

1

 

EXHIBIT 7

 

RULES AND REGULATIONS

 

A.            General

 

1.         Tenant and its employees shall not in any way obstruct the sidewalks, halls, stairways, or exterior vestibules of the Building, and shall use the same only as a means of passage to and from their respective offices. At no time shall Tenants permit its employees, contractors, or other representatives to loiter in Common Areas or elsewhere in and about the Property.

2.         Corridor doors, when not in use, shall be kept closed.

3.         Areas used in common by tenants shall be subject to such regulations as are posted therein.

4.         Any Tenant or vendor sponsored activity or event in the Common Area must be approved and scheduled through Landlord’s representative, which approval shall not be unreasonably withheld.

5.         No animals, except Seeing Eye dogs, shall be brought into or kept in, on or about the Premises or Common Areas.

6.         Alcoholic beverages (without Landlord’s prior written consent), illegal drugs or other illegal controlled substances are not permitted in the Common Areas, nor will any person under the influence of the same be permitted in the Common Areas. Landlord reserves the right to exclude or expel from the Building any persons who, in the judgment of the Landlord, is under the influence of alcohol or drugs, or shall do any act in violation of the rules and regulations of the Building.

7.         No firearms or other weapons are permitted in the Common Areas.

8.         No fighting or “horseplay” will be tolerated at any time in the Common Areas.

9.         Tenant shall not cause any unnecessary janitorial labor or services in the Common Areas by reason of Tenant’s carelessness or indifference in the preservation of good order and cleanliness.

10.  Smoking and discarding of smoking materials by Tenant and/or any Tenant Party is permitted only in exterior locations designated by Landlord. Tenant will instruct and notify its employees and visitors of such policy.

11.  Bicycles and other vehicles are not permitted inside or on the walkways outside the Building, except in those areas specifically designated by Landlord for such purposes

12.  Tenant shall not operate or permit to be operated on the Premises any coin or token operated vending machine or similar device (including, without limitation, telephones, lockers, toilets, scales, amusement devices and machines for sale of beverages food, candy, cigarettes or other goods), except for those vending machines or similar devices which are for the sole and exclusive use of tenant’s employees.

13.  Canvassing, soliciting, and peddling in or about the Building is prohibited. Tenant, its employees, agents and contractors shall cooperate with said policy, and Tenant shall cooperate and use best efforts to prevent the same by Tenant’s invitees.

14.  Fire protection and prevention practices implemented by the Landlord from time to time in the Common Areas, including participation in fire drills, must be observed by Tenant at all times.

15.  Except as provided for in the Lease, no signs, advertisements or notices shall be painted or affixed on or to any windows, doors or other parts of the Building that are visible from the exterior of the Building unless approved in writing by the Landlord.

16.  The restroom fixtures shall be used only for the purpose for which they were constructed and no rubbish, ashes, or other substances of any kind shall be thrown into them. Tenant will bear the expense of any damage resulting from misuse.

17.  Tenant will not interfere with or obstruct any perimeter heating, air conditioning or ventilating units.

18.  Tenant shall utilize Waltham Pest Control Service or such other pest control service approved by Landlord (which approval shall not be unreasonably withheld) to control pests in the Premises.

 

1

 

Except as included in Landlord’s Services, tenants shall bear the cost and expense of such pest control services.

19.       Tenant shall not install, operate or maintain in the Premises or in any other area of the Building, any electrical equipment which does not bear the U/L (Underwriters Laboratories) seal of approval (other than in connection with the development of electronic equipment which is part of the ordinary operations of the Tenant), or which would overload the electrical system or any part thereof beyond its capacity for proper, efficient and safe operation as determined by Landlord, taking into consideration the overall electrical system and the present and future requirements of the Building.

20.       Tenants shall not perform improvements or alterations within the Building or their Premises, if the work has the potential of disturbing the fireproofing which has been applied on the surfaces of structural steel members, without the prior written consent of Landlord.

21.       Tenant shall, at its sole cost and expense keep any garbage, trash, rubbish and refuse in vermin- proof containers within the interior of the Premises until removed.

22.       Lab operators who travel outside lab space must abide by the one glove rule and remove lab coats where predetermined.

23.       Chemical lists and MSDS sheets must be readily available at a centralized location of which Landlord has been provided prior notice. In the event of an emergency, first responders will require this information in order to properly evaluate the situation.

24.       Tenant shall provide Landlord, in writing, the names and contact information of two (2) representatives authorized by Tenant to request Landlord services, either billable or non-billable and to act as a liaison for matters related to the Premises.

 

B.            Access & Security

 

1.              Landlord reserves the right to close and keep locked all entrance and exit doors of the Building during the hours Landlord may deem advisable for the adequate protection of the Property. Use of the Building and the leased premises before 8 AM or after 6 PM, or any time during Saturdays, Sundays or legal holidays shall be allowed only to persons with a key/card key to the Building or guests accompanied by such persons. Any persons found in the Building after hours without such keys/card keys are subject to the surveillance of building staff.

2.              Tenant shall not place any additional lock or locks on any exterior door in the Premises or Building or on any door in the Building core within the Premises, including doors providing access to the telephone and electric closets and the slop sink, without Landlord’s prior written consent. A reasonable number of keys to the locks on the doors in the Premises shall be furnished by Landlord to Tenant at the cost of Tenant, and Tenant shall not have any duplicate keys made. All keys shall be returned to Landlord at the expiration or earlier termination of this Lease.

3.              Landlord may from time to time adopt appropriate systems and procedures for the security or safety of the Building, its occupants, entry and use, or its contents, provided that Tenant shall have access to the Building 24 hours per day, 7 days a week. Tenant, Tenant’s agents, employees, contractors, guests and invitees shall comply with Landlord’s reasonable requirements relative thereto.

4.              Tenant acknowledges that Property security problems may occur which may require the employment of extreme security measures in the day-to-day operation of the Common Areas. Accordingly, Tenant agrees to cooperate and cause its employees, contractors, and other representatives to cooperate fully with Landlord in the implementation of any reasonable security procedures concerning the Common Areas.

5.              Tenant and its employees, agents, contractors, invitees and licensees are limited to the Premises and the Common Areas, Tenants and its employees, agents, contractors, invitees and licensees may not enter other areas of the Project (other than the Common Areas) except when accompanied by an escort from the Landlord.

 

2

 

C.            Shipping/Receiving

 

1.              Dock areas exterior to the Building shall not be used for storage or staging by Tenant.

2.              In no case shall any truck or trailer be permitted to remain in a loading dock area for more than forty-eight (48) hours.

3.              There shall not be used in any Common Area, either by Tenant or by delivery personnel or others, in the delivery or receipt of merchandise, any hand trucks, except those equipped with rubber tires and sole guards.

4.              Lab operators carrying any lab related materials may only travel within the Premises. At no time should any lab materials travel in the Common Areas.

5.              Any dry ice brought into the building must be delivered through the loading dock serving the Premises.

6.              All nitrogen tanks must travel through the loading dock serving the Premises and should never be left unattended outside of the Premises.

 

3

 

EXHIBIT 8

 

LANDLORD’S SERVICES

 

·                      Hot/cold water to restrooms

·                      Electricity for Common Areas

·                      Management services

·                      Grounds maintenance

·                      Emergency Power: Landlord’s sole obligation for either providing emergency generators or providing emergency back-up power to Tenant shall be: (i) to provide an emergency generator for use of all tenants in the Building, including Tenant (the “Back-up Generator”) with twenty (20) kilowatts of electricity allocated for Tenant’s use (Tenant hereby acknowledging that the equipment to be connected to the Back-Up Generator as specified in Exhibit 3 collectively uses thirteen (13) kilowatts of electricity), and (ii) to contract with a third party to maintain the Back-up Generator as per the manufacturer’s standard maintenance guidelines. In the event that Tenant’s equipment connected to the Back-Up Generator uses more than twenty (20) kilowatts of electricity, Tenant shall, upon Landlord’s demand, disconnect from the Back-Up Generator such equipment as may be necessary to reduce Tenant’s use to equal or be less than twenty (20) kilowatts. Upon Tenant’s request, Landlord shall provide Tenant with (a) copies of completed work orders which indicate that standard maintenance has been performed on the Back-up Generator, and (b) a yearly maintenance and refueling schedule. Landlord shall have no obligation to provide Tenant with operational emergency generators or back-up power or to supervise, oversee or confirm that the third party maintaining the Back-up Generator is maintaining the generator as per the manufacturer’s standard guidelines or otherwise. During any period of replacement, repair or maintenance of the Back-up Generator when the Back-up Generator is not operational, including any delays thereto due to the inability to obtain parts or replacement equipment, Landlord shall provide written notice to Tenant within one (1) day after Landlord learns that the Back-up Generator is not operational, however Landlord shall have no obligation to provide Tenant with an alternative back-up generator or alternative sources of back-up power. Tenant expressly acknowledges and agrees that Landlord does not guaranty that the Back-up Generator will be operational at all times or that emergency power will be available to the Premises when needed. In no event shall Landlord be liable to Tenant or any other party for any damages of any type, whether actual or consequential, suffered by Tenant or any such other person in the event that any emergency generator or back-up power or any replacement thereof fails or does not provide sufficient power. Tenant shall pay Landlord for the cost of any electricity furnished to the Premises or any equipment exclusively serving the same within thirty (30) days after demand therefor.

 

1

 

FIRST AMENDMENT TO LEASE

 

This First Amendment to Lease (this “First Amendment”) is made as of November 30th, 2011 by and between KING 101 HARTWELL LLC, a Massachusetts limited liability company with an address c/o King Street Properties, 255 Bear Hill Road, Waltham, MA 02451 (“Landlord”), and T2 BIOSYSTEMS, INC., a Delaware corporation with an address of 101 Hartwell Avenue, Lexington, MA 02421 (“Tenant”).

 

W I T N E S S E T H

 

WHEREAS, Landlord and Tenant are the current parties to that certain Lease dated August 6, 2010 (the “Lease”), pursuant to which Landlord is leasing to Tenant approximately 20,135 rentable square feet (as more particularly described in the Lease, the “Premises”) of the building located at 101 Hartwell Avenue, Lexington, MA (the “Building”);

 

WHEREAS, Landlord and Tenant wish to amend the Lease as hereinafter set forth.

 

NOW, THEREFORE, in consideration of the covenants herein reserved and contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

 

1.              Recitals; Capitalized Terms. The foregoing recitals are hereby incorporated by reference. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them as set forth in the Lease.

 

2.              Emergency Power. Notwithstanding anything to the contrary, effective as of the date hereof, each reference in Exhibit 8 to “twenty (20) kilowatts” is hereby deleted and replaced with “thirty (30) kilowatts”. Additionally, Tenant’s acknowledgement in Exhibit 8 regarding the electricity usage of the equipment to be connected to the Backup Generator shall be revised to reflect that equipment to be connected to the Back-Up Generator collectively uses approximately seventeen (17) kilowatts of electricity.

 

3.              Ratification. Except as amended hereby, the terms and conditions of the Lease shall remain unaffected. From and after the date hereof, all references to the Lease shall mean the Lease as amended hereby. Additionally, Landlord and Tenant each confirms and ratifies that, as of the date hereof and to its actual knowledge, (a) the Lease is and remains in good standing and in full force and effect, and (b) neither party has any claims, counterclaims, set-offs or defenses against the other party arising out of the Lease or the Premises or in any way relating thereto or arising out of any other transaction between Landlord and Tenant.

 

4.              Miscellaneous. This First Amendment is binding upon and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns. This First Amendment constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions, and may not be amended, waived, discharged or terminated except by a written instrument signed by all the parties hereto.

 

[signatures on following page]

 

1

 

[SIGNATURE PAGE TO FIRST AMENDMENT TO LEASE BY AND BETWEEN
 KING 101 HARTWELL LLC AND T2 BIOSYSTEMS, INC.]

 

EXECUTED under seal as of the date first set forth above.

 

	
LANDLORD:
    	
KING   101 HARTWELL LLC
    	
 
    
	
 
    	
By:
    	
King   Berra LLC, its manager
    
	
 
    	
 
    	
By:  King Street Properties Investments LLC, its   manager
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   Stephen D. Lynch
    	
 
    
	
 
    	
 
    	
 
    	
Name:   
    	
Stephen   D. Lynch
    
	
 
    	
 
    	
 
    	
Title:   
    	
Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
TENANT:
    	
T2   BIOSYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   John McDonough
    	
 
    
	
 
    	
 
    	
Name:   
    	
John   McDonough
    
	
 
    	
 
    	
Title:   
    	
CEO
    
											

 

2

 

SECOND AMENDMENT TO LEASE

 

This Second Amendment to Lease (this “Second Amendment”)  is made as of July 11, 2014 by and between KING 101 HARTWELL LLC, a Massachusetts limited liability company with an address c/o King Street Properties, 255 Bear Hill Road, Waltham, MA 02451 (“Landlord”), and T2 BIOSYSTEMS, INC., a Delaware corporation with an address of 101 Hartwell Avenue, Lexington, MA 02421 (“Tenant”).

 

W I T N E S S E T H

 

WHEREAS, Landlord and Tenant are the current parties to that certain Lease dated August 6, 2010, as amended by that certain First Amendment to Lease dated as of November, 2011 (collectively, the “Lease”), pursuant to which Landlord is leasing to Tenant approximately 20,135 rentable square feet (as more particularly described in the Lease, the “Original Space”) of the building located at 101 Hartwell Avenue, Lexington, MA (the “Building”);

 

WHEREAS, Tenant wishes to lease additional space in the Building consisting of approximately 13,500 rentable square feet (as more particularly shown on the plan attached hereto as Exhibit A, the “Expansion Premises”);

 

WHEREAS, Landlord is willing to lease the Expansion Premises to Tenant on the terms and conditions hereinafter set forth; and

 

WHEREAS, Landlord and Tenant wish to amend the Lease as hereinafter set forth.

 

NOW, THEREFORE, in consideration of the covenants herein reserved and contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

 

1.              Recitals; Capitalized Terms. The foregoing recitals are hereby incorporated by reference. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them as set forth in the Lease.

 

2.              Lease of Expansion Premises.

 

(a)         Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Expansion Premises for a term commencing on the date on which Landlord delivers the Expansion Premises to Tenant free of occupants and personal property and broom clean (such date of delivery the “EP Commencement Date”) and, unless the Lease is earlier terminated or extended in accordance with the terms of the Lease, expiring on the last day of the Term, subject to all of the terms and conditions of the Lease except as expressly set forth in this Second Amendment. Subject to the foregoing delivery condition, Tenant hereby accepts the Expansion Premises in their “AS IS,” “WHERE IS” condition and with all faults on the date hereof, without representations or warranties, express or implied, in fact or by law, of any kind, and without recourse to Landlord.

 

(b)         From and after the EP Commencement Date, (i) the “Premises” shall be deemed to mean, collectively, the Original Space and the Expansion Premises (comprising a total of 33,635 rentable square feet) for all purposes of the Lease, as amended hereby, and (ii) the calculation of Tenant’s Share shall be 81.5%.

 

(c)          Notwithstanding anything to the contrary contained in the Lease, commencing on the date which is two (2) weeks after the EP Commencement Date, Tenant shall pay Base Rent with respect to the Expansion Premises in the amount of Thirty-Nine Thousand Three Hundred Seventy-Five Dollars ($39,375) per month during the Initial Term and otherwise in accordance with the terms of the Lease. Base Rent with respect to the Premises (i.e., the Original Space and the Expansion Premises) for any duly exercised Extension Term shall be determined in accordance with Section 1.2 of the Lease.

 

1

 

3.              Parking.

 

(a)              From and after the EP Commencement Date, Landlord shall, subject to and in accordance with the terms of Section 1.4(b) of the Lease, make available 3.0 parking spaces per 1,000 rentable square feet of the Premises for Tenant’s use in the parking areas serving the Building.

 

(b)              Notwithstanding anything to the contrary contained in the Lease, Landlord shall have the right, upon at least six (6) months’ written notice to Tenant, to temporarily relocate all or any portion of the Parking Spaces in to other parking areas in the vicinity of the Property (Landlord and Tenant hereby agreeing that the parking areas located at 101 Hartwell Avenue, 4 Hartwell Place and/or 91 Hartwell Avenue are acceptable).

 

(c)               To the extent that any spaces in the parking areas serving the Building are marked as being designated for visitors to the prior tenant of the Expansion Premises, Landlord shall designate such spaces for Tenant’s visitors. All of the spaces designated for Tenant’s visitors are included within the number of Parking Spaces reserved for Tenant pursuant to Section 1.4(b) of the Lease.

 

4.              Broker. Tenant and Landlord each warrants and represents that it has dealt with no broker in connection with the consummation of this Second Amendment other than Cassidy Turley (“Broker”). Tenant and Landlord each agrees to defend, indemnify and save the other harmless from and against any Claims arising in breach of its representation and warranty set forth in the immediately preceding sentence. Landlord shall be solely responsible for the payment of any brokerage commissions to Broker.

 

5.              Acknowledgement of Dates. Landlord and Tenant hereby agree that (a) the Term Commencement Date occurred on January 1, 2011; (b) the Rent Commencement Date occurred on January 1, 2011; and (c) the Initial Term is scheduled to expire on December 31, 2015.

 

6.              Ratification. Except as amended hereby, the terms and conditions of the Lease shall remain unaffected. From and after the date hereof, all references to the “Lease” shall mean the Lease as amended hereby. Additionally, Landlord and Tenant each confirms and ratifies that, as of the date hereof and to its actual knowledge, (a) the Lease is and remains in good standing and in full force and effect, and (b) neither party has any claims, counterclaims, set-offs or defenses against the other party arising out of the Lease or the Premises or in any way relating thereto or arising out of any other transaction between Landlord and Tenant.

 

7.              Miscellaneous. This Second Amendment is binding upon and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns. This Second Amendment constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions, and may not be amended, waived, discharged or terminated except by a written instrument signed by all the parties hereto.

 

[signatures on following page]

 

2

 

[SIGNATURE PAGE TO SECOND AMENDMENT TO LEASE BY AND BETWEEN
 KING 101 HARTWELL LLC AND T2 BIOSYSTEMS, INC.]

 

EXECUTED under seal as of the date first set forth above.

 

	
LANDLORD:
    	
KING 101 HARTWELL LLC
    
	
 
    	
By: King Berra LLC, its manager
    
	
 
    	
 
    	
By: King Street Properties Investments LLC, its manager
    

 

	
 
    	
By:
    	
/s/   Thomas Ragno
    	
 
    
	
 
    	
 
    	
Name:   Thomas Ragno
    
	
 
    	
 
    	
Title:   Manager
    

 

	
TENANT:
    	
T2   BIOSYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   John McDonough
    	
 
    
	
 
    	
 
    	
Name:   John McDonough
    
	
 
    	
 
    	
Title:   Chief Executive Officer and President
    

 

3

 

EXHIBIT A

 

PLAN OF EXPANSION PREMISES

 

4Exhibit 10.19

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT (as the same may be amended, restated, modified, or supplemented from time to time, this “Agreement”) dated as of July 11, 2014 (the “Effective Date”) among Solar Capital Ltd., a Maryland corporation with an office located at 500 Park Avenue, 3rd Floor, New York, NY 10022 (“Solar”), as collateral agent (in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”), and the lenders listed on Schedule 1.1 hereof or otherwise a party hereto from time to time including Solar in its capacity as a lender and Comerica Bank with an office located at 100 Federal Street, 28th Floor, Boston, MA 02110 (each a “Lender” and collectively, the “Lenders”), and T2 Biosystems, Inc., a Delaware corporation with offices located at 101 Hartwell Avenue, Lexington, MA 02421 (“Borrower”), provides the terms on which the Lenders shall lend to Borrower and Borrower shall repay the Lenders. The parties agree as follows:

 

1.                                      DEFINITIONS AND OTHER TERMS

 

1.1                               Terms. Capitalized terms used herein shall have the meanings set forth in Section 1.3 to the extent defined therein. All other capitalized terms used but not defined herein shall have the meaning given to such terms in the Code. Any accounting term used but not defined herein shall be construed in accordance with GAAP and all calculations shall be made in accordance with GAAP. The term “financial statements” shall include the accompanying notes and schedules.

 

1.2                               Section References. Any section, subsection, schedule or exhibit references are to this Agreement unless otherwise specified.

 

1.3                               Definitions. The following terms are defined in the Sections or subsections referenced opposite such terms:

 

	
“Agreement”
    	
Preamble
    
	
“Approved Lender”
    	
Section 12.1
    
	
“Borrower”
    	
Preamble
    
	
“Claims”
    	
Section 12.2
    
	
“Closing Fee”
    	
Section 2.4(a)
    
	
“Collateral Agent”
    	
Preamble
    
	
“Collateral Agent Report”
    	
Exhibit B, Section 5
    
	
“Communications”
    	
Section 10
    
	
“Default Rate”
    	
Section 2.3(b)
    
	
“Effective Date”
    	
Preamble
    
	
“Event of Default”
    	
Section 8
    
	
“Excluded Domestic Subsidiary”
    	
Section 6.10(a)
    
	
“Indemnified Person”
    	
Section 12.2
    
	
“Lender” and “Lenders”
    	
Preamble
    
	
“Lender Transfer”
    	
Section 12.1
    
	
“MSC Subsidiary”
    	
Section 7.8
    
	
“New Subsidiary”
    	
Section 6.10
    
	
“Non-Funding Lender”
    	
Exhibit B, Section 10(c)(ii)
    
	
“Original Lender”
    	
Definition of “Required Lender”
    
	
“Other Lender”
    	
Exhibit B, Section 10(c)(ii)
    
	
“Perfection Certificate” and “Perfection
    	
Section 5.1
    
	
Certificates”
    	
 
    
	
“Solar”
    	
Preamble
    
	
“Term A Loan”
    	
Section 2.2(a)(i)
    
	
“Term B Loan”
    	
Section 2.2(a)(ii)
    
	
“Termination Date”
    	
Exhibit B, Section 8
    
	
“Term Loan”
    	
Section 2.2(a)(ii)
    
	
“Transfer”
    	
Section 7.1
    

 

1

 

In addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:

 

“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made under the Code, and includes, without limitation, all accounts receivable and other sums owing to Borrower.

 

“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made under the Code.

 

“Affiliate” of any Person is a Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

 

“Amortization Date” means (a) if the Term B Conditions have not been satisfied, February 1, 2016, or (b) if the Term B Conditions have been satisfied, August 1, 2016.

 

“Anti-Terrorism Laws” are any laws relating to terrorism or money laundering, including without limitation Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.

 

“Applicable Percentage” means, (i) if the Borrower, the Guarantors and the MSC Subsidiary have, taken as a whole, Seventy Five Million Dollars ($75,000,000.00) or more of cash and Cash Equivalents, seventy-five percent (75%), and (ii) if the Borrower, the Guarantors and the MSC Subsidiary have, taken as a whole, less than Seventy Five Million Dollars ($75,000,000.00) of cash and Cash Equivalents, eighty-five percent (85%).

 

“Approved Fund” is any (i) investment company, fund, trust, securitization vehicle or conduit that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business or (ii) any Person (other than a natural person) which temporarily warehouses loans for any Lender or any entity described in the preceding clause (i) and that, with respect to each of the preceding clauses (i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) a Person (other than a natural person) or an Affiliate of a Person (other than a natural person) that administers or manages a Lender.

 

“Blocked Person” is any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current list published by OFAC or other similar list.

 

“Borrower’s Books” are Borrower’s or any of its Subsidiaries’ books and records including ledgers, federal, and state tax returns, records regarding Borrower’s or its Subsidiaries’ assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

 

“Business Day” is any day that is not a Saturday, Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed.

 

“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition, (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., (c) certificates of deposit maturing no more than one (1) year after issue provided that the account in which any such certificate of deposit is maintained

 

2

 

is subject to a Control Agreement in favor of Collateral Agent, and (d) any money market or similar funds that exclusively hold any of the foregoing.

 

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

 

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.

 

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account, or any other bank account maintained by Borrower or any Subsidiary at any time.

 

“Collateral Agent” is Solar, not in its individual capacity, but solely in its capacity as collateral agent on behalf of and for the ratable benefit of the Secured Parties.

 

“Commitment Percentage” is set forth in Schedule 1.1, as amended from time to time.

 

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made under the Code.

 

“Compliance Certificate” is that certain certificate in substantially the form attached hereto as Exhibit D.

 

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith in accordance with GAAP; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

 

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower or any of its Subsidiaries maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower or any of its Subsidiaries maintains a Securities Account or a Commodity Account, Borrower or such Subsidiary, as applicable, and Collateral Agent pursuant to which Collateral Agent, for the ratable benefit of the Secured Parties, obtains “control” (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.

 

“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.

 

“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

 

3

 

“Designated Deposit Account” is Borrower’s deposit account, account number 1894833175, maintained at Comerica Bank.

 

“Disclosure Schedules” the disclosure schedules to this agreement, as amended or supplemented from time to time by Borrower with the written consent of the Required Lenders (or as supplemented by Borrower pursuant to the terms of the Loan Documents), delivered by Borrower to the Lenders.

 

“Dollars,” “dollars” and “$” each mean lawful money of the United States. 

 

“Domestic Subsidiary” is any Subsidiary that is not a Foreign Subsidiary.

 

“Eligible Assignee” is (i) a Lender, (ii) an Affiliate of a Lender, (iii) an Approved Fund and (iv) any commercial bank, savings and loan association or savings bank or any other entity which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended) and which extends credit or buys loans as one of its businesses, including insurance companies, mutual funds, lease financing companies and commercial finance companies, in each case, which either (A) has a rating of BBB or higher from Standard & Poor’s Rating Group and a rating of Baa2 or higher from Moody’s Investors Service, Inc. at the date that it becomes a Lender or (B) has total assets in excess of Two Billion, Five Hundred Million Dollars ($2,500,000,000.00), and in each case of clauses (i) through (iv), which, through its applicable lending office, is capable of lending to Borrower without the imposition of any withholding or similar taxes; provided that notwithstanding the foregoing, “Eligible Assignee” shall not include, unless an Event of Default has occurred and is continuing, (i) Borrower or any of Borrower’s Affiliates or Subsidiaries or (ii) a direct competitor of Borrower or a vulture hedge fund, each as determined by Collateral Agent in its reasonable discretion. Notwithstanding the foregoing, (x) in connection with any assignment by a Lender as a result of a forced divestiture at the request of any regulatory agency, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party and (y) in connection with a Lender’s own financing or securitization transactions, the restrictions set forth herein shall not apply and Eligible Assignee shall mean any Person or party providing such financing or formed to undertake such securitization transaction and any transferee of such Person or party upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; provided that no such sale, transfer, pledge or assignment under this clause (y) shall release such Lender from any of its obligations hereunder or substitute any such Person or party for such Lender as a party hereto until Collateral Agent shall have received and accepted an effective assignment agreement from such Person or party in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee as Collateral Agent reasonably shall require.

 

“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

 

“Equity Raise Condition” means the consummations of any one (1) or more public or private stock offering, equity raises or strategic partner arrangements resulting in the receipt of at least Thirty Million Dollars ($30,000,000.00) in aggregate net cash proceeds to Borrower after the Effective Date.

 

“ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and its regulations.

 

“Exigent Circumstance” means any event or circumstance that, in the reasonable judgment of Collateral Agent, imminently threatens the ability of Collateral Agent to realize upon all or any material portion of the Collateral, such as, without limitation, fraudulent removal, concealment, or abscondment thereof, destruction or material waste thereof, or failure of Borrower or any of its Subsidiaries after reasonable demand to maintain or reinstate adequate casualty insurance coverage, or which, in the judgment of Collateral Agent, could reasonably be expected to result in a material diminution in value of the Collateral.

 

“Existing SVB Credit Facility” is the credit facility of Borrower evidenced by that certain Loan and Security Agreement, dated as of August 30, 2007, between Borrower and Silicon Valley Bank.

 

4

 

“FDA” means the U.S. Food and Drug Administration or any successor thereto or any other comparable Governmental Authority.

 

“Final Fee” is a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest or any other fee payable hereunder) (a) due on the earliest to occur of (i) the Maturity Date, (ii) the acceleration of any Term Loan, and (iii) the prepayment of all or any portion of any Term Loan pursuant to Section 2.2(c) or (d), and (b) in the amount of four and three-quarters percent (4.75%) of the aggregate amount of the Term Loans advanced hereunder. The Final Fee shall be payable as follows: (x) in the case of a partial prepayment of any Term Loan, four and three-quarters percent (4.75%) of the portion of the principal amount of the Term Loan prepaid shall be due at the time of such prepayment, and (y) in any other case, the remaining unpaid portion of the Final Fee shall be due at the earliest to occur of (A) the Maturity Date, (B) the acceleration of any Term Loan, or (C) the prepayment of all of the Terms Loans. The Final Fee shall be fully earned on the date so paid, non-refundable for any reason and payable to the Lenders in accordance with their respective Pro Rata Shares.

 

“Foreign Currency” means lawful money of a country other than the United States.

 

“Foreign Subsidiary” is a Subsidiary that is not an entity organized under the laws of the United States or any state thereof or the District of Columbia.

 

“Funding Date” is any date on which a Term Loan is made to or on account of Borrower which shall be a Business Day.

 

“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination.

 

“General Intangibles” are all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made under the Code, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

 

“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

 

“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body (including, without limitation, the FDA), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.

 

“Guarantor” is any Person providing a Guaranty in favor of Collateral Agent for the benefit of the Secured Parties (including without limitation pursuant to Section 6.10).

 

“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented.

 

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“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.

 

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions or proceedings seeking reorganization, arrangement, or other relief.

 

“Insolvent” means not Solvent.

 

“Intellectual Property” means all of Borrower’s or any of its Subsidiaries’ right, title and interest in and to the following:

 

(a)                                 its Copyrights, Trademarks and Patents;

 

(b)                                 any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating manuals;

 

(c)                                  any and all source code;

 

(d)                                 any and all design rights which may be available to Borrower;

 

(e)                                  any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and

 

(f)                                   all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

 

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made under the Code, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of any Person’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

 

“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.

 

“IPO” means the initial public offering and sale of Borrower’s common stock.

 

“Key Person” is each of Borrower’s (i) President and Chief Executive Officer, who is John P. McDonough as of the Effective Date, and (ii) Chief Financial Officer, who is Marc R. Jones as of the Effective Date.

 

“Knowledge” means to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers.

 

“Lender” is any one (1) of the Lenders.

 

“Lenders” are the Persons identified on Schedule 1.1 hereto and each assignee that becomes a party to this Agreement pursuant to Section 12.1.

 

“Lenders’ Expenses” are (a) all reasonable audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses, as well as appraisal fees, fees incurred on account of lien searches, inspection fees, and filing fees) for preparing, amending, negotiating and administering the Loan Documents, and (b) all fees and expenses (including attorneys’ fees and expenses, as well as appraisal fees, fees incurred on account

 

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of lien searches, inspection fees, and filing fees) for defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred by Collateral Agent and/or the Lenders in connection with the Loan Documents. Notwithstanding the foregoing, the amount of Lenders’ Expenses payable to Comerica Bank with respect to the due diligence, documentation, initial syndication and closing of the transactions hereunder prior to the Effective Date shall not exceed Ten Thousand Dollars ($10,000.00).

 

“LIBOR Rate” means the rate per annum rate published by the Intercontinental Exchange Benchmark Administration Ltd. (the “Service”) (or on any successor or substitute page of such Service, or any successor to or substitute for such Service) for a term of one (1) month, which determination shall be conclusive in the absence of manifest error.

 

“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

 

“Loan Documents” are, collectively, this Agreement, the Perfection Certificates, the Disclosure Schedules, each Compliance Certificate, each Loan Payment Request Form, any Guarantees, any subordination agreements, any note, or notes or guaranties executed by Borrower or any other Person, any agreements creating or perfecting rights in the Collateral (including all insurance certificates and endorsements, landlord consents and bailee consents) and any other present or future agreement entered into by Borrower, any Guarantor or any other Person for the benefit of the Lenders and Collateral Agent, as applicable, in connection with this Agreement; all as amended, restated, or otherwise modified.

 

“Loan Payment Request Form” is that certain form attached hereto as Exhibit C.

 

“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

“Material Adverse Change” is (a) a material adverse change in the business, operations or condition (financial or otherwise) of Borrower and its Subsidiaries, when taken as a whole; or (b) a material impairment of (i) the prospect of repayment of any portion of the Obligations, (ii) the legality, validity or enforceability of any Loan Document, (iii) the rights and remedies of Collateral Agent or Lenders under any Loan Document except as the result of the action or inaction of the Collateral Agent or Lenders or (iv) the validity, perfection or priority of any Lien in favor of Collateral Agent for the benefit of the Secured Parties on any of the Collateral except as the result of the action or inaction of the Collateral Agent or Lenders.

 

“Material Agreement” is (i) if the Borrower is a publicly reporting entity under the Securities Exchange Act of 1934, any license, agreement or other contractual arrangement required to be disclosed (including amendments thereto) under regulations promulgated under the Securities Act of 1933 or Securities Exchange Act of 1934, as each may be amended, or (ii) if the Borrower is not a publicly reporting entity under the Securities Exchange Act of 1934, any license, agreement or other contractual arrangement whereby Borrower or any of its Subsidiaries is reasonably likely to be required to transfer, either in-kind or in cash, prior to the Maturity Date, assets or property valued (book or market) at more than Three Hundred Thousand Dollars ($300,000.00) per year.

 

“Maturity Date” is, for each Term Loan, July 1, 2019.

 

“MDFA” means Massachusetts Development Finance Agency, a body politic and corporate created by Chapter 289 of the Acts of 1998 and established under Massachusetts General Laws Chapter 23G, as amended.

 

“MDFA Financing” is the equipment financing of Borrower evidenced by that certain Promissory Note, dated as of May 9, 2011 between Borrower and MDFA.

 

“MSC Investment Conditions” means that the Borrower has on deposit in a Collateral Account subject to a Control Agreement in favor of the Collateral Agent an amount greater than or equal to One Hundred Ten Percent (110%) of the outstanding principal and interest and the remaining unpaid portion of the Final Fee.

 

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“Obligations” are all of Borrower’s obligations to pay when due any debts, principal, interest, Lenders’ Expenses, the Prepayment Premium, the Final Fee, and any other amounts Borrower owes the Collateral Agent or the Lenders now or later, in connection with, related to, following, or arising from, out of or under, this Agreement or, the other Loan Documents, and including interest accruing after Insolvency Proceedings begin (whether or not allowed) and debts, liabilities, or obligations of Borrower assigned to the Lenders and/or Collateral Agent in connection with this Agreement and the other Loan Documents, and the performance of Borrower’s duties under the Loan Documents.

 

“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.

 

“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC.

 

“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

 

“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

 

“Payment Date” is the first (1st) calendar day of each calendar month, commencing on August 1, 2014.

 

“Payoff Letter” is a letter, in form and substance reasonably satisfactory to the Lenders, dated on or prior to the Effective Date, executed by the Borrower and the applicable lender/debt-holder with respect to the payoff of the amounts owed under and the termination of the Existing SVB Credit Facility and any other Indebtedness to be repaid with the proceeds of the first drawing of the Term A Loans.

 

“Permitted Acquisition” means an acquisition by Borrower of all or substantially all of the assets of, all of the ownership interests in, or a business line or unit or division of another Person; provided that (a) no Event of Default or event that with the passage of time would result in an Event of Default shall exist immediately before or immediately after the consummation of such acquisition, (b) such acquired Person or assets shall be in the same line of business as is conducted by Borrower as of the Effective Date (or a line of business reasonably related thereto), (c) such acquisition shall not cause the focus or locations of Borrower’s and its Subsidiaries’ operations (when taken as a whole) to be located outside of the United States, (d) such acquisition shall not constitute a hostile acquisition, (e) any Person acquired as a result of such acquisition shall, if required under Section 6.10 hereof, become a secured Guarantor, (f) in connection with such acquisition, neither Borrower nor any of its Subsidiaries (including for this purpose, the target of the acquisition) shall acquire or be subject to any Indebtedness or Liens that are not otherwise permitted hereunder, (g) the consideration paid in cash or Cash Equivalents in connection with all such acquisitions (exclusive of reasonable closing costs paid in cash) shall not exceed in the aggregate: (i) if the Equity Raise Condition has not been met, One Million Dollars ($1,000,000.00); or (ii) if the Equity Raise Condition has been met, Three Million Dollars ($3,000,000.00), (h) Borrower has notified the Lenders at least ten (10) Business Days in advance of entering into such transaction, which notice shall include a reasonably detailed description of such transaction, (i) Collateral Agent has received evidence, in form and substance reasonably satisfactory to Collateral Agent that Borrower has sufficient cash on hand to pay its projected expenses and all debt service when due for a period of twelve (12) months after the consummation of such transaction, (j) all transactions related to such acquisition shall be consummated in all material respects in accordance with applicable law; and (k) Borrower shall provide to the Lenders as soon as available but in any event not later than five (5) Business Days after the execution thereof, a copy of the executed purchase agreement or similar agreement with respect to any such acquisition.

 

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“Permitted Indebtedness” is:

 

(a)                                 Borrower’s Indebtedness to the Lenders and Collateral Agent under this Agreement and the other Loan Documents;

 

(b)                                 Indebtedness existing on the Effective Date and disclosed on the Disclosure Schedules;

 

(c)                                  Subordinated Debt;

 

(d)                                 unsecured Indebtedness to trade creditors and in connection with credit cards incurred in the ordinary course of business;

 

(e)                                  Indebtedness consisting of capitalized lease obligations and purchase money Indebtedness, in each case incurred by Borrower or any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such person, provided that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed Five Hundred Thousand Dollars ($500,000.00) at any time and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time of such acquisition, repair, improvement or construction is made);

 

(f)                                   Indebtedness secured by a Lien on specific equipment provided that (i) the aggregate outstanding amount of all such Indebtedness does not exceed Two Million Dollars ($2,000,000.00) at any time; provided that the Borrower may exceed such amount, up to an aggregate maximum of Ten Million Dollars ($10,000,000.00), with respect to any such equipment that is placed with a customer pursuant to a bona fide contract, and (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the equipment financed with such Indebtedness.

 

(g)                                  Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of Borrower’s business;

 

(h)                                 Indebtedness consisting of the obligation to pay rent when due under real property leases entered into in the ordinary course of Borrower’s business;

 

(i)                                     other unsecured Indebtedness at any time not to exceed Three Hundred Fifty Thousand Dollars ($350,000.00) in the aggregate;

 

(j)                                    reimbursement obligations in respect of letters of credit in the aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000.00) at any time; and

 

(k)                                 extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (f) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose materially more burdensome terms upon Borrower, or its Subsidiary, as the case may be.

 

“Permitted Investments” are:

 

(a)                                 Investments disclosed on the Disclosure Schedules and existing on the Effective Date;

 

(b)                                 (i) Investments consisting of cash and Cash Equivalents, and (ii) any Investments permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Collateral Agent;

 

(c)                                  Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower;

 

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(d)                                 Investments consisting of Deposit Accounts in which Collateral Agent has a perfected Lien (subject to the terms of this Agreement) for the ratable benefit of the Secured Parties;

 

(e)                                  Investments in connection with Transfers permitted by Section 7.1;

 

(f)                                   Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s board of directors; not to exceed One Hundred Thousand Dollars ($100,000.00) in the aggregate for (i) and (ii) in any fiscal year;

 

(g)                                  Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;

 

(h)                                 Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (h) shall not apply to Investments of Borrower in any Subsidiary;

 

(i)                                     Investments in Subsidiaries that are Guarantors;

 

(j)                                    Investments in Subsidiaries that are not Guarantors in the ordinary course of business for operating costs to be incurred by such Subsidiary in an aggregate amount for all such Investments not to exceed (i) if the Equity Raise Condition has not been met, Fifty Thousand Dollars ($50,000.00) per fiscal year, or (ii) if the Equity Raise Condition has been met, Five Hundred Thousand Dollars ($500,000.00) per fiscal quarter;

 

(k)                                 Investments in joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the licensing of technology (in compliance with the definition of “Permitted Licenses”), the development of technology or the providing of technical support and provided that the aggregate amount for cash consideration for all such Investments cannot exceed Two Hundred Fifty Thousand Dollars ($250,000.00) per year and Seven Hundred Fifty Thousand Dollars ($750,000.00) in the aggregate; and

 

(l)                                     Investments in Subsidiaries formed for the purpose of merging such Subsidiary into the target of a Permitted Acquisition or for merging the target of a Permitted Acquisition into such Subsidiary so long as upon the consummation of such Permitted Acquisition, Borrower is in compliance with Section 6.10.

 

“Permitted Licenses” are (A) licenses of over-the-counter software that is commercially available to the public, (B) non-exclusive licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries entered into as is customary in Borrower’s industry, provided, that, with respect to each such license described in clause (B), the license constitutes an arms-length transaction, the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer any Intellectual Property, and (C) exclusive licenses for the use of the Intellectual Property of Borrower or any of its Subsidiaries entered into as is customary in Borrower’s industry, provided, that, with respect to each such license described in this clause (C), the license (i) constitutes an arms-length transaction, the terms of which, on their face, do not provide for a sale or assignment of any Intellectual Property and do not restrict the ability of Borrower or any of its Subsidiaries, as applicable, to pledge, grant a security interest in or lien on, or assign or otherwise Transfer any Intellectual Property, (ii) is limited in territory with respect to a specific geographic country or region (i.e. Japan, Germany, northern China) outside of the United States, (iii) Borrower has used commercially reasonable efforts to obtain the consent and acknowledgement of the counterparty to such license for the collateral assignment of such license to the Collateral Agent for the benefit of the Lenders; (iv) Borrower delivers ten (10) Business Days’ prior written notice and a brief summary of the terms of the proposed license to Collateral Agent and delivers to Collateral Agent copies of the final executed licensing documents in connection with the exclusive license promptly upon consummation thereof; and (v) all upfront payments, royalties, milestone payments or other proceeds arising from

 

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the licensing agreement that are payable to Borrower or any of its Subsidiaries are paid to a Deposit Account that is governed by a Control Agreement in favor of the Collateral Agent.

 

“Permitted Liens” are:

 

(a)                                 Liens existing on the Effective Date and disclosed on the Disclosure Schedules or arising under this Agreement and the other Loan Documents;

 

(b)                                 Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and by appropriate proceedings and for which Borrower maintains adequate reserves on its Books in accordance with GAAP, provided that no notice of any such Lien has been filed or recorded in favor of the United States Treasury in accordance with the applicable provisions of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;

 

(c)                                  Liens securing Indebtedness permitted under clause (e) of the definition of “Permitted Indebtedness,” provided that (i) such liens exist prior to the acquisition of, or attach substantially simultaneous with, or within twenty (20) days after the, acquisition, lease, repair, improvement or construction of, such property financed or leased by such Indebtedness and (ii) such liens do not extend to any property of Borrower other than the property (and proceeds thereof) acquired, leased or built, or the improvements or repairs, financed by such Indebtedness;

 

(d)                                 Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00), and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;

 

(e)                                  Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);

 

(f)                                   Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase;

 

(g)                                  leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Collateral Agent or any Lender a security interest therein;

 

(h)                                 banker’s liens, rights of setoff and Liens in favor of financial institutions incurred in the ordinary course of business arising in connection with Borrower’s deposit accounts or securities accounts held at such institutions solely to secure payment of fees and similar costs and expenses and provided such accounts are maintained in compliance with Section 6.6(a) hereof;

 

(i)                                     Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7;

 

(j)                                    Liens securing Indebtedness permitted under clause (f) of the definition of “Permitted Indebtedness,” provided that such liens do not extend to any property of Borrower other than the applicable specified equipment;

 

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(k)                                 Liens on cash that stand as security for letter of credit reimbursement obligations and cash management obligations in the aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000.00); and

 

(l)                                     Permitted Licenses.

 

“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

 

“Prepayment Premium” is, with respect to any Term Loan subject to voluntary prepayment prior to the Maturity Date an additional fee payable to the Lenders in amount equal to:

 

(i)                                     for a prepayment made on or after the Effective Date through and including the first anniversary of the Effective Date, one and one-half percent (1.50%) of the principal amount of such Term Loan prepaid;

 

(ii)                                  for a prepayment made after the date which is after the first anniversary of the Effective Date through and including the second anniversary of the Effective Date, one percent (1.00%) of the principal amount of the Term Loans prepaid; and

 

(iii)                               for a prepayment made after the date which is after the second anniversary of the Effective Date and prior to the Maturity Date, one-half of one percent (0.50%) of the principal amount of the Term Loans prepaid.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible.

 

“Pro Rata Share” is, as of any date of determination, with respect to each Lender, a percentage (expressed as a decimal, rounded to the ninth decimal place) determined by dividing the outstanding principal amount of Term Loans held by such Lender by the aggregate outstanding principal amount of all Term Loans.

 

“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made under the Code.

 

“Registration” means any registration, authorization, approval, license, permit, clearance, certificate, and exemption issued or allowed by the FDA (including, without limitation, new drug applications, abbreviated new drug applications, biologics license applications, investigational new drug applications, over-the-counter drug monograph, device pre-market approval applications, device pre-market notifications, investigational device exemptions, product recertifications, manufacturing approvals, registrations and authorizations, CE Marks, pricing and reimbursement approvals, labeling approvals or their foreign equivalent, controlled substance registrations, and wholesale distributor permits).

 

“Regulatory Action” means an administrative or regulatory enforcement action, proceeding, investigation or inspection, FDA Form 483 notice of inspectional observation, warning letter, untitled letter, other notice of violation letter, recall, seizure, Section 305 notice or other similar written communication, or consent decree, issued by the FDA.

 

“Related Persons” means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee, representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor and other consultants and agents of or to such Person or any of its Affiliates.

 

“Required Lenders” means (i) for so long as all of the Persons that are Lenders on the Effective Date (each an “Original Lender”) have not assigned or transferred any of their interests in their Term Loan other than to an Affiliate of such Lender, Lenders holding one hundred percent (100%) of the aggregate outstanding principal

 

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balance of the Term Loans (or, if there are no Term Loans outstanding, the Term Loan Commitments), or (ii) at any time from and after the date any Original Lender has assigned or transferred any interest in its Term Loan, Lenders holding at least fifty and one-tenth percent (50.1%) of the aggregate outstanding principal balance of the Term Loan (or, if there are no Term Loans outstanding, the Term Loan Commitments) and, provided that in respect to this clause (ii), an assignment or transfer by an Original Lender shall not be deemed to have occurred with respect to: (A) each Original Lender that has not assigned or transferred any portion of its Term Loan, (B) each assignee or transferee of an Original Lender’s interest in the Term Loan, but only to the extent that such assignee or transferee is an Affiliate or Approved Fund of such Original Lender, and (C) any Person providing financing to any Person described in clauses (A) and (B) above; provided, however, that this clause (C) shall only apply upon the occurrence of a default, event of default or similar occurrence with respect to such financing.

 

“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Responsible Officer” is any of the President, Chief Executive Officer, or Chief Financial Officer of Borrower acting alone.

 

“Second Draw Period” is the period commencing on the date that the Term B Conditions have been met and ending on June 30, 2015.

 

“Secured Parties” means the Collateral Agent and the Lenders.

 

“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made under the Code.

 

“Solvent” means, with respect to any Person, that (a) the fair salable value of such Person’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of such Person’s liabilities, (b) such Person is not left with unreasonably small capital after giving effect to the transactions contemplated by this Agreement and the other Loan Documents, and (c) such Person is able to pay its debts (including trade debts) as they mature in the ordinary course.

 

“Subordinated Debt” is indebtedness incurred by Borrower or any of its Subsidiaries subordinated to all Indebtedness of Borrower and/or its Subsidiaries to the Lenders (pursuant to a subordination, intercreditor, or other similar agreement in form and substance reasonably satisfactory to Collateral Agent entered into between Collateral Agent, Borrower, and/or any of its Subsidiaries, and the other creditor).

 

“Subsidiary” is, with respect to any Person, any Person of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or through one or more intermediaries.

 

“Term A Draw Period” is the period commencing on the Effective Date and ending on December 31, 2014.

 

“Term Loan Commitment” is, for any Lender, the obligation of such Lender to make a Term Loan, up to the principal amount shown on Schedule 1.1. “Term Loan Commitments” means the aggregate amount of such commitments of all Lenders.

 

“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

 

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“Term B Conditions” means the occurrence of both of the following on or prior to June 30, 2015: (a) Section 510(k) clearance is received from the FDA for Borrower’s T2Dx and T2Candida products, and (b) the satisfaction of the Equity Raise Condition.

 

2.                                      LOANS AND TERMS OF PAYMENT

 

2.1                               Promise to Pay. Borrower hereby unconditionally promises to pay each Lender, the outstanding principal amount of all Term Loans advanced to Borrower by such Lender and accrued and unpaid interest thereon and any other amounts due hereunder as and when due in accordance with this Agreement.

 

2.2                               Term Loans.

 

(a)                                 Availability. (i) Subject to the terms and conditions of this Agreement, the Lenders agree, severally and not jointly, during the Term A Draw Period, to make term loans to Borrower in an aggregate principal amount of up to Twenty Million Dollars ($20,000,000.00) according to each Lender’s Term Loan Commitment for Term A Loans as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term A Loan”, and collectively as the “Term A Loans”). Subject to the terms and conditions of this Agreement, the Term A Loans may be drawn (i) in full on the Effective Date, or (ii) in three (3) drawings as follows: (A) an initial drawing on the Effective Date in an amount of not less than Ten Million Dollars ($10,000,000.00), and (B) two (2) subsequent drawings after the Effective Date but prior to the end of the Term A Draw Period, in an amount not less than Five Million Dollars ($5,000,000.00) or, if less, the remaining undrawn portion of the Term Loan Commitment for the Term A Loans (as set forth on Schedule 1.1). After repayment, no Term A Loan may be re-borrowed.

 

(ii)                                  Subject to the terms and conditions of this Agreement and the prior satisfaction of the Term B Conditions, the Lenders agree, severally and not jointly, during the Second Draw Period, to make term loans to Borrower in an aggregate principal amount of up to Ten Million Dollars ($10,000,000.00) according to each Lender’s Term Loan Commitment for Term B Loans as set forth on Schedule 1.1 hereto (such term loans are hereinafter referred to singly as a “Term B Loan”, and collectively as the “Term B Loans”; each Term A Loan or Term B Loan is hereinafter referred to singly as a “Term Loan” and the Term A Loans and the Term B Loans are hereinafter referred to collectively as the “Term Loans”). After repayment, no Term B Loan may be re-borrowed.

 

(b)                                 Repayment. Borrower shall make monthly payments of interest only commencing on the first (1st) Payment Date following the Funding Date of each Term Loan, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Amortization Date. Borrower agrees to pay, on any Funding Date of a Term Loan, any initial partial monthly interest payment otherwise due for the period between the Funding Date of such Term Loan and the next Payment Date. Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall (i) make monthly payments of interest, to Collateral Agent for the benefit of the Lenders (or, if there are only one (1) or two (2) Lenders, Borrower shall make payment directly to any such Lenders that have submitted a written request to Borrower (with a copy to Collateral Agent)) in accordance with their respective Pro Rata Shares, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon the effective rate of interest applicable to the Term Loan, as determined in Section 2.3(a) plus (ii) make consecutive equal monthly payments of principal to Collateral Agent for the benefit of the Lenders (or, if there are only one (1) or two (2) Lenders, Borrower shall make payment directly to any such Lenders that have submitted a written request to Borrower (with a copy to Collateral Agent)) in accordance with their respective Pro Rata Shares, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (A) the respective principal amounts of such Lender’s Term Loans outstanding, and (B) a repayment schedule equal to as applicable, (I) forty-two (42) months in the event that the Amortization Date occurs on February 1, 2016 or (II) thirty-six (36) months in the event that the Amortization Date occurs on August 1, 2016. All unpaid principal and accrued and unpaid interest with respect to each such Term Loan is due and payable in full on the Maturity Date. The Term Loans may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).

 

(c)                                  Mandatory Prepayments. If the Term Loans are accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Lenders, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of: (i) all outstanding principal of the Term Loans plus

 

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accrued and unpaid interest thereon through the prepayment date, (ii) the Final Fee plus (iii) all other Obligations that are due and payable, including Lenders’ Expenses and interest at the Default Rate (if any) with respect to any past due amounts. Notwithstanding (but without duplication with) the foregoing, on the Maturity Date, if the Final Fee had not previously been paid in full in connection with the prepayment of the Term Loans in full, Borrower shall pay to Collateral Agent for the benefit of the Lenders (or, if there are only one (1) or two (2) Lenders, Borrower shall make payment directly to any such Lenders that have submitted a written request to Borrower (with a copy to Collateral Agent)), the Final Fee in respect of the Term Loans.

 

(d)                                 Permitted Prepayment of Term Loans. Borrower shall have the option (i) to prepay all, but not less than all, of the outstanding principal balance of the Term Loans advanced by the Lenders under this Agreement, and (ii) to prepay a portion of the outstanding principal balance of the Term Loans ratably to the Lenders in amounts of not less than One Million Dollars ($1,000,000.00) per prepayment, provided that, in the case of any such prepayment made pursuant to clause (i) or (ii) of this Section 2.2(d), Borrower (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least five (5) Business Days prior to such prepayment, and (ii) pays to the Lenders on the date of such prepayment, payable to Collateral Agent for the benefit of the Lenders (or, if there are only one (1) or two (2) Lenders, Borrower shall make payment directly to such Lenders) in accordance with their respective Pro Rata Shares, an amount equal to the sum of (A) the outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (B) the Final Fee, (C) the Prepayment Premium, plus (D) all other Obligations that are due and payable on such prepayment date, including any Lenders’ Expenses and interest at the Default Rate (if any) with respect to any past due amounts. Prepayments of the Term Loan shall be applied to the Term Loan in inverse order of maturity.

 

2.3                               Payment of Interest on the Term Loans.

 

(a)                                 Interest Rate. Subject to Section 2.3(b), the principal amount outstanding under the Term Loans shall accrue interest at a floating per annum rate equal to the LIBOR Rate in effect from time to time plus Seven and Five-Hundredths percent (7.05%), which aggregate interest rate shall be determined by Collateral Agent on the third Business Day prior to the Funding Date of the applicable Term Loan and on the date occurring on the third Business Day prior to each Payment Date occurring thereafter, which interest shall be payable monthly in arrears in accordance with Sections 2.2(b) and 2.3(e). Except as set forth in Section 2.2(b), such interest shall accrue on each Term Loan commencing on, and including, the Funding Date of such Term Loan, and shall accrue on the principal amount outstanding under such Term Loan through and including the day on which such Term Loan is paid in full (or any payment is made hereunder).

 

(b)                                 Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, all Obligations shall accrue interest at a fixed per annum rate equal to the rate that is otherwise applicable thereto plus five percentage points (5.00%) (the “Default Rate”). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent.

 

(c)                                  360-Day Year. Interest shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed.

 

(d)                                 Debit of Accounts. Collateral Agent may debit (or ACH) any deposit accounts, maintained by Borrower or any of its Subsidiaries, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes the Lenders under the Loan Documents when due. Any such debits (or ACH activity) shall not constitute a set-off.

 

(e)                                  Payments. Except as otherwise expressly provided herein, all payments by Borrower under the Loan Documents shall be made to Collateral Agent for the benefit of the Lenders (or, if there are only one (1) or two (2) Lenders, Borrower shall make payment directly to any such Lenders that have submitted a written request to Borrower (with a copy to Collateral Agent)), at such Person’s office in immediately available funds on the date specified herein. Unless otherwise provided, interest is payable monthly on the Payment Date of each month. Payments of principal and/or interest received after 2:00 p.m. Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue until paid. All payments

 

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to be made by Borrower hereunder or under any other Loan Document, including payments of principal and interest, and all fees, expenses, indemnities and reimbursements, shall be made without set-off, recoupment or counterclaim, in lawful money of the United States and in immediately available funds.

 

2.4                               Fees. Borrower shall pay to Collateral Agent:

 

(a)                                 Closing Fee. A fully-earned, non-refundable closing fee in the amount of One Hundred Twenty-Five Thousand Dollars ($125,000.00) (the “Closing Fee”), which shall be due on the Effective Date, to be paid solely to, and solely for the account of, Solar;

 

(b)                                 Final Fee. The Final Fee, when due hereunder, to be paid solely to, and solely for the account of, Solar;

 

(c)                                  Prepayment Premium. The Prepayment Premium, when due hereunder, to be shared between the Lenders in accordance with their respective Pro Rata Shares; and

 

(d)                                 Lenders’ Expenses. All Lenders’ Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due.

 

2.5                               Withholding. Payments received by the Collateral Agent or the Lenders from Borrower hereunder will be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any governmental authority (including any interest, additions to tax or penalties applicable thereto), except as required by applicable law. Notwithstanding the foregoing, if at any time and as a result of a change in law occurring after the Closing Date, any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder to the Lenders, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or deduction (and including any such withholdings and deductions applicable to additional sums payable under this Section), each Lender receives a net sum equal to the sum which it would have received had no withholding or deduction been required and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority. Borrower will, upon request, furnish the Lenders with proof reasonably satisfactory to the Lenders indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith and by appropriate and timely proceedings and as to which payment in full is bonded or reserved against by Borrower. Notwithstanding the foregoing, Borrower shall not be obligated to indemnify a Lender or pay additional amounts under this Section 2.5 (i) if such Lender acquired the Term Loans (or Term Loan Commitments) after the Effective Date from (directly or indirectly) a Lender party to this Agreement on the Effective Date, to an extent greater than the payment under this Section 2.5 that the applicable original Lender would have been entitled to receive, except to the extent such Lender would be entitled to receive a greater payment as a result of a change in law that occurs after the Closing Date, (ii) as a result of the failure of a Lender to provide to Borrower an IRS Form W-9 or W-8 (or applicable successor form) that such Lender is legally entitled to provide or (iii) in respect of any withholding imposed under Sections 1471 to 1474 of the Internal Revenue Code of 1986, as amended. The agreements and obligations of Borrower contained in this Section 2.5 shall survive the termination of this Agreement.

 

2.6                               Secured Promissory Notes. If requested by a Lender, the Term Loans shall be evidenced by a Secured Promissory Note or Notes in the form attached as Exhibit G hereto (each a “Secured Promissory Note”), and shall be repayable as set forth in this Agreement. Borrower irrevocably authorizes each Lender to make or cause to be made, on or about the Funding Date of any Term Loan or at the time of receipt of any payment of principal on such Lender’s Secured Promissory Note, an appropriate notation on such Lender’s Secured Promissory Note Record reflecting the making of such Term Loan or (as the case may be) the receipt of such payment. The outstanding amount of each Term Loan set forth on such Lender’s Secured Promissory Note Record shall be, absent manifest error, prima facie evidence of the principal amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender’s Secured Promissory Note Record shall not limit or otherwise affect the obligations of Borrower under any Secured Promissory Note or any other Loan

 

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Document to make payments of principal of or interest on any Secured Promissory Note when due. Upon receipt of an affidavit of an officer of a Lender as to the loss, theft, destruction, or mutilation of its Secured Promissory Note, Borrower shall issue, in lieu thereof, a replacement Secured Promissory Note in the same principal amount thereof and of like tenor.

 

3.                                      CONDITIONS OF LOANS

 

3.1                               Conditions Precedent to Initial Term Loan. Each Lender’s obligation to make a Term A Loan is subject to the condition precedent that Collateral Agent and each Lender shall consent to or shall have received, in form and substance satisfactory to Collateral Agent and each Lender, such documents, and completion of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or appropriate, including, without limitation:

 

(a)                                 original Loan Documents, each duly executed by Borrower and each Subsidiary, as applicable;

 

(b)                                 a completed Perfection Certificate and Disclosure Schedules for Borrower and each of its Subsidiaries;

 

(c)                                  duly executed original Control Agreements with respect to any Collateral Accounts maintained by Borrower or any of its Subsidiaries;

 

(d)                                 the Operating Documents and good standing certificates of Borrower and its Subsidiaries certified by the Secretary of State (or equivalent agency) of Borrower’s and such Subsidiaries’ jurisdiction of organization or formation and each jurisdiction in which Borrower and each Subsidiary is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Effective Date;

 

(e)                                  a certificate of Borrower in substantially the form of Exhibit E hereto executed by the Secretary of Borrower with appropriate insertions and attachments, including with respect to (i) the Operating Documents of Borrower (which Certificate of Incorporation of Borrower shall be certified by the Secretary of State of the State of Delaware) and (ii) the resolutions adopted by Borrower’s board of directors for the purpose of approving the transactions contemplated by the Loan Documents;

 

(f)                                   certified copies, dated as of date no earlier than thirty (30) days prior to the Effective Date, of financing statement searches, as Collateral Agent shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Term Loan, will be terminated or released;

 

(g)                                  a duly executed legal opinion of counsel to Borrower dated as of the Effective Date;

 

(h)                                 evidence satisfactory to Collateral Agent and the Lenders that the insurance policies required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Collateral Agent, for the ratable benefit of the Secured Parties;

 

(i)                                     a copy of any applicable investors rights, shareholders, voting or other such agreement in respect of the Borrower, and all amendments thereto;

 

(j)                                    a fully-executed Payoff Letter; and

 

(k)                                 payment of the Closing Fee and Lenders’ Expenses then due as specified in Section 2.4 hereof.

 

3.2                               Conditions Precedent to all Term Loans. The obligation of each Lender to extend each Term Loan, including the initial Term Loan, is subject to the following conditions precedent:

 

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(a)                                 receipt by Collateral Agent of an executed Loan Payment Request Form in the form of Exhibit C attached hereto;

 

(b)                                 the representations and warranties in Section 5 hereof shall be true, accurate and complete in all material respects on the Funding Date of each Term Loan; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the funding of such Term Loan;

 

(c)                                  in such Lender’s reasonable discretion, there has not been any Material Adverse Change;

 

(d)                                 if requested by a Lender with respect to the Term B Loan, the delivery by Borrower of originally-executed, Secured Promissory Notes according to such Lender’s Term Loan Commitment Percentage with respect to the Term B Loans;

 

(e)                                  No Event of Default or an event that with the passage of time could result in an Event of Default, shall exist; and

 

(f)                                   payment of the fees and Lenders’ Expenses then due as specified in Section 2.5 hereof.

 

3.3                               Covenant to Deliver. Borrower agrees to deliver to Collateral Agent and the Lenders each item required to be delivered to Collateral Agent under this Agreement as a condition precedent to the funding of any Term Loan. Borrower expressly agrees that a Term Loan made prior to the receipt by Collateral Agent or any Lender of any such item shall not constitute a waiver by Collateral Agent or any Lender of Borrower’s obligation to deliver such item, and any such Term Loan in the absence of a required item shall be made in each Lender’s sole discretion.

 

3.4                               Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan set forth in this Agreement, to obtain a Term Loan (other than the Term Loan funded on the Effective Date), Borrower shall notify the Lenders (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon New York City time three (3) Business Days prior to the date the Term Loan is to be made. Together with any such electronic, facsimile or telephonic notification, Borrower shall deliver to Collateral Agent by electronic mail or facsimile a completed Loan Payment Request Form executed by a Responsible Officer or his or her designee. The Collateral Agent may rely on any telephone notice given by a person whom Collateral Agent reasonably believes is a Responsible Officer or designee. On the Funding Date related to any Term Loan, each Lender shall credit and/or transfer (as applicable) to the Designated Deposit Account, an amount equal to its Term Loan Commitment in respect of such Term Loan.

 

3.5                               Post-Closing Obligations. Notwithstanding any provision herein or in any other Loan Document to the contrary, to the extent not actually delivered on or prior to the Effective Date, the Borrowers shall, and shall cause each applicable Subsidiary to:

 

(a)                                 Use commercially reasonable effort to deliver to Collateral Agent a landlord’s consent executed in favor of Collateral Agent in respect of all of Borrower’s and each Subsidiaries’ leased locations no later than ninety (90) days after the Effective Date (or such later date as Collateral Agent may agree, in each case, not to exceed sixty (60) days thereafter);

 

(b)                                 Use commercially reasonable effort to deliver a bailee waiver executed in favor of Collateral Agent in respect of each third party bailee where Borrower or any Subsidiary maintains Collateral having a book value in excess of One Hundred Fifty Thousand Dollars ($150,000.00) no later than ninety (90) days after the Effective Date (or such later date as Collateral Agent may agree, in each case, not to exceed sixty (60) days thereafter); and

 

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(c)                                  use commercially reasonable efforts to deliver to Collateral Agent a subordination agreement, duly executed by MDFA in respect of the MDFA Financing substantially in the form of Intercreditor Agreement dated as of May 9, 2011, between MDFA and Silicon Valley Bank no later than ninety (90) days after the Effective Date (or such later date as Collateral Agent may agree, in each case, not to exceed sixty (60) days thereafter).

 

4.                                      CREATION OF SECURITY INTEREST

 

4.1                               Grant of Security Interest. Borrower hereby grants Collateral Agent, for the ratable benefit of the Secured Parties, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Collateral Agent, for the ratable benefit of the Secured Parties, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products and supporting obligations (as defined in the Code) in an amount greater than Fifty Thousand Dollars ($50,000) in respect thereof. If Borrower shall acquire any commercial tort claim (as defined in the Code), Borrower shall grant to Collateral Agent, for the ratable benefit of the Secured Parties, a security interest therein and in the proceeds and products and supporting obligations (as defined in the Code) thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Collateral Agent.

 

If this Agreement is terminated, Collateral Agent’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as the Lenders’ obligation to extend Term Loans has terminated, Collateral Agent shall, at the sole cost and expense of Borrower, release its Liens (and enter into any documentation reasonably requested by Borrower) in the Collateral and all rights therein shall revert to Borrower.

 

4.2                               Authorization to File Financing Statements. Borrower hereby authorizes Collateral Agent to file financing statements or take any other action required to perfect Collateral Agent’s security interests in the Collateral (held for the ratable benefit of the Secured Parties), without notice to Borrower, with all appropriate jurisdictions to perfect or protect Collateral Agent’s interest or rights under the Loan Documents.

 

5.                                      REPRESENTATIONS AND WARRANTIES 

 

Borrower represents and warrants to Collateral Agent and the Lenders as follows:

 

5.1                               Due Organization, Authorization: Power and Authority. Borrower and each of its Subsidiaries is duly existing and in good standing as a Registered Organization in its jurisdictions of organization or formation and Borrower and each of its Subsidiaries is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its businesses or its ownership of property requires that it be so qualified except where the failure to do so could not reasonably be expected to have a Material Adverse Change. In connection with this Agreement, Borrower and each of its Subsidiaries has delivered to Collateral Agent a completed perfection certificate and any updates or supplements thereto on, before or after the Effective Date (each a “Perfection Certificate” and collectively, the “Perfection Certificates”). Borrower represents and warrants that all the information set forth on the Perfection Certificates pertaining to Borrower and each of its Subsidiaries is accurate and complete.

 

The execution, delivery and performance by Borrower and each of its Subsidiaries of the Loan Documents to which it is, or they are, a party have been duly authorized, and do not (i) conflict with any of Borrower’s or such Subsidiaries’ organizational documents, including its respective Operating Documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law applicable thereto, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or such Subsidiary, or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect) or are being obtained pursuant to Section 6.1(b), or (v) constitute an event of default under any material agreement by which Borrower, any of its Subsidiaries or any of their respective properties, is bound. Neither Borrower nor any

 

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of its Subsidiaries is in default under any agreement to which it is a party or by which it or any of its assets is bound in which such default could reasonably be expected to have a Material Adverse Change.

 

5.2                               Collateral.

 

(a)                                 Borrower and each its Subsidiaries have good title to, have rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien under the Loan Documents, free and clear of any and all Liens except Permitted Liens, and neither Borrower nor any of its Subsidiaries have any Deposit Accounts, Securities Accounts, Commodity Accounts or other investment accounts other than the Collateral Accounts or the other investment accounts, if any, described in the Perfection Certificates delivered to Collateral Agent in connection herewith in respect of which Borrower or such Subsidiary has given Collateral Agent notice and taken such actions as are necessary to give Collateral Agent a perfected security interest therein as required under this Agreement. The Accounts are bona fide, existing obligations of the Account Debtors.

 

(b)                                 The security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral, subject only to involuntary Permitted Liens that, under applicable law, have priority over Collateral Agent’s Lien.

 

(c)                                  On the Effective Date, and except as disclosed on the Disclosure Schedules (i) the Collateral is not in the possession of any third party bailee, and (ii) no such third party bailee possesses components of the Collateral in excess of One Hundred Fifty Thousand Dollars ($150,000.00).

 

(d)                                 All Inventory and Equipment is in all material respects of good and marketable quality, free from material defects.

 

(e)                                  Borrower and each of its Subsidiaries is the sole owner of the Intellectual Property each respectively purports to own, free and clear of all Liens other than Permitted Liens. Except as noted on the Disclosure Schedules (which, upon the consummation of a transaction not prohibited by this Agreement, may be updated to reflect such transaction), neither Borrower nor any of its Subsidiaries is a party to, nor is bound by, any material license or other Material Agreement.

 

5.3                               Litigation. Except as disclosed on the Disclosure Schedules, there are no actions, suits, investigations, or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than One Hundred Fifty Thousand Dollars ($150,000.00).

 

5.4                               No Material Adverse Change; Financial Statements. All consolidated financial statements for Borrower and its consolidated Subsidiaries, delivered to Collateral Agent fairly present, in conformity with GAAP, and in all material respects the consolidated financial condition of Borrower and its consolidated Subsidiaries, and the consolidated results of operations of Borrower and its consolidated Subsidiaries. Since December 31, 2013, there has not been a Material Adverse Change.

 

5.5                               Solvency. Borrower is Solvent. Borrower and each of its Subsidiaries, when taken as a whole, is Solvent.

 

5.6                               Regulatory Compliance. Neither Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower and each of its Subsidiaries has complied in all material respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005. Neither Borrower nor any of its Subsidiaries has violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a Material Adverse Change. Neither Borrower’s nor any of its Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary or, to Borrower’s knowledge, by

 

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previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than in material compliance with applicable laws. Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.

 

None of Borrower, any of its Subsidiaries, or, to Borrower’s knowledge, any of Borrower’s or its Subsidiaries’ Affiliates or any of their respective agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. None of Borrower, any of its Subsidiaries, or to the knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law.

 

5.7                               Investments. Neither Borrower nor any of its Subsidiaries owns any stock, shares, partnership interests or other equity securities except for Permitted Investments.

 

5.8                               Tax Returns and Payments; Pension Contributions. Borrower and each of its Subsidiaries has timely filed all required tax returns and reports, each of such returns and reports is true, correct and complete in all material respects, and Borrower and each of its Subsidiaries, has timely paid all taxes shown on such returns and reports and all other foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower and such Subsidiaries in an amount greater than Twenty-Five Thousand Dollars ($25,000), in all jurisdictions in which Borrower or any such Subsidiary is subject to taxes, including the United States, unless such taxes are being contested in accordance with the next sentence. Borrower and each of its Subsidiaries, may defer payment of any contested taxes, provided that Borrower or such Subsidiary, (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted; (b) notifies Collateral Agent of the commencement of, and any material development in, the proceeding; and (c) adequate reserves or other appropriate provisions are maintained on the books of such Borrower or Subsidiary, as applicable, in accordance with GAAP and which do not involve, in the reasonable judgment of the Collateral Agent, any risk of the sale, forfeiture or loss of any material portion of the Collateral. Neither Borrower nor any of its Subsidiaries is aware of any claims or adjustments proposed for any of Borrower’s or such Subsidiaries’, prior tax years which could result in additional taxes becoming due and payable by Borrower or its Subsidiaries. Borrower and each of its Subsidiaries have paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and neither Borrower nor any of its Subsidiaries have, withdrawn from participation in, and have not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower or its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.

 

5.9                               Use of Proceeds. Borrower shall use the proceeds of the Term Loans to repay certain existing Indebtedness and as working capital and to fund its general business requirements, and not for personal, family, household or agricultural purposes.

 

5.10                        Full Disclosure. No written representation, warranty or other statement of Borrower or any of its Subsidiaries in any certificate or written statement, when taken as a whole, given to Collateral Agent or any Lender, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Collateral Agent or any Lender, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized that projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

 

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6.                                      AFFIRMATIVE COVENANTS

 

Borrower shall, and shall cause each of its Subsidiaries to, do all of the following: 

 

6.1                               Government Compliance.

 

(a)                                 Other than specifically permitted hereunder, maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of organization and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Change. Comply with all laws, ordinances and regulations to which Borrower or any of its Subsidiaries is subject, the noncompliance with which could reasonably be expected to have a Material Adverse Change.

 

(b)                                 Obtain and keep in full force and effect, all of the material Governmental Approvals necessary for the performance by Borrower and its Subsidiaries of their respective businesses and obligations under the Loan Documents and the grant of a security interest to Collateral Agent for the ratable benefit of the Secured Parties, in all of the Collateral.

 

6.2                               Financial Statements, Reports, Certificates; Notices.

 

(a)                                 Deliver to Collateral Agent:

 

(i)                                     as soon as available, but no later than thirty (30) days after the last day of each month (commencing with June 2014), a company prepared consolidated and, if prepared by Borrower or if reasonably requested by the Lenders, consolidating balance sheet, income statement and cash flow statement covering the consolidated operations of Borrower and its consolidated Subsidiaries for such month certified by a Responsible Officer and in a form reasonably acceptable to the Collateral Agent;

 

(ii)                                  as soon as available, but no later than one hundred eighty (180) days after the last day of Borrower’s fiscal year or within five (5) days of filing of the same with the SEC, audited consolidated financial statements covering the consolidated operations of Borrower and its consolidated Subsidiaries for such fiscal year, prepared under GAAP, consistently applied, together with an unqualified opinion (other than with respect to a going-concern qualification based solely on the amount of cash and Cash Equivalents held by Borrower) on the financial statements from an independent certified public accounting firm acceptable to Collateral Agent in its reasonable discretion;

 

(iii)                               as soon as available after approval thereof by Borrower’s board of directors, but no later than ten (10) days’ after such approval, Borrower’s annual financial projections for the entire current fiscal year as approved by Borrower’s board of directors; provided that, any revisions to such projections approved by Borrower’s board of directors shall be delivered to Collateral Agent and the Lenders no later than seven (7) days after such approval);

 

(iv)                              together with the delivery of the Compliance Certificate, copies of all non-ministerial statements, reports and notices made available to Borrower’s security holders (except as otherwise required to be delivered hereunder, other than materials provided to members of the Borrower’s board of directors solely in their capacities as board members or management of the Borrower) or holders of Subordinated Debt (except as otherwise required to be delivered hereunder, other than materials provided to members of the Borrower’s board of directors solely in their capacities as board members or management of the Borrower);

 

(v)                                 in the event that Borrower becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within together with the delivery of the Compliance Certificate, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission;

 

(vi)                              unless the IPO has occurred, together with the delivery of the Compliance Certificate, notice of any amendments (A) to the capitalization table of Borrower, and (B) to the respective

 

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Operating Documents of Borrower or any of its Subsidiaries, in each case together with any copies reflecting such amendments with respect thereto;

 

(vii)                           prompt delivery of (and in any event within five (5) days after the same are sent or received) copies of all material correspondence, reports, documents and other filings with any Governmental Authority that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals material to Borrower’s business or that otherwise could reasonably be expected to have a Material Adverse Change;

 

(viii)                        prompt notice of any event that (A) could reasonably be expected to materially and adversely affect the value of the Intellectual Property or (B) could reasonably be expected to result in a Material Adverse Change;

 

(ix)                              written notice delivered at least ten (10) days’ prior to Borrower’s creation of a New Subsidiary in accordance with the terms of Section 6.10);

 

(x)                                 written notice delivered at least ten (10) days with respect to clause (A) and thirty (30) days with respect to clause (B) through (E) prior to Borrower’s (A) adding any new offices or business locations, including warehouses (unless such new offices or business locations contain less than One Hundred Fifty Thousand Dollars ($150,000.00) in assets or property of Borrower or any of its Subsidiaries), (B) changing its respective jurisdiction of organization, (C) changing its organizational structure or type, (D) changing its respective legal name, or (E) changing any organizational number(s) (if any) assigned by its respective jurisdiction of organization;

 

(xi)                              upon Borrower becoming aware of the existence of any Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, prompt (and in any event within three (3) Business Days) written notice of such occurrence, which such notice shall include a reasonably detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, and Borrower’s proposal regarding how to cure such Event of Default or event;

 

(xii)                           immediate notice if Borrower or such Subsidiary has knowledge that Borrower, or any Subsidiary or Affiliate of Borrower, is listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering;

 

(xiii)                        notice of any commercial tort claim (as defined in the Code) or letter of credit rights (as defined in the Code) held by Borrower or any Guarantor, in each case in an amount greater than Fifty Thousand Dollars ($50,000.00) and of the general details thereof;

 

(xiv)                       if Borrower or any of its Subsidiaries is not now a Registered Organization but later becomes a Registered Organization, written notice of such occurrence and information regarding such Person’s organizational identification number within seven (7) Business Days of receiving such organizational identification number; and

 

(xv)                          other information as reasonably requested by Collateral Agent.

 

Notwithstanding the foregoing, documents and notices required to be delivered pursuant to the terms hereof (to the extent any such documents and notices are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address.

 

(b)                                 Concurrently with the delivery of the financial statements specified in Section 6.2(a)(i) above but no later than thirty (30) days after the last day of each month, deliver to Collateral Agent:

 

(i)                                     a duly completed Compliance Certificate signed by a Responsible Officer;

 

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(ii)                                  copies of any material Governmental Approvals obtained by Borrower or any of its Subsidiaries;

 

(iii)                               written notice of the commencement of, and any material development in, the proceedings contemplated by Section 5.8 hereof;

 

(iv)                              written notice of any litigation or governmental proceedings pending or threatened (in writing) against Borrower or any of its Subsidiaries, which could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of One Hundred Fifty Thousand Dollars ($150,000.00); and

 

(v)                                 written notice of all returns, recoveries, disputes and claims regarding Inventory that involve more than Fifty Thousand Dollars ($50,000.00) individually or in the aggregate in any calendar year.

 

(c)                                  Keep proper, complete and true books of record and account in accordance with GAAP in all material respects. Borrower shall, and shall cause each of its Subsidiaries to, allow, at the sole cost of Borrower, Collateral Agent or any Lender, during regular business hours upon reasonable prior notice (provided that no notice shall be required when an Event of Default has occurred and is continuing), to visit and inspect any of its properties, to examine and make abstracts or copies from any of its books and records, and to conduct a collateral audit and analysis of its operations and the Collateral. Such audits shall be conducted no more often than twice every year unless (and more frequently if) an Event of Default has occurred and is continuing.

 

(d)                                 Semi-annually, on or before the last Business Day of January and July of each year (commencing with January 2015), deliver to Collateral Agent an updated Perfection Certificate and Disclosure Schedules to reflect any amendments, modifications and updates, if any, to certain information in the Perfection Certificate and Disclosure Schedule.

 

6.3                               Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower, or any of its Subsidiaries, as applicable, and their respective Account Debtors shall follow Borrower’s, or such Subsidiary’s, customary practices.

 

6.4                               Taxes; Pensions. Timely file and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower or its Subsidiaries, except as otherwise permitted pursuant to the terms of Section 5.8 hereof, and shall deliver to Collateral Agent, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with the terms of such plans.

 

6.5                               Insurance. Keep Borrower’s and its Subsidiaries’ business and the Collateral insured for risks and in amounts standard for companies in Borrower’s and its Subsidiaries’ industry and location and as Collateral Agent may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to Collateral Agent and Lenders. All property policies shall have a lender’s loss payable endorsement showing Collateral Agent as lender loss payee and shall waive subrogation against Collateral Agent, and all liability policies shall show, or have endorsements showing, Collateral Agent (for the ratable benefit of the Secured Parties), as additional insured. The Collateral Agent shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral, and each provider of any such insurance shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Collateral Agent, that it will give the Collateral Agent thirty (30) days prior written notice before any such policy or policies shall be canceled (except in the case of nonpayment). Borrower shall provide copies of any notice received in connection with the cancellation of insurance policies. At Collateral Agent’s request, Borrower shall deliver to the Collateral Agent certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Collateral Agent’s option, be payable to Collateral Agent, for the ratable benefit of the Secured Parties, on account of the then-outstanding Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy within ninety (90) days of receipt thereof up to Two Hundred Fifty Thousand Dollars ($250,000.00) with respect to any loss, but not exceeding Two Hundred Fifty Thousand Dollars

 

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($250,000.00), in the aggregate for all losses under all casualty policies in any one (1) year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Collateral Agent has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Collateral Agent, be payable to Collateral Agent, for the ratable benefit of the Lenders, on account of the Obligations. If Borrower or any of its Subsidiaries fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons, Collateral Agent may make (but has no obligation to do so), at Borrower’s expense, all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Collateral Agent deems prudent.

 

6.6                               Operating Accounts.

 

(a)                                 Maintain Borrower’s and Guarantors Collateral Accounts depositary institutions that have agreed to execute Control Agreements in favor of Collateral Agent with respect to such Collateral Accounts. The provisions of the previous sentence shall not apply to Deposit Accounts exclusively used for cash collateral for Permitted Liens under clause (k) of the definition thereof, payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s, or any Guarantor’s, employees and identified to Collateral Agent by Borrower as such in the Disclosure Schedules.

 

(b)                                 Borrower shall provide Collateral Agent ten (10) days’ prior written notice before Borrower or any Guarantor establishes any Collateral Account. In addition, for each Collateral Account that Borrower or any Guarantor, at any time maintains, Borrower or such Guarantor shall cause the applicable bank or financial institution at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Collateral Agent’s Lien in such Collateral Account (held for the ratable benefit of the Secured Parties) in accordance with the terms hereunder prior to the establishment of such Collateral Account. The provisions of the previous sentence shall not apply to Deposit Accounts exclusively used for cash collateral for Permitted Liens under clause (k) of the definition thereof, payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s, or any Guarantor’s, employees and identified to Collateral Agent by Borrower as such in the Disclosure Schedules.

 

(c)                                  Within one hundred twenty (120) days after the Effective Dave, (i) close all Collateral Accounts (other than any Deposit Account solely used cash collateral for Permitted Liens under clause (k) of the definition thereof), (ii) open replacement accounts with Comerica Bank, and (iii) cause Comerica Bank to execute and deliver Control Agreements or other appropriate instruments with respect to all such Collateral Accounts to perfect Collateral Agent’s Lien in such Collateral Account (held for the ratable benefit of the Secured Parties) in accordance with the terms hereunder. The provisions of clause (iii) shall not apply to apply to Deposit Accounts exclusively used for cash collateral for Permitted Liens under clause (k) of the definition thereof, payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s, or any Guarantor’s, employees and identified to Collateral Agent by Borrower as such in the Disclosure Schedules.

 

(d)                                 At all times after one hundred twenty (120) days after the Effective Date, Borrower shall, and shall cause any Guarantors and the MSC Subsidiary to, keep on deposit with Comerica Bank not less than the Applicable Percentage of the Borrower’s and such Subsidiaries’ (taken as a whole) cash and Cash Equivalents.

 

(e)                                  Neither Borrower nor any Guarantor shall maintain any Collateral Accounts except Collateral Accounts maintained in accordance with this Section 6.6.

 

6.7                               Protection of Intellectual Property Rights. Borrower and each of its Subsidiaries shall: (a) use commercially reasonable efforts to protect, defend and maintain the validity and enforceability of its respective Intellectual Property that is material to its business; (b) promptly advise Collateral Agent in writing of material infringement by a third party of its respective Intellectual Property; and (c) not allow any of its respective Intellectual Property material to its respective business to be abandoned, forfeited or dedicated to the public without Collateral Agent’s prior written consent.

 

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6.8                               Litigation Cooperation. Commencing on the Effective Date and continuing through the termination of this Agreement, make available to Collateral Agent, without expense to Collateral Agent or the Lenders, Borrower and each of Borrower’s officers, employees and agents and Borrower’s Books, to the extent that Collateral Agent may reasonably deem them necessary to prosecute or defend any third-party suit or proceeding instituted by or against Collateral Agent with respect to any Collateral or relating to Borrower.

 

6.9                               Landlord Waivers; Bailee Waivers. In the event that Borrower or any of its Subsidiaries, after the Effective Date, intends to add any new offices or business locations, including warehouses, or otherwise store any portion of the Collateral with, or deliver any portion of the Collateral to, a bailee, in each case pursuant to Section 7.2, then, in the event that the Collateral at any new location is valued (based on book value) in excess of One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate, at Collateral Agent’s election, Borrower or such Subsidiary shall use commercially reasonable efforts to cause such bailee or landlord, as applicable to execute and deliver a bailee waiver or landlord waiver, as applicable, in form and substance reasonably satisfactory to Collateral Agent prior to the addition of any new offices or business locations, or any such storage with or delivery to any such bailee, as the case may be.

 

6.10                        Creation/Acquisition of Subsidiaries. In the event any Borrower or any Subsidiary of any Borrower creates or acquires any Subsidiary after the Effective Date, Borrower or such Subsidiary shall promptly notify the Collateral Agent of such creation or acquisition, and Borrower or such Subsidiary shall take all actions necessary to achieve the following with respect to such “New Subsidiary” (defined as a Subsidiary formed after the date hereof during the term of this Agreement):

 

(a)                                 if such New Subsidiary is a Domestic Subsidiary (except for (i) a Domestic Subsidiary that solely holds the equity interests of one (1) or more Foreign Subsidiaries (an “Excluded Domestic Subsidiary”), and (ii) the MSC Subsidiary), to cause such New Subsidiary to become a co-Borrower hereunder, or, if approved by Collateral Agent, a secured guarantor with respect to the Obligations; and

 

(b)                                 with respect to New Subsidiaries owned directly by the Borrower or a Guarantor, to grant and pledge to Collateral Agent a perfected security interest in (A) one hundred percent (100%) of the stock, units or other evidence of ownership held by Borrower or its Subsidiaries of any such New Subsidiary that is a Domestic Subsidiary (except if such New Subsidiary is an Excluded Domestic Subsidiary), or (B) sixty-five (65%) of the stock, units or other evidence of ownership held by Borrower or a Guarantor of any such New Subsidiary which is (i) a Foreign Subsidiary or (ii) an Excluded Domestic Subsidiary.

 

6.11                        Further Assurances. Execute any further instruments and take further action as Collateral Agent or any Lender reasonably requests to perfect or continue Collateral Agent’s Lien in the Collateral or to effect the purposes of this Agreement.

 

7.                                      NEGATIVE COVENANTS

 

Borrower shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of the Required Lenders:

 

7.1                               Dispositions. Convey, sell, lease, transfer, assign, dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment; (c) in connection with Permitted Liens, Permitted Investments and Permitted Licenses; or (d) cash or Cash Equivalents pursuant to transactions not prohibited by this Agreement.

 

7.2                               Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses engaged in by Borrower or such Subsidiary, as applicable, as of the Effective Date or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) permit any Key Person to cease being actively engaged in the management of Borrower unless written notice thereof is provided to Collateral Agent within ten (10) days of such cessation, or (ii) enter into any transaction or series of related transactions, other than the IPO, in which (A) the stockholders of Borrower who were not

 

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stockholders immediately prior to the first such transaction own more than forty-five percent (45%) of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions and (B) except as permitted by Section 7.3, Borrower ceases to own, directly or indirectly, one hundred percent (100%) of the ownership interests in each Subsidiary of Borrower.

 

7.3                               Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock, shares or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary (provided such surviving Subsidiary is a “co-Borrower” hereunder or has provided a secured Guaranty of Borrower’s Obligations hereunder in accordance with Section 6.10) or with (or into) Borrower provided Borrower is the surviving legal entity, and as long as no Event of Default is occurring prior thereto or arises as a result therefrom. Notwithstanding the foregoing, Borrower may enter into and consummate any Permitted Acquisition.

 

7.4                               Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

 

7.5                               Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein (except for Permitted Liens), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Collateral Agent, for the ratable benefit of the Secured Parties) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower, or any of its Subsidiaries, from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or such Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens”.

 

7.6                               Maintenance of Collateral Accounts. With respect to Borrower and any Guarantors, maintain any Collateral Account except pursuant to the terms of Section 6.6 hereof.

 

7.7                               Restricted Payments. (a) Declare or pay any dividends (other than dividends payable solely in capital stock) or make any other distribution or payment on account of or redeem, retire, defease or purchase any capital stock (other than (i) the declaration or payment of dividends to Borrower, (ii) so long as no Event of Default or event that with the passage of time would result in an Event of Default exists or would result therefrom, the declaration or payment of any dividends solely in the form of equity securities, and (iii) so long as no Event of Default or event that with the passage of time would result in an Event of Default exists or would result therefrom, repurchases of unvested common stock from employees or consultants at cost as a result of the termination of the employment or other service relationship of such employees or consultants in an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00) in any year and One Million Dollars ($1,000,000.00) over the term of this Agreement), (b) other than the Obligations in accordance with the terms hereof, purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness prior to its scheduled maturity unless being replaced with Indebtedness of at least the same principal amount and such new Indebtedness is Permitted Indebtedness, or (c) be a party to or bound by an agreement that restricts a Subsidiary from paying dividends or otherwise distributing property to Borrower.

 

7.8                               Investments. Directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so other than (a) Permitted Investments, and (b) if the MSC Investment Conditions have been met and no Event of Default or an event that with the passage of time could result in an Event of Default, shall exist, Investments in a wholly-owned corporation Subsidiary incorporated in Massachusetts for the purpose of holding Investments as a Massachusetts security corporation under 830 CMR 63.38B.1 of the Massachusetts tax code and applicable regulations (as the same may be amended, modified or replaced from time to time) (the “MSC Subsidiary”). If at any time after the incorporation of the MSC Subsidiary the MSC Investment Conditions are not met, then (i) the Borrower shall cause the MSC Subsidiary to distribute to the Borrower all assets held by the MSC Subsidiary for deposit into a Collateral Account subject to a Control Agreement in favor of Collateral Agent, and (ii) the Borrower shall not permit the MSC Subsidiary to hold any assets. The Borrower shall not permit the MSC Subsidiary to make any Investments or hold any assets that would cause the MSC Subsidiary to fail to qualify as a Massachusetts security corporation under 830 CMR 63.38B.1 of the Massachusetts tax code and applicable regulations (as the same may be amended, modified or replaced from time to time).

 

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7.9                               Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower or any of its Subsidiaries, except for (a) transactions that are in the ordinary course of Borrower’s or such Subsidiary’s business, upon fair and reasonable terms that are no less favorable to Borrower or such Subsidiary than would be obtained in an arm’s length transaction with a non-affiliated Person, (b) Subordinated Debt or equity investments by Borrower’s investors in Borrower or its Subsidiaries; and (c) compensation arrangements for Borrower’s and its Subsidiaries’ officers, directors and employees that are customary in the Borrower’s industry.

 

7.10                        Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to the Lenders.

 

7.11                        Compliance. (a) Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Term Loan for that purpose; (b) fail to meet the minimum funding requirements of ERISA; (c) permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; (d) fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a Material Adverse Change, or permit any of its Subsidiaries to do so; or (e) withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other Governmental Authority.

 

7.12                        Compliance with Anti-Terrorism Laws. Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries permit any Affiliate to, directly or indirectly, knowingly enter into any documents, instruments, agreements or contracts with any Person listed on the OFAC Lists. Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries, permit any Affiliate to, directly or indirectly, (a) conduct any business or engage in any transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked Person, (b) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order No. 13224 or any similar executive order or other Anti-Terrorism Law, or (c) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.

 

8.                                      EVENTS OF DEFAULT

 

Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:

 

8.1                               Payment Default. Borrower fails to (a) make any payment of principal or interest on any Term Loan on its due date, or (b) pay any other Obligation within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace period shall not apply to payments due on the Maturity Date or the date or acceleration pursuant to Section 9.1 (a) hereof);

 

8.2                               Covenant Default. 

 

(a)                                 Borrower or any of its Subsidiaries fails or neglects to perform any obligation in Sections 6.2 (Financial Statements, Reports, Certificates), 6.4 (Taxes), 6.5 (Insurance), 6.6 (Operating Accounts), 6.7 (Protection of Intellectual Property Rights), 6.9 (Landlord Waivers; Bailee Waivers), 6.10 (Creation/Acquisition of Subsidiaries) or Borrower violates any provision in Section 7; or

 

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(b)                                 Borrower, or any of its Subsidiaries, fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any other Loan Document to which such person is a party, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within fifteen (15) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the fifteen (15) day period or cannot after diligent attempts by Borrower or such Subsidiary, as applicable, be cured within such fifteen (15) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Term Loans shall be made during such cure period).

 

8.3                               Material Adverse Change. Required Lenders determine that a Material Adverse Change has occurred.

 

8.4                               Attachment; Levy; Restraint on Business.

 

(a)                                 (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or any of its Subsidiaries or of any entity under control of Borrower or its Subsidiaries on deposit with any institution at which Borrower or any of its Subsidiaries maintains a Collateral Account, or (ii) a notice of lien, levy, or assessment is filed against Borrower or any of its Subsidiaries or their respective assets by any government agency, and the same under subclauses (i) and (ii) of this clause (a) are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); and

 

(b)                                 (i) any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower or any of its Subsidiaries from conducting any part of its business;

 

8.5                               Insolvency. (a) Borrower or any of its Subsidiaries is or becomes Insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and not dismissed or stayed within forty-five (45) days (but no Term Loans shall be extended while Borrower or any Subsidiary is Insolvent and/or until any Insolvency Proceeding is dismissed);

 

8.6                               Other Agreements. There is a default in any agreement to which Borrower or any of its Subsidiaries is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Three Hundred Fifty Thousand Dollars ($350,000.00) or that could reasonably be expected to have a Material Adverse Change;

 

8.7                               Judgments. One or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least Three Hundred Fifty Thousand Dollars ($350,000.00) (not covered by independent third-party insurance as to which (a) Borrower reasonably believes such insurance carrier will accept liability, (b) Borrower or the applicable Subsidiary has submitted such claim to such insurance carrier and (c) liability has not been rejected by such insurance carrier) shall be rendered against Borrower or any of its Subsidiaries and shall remain unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof;

 

8.8                               Misrepresentations. Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Collateral Agent and/or the Lenders or to induce Collateral Agent and/or the Lenders to enter this Agreement or any Loan Document, and such representation, warranty, or other statement, when taken as a whole, is incorrect in any material respect when made;

 

8.9                               Subordinated Debt. A default or breach occurs under any subordination agreement, or any creditor that has signed such an agreement with Collateral Agent or the Lenders breaches any terms of such agreement;

 

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8.10                        Guaranty. (a) Any Guaranty terminates or ceases for any reason to be in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any Guaranty; or (c) any circumstance described in Section 8 (including, for the avoidance of doubt, any applicable cure periods) occurs with respect to any Guarantor;

 

8.11                        Governmental Approvals; FDA Action. (a) Any Governmental Approval shall have been revoked, rescinded, suspended, modified in an adverse manner, or not renewed in the ordinary course for a full term and such revocation, rescission, suspension, modification or non-renewal has resulted in or could reasonably be expected to result in a Material Adverse Change; or (b) (i) the FDA initiates a Regulatory Action or any other enforcement action against Borrower or any of its Subsidiaries or any supplier of Borrower or any of its Subsidiaries that causes Borrower or any of its Subsidiaries to recall, withdraw, remove or discontinue marketing any of its products; (ii) the FDA issues a warning letter to Borrower or any of its Subsidiaries with respect to any of its activities or products which could reasonably be expected to result in a Material Adverse Change; (iii) Borrower or any of its Subsidiaries conducts a mandatory or voluntary recall which could reasonably be expected to result in liability and expense to Borrower or any of its Subsidiaries of Seven Hundred Fifty Thousand Dollars ($750,000.00) or more; (iv) Borrower or any of its Subsidiaries enters into a settlement agreement with the FDA that results in aggregate liability as to any single or related series of transactions, incidents or conditions, of Seven Hundred Fifty Thousand Dollars ($750,000.00) or more, or that could reasonably be expected to result in a Material Adverse Change; or (v) the FDA revokes any authorization or permission granted under any Registration, or Borrower or any of its Subsidiaries withdraws any Registration, that could reasonably be expected to result in a Material Adverse Change.

 

8.12                        Lien Priority. Any Lien created hereunder or by any other Loan Document shall at any time fail to constitute a valid and perfected Lien (to the extent required to be perfected) on any material Collateral purported to be secured thereby, subject to no prior or equal Lien, other than Permitted Liens; provided that, notwithstanding the foregoing, any failure to maintain such perfection that results directly from the failure of the Collateral Agent to (i) maintain possession of certificates actually delivered to it representing securities or negotiable instruments or (ii) file UCC continuation statements (which, in either case, does not arise from a breach by Borrower of its obligations under the Loan Documents) shall not constitute an Event Default under this Section 8.12.

 

9.                                      RIGHTS AND REMEDIES

 

9.1                               Rights and Remedies.

 

(a)                                 Upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall at the written direction of Required Lenders without notice or demand, do any or all of the following: (i) deliver notice of the Event of Default to Borrower, (ii) by notice to Borrower declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations shall be immediately due and payable without any action by Collateral Agent or the Lenders) or (iii) by notice to Borrower suspend or terminate the obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders (but if an Event of Default described in Section 8.5 occurs all obligations, if any, of the Lenders to advance money or extend credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Collateral Agent and/or the Lenders shall be immediately terminated without any action by Collateral Agent or the Lenders).

 

(b)                                 Without limiting the rights of Collateral Agent and the Lenders set forth in Section 9.1(a) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall at the written direction of the Required Lenders without notice or demand, to do any or all of the following:

 

(i)                                     foreclose upon and/or sell or otherwise liquidate, the Collateral;

 

(ii)                                  make a demand for payment upon any Guarantor pursuant to the Guaranty delivered by such Guarantor;

 

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(iii)            apply to the Obligations any (A) balances and deposits of Borrower that Collateral Agent or any Lender holds or controls, (B) any amount held or controlled by Collateral Agent or any Lender owing to or for the credit or the account of Borrower, or (C) amounts received from any Guarantors in accordance with the respective Guaranty delivered by such Guarantor; and/or

 

(iv)           commence and prosecute an Insolvency Proceeding or consent to Borrower commencing any Insolvency Proceeding.

 

(c)                                  Without limiting the rights of Collateral Agent and the Lenders set forth in Sections 9.1(a) and (b) above, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall at the written direction of the Required Lenders, without notice or demand, to do any or all of the following:

 

(i)                  settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Collateral Agent considers advisable, notify any Person owing Borrower money of Collateral Agent’s security interest in such funds, and verify the amount of such account;

 

(ii)               make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its Liens in the Collateral (held for the ratable benefit of the Secured Parties). Borrower shall assemble the Collateral if Collateral Agent requests and make it available at such location as Collateral Agent reasonably designates. Collateral Agent may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Collateral Agent a license to enter and occupy any of its premises, without charge, to exercise any of Collateral Agent’s rights or remedies;

 

(iii)            ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, and/or advertise for sale, any of the Collateral. Collateral Agent is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s and each of its Subsidiaries’ labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Collateral Agent’s exercise of its rights under this Section 9.1, Borrower’s and each of its Subsidiaries’ rights under all licenses and all franchise agreements inure to Collateral Agent, for the benefit of the Lenders;

 

(iv)           place a “hold” on any Collateral Account maintained with Collateral Agent or any Lender or otherwise in respect of which a Control Agreement has been delivered in favor of Collateral Agent (for the ratable benefit of the Secured Parties) and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

 

(v)              demand and receive possession of Borrower’s Books;

 

(vi)           appoint a receiver to seize, manage and realize any of the Collateral, and such receiver shall have any right and authority as any competent court will grant or authorize in accordance with any applicable law, including any power or authority to manage the business of Borrower or any of its Subsidiaries; and

 

(vii)        subject to clauses 9.1(a) and (b), exercise all rights and remedies available to Collateral Agent and each Lender under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).

 

Notwithstanding any provision of this Section 9.1 to the contrary, upon the occurrence of any Event of Default, Collateral Agent shall have the right to exercise any and all remedies referenced in this Section 9.1 without the written consent of Required Lenders following the occurrence and during the continuation of an Exigent Circumstance.

 

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9.2                               Power of Attorney. Borrower hereby irrevocably appoints Collateral Agent as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s or any of its Subsidiaries’ name on any checks or other forms of payment or security; (b) sign Borrower’s or any of its Subsidiaries’ name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts of Borrower directly with the applicable Account Debtors, for amounts and on terms Collateral Agent determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Collateral Agent or a third party as the Code or any applicable law permits. Borrower hereby appoints Collateral Agent as its lawful attorney-in-fact to sign Borrower’s or any of its Subsidiaries’ name on any documents necessary to perfect or continue the perfection of Collateral Agent’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and Collateral Agent and the Lenders are under no further obligation to make extend Term Loans hereunder. Collateral Agent’s foregoing appointment as Borrower’s or any of its Subsidiaries’ attorney in fact, and all of Collateral Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Collateral Agent’s and the Lenders’ obligation to provide Term Loans terminates.

 

9.3                               Protective Payments. If Borrower or any of its Subsidiaries fail to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower or any of its Subsidiaries is obligated to pay under this Agreement or any other Loan Document, Collateral Agent may obtain such insurance or make such payment, and all amounts so paid by Collateral Agent are Lenders’ Expenses and immediately due and payable, bearing interest at the Default Rate, and secured by the Collateral. Collateral Agent will make reasonable efforts to provide Borrower with notice of Collateral Agent obtaining such insurance or making such payment at the time it is obtained or paid or within a reasonable time thereafter. No such payments by Collateral Agent are deemed an agreement to make similar payments in the future or Collateral Agent’s waiver of any Event of Default.

 

9.4                               Application of Payments and Proceeds. Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Collateral Agent from or on behalf of Borrower or any of its Subsidiaries of all or any part of the Obligations, and, as between Borrower on the one hand and Collateral Agent and Lenders on the other, Collateral Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Collateral Agent may deem advisable notwithstanding any previous application by Collateral Agent, and (b) the proceeds of any sale of, or other realization upon all or any part of the Collateral shall be applied: first, to the Lenders’ Expenses; second, to accrued and unpaid interest on the Obligations (including any interest which, but for the provisions of the United States Bankruptcy Code, would have accrued on such amounts); third, to the Final Fee; fourth, to the principal amount of the Obligations outstanding; and fifth, to any other Obligations owing to Collateral Agent or any Lender under the Loan Documents. Any balance remaining shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out the foregoing, (x) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (y) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category. Any reference in this Agreement to an allocation between or sharing by the Lenders of any right, interest or obligation “ratably,” “proportionally” or in similar terms shall refer to the Lenders’ Pro Rata Shares unless expressly provided otherwise. Collateral Agent, or if applicable, each Lender, shall promptly remit to the other Lenders such sums as may be necessary to ensure the ratable repayment of each Lender’s Pro Rata Share of any Term Loan and the ratable distribution of interest, fees and reimbursements paid or made by Borrower. Notwithstanding the foregoing, a Lender receiving a scheduled payment shall not be responsible for determining whether the other Lenders also received their scheduled payment on such date; provided, however, if it is later determined that a Lender received more than its Pro Rata Share of scheduled payments made on any date or dates, then such Lender shall remit to Collateral Agent or the other Lenders such sums as may be necessary to ensure the ratable payment of such scheduled payments, as instructed by Collateral Agent. If any payment or distribution of any kind or character, whether in cash, properties or securities, shall be received by a Lender in excess of its Pro

 

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Rata Share, then the portion of such payment or distribution in excess of such Lender’s Pro Rata Share shall be received and held by such Lender in trust for and shall be promptly paid over to the other Lenders (in accordance with their respective Pro Rata Shares) for application to the payments of amounts due on such other Lenders’ claims. To the extent any payment for the account of Borrower is required to be returned as a voidable transfer or otherwise, the Lenders shall contribute to one another as is necessary to ensure that such return of payment is on a pro rata basis. If any Lender shall obtain possession of any Collateral, it shall hold such Collateral for itself and as agent and bailee for the Secured Parties for purposes of perfecting Collateral Agent’s security interest therein (held for the ratable benefit of the Secured Parties).

 

9.5                               Liability for Collateral. So long as Collateral Agent and the Lenders comply with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Collateral Agent and the Lenders, Collateral Agent and the Lenders shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.

 

9.6                               No Waiver; Remedies Cumulative. Failure by Collateral Agent or any Lender, at any time or times, to require strict performance by Borrower of any provision of this Agreement or by Borrower or any other Loan Document shall not waive, affect, or diminish any right of Collateral Agent or any Lender thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by Collateral Agent and the Required Lenders and then is only effective for the specific instance and purpose for which it is given. The rights and remedies of Collateral Agent and the Lenders under this Agreement and the other Loan Documents are cumulative. Collateral Agent and the Lenders have all rights and remedies provided under the Code, any applicable law, by law, or in equity. The exercise by Collateral Agent or any Lender of one right or remedy is not an election, and Collateral Agent’s or any Lender’s waiver of any Event of Default is not a continuing waiver. Collateral Agent’s or any Lender’s delay in exercising any remedy is not a waiver, election, or acquiescence.

 

9.7                               Demand Waiver. Borrower waives, to the fullest extent permitted by law, demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Collateral Agent or any Lender on which Borrower or any Subsidiary is liable.

 

10.                               NOTICES

 

Other than as specifically provided herein, all notices, consents, requests, approvals, demands, or other communication (collectively, “Communications”) by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Any of Collateral Agent, Lender or Borrower may change its mailing address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.

 

	
 
    	
If to Borrower:
    	
 
    	
T2 Biosystems, Inc.
    
	
 
    	
 
    	
 
    	
101 Hartwell Avenue
    
	
 
    	
 
    	
 
    	
Lexington, MA 02421
    
	
 
    	
 
    	
 
    	
Attn: Marc Jones
    
	
 
    	
 
    	
 
    	
Fax: (781) 357-3080
    
	
 
    	
 
    	
 
    	
Email: mjones@t2biosystems.com
    

 

33

 

	
 
    	
with a copy (which shall not constitute notice) to:
    	
 
    	
Latham & Watkins LLP

505 Montgomery Street

San Francisco, CA 94111

Attn: Haim Zaltzman

Fax: (415) 395-8095

Email: haim.zaltzman@lw.com
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
If to Collateral Agent:
    	
 
    	
SOLAR CAPITAL LTD.

500 Park Avenue, 3rd Floor

New York, NY 10022

Attention: Anthony Storino

Fax: (212) 993-1698

Email: storino@Solarcapltd.com
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
with a copy to
    	
 
    	
COMERICA BANK

100 Federal Street, 28th Floor

Boston, MA 02110

Attn: Garth Gorrall

Fax: 617.757.6351

Email: gwgorrall@comerica.com
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
with a copy (which shall not constitute notice) to:
    	
 
    	
Morrison & Foerster LLP

425 Market Street, 32nd Floor

San Francisco, CA 94105

Attn: Jeff Kayes

Fax: (415) 268-7522

Email: jkayes@mofo.com
    

 

11.                               CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

 

11.1                      Waiver of Jury Trial. EACH OF BORROWER, COLLATERAL AGENT AND LENDERS UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG BORROWER, COLLATERAL AGENT AND/OR LENDERS. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. Governing Law and Jurisdiction. THIS AGREEMENT, THE OTHER LOAN DOCUMENTS (EXCLUDING THOSE LOAN DOCUMENTS THAT BY THEIR OWN TERMS ARE EXPRESSLY GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL, PROVIDED, HOWEVER, THAT IF THE LAWS OF ANY JURISDICTION OTHER THAN NEW YORK SHALL GOVERN IN REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS IN COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTIONS SHALL CONTINUE TO APPLY TO THAT EXTENT. Submission to Jurisdiction. Any legal

 

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action or proceeding with respect to the Loan Documents shall be brought exclusively in the courts of the State of New York located in the City of New York, Borough of Manhattan, or of the United States of America for the Southern District of New York and, by execution and delivery of this Agreement, Borrower hereby accepts for itself and in respect of its Property, generally and unconditionally, the jurisdiction of the aforesaid courts. Notwithstanding the foregoing, Collateral Agent and Lenders shall have the right to bring any action or proceeding against Borrower (or any property of Borrower) in the court of any other jurisdiction Collateral Agent or Lenders deem necessary or appropriate in order to realize on the Collateral or other security for the Obligations. The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such jurisdictions.

 

11.4                        Service of Process. Borrower irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with any Loan Document by any means permitted by applicable requirements of law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of Borrower specified herein (and shall be effective when such mailing shall be effective, as provided therein). Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

 

11.5                        Non-exclusive Jurisdiction. Nothing contained in this Article 11 shall affect the right of Collateral Agent or Lenders to serve process in any other manner permitted by applicable requirements of law or commence legal proceedings or otherwise proceed against Borrower in any other jurisdiction.

 

12.                               GENERAL PROVISIONS

 

12.1                        Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not transfer, pledge or assign this Agreement or any rights or obligations under it without Collateral Agent’s prior written consent (which may be granted or withheld in Collateral Agent’s discretion, subject to Section 12.5). The Lenders have the right, without the consent of or notice to Borrower, to sell, transfer, assign, pledge, negotiate, or grant participation in (any such sale, transfer, assignment, negotiation, or grant of a participation, a “Lender Transfer”) all or any part of, or any interest in, the Lenders’ obligations, rights, and benefits under this Agreement and the other Loan Documents; provided, however, that any such Lender Transfer (other than (i) any Transfer at any time that an Event of Default has occurred and is continuing, or (ii) a transfer, pledge, sale or assignment to an Eligible Assignee) of its obligations, rights, and benefits under this Agreement and the other Loan Documents shall require the prior written consent of the Collateral Agent (such approved assignee, an “Approved Lender”); and provided, further, that on the date it becomes a party to this Agreement, an Approved Lender must be capable, through its applicable lending office, of receiving payments of interest from the Borrower without the imposition of any withholding taxes that would be required to be borne by the Borrower or requiring the payment of any additional amounts by Borrower pursuant to Section 2.5 hereof. Borrower and Collateral Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned until Collateral Agent shall have received and accepted an effective assignment agreement in form satisfactory to Collateral Agent executed, delivered and fully completed by the applicable parties thereto, and shall have received such other information regarding such Eligible Assignee or Approved Lender as Collateral Agent reasonably shall require. Notwithstanding anything to the contrary contained herein, so long as no Event of Default has occurred and is continuing, no Lender Transfer (other than a Lender Transfer in connection with (x) assignments by a Lender due to a forced divestiture at the request of any regulatory agency; or (y) upon the occurrence of a default, event of default or similar occurrence with respect to a Lender’s own financing or securitization transactions) shall be permitted, without Borrower’s consent, to any Person which is an Affiliate or Subsidiary of Borrower, a direct competitor of Borrower or a vulture hedge fund, each as reasonably determined by Collateral Agent at the time of such assignment.

 

12.2                        Indemnification. Subject to Section 2.5, Borrower agrees to indemnify, defend and hold each Secured Party and their respective directors, officers, employees, consultants, agents, attorneys, or any other Person affiliated with or representing such Secured Party (each, an “Indemnified Person”) harmless against: (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with,

 

35

 

related to, following, or arising from, out of or under, the transactions contemplated by the Loan Documents; and (b) all losses and Lenders’ Expenses incurred or paid by Indemnified Person in connection with, related to, following, or arising from, out of or under the transactions contemplated by the Loan Documents (including reasonable attorneys’ fees and expenses), except, in each case, for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct. Borrower hereby further agrees to indemnify, defend and hold each Indemnified Person harmless from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including the fees and disbursements of counsel for such Indemnified Person) in connection with any investigative, response, remedial, administrative or judicial matter or proceeding, whether or not such Indemnified Person shall be designated a party thereto and including any such proceeding initiated by or on behalf of Borrower, and the reasonable expenses of investigation by engineers, environmental consultants and similar technical personnel and any commission, fee or compensation claimed by any broker (other than any broker retained by Collateral Agent or Lenders) asserting any right to payment for the transactions contemplated hereby which may be imposed on, incurred by or asserted against such Indemnified Person as a result of or in connection with the transactions contemplated hereby and the use or intended use of the proceeds of the loan proceeds except for liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements directly caused by such Indemnified Person’s gross negligence or willful misconduct. Notwithstanding the foregoing, if not direct conflict of interest is apparent in connection with the defense of any Claim, Collateral Agent and the Lenders shall first take commercially reasonable efforts to use the same counsel as Borrower, or, if a conflict does exist, use only one counsel among all Indemnified Persons with respect to the defense of any Claim.

 

12.3                        Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

 

12.4                        Correction of Loan Documents. Collateral Agent may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement of the parties.

 

12.5                        Amendments in Writing; Integration. (a) No amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, or any consent to any departure by Borrower or any of its Subsidiaries therefrom, shall in any event be effective unless the same shall be in writing and signed by Borrower, Collateral Agent and the Required Lenders provided that:

 

(i)             no such amendment, waiver or other modification that would have the effect of increasing or reducing a Lender’s Term Loan Commitment or Commitment Percentage shall be effective as to such Lender without such Lender’s written consent;

 

(ii)          no such amendment, waiver or modification that would affect the rights and
 duties of Collateral Agent shall be effective without Collateral Agent’s written consent or signature; and

 

(iii)       no such amendment, waiver or other modification shall, unless signed by all
 the Lenders directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with respect to any Term Loan or forgive any principal, interest (other than default interest) or fees (other than late charges) with respect to any Term Loan (B) postpone the date fixed for, or waive, any payment of principal of any Term Loan or of interest on any Term Loan (other than default interest) or any fees provided for hereunder (other than late charges or for any termination of any commitment); (C) change the definition of the term “Required Lenders” or the percentage of Lenders which shall be required for the Lenders to take any action hereunder; (D) release all or substantially all of any material portion of the Collateral, authorize Borrower to sell or otherwise dispose of all or substantially all or any material portion of the Collateral or release any Guarantor of all or any portion of the Obligations or its Guaranty obligations with respect thereto, except, in each case with respect to this clause (D), as otherwise may be expressly permitted under this Agreement or the other Loan Documents (including in connection with any disposition permitted hereunder); (E) amend, waive or otherwise modify this Section 12.5 or the definitions of the terms used in this Section 12.5 insofar as the definitions affect the substance of this Section 12.5; (F) consent to the assignment, delegation or other transfer by Borrower of any of its rights and obligations under any Loan Document or release Borrower of its payment obligations under any Loan Document, except, in each case with respect to this clause (F), pursuant to a merger or consolidation permitted pursuant to this Agreement; (G) amend any of the provisions of Section 9.4 or amend any of the definitions of Pro Rata Share, Term Loan Commitment, Commitment

 

36

 

Percentage or that provide for the Lenders to receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of Collateral hereunder; (H) subordinate the Liens granted in favor of Collateral Agent securing the Obligations; or (I) amend any of the provisions of Section 12.5. It is hereby understood and agreed that all Lenders shall be deemed directly affected by an amendment, waiver or other modification of the type described in the preceding clauses (C), (D), (E), (F), (G) and (H) of the immediately preceding sentence.

 

(b)                            Other than as expressly provided for in Section 12.5(a)(i)-(iii), Collateral Agent may, if requested by the Required Lenders, from time to time designate covenants in this Agreement less restrictive by notification to a representative of Borrower.

 

(c)                             This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

 

12.6                        Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.

 

12.7                        Survival. All covenants, representations and warranties made in this Agreement continue in full force and effect until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied. The obligation of Borrower in Section 12.2 to indemnify each Lender and Collateral Agent, as well as the confidentiality provisions in Section 12.8 below, shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

 

12.8                        Confidentiality. In handling any confidential information of Borrower, the Lenders and Collateral Agent shall exercise the same degree of care that it exercises for their own proprietary information, but disclosure of information may be made: (a) subject to the terms and conditions of this Agreement, to the Lenders’ and Collateral Agent’s Subsidiaries, Affiliates or investors, or in connection with a Lender’s own financing or securitization transactions and upon the occurrence of a default, event of default or similar occurrence with respect to such financing or securitization transaction; (b) to prospective transferees (other than those identified in (a) above) or purchasers of any interest in the Term Loans (provided, however, the Lenders and Collateral Agent shall obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision or to similar confidentiality terms); (c) as required by law, regulation, subpoena, legal process or other order; (d) to Lenders’ or Collateral Agent’s regulators or as otherwise required in connection with an examination or audit; (e) as Collateral Agent reasonably considers appropriate in exercising remedies under the Loan Documents; and (f) to any Affiliate, officer, director, employee, agent or advisor of Collateral Agent or a Lender, including, without limitation, legal counsel, accountants, and other professional advisors of Collateral Agent or the Lenders, in each case on a need-to-know basis. Confidential information does not include information that either: (i) is in the public domain or in the Lenders’ and/or Collateral Agent’s possession when disclosed to the Lenders and/or Collateral Agent, or becomes part of the public domain after disclosure to the Lenders and/or Collateral Agent at no fault of the Lenders or the Collateral Agent; or (ii) is disclosed to the Lenders and/or Collateral Agent by a third party, if the Lenders and/or Collateral Agent does not know that the third party is prohibited from disclosing the information. Collateral Agent and the Lenders may use confidential information for any purpose, including, without limitation, for the development of client databases, reporting purposes, and market analysis. The provisions of the immediately preceding sentence shall survive the termination of this Agreement. The agreements provided under this Section 12.9 supersede all prior agreements, understanding, representations, warranties, and negotiations between the parties about the subject matter of this Section 12.8.

 

12.9                        Right of Set Off. Borrower hereby grants to Collateral Agent and to each Lender, a Lien, security interest and right of set off as security for all Obligations to Secured Parties hereunder, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of any Secured Party or any entity under the control of such Secured Party including a Collateral Agent Affiliate) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, any Secured Party may set off the same or any part

 

37

 

thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY BORROWER.

 

12.10                 Cooperation of Borrower. If necessary, Borrower agrees to (i) execute any documents reasonably required to effectuate and acknowledge each assignment of a Term Loan Commitment (or portion thereof) or Term Loan (or portion thereof) to an assignee in accordance with Section 12.1, (ii) make Borrower’s management personnel available to meet with Collateral Agent and prospective participants and assignees of Term Loan Commitments, the Term Loans or portions thereof (which meetings shall be conducted no more often than twice every twelve months unless an Event of Default has occurred and is continuing), and (iii) assist Collateral Agent and the Lenders in the preparation of information relating to the financial affairs of Borrower as any prospective participant or assignee of a Term Loan Commitment (or portions thereof) or Term Loan (or portions thereof) reasonably may request. Subject to the provisions of Section 12.8, Borrower authorizes each Lender to disclose to any prospective participant or assignee of a Term Loan Commitment (or portions thereof), any and all information in such Lender’s possession concerning Borrower and its financial affairs which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement, or which has been delivered to such Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower prior to entering into this Agreement, in each case subject to Section 12.8.

 

12.11                 Public Announcement. Collateral Agent and each Lender may, with the consent of the Borrower (which consent may not be unreasonably conditioned, withheld or delayed), make a public announcement of the transactions contemplated by this Agreement, and may publicize the same in marketing materials, newspapers and other publications, and otherwise, and in connection therewith may use Borrower’s name, tradenames and logos. Notwithstanding the foregoing, such consent from Borrower shall not be required for any disclosures by Collateral Agent or the Lenders required by the Securities and Exchange Commission or other governmental agency and any other public disclosure with investors, other governmental agencies or other related persons.

 

12.12                 Collateral Agent and Lender Agreement. Collateral Agent and the Lenders hereby agree to the terms and conditions set forth on Exhibit B attached hereto. Borrower acknowledges and agrees to the terms and conditions set forth on Exhibit B attached hereto.

 

12.13                 Time of Essence. Time is of the essence for the performance of Obligations under this Agreement.

 

12.14                 Termination Prior to Maturity Date; Survival. All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations have been satisfied. So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement and for which no claim has been made) in accordance with the terms of this Agreement, this Agreement may be terminated prior to the Maturity Date by Borrower, effective five (5) Business Days after written notice of termination is given to the Collateral Agent and the Lenders.

 

[Balance of Page Intentionally Left Blank]

 

38

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.

 

BORROWER:

 

T2 BIOSYTEMS, INC.

 

 

	
By
    	
/s/ John McDonough
    	
 
    
	
Name:
    	
John McDonough
    	
 
    
	
Title:
    	
President and CEO
    	
 
    

 

 

COLLATERAL AGENT AND LENDERS:

 

SOLAR CAPITAL LTD.

as Collateral Agent and a Lender

 

 

	
By
    	
/s/ Anthony J. Storino
    	
 
    
	
Name:
    	
Anthony J. Storino
    	
 
    
	
Title:
    	
Authorized Signatory
    	
 
    

 

 

LENDER:

 

COMERICA BANK

as a Lender

 

 

	
By
    	
/s/ Garth Gorrall
    	
 
    
	
Name:
    	
Garth Gorrall
    	
 
    
	
Title:
    	
SVP
    	
 
    

 

[Signature Page to Loan and Security Agreement]

 

 

SCHEDULE 1.1

 

Lenders and Commitments

 

Term A Loans

 

	
Lender
    	
 
    	
Term Loan Commitment
    	
 
    	
Commitment Percentage
    	
 
    
	
Solar Capital Ltd.
    	
 
    	
$
    	
16,666,666.67
    	
 
    	
83.33
    	
%
    
	
Comerica Bank
    	
 
    	
$
    	
3,333,333.33
    	
 
    	
16.67
    	
%
    
	
TOTAL
    	
 
    	
 
    	
 
    	
100.00
    	
%
    

 

Term B Loans

 

	
Lender
    	
 
    	
Term Loan Commitment
    	
 
    	
Commitment Percentage
    	
 
    
	
Solar Capital Ltd.
    	
 
    	
$
    	
8,333,333.33
    	
 
    	
83.33
    	
%
    
	
Comerica Bank
    	
 
    	
$
    	
1,666,666.67
    	
 
    	
16.67
    	
%
    
	
TOTAL
    	
 
    	
 
    	
 
    	
100.00
    	
%
    

 

Aggregate (all Term Loans)

 

	
Lender
    	
 
    	
Term Loan Commitment
    	
 
    	
Commitment Percentage
    	
 
    
	
Solar Capital Ltd.
    	
 
    	
$
    	
25,000,000.00
    	
 
    	
83.33
    	
%
    
	
Comerica Bank
    	
 
    	
$
    	
5,000,000.00
    	
 
    	
16.67
    	
%
    
	
TOTAL
    	
 
    	
 
    	
 
    	
100.00
    	
%
    

 

 

EXHIBIT A

 

Description of Collateral

 

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:

 

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as noted below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other Collateral Accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

 

All Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

 

Notwithstanding the foregoing, the Collateral does not include (a) (1) more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower or any Guarantor of any Foreign Subsidiary or any Excluded Domestic Subsidiary which shares entitle the holder thereof to vote for directors or any other matter or (2) any of the stock or other equity interests in any Foreign Subsidiary that is not owned by a Guarantor, (b) any interest of Borrower as a lessee or sublessee under a real property lease; (c) rights held under a license that are not assignable by their terms without the consent of the licensor thereof (but only to the extent such restriction on assignment is effective under Section 9-406, 9-407, 9-408 or 9-409 of the Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); (d) any interest of Borrower as a lessee or borrower under an Equipment lease, Equipment financing or the MDFA Financing if Borrower is prohibited by the terms of such agreement from granting a security interest in such lease or under which such an assignment or Lien would cause a default to occur under such lease; provided, however, that upon termination of such prohibition, such interest shall immediately become Collateral without any action by Borrower, Collateral Agent or any Lender, or (e) any Intellectual Property; provided, however, the Collateral shall include all Accounts and all proceeds of Intellectual Property. If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Collateral Agent’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property.

 

 

EXHIBIT B

 

Collateral Agent and Lender Terms

 

1.                                      Appointment of Collateral Agent.

 

(a)                                 Each Lender hereby appoints Solar (together with any successor Collateral Agent pursuant to Section 1.7 of this Exhibit B) as Collateral Agent under the Loan Documents and authorizes Collateral Agent to (i) execute and deliver the Loan Documents and accept delivery thereof on its behalf from Borrower, (ii) take such action on its behalf and to exercise all rights, powers and remedies and perform the duties as are expressly delegated to Collateral Agent under such Loan Documents and (iii) exercise such powers as are reasonably incidental thereto.

 

(b)                                 Without limiting the generality of clause (a) above, Collateral Agent shall have the sole and exclusive right and authority (to the exclusion of the Lenders), and is hereby authorized, to (i) act as the disbursing and collecting agent for the Lenders with respect to all payments and collections arising in connection with the Loan Documents (including in any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any Loan Document to any Lender is hereby authorized to make such payment to Collateral Agent, (ii) file and prove claims and file other documents necessary or desirable to allow the claims of Collateral Agent and Lenders with respect to any Obligation in any bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Lender), (iii) act as collateral agent for the Secured Parties for purposes of the perfection of all Liens created by the Loan Documents and all other purposes stated therein, (iv) manage, supervise and otherwise deal with the Collateral as permitted pursuant to the Loan Agreement, (v) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Loan Documents, (vi) except as may be otherwise specified in any Loan Document, exercise all remedies given to Collateral Agent and the other Lenders with respect to the Borrower and/or the Collateral, whether under the Loan Documents, applicable Requirements of Law or otherwise and (vii) execute any amendment, consent or waiver under the Loan Documents on behalf of any Lender that has consented in writing to such amendment, consent or waiver; provided, however, that Collateral Agent hereby appoints, authorizes and directs each Lender to act as collateral sub-agent for Collateral Agent and the Lenders for purposes of the perfection of all Liens with respect to the Collateral, including any Deposit Account maintained by Borrower or any Guarantor with, and cash and Cash Equivalents held by, such Lender, and may further authorize and direct the Lenders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to Collateral Agent, and each Lender hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed. Collateral Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through any trustee, co-agent, employee, attorney-infact and any other Person (including any Lender). Any such Person shall benefit from this Exhibit B to the extent provided by Collateral Agent.

 

(c)                                  Under the Loan Documents, Collateral Agent (i) is acting solely on behalf of the Lenders, with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Collateral Agent”, the terms “agent”, “Collateral Agent” and “collateral agent” and similar terms in any Loan Document to refer to Collateral Agent, which terms are used for title purposes only, (ii) is not assuming any obligation under any Loan Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender or any other Person and (iii) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Loan Document, and each Lender, by accepting the benefits of the Loan Documents, hereby waives and agrees not to assert any claim against Collateral Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (i) through (iii) above. Except as expressly set forth in the Loan Documents, Collateral Agent shall not have any duty to disclose, and shall not be liable for failure to disclose, any information relating to Borrower or any of its Subsidiaries that is communicated to or obtained by Solar or any of its Affiliates in any capacity.

 

 

2.                                      Binding Effect; Use of Discretion; E-Systems.

 

(a)                                 Each Lender, by accepting the benefits of the Loan Documents, agrees that (i) any action taken by Collateral Agent or the Required Lenders (or, if expressly required in any Loan Document, a greater proportion of the Lenders) in accordance with the provisions of the Loan Documents, (ii) any action taken by Collateral Agent in reliance upon the instructions of the Required Lenders (or, where so required, such greater proportion) and (iii) the exercise by Collateral Agent or the Required Lenders (or, where so required, such greater proportion) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of Lenders.

 

(b)                                 If Collateral Agent shall request instructions from the Required Lenders or all affected Lenders with respect to any act or action (including failure to act) in connection with any Loan Document, then Collateral Agent shall be entitled to refrain from such act or taking such action unless and until Collateral Agent shall have received instructions from the Required Lenders or all affected Lenders, as the case may be, and Collateral Agent shall not incur liability to any Person by reason of so refraining. Collateral Agent shall be fully justified in failing or refusing to take any action under any Loan Document (i) if such action would, in the opinion of Collateral Agent, be contrary to any Requirement of Law or any Loan Document, (ii) if such action would, in the opinion of Collateral Agent, expose Collateral Agent to any potential liability under any Requirement of Law or (iii) if Collateral Agent shall not first be indemnified to its satisfaction against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Without limiting the foregoing, no Lender shall have any right of action whatsoever against Collateral Agent as a result of Collateral Agent acting or refraining from acting under any Loan Document in accordance with the instructions of the Required Lenders or all affected Lenders, as applicable.

 

(c)                                  Collateral Agent is hereby authorized by Borrower and each Lender to establish procedures (and to amend such procedures from time to time) to facilitate administration and servicing of the Term Loans and other matters incidental thereto. Without limiting the generality of the foregoing, Collateral Agent is hereby authorized to establish procedures to make available or deliver, or to accept, notices, documents (including, without limitation, borrowing base certificates) and similar items on, by posting to or submitting and/or completion, on E-Systems. Borrower and each Lender acknowledges and agrees that the use of transmissions via an E-System or electronic mail is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse, and Borrower and each Lender assumes and accepts such risks by hereby authorizing the transmission via E-Systems or electronic mail. Each “e-signature” on any such posting shall be deemed sufficient to satisfy any requirement for a “signature”, and each such posting shall be deemed sufficient to satisfy any requirement for a “writing”, in each case including pursuant to any Loan Document, any applicable provision of any Code, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing such subject matter. All uses of an E-System shall be governed by and subject to, in addition to this Section, the separate terms, conditions and privacy policy posted or referenced in such E-System (or such terms, conditions and privacy policy as may be updated from time to time, including on such E-System) and related contractual obligations executed by Collateral Agent, Borrower and/or Lenders in connection with the use of such E-System. ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED “AS IS” AND “AS AVAILABLE”. NO REPRESENTATION OR WARRANTY OF ANY KIND IS MADE BY AGENT, ANY LENDER OR ANY OF THEIR RELATED PERSONS IN CONNECTION WITH ANY E-SYSTEMS.

 

3.                                      Collateral Agent’s Reliance, Etc. Collateral Agent may, without incurring any liability hereunder, (a) consult with any of its Related Persons and, whether or not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, Borrower) and (b) rely and act upon any document and information (including those transmitted by electronic transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties. None of Collateral Agent and its Related Persons shall be liable for any action taken or omitted to be taken by any of them under or in connection with any Loan Document, and each Lender and Borrower hereby waives and shall not assert (and Borrower shall cause its Subsidiaries to waive and agree not to assert) any right, claim or cause of action based thereon, except to the extent of liabilities resulting from the gross negligence or willful misconduct of Collateral Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment of a court of competent jurisdiction) in connection with the duties of Collateral Agent expressly set forth herein. Without limiting the foregoing, Collateral Agent: (i) shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the

 

 

Required Lenders or for the actions or omissions of any of its Related Persons, except to the extent that a court of competent jurisdiction determines in a final non-appealable judgment that Collateral Agent acted with gross negligence or willful misconduct in the selection of such Related Person; (ii) shall not be responsible to any Lender or other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Loan Document; (iii) makes no warranty or representation, and shall not be responsible, to any Lender or other Person for any statement, document, information, representation or warranty made or furnished by or on behalf of Borrower or any Related Person of Borrower in connection with any Loan Document or any transaction contemplated therein or any other document or information with respect to Borrower, whether or not transmitted or (except for documents expressly required under any Loan Document to be transmitted to the Lenders) omitted to be transmitted by Collateral Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by Collateral Agent in connection with the Loan Documents; and (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan Document, whether any condition set forth in any Loan Document is satisfied or waived, as to the financial condition of Borrower or as to the existence or continuation or possible occurrence or continuation of any Event of Default, and shall not be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice from Borrower or any Lender describing such Event of Default that is clearly labeled “notice of default” (in which case Collateral Agent shall promptly give notice of such receipt to all Lenders, provided that Collateral Agent shall not be liable to any Lender for any failure to do so, except to the extent that such failure is attributable to Collateral Agent’s gross negligence or willful misconduct as determined by a final non- appealable judgment of a court of competent jurisdiction); and, for each of the items set forth in clauses (i) through (iv) above, each Lender and Borrower hereby waives and agrees not to assert (and Borrower shall cause its Subsidiaries to waive and agree not to assert) any right, claim or cause of action it might have against Collateral Agent based thereon.

 

4.                                      Collateral Agent Individually. Collateral Agent and its Affiliates may make loans and other extensions of credit to, acquire stock and stock equivalents of, engage in any kind of business with, Borrower or any Affiliate of Borrower as though it were not acting as Collateral Agent and may receive separate fees and other payments therefor. To the extent Collateral Agent or any of its Affiliates makes any Term Loans or otherwise becomes a Lender hereunder, it shall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities as any other Lender and the terms “Lender”, “Required Lender” and any similar terms shall, except where otherwise expressly provided in any Loan Document, include, without limitation, Collateral Agent or such Affiliate, as the case may be, in its individual capacity as Lender, or as one of the Required Lenders.

 

5.                                      Lender Credit Decision; Collateral Agent Report. Each Lender acknowledges that it shall, independently and without reliance upon Collateral Agent, any Lender or any of their Related Persons or upon any document solely or in part because such document was transmitted by Collateral Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of Borrower and make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in any Loan Document, in each case based on such documents and information as it shall deem appropriate. Except for documents expressly required by any Loan Document to be transmitted by Collateral Agent to the Lenders, Collateral Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, Property, financial and other condition or creditworthiness of Borrower or any Affiliate of Borrower that may come in to the possession of Collateral Agent or any of its Related Persons. Each Lender agrees that is shall not rely on any field examination, audit or other report provided by Collateral Agent or its Related Persons (an “Collateral Agent Report”). Each Lender further acknowledges that any Collateral Agent Report (a) is provided to the Lenders solely as a courtesy, without consideration, and based upon the understanding that such Lender will not rely on such Collateral Agent Report, (b) was prepared by Collateral Agent or its Related Persons based upon information provided by Borrower solely for Collateral Agent’s own internal use, and (c) may not be complete and may not reflect all information and findings obtained by Collateral Agent or its Related Persons regarding the operations and condition of Borrower. Neither Collateral Agent nor any of its Related Persons makes any representations or warranties of any kind with respect to (i) any existing or proposed financing, (ii) the accuracy or completeness of the information contained in any Collateral Agent Report or in any related documentation, (iii) the scope or adequacy of Collateral Agent’s and its Related Persons’ due diligence, or the presence or absence of any

 

 

errors or omissions contained in any Collateral Agent Report or in any related documentation, and (iv) any work performed by Collateral Agent or Collateral Agent’s Related Persons in connection with or using any Collateral Agent Report or any related documentation. Neither Collateral Agent nor any of its Related Persons shall have any duties or obligations in connection with or as a result of any Lender receiving a copy of any Collateral Agent Report. Without limiting the generality of the forgoing, neither Collateral Agent nor any of its Related Persons shall have any responsibility for the accuracy or completeness of any Collateral Agent Report, or the appropriateness of any Collateral Agent Report for any Lender’s purposes, and shall have no duty or responsibility to correct or update any Collateral Agent Report or disclose to any Lender any other information not embodied in any Collateral Agent Report, including any supplemental information obtained after the date of any Collateral Agent Report. Each Lender releases, and agrees that it will not assert, any claim against Collateral Agent or its Related Persons that in any way relates to any Collateral Agent Report or arises out of any Lender having access to any Collateral Agent Report or any discussion of its contents, and agrees to indemnify and hold harmless Collateral Agent and its Related Persons from all claims, liabilities and expenses relating to a breach by any Lender arising out of such Lender’s access to any Collateral Agent Report or any discussion of its contents.

 

6.                                      Indemnification. Each Lender agrees to reimburse Collateral Agent and each of its Related Persons (to the extent not reimbursed by Borrower as required under the Loan Documents (including pursuant to Section 12.2 of the Agreement)) promptly upon demand for its Pro Rata Share of any out-of-pocket costs and expenses (including, without limitation, fees, charges and disbursements of financial, legal and other advisors and any taxes or insurance paid in the name of, or on behalf of, Borrower) incurred by Collateral Agent or any of its Related Persons in connection with the preparation, syndication, execution, delivery, administration, modification, amendment, consent, waiver or enforcement of, or the taking of any other action (whether through negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding (including, without limitation, preparation for and/or response to any subpoena or request for document production relating thereto) or otherwise) in respect of, or legal advice with respect to, its rights or responsibilities under, any Loan Document. Each Lender further agrees to indemnify Collateral Agent and each of its Related Persons (to the extent not reimbursed by Borrower as required under the Loan Documents (including pursuant to Section 12.2 of the Agreement)), ratably according to its Pro Rata Share, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including, to the extent not indemnified by the applicable Lender, taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to or for the account of any Lender) that may be imposed on, incurred by, or asserted against Collateral Agent or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any Loan Document or any other act, event or transaction related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by Collateral Agent or any of its Related Persons under or with respect to the foregoing; provided that no Lender shall be liable to Collateral Agent or any of its Related Persons under this Section 6 of this Exhibit B to the extent such liability has resulted from the gross negligence or willful misconduct of Collateral Agent or, as the case may be, such Related Person, as determined by a final non-appealable judgment of a court of competent jurisdiction. To the extent required by any applicable Requirement of Law, Collateral Agent may withhold from any payment to any Lender under a Loan Document an amount equal to any applicable withholding tax. If the Internal Revenue Service or any other Governmental Authority asserts a claim that Collateral Agent did not properly withhold tax from amounts paid to or for the account of any Lender for any reason, or if Collateral Agent reasonably determines that it was required to withhold taxes from a prior payment to or for the account of any Lender but failed to do so, such Lender shall promptly indemnify Collateral Agent fully for all amounts paid, directly or indirectly, by Collateral Agent as tax or otherwise, including penalties and interest, and together with all expenses incurred by Collateral Agent. Collateral Agent may offset against any payment to any Lender under a Loan Document, any applicable withholding tax that was required to be withheld from any prior payment to such Lender but which was not so withheld, as well as any other amounts for which Collateral Agent is entitled to indemnification from such Lender under the immediately preceding sentence of this Section 6 of this Exhibit B.

 

7.                                      Successor Collateral Agent. Collateral Agent may resign at any time by delivering notice of such resignation to the Lenders and Borrower, effective on the date set forth in such notice or, if no such date is set forth therein, upon the date such notice shall be effective, in accordance with the terms of this Section 7 of this Exhibit B. If Collateral Agent delivers any such notice, the Required Lenders shall have the right to appoint a successor Collateral Agent. If, after 30 days after the date of the retiring Collateral Agent’s notice of resignation, no successor Collateral Agent has been appointed by the Required Lenders and has accepted such appointment, then the

 

 

retiring Collateral Agent may, on behalf of the Lenders, appoint a successor Collateral Agent from among the Lenders. Effective immediately upon its resignation, (a) the retiring Collateral Agent shall be discharged from its duties and obligations under the Loan Documents, (b) the Lenders shall assume and perform all of the duties of Collateral Agent until a successor Collateral Agent shall have accepted a valid appointment hereunder, (c) the retiring Collateral Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to any actions taken or omitted to be taken while such retiring Collateral Agent was, or because such Collateral Agent had been, validly acting as Collateral Agent under the Loan Documents, and (iv) subject to its rights under Section 2(b) of this Exhibit B, the retiring Collateral Agent shall take such action as may be reasonably necessary to assign to the successor Collateral Agent its rights as Collateral Agent under the Loan Documents. Effective immediately upon its acceptance of a valid appointment as Collateral Agent, a successor Collateral Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Collateral Agent under the Loan Documents.

 

8.                                      Release of Collateral. Each Lender hereby consents to the release and hereby directs Collateral Agent to release (or in the case of clause (b)(ii) below, release or subordinate) the following:

 

(a)                                 any Guarantor if all of the stock of such Subsidiary owned by Borrower is sold or transferred in a transaction permitted under the Loan Documents (including pursuant to a valid waiver or consent), to the extent that, after giving effect to such transaction, such Subsidiary would not be required to guaranty any Obligations pursuant to any Loan Document; and

 

(b)                                 any Lien held by Collateral Agent for the benefit of the Secured Parties against (i) any Collateral that is sold or otherwise disposed of by Borrower in a transaction permitted by the Loan Documents (including pursuant to a valid waiver or consent), (ii) any Collateral subject to a Lien that is expressly permitted under clause (c) of the definition of the term “Permitted Lien” and (iii) all of the Collateral and Borrower, upon (A) termination of all of the Term Loan Commitments, (B) the payment in full in cash of all of the Obligations (other than inchoate indemnity obligations for which no claim has been made), and (C) to the extent requested by Collateral Agent, receipt by Collateral Agent and Lenders of liability releases from Borrower in form and substance acceptable to Collateral Agent (the satisfaction of the conditions in this clause (iii), the “Termination Date”).

 

9.                                      Setoff and Sharing of Payments. In addition to any rights now or hereafter granted under any applicable Requirement of Law and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default and subject to Section 10(d) of this Exhibit B, each Lender is hereby authorized at any time or from time to time upon the direction of Collateral Agent, without notice to Borrower or any other Person, any such notice being hereby expressly waived, to setoff and to appropriate and to apply any and all balances held by it at any of its offices for the account of Borrower (regardless of whether such balances are then due to Borrower) and any other properties or assets at any time held or owing by that Lender or that holder to or for the credit or for the account of Borrower against and on account of any of the Obligations that are not paid when due. Any Lender exercising a right of setoff or otherwise receiving any payment on account of the Obligations in excess of its Pro Rata Share thereof shall purchase for cash (and the other Lenders or holders shall sell) such participations in each such other Lender’s or holder’s Pro Rata Share of the Obligations as would be necessary to cause such Lender to share the amount so offset or otherwise received with each other Lender or holder in accordance with their respective Pro Rata Shares of the Obligations. Borrower agrees, to the fullest extent permitted by law, that (a) any Lender may exercise its right to offset with respect to amounts in excess of its Pro Rata Share of the Obligations and may purchase participations in accordance with the preceding sentence and (b) any Lender so purchasing a participation in the Term Loans made or other Obligations held by other Lenders or holders may exercise all rights of offset, bankers’ liens, counterclaims or similar rights with respect to such participation as fully as if such Lender or holder were a direct holder of the Term Loans and the other Obligations in the amount of such participation. Notwithstanding the foregoing, if all or any portion of the offset amount or payment otherwise received is thereafter recovered from the Lender that has exercised the right of offset, the purchase of participations by that Lender shall be rescinded and the purchase price restored without interest. Each Lender acknowledges that the Closing Fee and the Final Fee are payable solely to Solar (or its successors and assigns, which, if there is a partial assignment, shall be shared on a pro rata basis). If any of the Closing Fee or the Final Fee (or assets in lieu of payment in connection with an exercise of remedies or Insolvency Proceeding) is received by any Lender (other than Solar or its successors and assigns), or if any of Solar or any of Solar’s successors and assigns receive a Closing Fee or Final Fee (or assets in lieu of payment in connection with an exercise of remedies or Insolvency Proceeding) in

 

 

excess of the amount of such fees owing to such Person, such Person shall receive and hold such funds or assets as agent for the appropriate Lender, and shall promptly turn such funds or assets over to the appropriate Lender.

 

10.                               Advances; Payments; Non-Funding Lenders; Actions in Concert.

 

(a)                                 Advances; Payments. If Collateral Agent receives any payment with respect to a Term Loan for the account of the Lenders on or prior to 2:00 p.m. (New York time) on any Business Day, Collateral Agent shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment on such Business Day. If Collateral Agent receives any payment with respect to a Term Loan for the account of Lenders after 2:00 p.m. (New York time) on any Business Day, Collateral Agent shall pay to each applicable Lender such Lender’s Pro Rata Share of such payment on the next Business Day.

 

(b)                                 Return of Payments.

 

(i)                           If Collateral Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by Collateral Agent or on behalf of from Borrower and such related payment is not received by Collateral Agent, then Collateral Agent will be entitled to recover such amount (including interest accruing on such amount at the rate otherwise applicable to such Obligation) from such Lender on demand without setoff, counterclaim or deduction of any kind.

 

(ii)                        If Collateral Agent determines at any time that any amount received by Collateral Agent under any Loan Document must be returned to Borrower or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other term or condition of any Loan Document, Collateral Agent will not be required to distribute any portion thereof to any Lender. In addition, each Lender will repay to Collateral Agent on demand any portion of such amount that Collateral Agent has distributed to such Lender, together with interest at such rate, if any, as Collateral Agent is required to pay to Borrower or such other Person, without setoff, counterclaim or deduction of any kind and Collateral Agent will be entitled to set off against future distributions to such Lender any such amounts (with interest) that are not repaid on demand.

 

(c)                                  Non-Funding Lenders.

 

(i)                           Unless Collateral Agent shall have received notice from a Lender prior to the date of any Term Loan that such Lender will not make available to Collateral Agent such Lender’s Pro Rata Share of such Term Loan, Collateral Agent may assume that such Lender will make such amount available to it on the date of such Term Loan in accordance with Section 2(b) of this Exhibit B, and Collateral Agent may (but shall not be obligated to), in reliance upon such assumption, make available a corresponding amount for the account of Borrower on such date. If and to the extent that such Lender shall not have made such amount available to Collateral Agent, such Lender and Borrower severally agree to repay to Collateral Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the day such amount is made available to Borrower until the day such amount is repaid to Collateral Agent, at a rate per annum equal to the interest rate applicable to the Obligation that would have been created when Collateral Agent made available such amount to Borrower had such Lender made a corresponding payment available. If such Lender shall repay such corresponding amount to Collateral Agent, the amount so repaid shall constitute such Lender’s portion of such Term Loan for purposes of this Agreement.

 

(ii)                        To the extent that any Lender has failed to fund any Term Loan or any other payments required to be made by it under the Loan Documents after any such Term Loan is required to be made or such payment is due (a “Non-Funding Lender”), Collateral Agent shall be entitled to set off the funding short-fall against that Non-Funding Lender’s Pro Rata Share of all payments received from or on behalf of Borrower thereunder. The failure of any Non-Funding Lender to make any Term Loan or any payment required by it hereunder shall not relieve any other Lender (each such other Lender, an “Other Lender”) of its obligations to make such Term Loan, but neither any Other Lender nor Collateral Agent shall be responsible for the failure of any Non-Funding Lender to make such Term Loan or make any other payment required hereunder. Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a “Lender” (or be included in the calculation of “Required Lenders” hereunder) for any voting or consent rights under or with respect to any Loan Document. At Borrower’s

 

 

request, Collateral Agent or a Person reasonably acceptable to Collateral Agent shall have the right with Collateral Agent’s consent and in Collateral Agent’s sole discretion (but Collateral Agent or any such Person shall have no obligation) to purchase from any Non-Funding Lender, and each Lender agrees that if it becomes a Non-Funding Lender it shall, at Collateral Agent’s request, sell and assign to Collateral Agent or such Person, all of the Term Loan Commitment (if any), and all of the outstanding Term Loan of that Non-Funding Lender for an amount equal to the aggregate outstanding principal balance of the Term Loan held by such Non-Funding Lender and all accrued interest with respect thereto through the date of sale, such purchase and sale to be consummated pursuant to an executed assignment agreement in form and substance reasonably satisfactory to, and acknowledged by, Collateral Agent.

 

(d)                                 Actions in Concert. Anything in this Agreement to the contrary notwithstanding, each Lender hereby agrees with each other Lender that no Lender shall take any action to protect or enforce its rights arising out of any Loan Document (including exercising any rights of setoff) without first obtaining the prior written consent of Collateral Agent or Required Lenders, it being the intent of Lenders that any such action to protect or enforce rights under any Loan Document shall be taken in concert and at the direction or with the consent of Collateral Agent or Required Lenders.

 

 

EXHIBIT C

 

Loan Payment Request Form

 

	
Fax To: (212) 993-1698
    	
Date:
    	
 
    
	
 
    	
 
    
	
LOAN PAYMENT:
    	
 
    
	
[                           ]
    

 

	
From Account #
    	
 
    	
 
    	
To Account #
    	
 
    
	
 
    	
(Deposit Account #)
    	
 
    	
 
    	
(Loan Account #)
    
	
Principal $
    	
 
    	
 
    	
and/or Interest $
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Authorized Signature:
    	
 
    	
 
    	
 
    	
Phone Number:
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
 
    
											

 

LOAN ADVANCE:

 

Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.

 

	
From Account #
    	
 
    	
 
    	
To Account #
    	
 
    
	
 
    	
(Loan Account #)
    	
 
    	
 
    	
(Deposit Account #)
    
	
 
    	
 
    
	
Amount of Advance $
    	
 
    	
 
    
						

 

All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date:

 

	
Authorized Signature:
    	
 
    	
 
    	
Phone Number:
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
 
    	
 
    
							

 

OUTGOING WIRE REQUEST:

 

Complete only if all or a portion of funds from the loan advance above is to be wired.

 

	
Beneficiary Name:
    	
 
    	
 
    	
Amount of Wire: $
    	
 
    
	
Beneficiary Bank:
    	
 
    	
 
    	
Account Number:
    	
 
    
	
City and State:
    	
 
    	
 
    	
 
    
								

 

	
Beneficiary Bank Transit (ABA) #:
    	
 
    	
 
    	
Beneficiary Bank Code (Swift, Sort, Chip, etc.):
    	
 
    
	
 
    	
 
    	
 
    	
(For   International Wire Only)
    	
 
    
	
Intermediary Bank:
    	
 
    	
 
    	
Transit (ABA) #:
    	
 
    
	
For Further Credit to:
    	
 
    	
 
    	
 
    
								

 

	
Special Instruction:
    	
 
    

 

By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us).

 

	
Authorized Signature:
    	
 
    	
 
    	
2nd Signature (if required):
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
Print Name/Title:
    	
 
    
	
Telephone #:
    	
 
    	
 
    	
Telephone #:
    	
 
    
									

 

 

EXHIBIT D

 

Compliance Certificate

 

TO:         SOLAR CAPITAL LTD., as Collateral Agent and Lender

COMERICA BANK, as Lender

 

FROM:       T2 BIOSYSTEMS, INC.

 

The undersigned authorized officer (“Officer”) of T2 Biosystems, Inc. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement dated as of July 11, 2014, by and among Borrower, Collateral Agent, and the Lenders from time to time party thereto (the “Loan Agreement;” capitalized terms used but not otherwise defined herein shall have the meanings given them in the Loan Agreement),

 

(a)                            Borrower is in complete compliance for the period ending                  with all required covenants except as noted below;

 

(b)                            There exists no Events of Default or events that with the passage of time would result in an Event of Default, except as noted below;

 

(c)                             Except as noted below, all representations and warranties of Borrower stated in the Loan Documents are true and correct in all material respects on this date and for the period described in (a), above; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date.

 

(d)                            Borrower and each of Borrower’s Subsidiaries has timely filed all required tax returns and reports, Borrower and each of Borrower’s Subsidiaries has timely paid all foreign, federal, state, and local taxes, assessments, deposits and contributions owed by Borrower or Subsidiary, except as otherwise permitted pursuant to the terms of Section 5.8 of the Loan Agreement;

 

(e)                             No Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Collateral Agent and the Lenders.

 

Attached are the required documents, if any, supporting our certification(s). The Officer, on behalf of Borrower, further certifies that the attached financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes and except, in the case of unaudited financial statements, for the absence of footnotes and subject to year-end audit adjustments as to the interim financial statements.

 

Please indicate compliance status since the last Compliance Certificate by circling Yes, No, or N/A under “Complies” column.

 

	
 
    	
 
    	
Reporting Covenant
    	
 
    	
Requirement
    	
 
    	
Actual
    	
 
    	
Complies
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1)
    	
 
    	
Financial statements
    	
 
    	
Monthly within 30 days
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2)
    	
 
    	
Annual (CPA Audited) statements
    	
 
    	
Within 180 days after FYE
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3)
    	
 
    	
Annual Financial Projections/Budget (prepared on a monthly basis)
    	
 
    	
Annually (within earlier 30 days of approval or 60 days of FYE), and   when revised
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    

 

 

	
4)
    	
 
    	
A/R & A/P agings
    	
 
    	
If applicable
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5)
    	
 
    	
8-K, 10-K and 10-Q Filings
    	
 
    	
If applicable, within 5 days of filing
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6)
    	
 
    	
Compliance Certificate
    	
 
    	
Monthly within 30 days
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
N/A
    

 

Deposit and Securities Accounts

(Please list all accounts; attach separate sheet if additional space needed)

 

	
 
    	
 
    	
Institution Name
    	
 
    	
Account Number
    	
 
    	
New Account?
    	
 
    	
Account Control Agreement in place?
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
No
    	
 
    	
Yes
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
No
    	
 
    	
Yes
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
No
    	
 
    	
Yes
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Yes
    	
No
    	
 
    	
Yes
    	
No
    

 

Other Matters

 

	
1)
    	
Have there been any changes in Key Persons since the last Compliance   Certificate?
    	
 
    	
Yes
    	
 
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2)
    	
Have there been any transfers/sales/disposals/retirement of   Collateral or IP prohibited by the Loan Agreement?
    	
 
    	
Yes
    	
 
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3)
    	
Have there been any new or pending claims or causes of action against   Borrower that involve more than One Hundred Fifty Thousand Dollars   ($150,000.00)?
    	
 
    	
Yes
    	
 
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4)
    	
Have there been any amendments of the capitalization table of   Borrower and to the Operating Documents of Borrower or any of its   Subsidiaries? If yes, provide copies of any such amendments with this   Compliance Certificate.
    	
 
    	
Yes
    	
 
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5)
    	
Has Borrower or any Subsidiary entered into or amended any Material   Agreement? If yes, please explain and provide a copy of the Material   Agreement(s) and/or amendment(s).
    	
 
    	
Yes
    	
 
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6)
    	
Has Borrower provided the Collateral Agent with all notices required   to be delivered under Sections 6.2(a) and 6.2(b) of the Loan   Agreement?
    	
 
    	
Yes
    	
 
    	
No
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7)
    	
Have there been any returns, recoveries, disputes and claims that   involve more than Two Hundred Fifty Thousand Dollars ($250,000.00)   individually or in the aggregate since the beginning of the year.
    	
 
    	
Yes
    	
 
    	
No
    

 

 

Exceptions

 

Please explain any exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions.” Attach separate sheet if additional space needed.)

 

 

	
T2 BIOSYSTEMS, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    

 

	
 
    	
COLLATERAL AGENT USE ONLY
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Received by:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Verified by:
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Compliance Status:
    	
Yes
    	
No
    
								

 

 

CORPORATE BORROWING CERTIFICATE

 

DATE: July 11, 2014

 

	
BORROWER: 
    	
T2 BIOSYSTEMS, INC.
    	
 
    
	
LENDERS:
    	
SOLAR CAPITAL LTD., as Collateral Agent and Lender
    	
 
    
	
 
    	
COMERICA BANK, as Lender
    	
 
    

 

I hereby certify as follows, as of the date set forth above:

 

1.                                           I am the Secretary, Assistant Secretary or other officer of Borrower. My title is as set forth below.

 

2.                                           Borrower’s exact legal name is set forth above. Borrower is a corporation existing under the laws of the State of Delaware.

 

3.                                           Attached hereto as Exhibit A and Exhibit B, respectively, are true, correct and complete copies of (i) Borrower’s Certificate of Incorporation (including amendments), as filed with the Secretary of State of the state in which Borrower is incorporated as set forth in paragraph 2 above; and (ii) Borrower’s Bylaws. Neither such Certificate of Incorporation nor such Bylaws have been amended, annulled, rescinded, revoked or supplemented, and such Certificate of Incorporation and such Bylaws remain in full force and effect as of the date hereof.

 

4.                                           The following resolutions were duly and validly adopted by Borrower’s board of directors at a duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized corporate action). Such resolutions are in full force and effect as of the date hereof and have not been in any way modified, repealed, rescinded, amended or revoked, and the Lenders may rely on them until each Lender receives written notice of revocation from Borrower.

 

[Balance of Page Intentionally Left Blank]

 

 

RESOLVED, that any one of the following officers or employees of Borrower, whose names, titles and signatures are below, may act on behalf of Borrower:

 

	
Name
    	
 
    	
Title
    	
 
    	
Signature
    	
 
    	
Authorized to
   Add or Remove
   Signatories
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
o
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
o
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
o
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
o
    

 

RESOLVED FURTHER, that any one of the persons designated above with a checked box beside his or her name may, from time to time, add or remove any individuals to and from the above list of persons authorized to act on behalf of Borrower.

 

RESOLVED FURTHER, that such individuals may, on behalf of Borrower:

 

Borrow Money. Borrow money from the Lenders.

 

Execute Loan Documents. Execute any loan documents any Lender requires.

 

Grant Security. Grant Collateral Agent a security interest in any of Borrower’s assets.

 

Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds. 

 

Further Acts. Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreement that waive Borrower’s right to a jury trial) they believe to be necessary to effectuate such resolutions.

 

RESOLVED FURTHER, that all acts authorized by the above resolutions and any prior acts relating thereto are ratified.

 

[Balance of Page Intentionally Left Blank]

 

 

5.                                      The persons listed above are Borrower’s officers or employees with their titles and signatures shown next to their names.

 

	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

*** If the Secretary, Assistant Secretary or other certifying officer executing above is designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers, this Certificate must also be signed by a second authorized officer or director of Borrower.

 

I, the                                           of Borrower, hereby certify as to paragraphs 1 through 5 above, as of the date set forth above.

[print title]

 

	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Corporate Borrowing Certificate]

 

 

EXHIBIT A

 

Certificate of Incorporation (including amendments)

 

[see attached]

 

 

EXHIBIT B

 

Bylaws

 

[see attached]

 

 

Exhibit G

 

Form of Secured Promissory Note

 

THIS NOTE WAS ISSUED WITH “ORIGINAL ISSUE DISCOUNT” WITHIN THE MEANING OF SECTION 1272, ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. UPON WRITTEN REQUEST, THE BORROWER WILL PROVIDE TO ANY HOLDER OF THE NOTE (1) THE ISSUE PRICE AND DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE ORIGINAL YIELD TO MATURITY OF THE NOTE. SUCH REQUEST SHOULD BE SENT TO THE BORROWER AT 101 HARTWELL AVENUE, LEXINGTON, MA 02421.

 

SECURED PROMISSORY NOTE
 (Term [A][B] Loan)

 

	
$
    	
 
    	
Dated: [DATE]
    

 

FOR VALUE RECEIVED, the undersigned, T2 BIOSYSTEMS, INC., a Delaware corporation with offices located at 101 Hartwell Avenue, Lexington, MA 02421 (“Borrower”) HEREBY PROMISES TO PAY to the order of [                ] (“Lender”) the principal amount of [              ] DOLLARS ($                  ) or such lesser amount as shall equal the outstanding principal balance of the Term [A][B] Loan made to Borrower by Lender, plus interest on the aggregate unpaid principal amount of such Term [A][B] Loan, at the rates and in accordance with the terms of the Loan and Security Agreement dated as of July 11, 2014 by and among Borrower, Lender, Solar Capital Ltd., as Collateral Agent, and the other Lenders from time to time party thereto (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). If not sooner paid, the entire principal amount and all accrued and unpaid interest hereunder shall be due and payable on the Maturity Date as set forth in the Loan Agreement. Any capitalized term not otherwise defined herein shall have the meaning attributed to such term in the Loan Agreement.

 

Principal, interest and all other amounts due with respect to the Term [A][B] Loan, are payable in lawful money of the United States of America to Lender as set forth in the Loan Agreement and this Secured Promissory Note (this “Note”). The principal amount of this Note and the interest rate applicable thereto, and all payments made with respect thereto, shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note.

 

The Loan Agreement, among other things, (a) provides for the making of a secured Term [A][B] Loan by Lender to Borrower, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events.

 

This Note may not be prepaid except as set forth in Section 2.2 (c) and Section 2.2(d) of the Loan Agreement.

 

This Note and the obligation of Borrower to repay the unpaid principal amount of the Term [A][B] Loan, interest on the Term [A][B] Loan and all other amounts due Lender under the Loan Agreement is secured under the Loan Agreement.

 

Presentment for payment, demand, notice of protest and all other demands and notices of any kind in connection with the execution, delivery, performance and enforcement of this Note are hereby waived.

 

Borrower shall pay all fees and expenses, including, without limitation, attorneys’ fees and costs, incurred by Lender in the enforcement or attempt to enforce any of Borrower’s obligations hereunder not performed when due subject to the terms of the Loan Agreement.

 

This Note shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of New York.

 

 

The ownership of an interest in this Note shall be registered on a record of ownership maintained by Lender or its agent. Notwithstanding anything else in this Note to the contrary, the right to the principal of, and stated interest on, this Note may be transferred only if the transfer is registered on such record of ownership and the transferee is identified as the owner of an interest in the obligation. Borrower shall be entitled to treat the registered holder of this Note (as recorded on such record of ownership) as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in this Note on the part of any other person or entity.

 

[Balance of Page Intentionally Left Blank]

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one of its officers thereunto duly authorized on the date hereof.

 

	
 
    	
BORROWER:
    
	
 
    	
 
    
	
 
    	
T2 BIOSYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

LOAN AND PAYMENTS OF PRINCIPAL

 

	
Date
    	
 
    	
Principal
   Amount
    	
 
    	
Scheduled
   Payment Amount
    	
 
    	
Notation By
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

SCHEDULE 1.1

 

Lenders and Commitments

 

Term A Loans

 

	
Lender
    	
 
    	
Term Loan Commitment
    	
 
    	
Commitment Percentage
    	
 
    
	
Solar Capital Ltd.
    	
 
    	
$
    	
16,666,666.67
    	
 
    	
83.33
    	
%
    
	
Comerica Bank
    	
 
    	
$
    	
3,333,333.33
    	
 
    	
16.67
    	
%
    
	
TOTAL
    	
 
    	
 
    	
 
    	
100.00
    	
%
    

 

Term B Loans

 

	
Lender
    	
 
    	
Term Loan Commitment
    	
 
    	
Commitment Percentage
    	
 
    
	
Solar Capital Ltd.
    	
 
    	
$
    	
8,333,333.33
    	
 
    	
83.33
    	
%
    
	
Comerica Bank
    	
 
    	
$
    	
1,666,666.67
    	
 
    	
16.67
    	
%
    
	
TOTAL
    	
 
    	
 
    	
 
    	
100.00
    	
%
    

 

Aggregate (all Term Loans)

 

	
Lender
    	
 
    	
Term Loan Commitment
    	
 
    	
Commitment Percentage
    	
 
    
	
Solar Capital Ltd.
    	
 
    	
$
    	
25,000,000.00
    	
 
    	
83.33
    	
%
    
	
Comerica Bank
    	
 
    	
$
    	
5,000,000.00
    	
 
    	
16.67
    	
%
    
	
TOTAL
    	
 
    	
 
    	
 
    	
100.00
    	
%
    

 

 

DISCLOSURE SCHEDULES

 

Disclosure Schedule 1.3(a)

 

Indebtedness

 

·                       $1.675 million owed to Massachusetts Development Finance Agency (“MDFA”) pursuant to that certain Promissory Note dated May 9, 2011.

 

·                       $12,000 owed to CIT Finance LLC (“CIT”) pursuant to that certain Lease Agreement dated December 2013.

 

·                       $340,000 Standby Letter of Credit with Silicon Valley Bank

 

·                       $20,000 Business Credit Card with Silicon Valley Bank

 

 

Disclosure Schedule 1.3(b)

 

Investments

 

None.

 

 

Disclosure Schedule 1.3(c)

 

Liens

 

·                       Security interest of MDFA in certain equipment pursuant to that certain Security Agreement dated May 9, 2011, between MDFA and Borrower.

 

·                       Security interest of CIT in certain equipment pursuant to that certain Lease Agreement dated December 2013, between CIT and Borrower.

 

·                       Security interest of Silicon Valley Bank in accounts # 3300775067 and # 8800063434 pursuant to that certain Payoff Letter dated on or about the date hereof.

 

 

Disclosure Schedule 5.2(c)

 

Collateral Locations

 

None.

 

 

Disclosure Schedule 5.2(e)

 

Material Agreements

 

·                       Exclusive License Agreement by and between the Company and The General Hospital Corporation d/b/a Massachusetts General Hospital, dated November 7, 2006, as amended.

 

·                       Promissory Note in favor of MDFA dated May 9, 2011.

 

 

Disclosure Schedule 5.3

 

Litigation

 

None.

 

 

Radius Health, Inc.

 

Disclosure Schedule 6.6(a) and (b)

 

Excluded Accounts

 

None.

 

RAD1901 Investigator’s Brochure

 

7

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