Leasehold Deed Of Trust

LEASEHOLD DEED OF TRUST, ASSIGNMENT AND SECURITY AGREEMENT


THIS LEASEHOLD DEED OF TRUST, ASSIGNMENT AND SECURITY AGREEMENT is made this 1st day of April , 1998, by BPG INDUSTRIAL PARTNERS II, LLC, a Maryland limited liability company (herein referred to as the "Borrower") and BIORELIANCE CORPORATION, a Delaware corporation (herein referred to as the "Corporate Guarantor"; together with the Borrower and the Corporate Guarantor collectively, the "Grantors" and each a "Grantor") MAGENTA CORPORATION, a Delaware corporation (herein referred to as the "Affiliate"), to CYNTHIA FLANDERS and EILEEN CHOW, as Trustees (herein referred to as the "Individual Trustees"), and NATIONSBANK, N.A., a national banking association, its successors and assigns (herein referred to as the "Lender" or the "Beneficiary"). The Affiliate joins in this Deed of Trust solely to convey its leasehold interest in the Leasehold Real Property (hereinafter defined) to the Beneficiary.


RECITALS


1. The Borrower has requested that the Lender make a loan (herein referred to as the "Loan") to the Borrower in the principal amount of $4,650,000. The Loan will be evidenced by the Borrower's Deed of Trust Note of even date hereof (herein referred to as the "Note").


2. The Corporate Guarantor has guaranteed repayment of the Loan pursuant to that certain Guaranty Agreement of even date herewith from the Corporate Guarantor in favor of the Lender (as amended from time to time, the "Guaranty").


3. The Corporate Guarantor is the holder of a leasehold interest in the Property (as hereinafter defined) pursuant to that certain Lease Purchase Agreement of even date herewith, by and between Montgomery County, Maryland, as landlord (the "County") and the Corporate Guarantor, as tenant, which Lease Purchase Agreement, or memorandum thereof, is being recorded among the Land Records of Montgomery County, Maryland immediately prior to this Deed of Trust (as the same may from time to time, with the Beneficiary's prior written consent, be extended, amended, restated, supplemented or otherwise modified, the "Ground Lease").


4. The Corporate Guarantor has subleased a portion of its leasehold interest in the Property (the "Leasehold Parcel") to the Borrower pursuant to that certain Lease Agreement of even date herewith, by and between the Corporate Guarantor, as landlord and the Borrower, as tenant, which Lease Agreement, or memorandum thereof, is being recorded among the Land Records of Montgomery County, Maryland immediately prior to this Deed of Trust (as the same may from time to time, with the Beneficiary's prior written consent, be extended, amended, restated, supplemented or otherwise modified, the "Sub-Lease"). 2
5. The Borrower has further subleased its leasehold interest in the Leasehold Parcel to the Affiliate, pursuant to a Lease Agreement of even date herewith, by and between the Borrower, as landlord, and the Affiliate, as tenant, which Lease Agreement, or memorandum thereof, is being recorded among the Land Records of Montgomery County, Maryland immediately prior to this Deed of Trust (as the same may from time to time, with the Beneficiary's prior written consent, be extended, amended, restated, supplemented or otherwise modified as the same may be amended from time to time, the "Facility Lease").


6. As a condition precedent to making the Loan to the Borrower, the Lender required that the Grantors secure the payment and performance of all obligations of the Grantors arising out of, or in connection with, the Loan, including all of the Corporate Guarantor's obligations under the Guaranty by the execution of this Leasehold Deed of Trust, Assignment and Security Agreement.


NOW THEREFORE, in order to induce the Lender to make the Loan to the Borrower, the Grantors agree as follows:


Article I. Definitions, Rules of Construction.


Section I.1. Definitions. As used in this Leasehold Deed of Trust, Assignment and Security Agreement, the terms defined in the Preamble and Recitals hereto shall have the respective meanings specified therein, and the following terms shall have the meanings indicated:


"Accounts" means all accounts of each Grantor within the meaning of the Uniform Commercial Code of the State derived from or arising out of the use, occupancy or enjoyment of the Property or for services rendered therein or thereon.


"Additions" means any and all alterations, additions, accessions and improvements to property, substitutions therefor, and renewals and replacements thereof.


"Beneficiary" means the Lender and its successors and assigns.


"BioReliance Loan" means any loan now or hereafter made by the Lender to the Affiliate and/or the Corporate Guarantor the proceeds of which will be used to finance the costs of construction of certain improvements to the Leasehold Real Property.


"Casualty" means any act or occurrence of any kind or nature that results in damage, loss or destruction to the Leasehold Real Property.


"Claim" means any liability, suit, action, claim, demand, loss, expense, penalty, fine, judgment or other cost of any kind or nature whatsoever, including without limitation, fees, costs and expenses of attorneys, consultants, contractors and experts.


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"Completion Guarantors" means Robert E. Buccini and David B. Pollin and their respective successors and assigns.


"Condemnation" means any taking of title, of use, or of any other property interest under the exercise of the power of eminent domain, whether temporarily or permanently, by any Governmental Authority or by any Person acting under Governmental Authority.


"Condemnation Awards" means any and all judgments, awards of damages (including, but not limited to, severance and consequential damages), payments, proceeds, settlements, amounts paid for a taking in lieu of Condemnation, or other compensation heretofore or hereafter made, including interest thereon, and the right to receive the same, as a result of, or in connection with, any Condemnation or threatened Condemnation.


"Contracts of Sale" means any contracts for the sale of all or any part of the Property or any interest therein, whether now or hereafter executed, including, without limitation, all of the Proceeds thereof, any funds deposited thereunder to secure performance by the purchasers of their obligations and the right, after the occurrence of an Event of Default to receive and collect all payments due under any contracts of sale.


"Corporate Guarantor" means BioReliance Corporation and its successors and assigns.


"Deed of Trust" means this Leasehold Deed of Trust, Assignment and Security Agreement executed by the Grantors and the Affiliate for the benefit of the Beneficiary, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.


"Default" means an event which, with the giving of Notice or lapse of time, or both, could or would constitute an Event of Default under the provisions of this Deed of Trust.


"Encumbrance" means any Lien, easement, right of way, roadway (public or private), common area, condominium regime, cooperative housing regime, restrictive covenant, Lease or other matter of any nature that would affect title to the Property.


"Environmental Assessment" means a report of an environmental assessment of the Property of such scope (including but not limited to the taking of soil borings and air and groundwater samples and other above and below ground testing) as the Beneficiary may request, prepared by a recognized environmental consulting firm acceptable to the Beneficiary in all respects and sufficient in detail to comply with the Beneficiary's established guidelines and the guidelines of any appropriate Governmental Authority.


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"Environmental Report" means that certain Phase I Environmental Site Assessment Narrative prepared for The Buccini/Pollin Group by Loiederman Associates, Inc., dated November 1997.


"Environmental Requirement" means any Law or other agreement or restriction, whether public or private (including but not limited to any condition or requirement imposed by any insurer or surety company), now existing or hereafter created, issued or enacted and all amendments thereto, modifications thereof and substitutions therefor, which in any way pertains to human health, safety or welfare, Hazardous Materials, Hazardous Materials Contamination or the environment (including but not limited to ground, air, water or noise pollution or contamination, and underground or above ground tanks) and shall include without limitation, the Resource Conservation and Recovery Act (the Solid Waste Disposal Act), 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et seq. ("CERCLA"), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"); the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; and the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.


"Equipment" means all building materials, fixtures, equipment and other tangible personal property of every kind and nature whatsoever [other than consumable goods, and trade fixtures or other personal property owned by tenants (other than the Grantors and the Affiliate) occupying the Improvements], now or hereafter located or contained in or upon, or attached to, the Leasehold Real Property, whether now owned or hereafter acquired by any Grantor; together with all Additions to the Equipment and Proceeds thereof.


"Event of Default" means the occurrence of any one or more of the events specified in Article VI of this Deed of Trust and the continuance of such event beyond the applicable cure periods, if any, set forth in Article VI.


"Expenses" means all costs and expenses of any nature whatsoever incurred at any time and from time to time (whether before or after an Event of Default) by the Beneficiary or the Trustees in exercising or enforcing any rights, powers and remedies provided in this Deed of Trust or any of the other Loan Documents, including, without limitation, reasonable attorney's fees, court costs, receiver's fees, management fees and costs incurred in the repair, maintenance and operation of, or taking possession of, or selling, the Property.


"Facility Lease" has the meaning set forth in the Recitals to this Deed of Trust.


"Governmental Authority" means any governmental or quasi-governmental entity, including, without limitation, any department, commission, board, bureau, agency, administration, service or other instrumentality of any governmental entity.


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"Ground Lease Payments" means any and all sums payable at any time or from time to time by the Corporate Guarantor pursuant to the Ground Lease.


"Guarantors" means the Completion Guarantors and the Corporate Guarantor, and its, his, her, their respective heirs, personal representatives, successors and assigns.


"Guaranty" means the Guaranty of Payment of even date hereof executed by the Corporate Guarantor for the benefit of the Lender, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.


"Guaranty of Completion" means the Guaranty of Completion of even date hereof executed by the Completion Guarantors for the benefit of the Lender, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.


"Hazardous Materials" means any and all hazardous or toxic substances, wastes or materials which, because of their quantity, concentration, or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard or nuisance to human health, safety or welfare or to the environment when used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled, including without limitation, any substance, waste or material which is or contains asbestos, radon, polychlorinated biphenyls, urea formaldehyde, explosives, radioactive materials or petroleum products.


"Hazardous Materials Contamination" means the use, treatment, storage, disposal, generation of, manufacturing, transportation or handling of any Hazardous Materials in violation of any Laws, including, but not limited to any Environmental Requirements, governing the use, treatment, storage, disposal, generation of, manufacturing, transportation or handling of Hazardous Materials.


"Improvements" means all buildings, structures and other improvements now or hereafter existing, erected or placed on the Leasehold Parcel, or in any way used in connection with the use, enjoyment, occupancy or operation of the Leasehold Parcel.


"Land" means the land described in Exhibit "A" attached hereto, including the Leasehold Parcel, together with (a) all estates, title interests, title reversion rights, increases, issues, profits, rights of way or uses, additions, accretions, servitudes, gaps, gores, liberties, privileges, water rights, water courses, alleys, streets, passages, ways, vaults, licenses, tenements, franchises, hereditaments, appurtenances, easements and other rights, now or hereafter owned by any Grantor and belonging or appertaining to the Land or the Leasehold Parcel, as the case may be, (b) all Claims whatsoever of any Grantor with respect to the Land or the Leasehold Parcel, as the case may be, either in law or in equity, in possession or in expectancy, and (c) all estate, right, title and interest of any Grantor in and to all streets, roads and public places, opened or proposed, now or hereafter adjoining or appertaining to, the Land or the Leasehold Parcel, as the case may be.


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"Laws" means federal, state and local laws, statutes, rules, ordinances, regulations, codes, licenses, authorizations, decisions, injunctions, interpretations, orders or decrees of any court or other Governmental Authority having jurisdiction as may be in effect from time to time.


"Leasehold Parcel" has the meaning set forth in the Recitals.


"Leasehold Real Property" means the Leasehold Parcel, together with all Improvements, and all Additions to, and Proceeds of the foregoing.


"Leases" means all leases, license agreements and other occupancy or use agreements (whether oral or written), now or hereafter existing, which cover or relate to the Real Property, together with all options therefor, amendments thereto and renewals, modifications and guarantees thereof, including, without limitation, the Related Leases, any cash or securities deposited under the Leases to secure performance by the tenants of their obligations under the Leases, whether such cash or securities are to be held until the expiration of the terms of the Leases or applied to one or more of the installments of rent coming due.


"Lien" means any mortgage, deed of trust, pledge, security interest, assignment, judgment, lien or charge of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code of any jurisdiction.


"Loan Agreement" means the Loan Agreement of even date hereof between the Borrower and the Lender and acknowledged by the Corporate Guarantor, which sets forth, among other things, the terms and conditions upon which the Loan proceeds will be disbursed, as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.


"Loan Documents" means this Deed of Trust, the Note, the Loan Agreement, the Guaranty, the Guaranty of Completion, and any and all other documents which any Grantor, any Guarantor or any other party or parties have executed and delivered, or may hereafter execute and deliver, to evidence, secure or guarantee the Obligations, or any part thereof, all as the same may from time to time be extended, amended, restated, supplemented or otherwise modified.


"Loan to Value Ratio" has the meaning set forth in Section 9.08 of this Deed of Trust.


"Net Proceeds", when used with respect to any Condemnation Awards or insurance proceeds allocable to the Real Property, means the gross proceeds from any Casualty or Condemnation remaining after payment of all expenses (including reasonable attorneys' fees) incurred in the collection of such gross proceeds.


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"Notice" means a written communication delivered by hand, or sent by overnight courier, or by certified or registered mail, postage prepaid, return receipt requested, to the Person to whom such communication is to be given, at the following addresses:


Lender: NationsBank, N.A.
Commercial Banking
6610 Rockledge Drive
Bethesda, Maryland 20817
Attn: Elizabeth F. Shore


with a copy to Ober, Kaler, Grimes & Shriver, P.C.
1401 H Street, N.W., Suite 500
Washington, D.C. 20005
Attn: Richard M. Pollak, Esq.


if to the Grantors: BioReliance Corporation
9900 Blackwell Road
Rockville, Maryland 20850
Attn: General Counsel


BPG Industrial Partners II, LLC
Tavern Square, Suite 305
110 North Royal Street
Alexandria, Virginia 22314
Attn: Robert E. Buccini


with a copy to Arent, Fox, Kintner, Plotkin & Kahn
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
Attn: Richard L. Brand, Esq.


and


Shulman, Rogers, Gandal, Pordy & Ecker,
P.A.
11921 Rockville Pike, 3rd Floor
Rockville, Maryland 20852
Attn: Rebecca Oshoway, Esquire


Trustees: c/o NationsBank, N.A.
Commercial Banking
6610 Rockledge Drive
Bethesda, Maryland 20817


7 8 or at such other address as any party shall have notified the others of in the manner set forth in this definition.


"Obligations" means all present and future debts, obligations and liabilities of any of the Grantors to the Beneficiary and the Trustees arising pursuant to, and/or on account of, the provisions of this Deed of Trust, the Note, the BioReliance Loan and any of the other Loan Documents, including, without limitation, the obligations to (a) pay all principal (including, again without limitation, any principal advanced after the date of this Deed of Trust and any principal that is repaid and readvanced), interest, late charges and prepayment premiums (if any) due at any time under the Note, and (b) pay all Expenses, indemnification payments and other sums due at any time under this Deed of Trust together with interest thereon as provided in Section 4.17, and (c) perform, observe and comply with all of the terms, covenants and conditions, expressed or implied, which any Grantor is required by this Deed of Trust and any of the other Loan Documents, to perform, observe or comply with.


"Permitted Encumbrances" means (a) the Encumbrances set forth in the Commitment for Title Insurance No. 50-178-026 issued on October 31, 1997 by Lawyers Title Insurance Company, as updated to the date of this Deed of Trust, (b) this Deed of Trust, (c) any Leases (including, but not limited to the Sub-Lease and the Facility Lease) so long as such Leases are subject and subordinate to this Deed of Trust, (d) liens for Property Assessments which are either (i) not delinquent, or (ii) being contested in accordance with the provisions of Section 4.18, and (e) any liens in favor of the Lender in connection with the BioReliance Loan.


"Person" means an individual, a corporation, a partnership, a joint venture, a trust, a limited liability company, an unincorporated association, any Governmental Authority or any other entity.


"Personalty" means all of each Grantor's interest in personal property of any kind or nature whatsoever, whether tangible or intangible and whether now owned or hereafter acquired, which is used in the construction of, or is placed upon, or is derived from or used in connection with the maintenance, use, occupancy or enjoyment of, the Real Property, including, without limitation, (a) the Equipment, (b) the Accounts, (c) any franchise or license agreements and management agreements entered into with respect to the Real Property or the business conducted therein (provided all of such agreements shall be subordinate to this Deed of Trust, and the Beneficiary shall have no responsibility for the performance of any Grantor's obligations thereunder), and (d) all plans and specifications, contracts and subcontracts for the construction or repair of the Improvements, sewer and water taps, allocations and agreements for utilities, bonds, permits, licenses, guarantees, warranties, causes of action, judgments, Claims, profits, security deposits, utility deposits, refunds of fees or deposits paid to any Governmental Authority, letters of credit and policies of insurance; together with all Additions to the Personalty and Proceeds thereof.


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"Proceeds", when used with respect to any of the collateral described in this Deed of Trust, means all proceeds within the meaning of the Uniform Commercial Code of the State and shall also include the proceeds of any and all insurance policies.


"Property" when used herein with respect to the Borrower and/or the Affiliate, means the Leasehold Real Property, and when used herein with respect to the Corporate Guarantor means the Real Property.


"Property Assessments" means all taxes, payments in lieu of taxes, water rents, sewer rents, assessments, condominium charges, maintenance charges and other governmental or municipal or public or private dues, charges and levies and any Liens (including federal tax liens) which are or may be levied, imposed or assessed upon the Real Property or any part thereof, or upon any Leases or any Rents, whether levied directly or indirectly or as excise taxes, as income taxes, or otherwise.


"Real Property" means the Land and the Improvements, including, the Leasehold Real Property, and all Additions to, and Proceeds of the foregoing.


"Related Leases" means the Ground Lease, the Sub-Lease and the Facility Lease.


"Reimbursement Rate" means the Default Rate set forth in the Note.


"Rents" means all of the rents, royalties, issues, profits, revenues, earnings, income and other benefits of the Real Property, or arising from the use or enjoyment of the Real Property, or from any Lease or other use or occupancy agreement pertaining to the Real Property.


"State" means the State of Maryland.


"Sub-Lease" has the meaning set forth in the Recitals to this Deed of Trust.


"Sub-Lease Payments" means any and all sums payable at any time or from time to time by the Borrower pursuant to the Sub-Lease.


"Taxes" means all taxes and assessments whether general or special, ordinary or extraordinary, or foreseen or unforeseen, which at any time may be assessed, levied, confirmed or imposed on any Grantor or on any of its properties or assets or any part thereof or in respect of any of its franchises, businesses, income or profits.


"Transfer" means any direct or indirect sale, assignment, conveyance or transfer, including, without limitation, any contract or agreement to sell, assign, convey or transfer, whether made with or without consideration.


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"Trustees" means the Individual Trustees or their successors in trust who may be acting under and pursuant to this Deed of Trust from time to time.


Section I.2. Rules of Construction. The words "hereof", "herein", "hereunder", "hereto", and other words of similar import refer to this Deed of Trust in its entirety. The terms "agree" and "agreements" mean and include "covenant" and "covenants". The headings of this Deed of Trust are for convenience only and shall not define or limit the provisions hereof. All references (a) made in the neuter, masculine or feminine gender shall be deemed to have been made in all such genders, (b) made in the singular or plural number shall be deemed to have been made, respectively, in the plural or singular number as well, (c) to the Land, the Leasehold Parcel, the Improvements, the Personalty, the Real Property, the Leasehold Real Property or Property shall mean all or any portion of each of the foregoing, respectively, and (d) to Section numbers are to the respective Sections contained in this Deed of Trust unless expressly indicated otherwise. The term "Grantor" shall also refer to all of the Persons signing this Deed of Trust as a Grantor, and to each of them, and all of them are jointly and severally bound, obligated and liable hereunder. The Trustees or the Beneficiary may release, compromise, modify or settle with any of the Grantors, in whole or in part, without impairing, lessening or affecting the obligations and liabilities of the others of the Grantors hereunder or under the Note. Any of the acts mentioned aforesaid may be done without the approval or consent of, or notice to, any of the Grantors.


Article II. Granting Clauses; Condition of Grant. In order to secure the prompt payment and performance of the Obligations, the Grantors and the Affiliates (a) grant, bargain, sell and convey the Property unto the Trustees in trust for the benefit of the Beneficiary, to have and to hold the Property unto the Trustees for the unexpired term of years remaining under the Ground Lease, the Sub-Lease, and the Facility Lease and any renewals or extensions thereof, together with all of the Grantors' rights, title and interest as tenant under the Ground Lease, and the Sub-Lease, as the case may be, including, without limitation, its rights (if any) to terminate, disaffirm, surrender, supplement, alter or amend the Ground Lease or the Sub-Lease, to renew or extend the Ground Lease or the Sub-Lease, and to purchase the fee simple interest in the Land; provided that, the Grantors may retain possession of the Property until the occurrence of an Event of Default and further provided, that with respect to the Sub-Lease and the Facility Lease, it being understood and agreed that the Borrower a ...