MORTGAGE BETWEEN BIOPURE AND PHARMACIA_ MA

THIS MORTGAGE ("Mortgage") is made October 8, 1996, between BIOPURE CORPORATION, a Delaware corporation with offices at 11 Hurley Street, Cambridge, Massachusetts 02141 ("Mortgagor"), and PHARMACIA & UPJOHN, INC., a Delaware corporation with offices at 7000 Portage Road, Kalamazoo, Michigan 49001 ("Mortgagee").



WHEREAS, Mortgagor by its certain Promissory Note of even date herewith ("Note") has evidenced its obligation to pay to Mortgagee the principal sum of $9,000,000, with interest and certain other sums, all as more fully therein provided;



NOW THEREFORE, to secure the payment of all principal, interest and other sums due or to become due under the Note, the Security Agreement dated the date hereof between Mortgagor and Mortgagee (the "Security Agreement") or this Mortgage (collectively, "Debt"), Mortgagor hereby grants, bargains, sells, conveys, aliens, enfeoffs, confirms, releases, assigns, transfers, pledges and mortgages unto Mortgagee, all and singular Mortgagor's rights, titles and interests in and to the following (collectively, "Mortgaged Property"):



ALL THAT CERTAIN leasehold estate ("Leasehold") with respect to that certain real property located in Middlesex County, Massachusetts, more particularly described in Exhibit "A" attached hereto and made a part hereof ("Land"), which Leasehold was created pursuant to that certain Commercial Lease Agreement dated as of August 29, 1994, as amended, between Eleven Hurley Street Associates and the Mortgagor ("Base Lease") which, or a notice of which, is recorded with the Middlesex South County Registry of Deeds in Deed Book 24917, page 436, together with all Mortgagor's rights, credits, deposits, options, privileges and interests under or pertaining to the Base Lease or the Land;



TOGETHER WITH any and all (a) buildings, structures, fixtures and improvements now or hereafter located or erected on the Land ("Improvements"; the Leasehold, Land and Improvements are sometimes herein collectively referred to as "Real Estate"), (b) passages, ways, water courses, easements, rights, estates, interests, liberties, privileges, tenements, issues, proceeds, products, profits, condemnation damages, proceeds of insurance, hereditaments and appurtenances of every type and nature whatsoever to the Real Estate belonging or appertaining, and claims or demands of any nature whatsoever of Mortgagor either at law or in equity, in possession or expectancy, of, in and to the Real Estate, (c) leases, subleases, contracts to lease and other agreements relating to the use or occupancy of all or any part of the Real Estate now or hereafter entered into by Mortgagor as landlord or sublandlord (collectively, "Leases") and the rents, security deposits, issues and profits arising or issuing therefrom ("Rents"), and (d) building materials, furniture, fixtures, furnishings, fittings, apparatus, appliances, machinery, equipment, supplies, inventory and

personal property of every kind and nature whatsoever, now or hereafter attached to, placed, installed or located upon, or used or useful in any way with respect to, the Real Estate and all replacements thereof and modifications and additions thereto and the proceeds and products thereof (all of the things mentioned in this clause (d) being sometimes herein collectively called "Personalty");



TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee forever, provided that if Mortgagor shall pay Mortgagee the Debt, and shall otherwise perform all Mortgagor's covenants, agreements and obligations hereunder and under the Note, then this Mortgage and the estate and interests hereby granted, shall cease and be void; otherwise this Mortgage shall remain in full force and effect.



AND Mortgagor covenants and agrees with Mortgagee as follows:



1. Payment of Debt. Mortgagor shall pay when due the Debt in the manner provided in the Note, the Security Agreement and this Mortgage. The Debt and each part thereof, if not paid when due, shall bear interest at the Default Rate specified in the Note ("Default Rate") from the due date until paid in full.



2. Performance of Covenants. Mortgagor shall observe and perform faithfully when due each and every obligation, covenant and agreement on Mortgagor's part to be observed or performed under this Mortgage, the Security Agreement or the Note.



3. Title. Mortgagor represents and warrants to Mortgagee that: (a) Mortgagor is and shall at all times remain the legal and beneficial owner of good and marketable indefeasible title to all of the Mortgaged Property, including without limitation the Leasehold, (b) there is no limitation on the right of Mortgagor to encumber the Mortgaged Property, and (c) this Mortgage is a good and valid first lien on the Mortgaged Property, subject to no other mortgage, lien, pledge, security interest or encumbrance. Mortgagor covenants to keep this Mortgage a good and valid first lien on the Mortgaged Property at all times, and shall warrant and forever defend the title to the Mortgaged Property unto the Mortgagee against every person claiming or to claim the same or any part thereof.



4. Base Lease. The Mortgagor shall not sell, assign, modify, amend, supplement, encumber or surrender the Base Lease without the prior written consent of Mortgagee in each instance. Mortgagor shall promptly and fully keep, perform and comply with all the terms, provisions, covenants, conditions and agreements imposed upon or assumed by the Mortgagor as lessee under the Base Lease and shall not do, or permit anything to be done, or omit from doing anything, which will give the landlord under the Base Lease a right to terminate the Base Lease. If the Mortgagor shall, in any manner, fail in this agreement, Mortgagee may (but shall not be obligated to) take any action Mortgagee deems necessary or desirable to prevent or cure any default by Mortgagor in the performance of or compliance with any of Mortgagor's covenants or obligations under the Base Lease. Mortgagee may rely







on any notice of default received from said landlord and may act thereon as herein provided even though the existence of such default or the nature thereof may be questioned or denied by Mortgagor or any party acting on behalf of Mortgagor, and such notice of default shall be conclusive evidence that a default exists for the purpose of this Section. Mortgagee shall have the right to enter upon the demised premises and any other property owned or controlled by Mortgagor which is affected by any of the terms, conditions, provisions, covenants and agreements of the Base Lease to such extent and as often as Mortgagee, in its sole discretion, deems necessary or desirable in order to prevent or cure and such default by Mortgagor. Mortgagee may expend such sums of money as Mortgagee, in its sole discretion deems necessary for any such purpose, and all sums so expended shall be deemed part of the debt and shall be secured by this Mortgage.



5. Fee Title. Mortgagor covenants that so long as any of the Debt remains unpaid, the Leasehold shall not merge in or with the fee title or in or with any other estate or interest in the Real Estate, but always shall be complete, separate and distinct notwithstanding the occurrence of any event or events by which the Leasehold may become vested in the same person in whom said fee title is vested.



6. Enforceability of Base Lease. Mortgagor represents and warrants to Mortgagee that: (a) the Base Lease is valid, subsisting and all the terms thereof are enforceable, (b) the rents and charges reserved in the Base Lease by the landlord thereunder, to the extent now or heretofore payable, have been fully paid and Mortgagor has no knowledge of any default thereunder by either party thereto and (c) no delinquency exists in respect to the payment of any tax, assessment, water or sewer rent or charge, or other governmental imposition of any kind levied or assessed upon the Mortgaged Property.



7. Security Agreement. (A) Without limiting any of the provisions of this Mortgage, Mortgagor, as debtor, expressly grants to the Mortgagee, as secured party, a security interest under the Massachusetts Uniform Commercial Code ("UCC") in all and singular the Personalty and in any portion of the balance of the Mortgaged Property which does not constitute real estate (collectively, "Collateral").



(B) In addition to and cumulative of other remedies granted in the Loan Documents, Mortgagee may, upon the occurrence of any default by Mortgagor hereunder, proceed under the UCC as to all or any part (as Mortgagee may elect) of the Collateral, and shall have and may exercise with respect to the Collateral all the rights, remedies and powers of a secured party under the UCC, including, without limitation, the right to sell at public or private sale or sales, or otherwise dispose of, lease or utilize the Collateral and any and all parts thereof in any manner permitted under the UCC after default by a debtor, and to apply the proceeds thereof toward payment of any costs and expenses thereby incurred by Mortgagee, and toward payment of the Debt, in such order and manner as Mortgagee may elect.







(C) Among the rights of Mortgagee following a default by Mortgagor hereunder, and without limitation thereto, Mortgagee shall have the right to take possession of the Collateral and to enter upon any premises where same may be situated for such purpose without being deemed guilty of trespass and without liability for damages thereby occasioned, and to take any action deemed necessary, appropriate or desirable by Mortgagee, to repair, refurbish or otherwise prepare the Collateral for sale, lease or other use or disposition as herein authorized.



(D) To the extent permitted by law, Mortgagor expressly waives any notice of sale or other disposition of the Collateral, and all other rights and remedies of a debtor or procedures or formalities prescribed by law relative to the sale or disposition of the Collateral or the exercise of any other right or remedy of Mortgagee existing after a default by Mortgagor hereunder.



(E) Mortgagee, upon a default by Mortgagor hereunder, is expressly granted the right, at its option, to transfer at any time to itself or to its nominee the Collateral, or any part or parts thereof, as Mortgagee may elect, and to receive the monies, income, proceeds and benefits attributable or accruing thereto, and to hold the same as security for the Debt or to apply it in payment of the Debt, in such order or manner as Mortgagee may elect.



(F) Should Mortgagee elect to exercise its rights under the provisions of this Section as to part of the Collateral, such election shall not preclude Mortgagee from exercising the rights and remedies granted by the other provisions of this Mortgage or by law as to the remaining Collateral.



(G) Mortgagee may, at its election, at any time after delivery of this Mortgage, use and file executed counterparts hereof as financing statements under the UCC.



(H) So long as any of the Debt remains unpaid, Mortgagor shall not execute and there shall not be filed in any public office any financing statement or statements affecting the Collateral other than financing statements in favor of Mortgagee hereunder.



(I) Financing statements have been executed by the parties simultaneously with the execution and delivery hereof, and are intended to be forthwith filed and recorded in all appropriate filing and recording offices. Mortgagee is authorized to file and record additional financing statements and continuations thereof in each jurisdiction where Mortgagee deems it necessary or desirable, and, at the request of Mortgagee, Mortgagor shall join Mortgagee in executing one or more additional financing statements in form satisfactory to Mortgagee, and will pay the cost of filing or recording such financing statements or executed counterparts of this Mortgage, as financing statements, in all public offices at any time and from time to time whenever such filing or recording is deemed by Mortgagee to be necessary or desirable. Mortgagor shall also pay the cost of filing or recording all such continuation statements deemed by Mortgagee to be necessary or desirable.







8. Insurance. (A) Mortgagor shall at all times keep the Mortgaged Property insured for the protection of Mortgagee against such risks, and with such coverages, as Mortgagee shall from time to time require, including without limitation, broad form, comprehensive fire and extended coverage insurance, with coverage for theft, vandalism and malicious mischief, for the full replacement value of the Improvements, and rent insurance with respect to the Rents payable for the one year period following the occurrence of a casualty. All insurance policies required by this paragraph shall contain: (i) a "New York" or "Massachusetts" form noncontributory mortgagee clause providing, among other things, that any payment occasioned by loss thereunder shall be payable to the holder of this Mortgage alone, and that Mortgagee shall not be subject to defenses otherwise available to the insurer against the insured thereunder, (ii) a waiver of subrogation as to Mortgagee's interest, (iii) a waiver of co-insurance as to Mortgagee, and (iv) if requested by Mortgagee from time to time, an "owner not in control" endorsement.



(B) Mortgagor shall at all times maintain comprehensive general public liability insurance, worker's compensation insurance and such other liability insurance incident to the ownership of the Mortgaged Property as Mortgagee may from time to time require. All insurance policies required by this paragraph shall, at Mortgagee's election, name Mortgagee as a co-insured party.



(C) If, at any time or from time to time, the Real Estate is located in a designated "flood prone" area pursuant to the Flood Disaster Protection Act of 1973, or any amendment or supplement thereto, then Mortgagor shall obtain flood insurance and shall take such other action as may be necessary to comply fully with the National Flood Insurance Program set forth in said Act. Mortgagor shall comply fully with the National Flood Insurance Act of 1968, as the same may be amended from time to time, and all other laws, orders, rules, ordinances and regulations concerning flood insurance, to the extent applicable to the Mortgaged Property.



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