PROMISSORY NOTE
$10,000,000.00 October 5, 2001
New York, New York
FOR VALUE RECEIVED, 325 SPRING STREET LLC, a Delaware limited
liability company, having offices in care of Savanna Partners, 80 Fifth
Avenue, New York, New York 10010 ("Borrower"), hereby promises to pay to
IMCLONE SYSTEMS INCORPORATED, a Delaware corporation, having an address at 180
Varick Street, New York, New York 10014, and its successors and assigns
("Lender"), the principal sum of TEN MILLION DOLLARS ($10,000,000.00) (the
"Principal Sum"), in lawful money of the United States of America, together
with interest on said Principal Sum, or so much thereof as shall be
outstanding hereunder from time to lime, to be computed from the date hereof
at the rates and in the amounts hereinafter set forth. The Principal Sum shall
be reduced by any payments in reduction of principal made by the Borrower from
time to time.
Borrower hereby covenants with Lender as follows:
1. Interest Rate. Borrower shall pay to Lender, monthly in arrears, base
interest on the Principal Sum calculated on the basis of a year of 365 days
and the actual number of days elapsed (a) from the date hereof through and
until the Maturity Date (as hereinafter defined) at the Interest Rate (as
hereinafter defined) and (b) from and after the Maturity Date and until the
Principal Sum has been paid in full, at the Default Rate (as hereinafter
defined).
As used in this Note, the following terms shall have the meanings
provided for below:
"Business Day" shall mean any day other than a day on which banking
institutions in New York are authorized or obligated by law or executive order
to close.
"Default Rate" shall mean the lesser of (i) five (5%) percent per
annum over the Interest Rate and (ii) the maximum lawful non-usurious contract
rate of interest allowed by applicable law.
"Effective Date" shall mean the Commencement Date as defined in the
Sublease (as hereinafter defined).
"Interest Rate" shall mean a fixed rate of interest equal to (a) 5.5%
per annum, for the period commencing on the Effective Date through and
including the day immediately preceding the fifth (5th) anniversary of the
Effective Date, (b) 6.5% per annum, for the period commencing on the fifth
(5th) anniversary of the Effective Date through and including the day
immediately preceding the tenth (10th) anniversary of the Effective Date, (c)
7.5% per annum, for the period commencing on the tenth (10th) anniversary of
the Effective Date through and including the day immediately preceding the
fifteenth (15th) anniversary of the Effective Date and (d) 8.5% per annum, for
the period commencing on the fifteenth (15th) anniversary of the Effective
Date through and including the Maturity Date.
"Payment Date" shall have the meaning ascribed thereto in Section 3.1
below.
2. Maturity Date. The entire unpaid balance of the Principal Sum,
together with all interest accrued and unpaid thereon shall be due and payable
in full on the day immediately preceding the twentieth (20th) anniversary of
the Effective Date (which date, or such earlier date to which the maturity of
this Note is accelerated, shall be referred to as the "Maturity Date");
provided, however, that mandatory prepayment of all or a portion of this Note
may be required under certain circumstances as provided herein; and provided,
further, that upon the occurrence of an Event of Default (as hereinafter
defined), at the option of Lender, the entire unpaid balance of the Principal
Sum, together with all interest accrued and unpaid thereon shall become
immediately due and payable.
3. Interest and Principal Payments. The Principal Sum and interest
thereon shall be paid by Borrower to Lender in accordance with the further
provisions of this Section 3.
3.1 On the first day of the month immediately following the
Effective Date of this Note, and on the first day of each of the succeeding
months thereafter to and including the Maturity Date (each, a "Payment Date"),
Borrower shall pay to Lender the monthly payments on account of principal and
interest more particularly described on Exhibit A annexed hereto and made a
part hereof.
3.2 On the Maturity Date, Borrower shall pay to Lender the
entire unpaid balance of the Principal Sum, together with all accrued and
unpaid interest thereon and all other amounts due hereunder.
3.3 All sums payable hereunder shall be payable in lawful money
of the United States of America at Lender's address listed above, or, upon
receipt of notification by Borrower, at such other place designated in writing
by Lender. If the date on which any payment is required to be made hereunder
is not a Business Day, then such date for payment shall be extended to the
next succeeding Business Day.
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4. Event of Default: Acceleration by Lender.
4.1 The occurrence of any one of the following events shall
constitute an event of default (each an "Event of Default") by Borrower under
this Note:
(i) if Borrower defaults, and such default
remains uncured for five (5) days after notice from Lender, with respect to
(i) any repayment of the principal amount of his/its obligations hereunder
when due and payable, whether at stated maturity, upon acceleration or
otherwise, or (ii) the payment of any interest hereunder when due and payable
or declared due and payable, unless such default is caused solely by the
failure of the Lock Box Bank (as such term is defined in the Sublease as
defined in Section 13.4 hereof) from making payment to Lender and not by any
fault, acts or omissions of Borrower;
(ii) if a petition under any section or chapter
of the United States Bankruptcy Code or any similar law or regulation is filed
by the Borrower or if Borrower shall make an assignment for the benefit of its
creditors;
(iii) if Borrower is enjoined, restrained or in
any way prevented by court order from conducting all or any material part of
his business affairs or if a petition under any section or chapter of the
United States Bankruptcy Code or any similar law or regulation is filed
against the Borrower and such injunction, restraint or petition is not
dismissed or stayed within sixty (60) days after entry or filing thereof;
(iv) if application is made by Borrower for the
appointment of a receiver, trustee or custodian for any of Borrower's assets;
or
(v) if an application is made by any person
other than Borrower for the appointment of a receiver, trustee or custodian
for any of such Obligor's assets and such application is not dismissed within
sixty (60) days after the application therefore;
(vi) the dissolution of Borrower;
(vii) if Borrower defaults beyond the expiration
of applicable notice and cure periods with respect to any of its obligations
under the Leasehold Mortgage (as herein defined).
4.2 Upon the occurrence and during the continuation of any Event
of Default, Lender, by written notice to Borrower, may declare the entire
unpaid principal amount of this Note, the interest accrued thereon, and all
obligations of Borrower hereunder to be immediately due and payable; and the
entire unpaid principal amount owed hereunder, all interest accrued thereon,
and all other obligations of the undersigned to the holder hereof shall
automatically become immediately due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived.
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5. Prepayment by Borrower. The outstanding Principal Sum may be prepaid,
in whole or in part, at any time, without the prior consent of Lender, without
premium or penalty of any kind, upon not less than five (5) days prior written
notice to Lender, with all accrued interest to the date of prepayment. Any
prepayment shall be applied first to any interest accrued and outstanding
hereunder and then to the outstanding Principal Sum. Notwithstanding the
foregoing to the contrary, there shall be no adjustment in the due date or in
the amount of the monthly payments on account of principal and interest
described on Exhibit A due hereunder as a result of such prepayment.
6. Default Rate Interest/Late Charge
6.1 Upon the occurrence of any Event of Default hereunder, and
after maturity (whether by acceleration or otherwise), whichever shall occur
earlier, interest on the Principal Sum, all overdue interest and all other
sums payable hereunder shall be at the Default Rate, which Default Rate shall
apply from the date of the occurrence of such Event of Default or the maturity
of this Note, as the case may be, until the indefeasible repayment of all
amounts outstanding hereunder, including without limitation overdue interest,
fees, costs and all other sums payable hereunder, it being the intention of
Lender and Borrower that the Default Rate will apply from the time of an Event
of Default or maturity, as the case may be, occurs until Lender is so
indefeasibly repaid in full, and shall include without limitation the period
commencing on the date a judgment with respect to this Note is entered through
and including the time of satisfaction of such judgment. Borrower hereby
knowingly, intelligently and after consultation with Borrower's counsel waives
the benefits of all applicable statutes providing for an interest rate hereon
other than as set forth herein. Interest at the Default Rate shall be paid
immediately upon demand, which demand may be made as frequently as Lender
shall elect.
6.2 If any payment due hereunder is not paid within ten (10)
days after the date when due, Borrower shall pay to Lender a late charge of
four percent (4%) of the amount so overdue in order to defray part of the
expense incident to handling such delinquent payment. Such late charge shall
be immediately due and payable without notice or demand by Lender. Borrower
recognizes that its default in making, when due, any payment under this Note
will require Lender to incur additional expense in servicing and administering
this Note and a loss to Lender of the use of the money due and in frustration
to Lender in meeting its other financial and loan commitments. Borrower
additionally acknowledges that the damages caused thereby would be extremely
difficult and impractical to ascertain. Borrower agrees (i) that an amount
equal to the late charge plus the accrual of interest at the Default Rate is a
reasonable estimate of the damage to Lender in the event of a late payment,
and (ii) that the accrual of interest at the Default Rate following any other
Event of Default is a reasonable estimate of the damage to Lender in the event
of such other Event of Default, regardless of whether there has been an
acceleration of this Note.
7. Borrower's Waivers. Borrower, for itself and its successors and
assigns, hereby waives presentment for payment, demand, notice of dishonor,
protest, notice of
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protest and any other notice Borrower may lawfully waive and any and all lack
of diligence or delays in the collection or enforcement hereof, and waives and
renounces all rights to the benefits of any statute of limitations and any
moratorium, appraisal, exemption and homestead rights now provided or which
may hereafter be provided by any federal or state statute, including, but not
limited to, exemptions provided or allowed under the Bankruptcy Reform Act of
1978, as amended (the "Bankruptcy Code"), both as to itself and as to all of
its property, whether real or personal, against the enforcement and collection
of the obligations evidenced by this Note and any and all extensions, renewals
and modifications hereof. Borrower consents to any extension of time of payment
hereof, release of all or any part of the security for the payment of this
obligation, and release of any party liable for payment of this obligation, by
Lender, from time to time, and any such extension or release may be made
without notice to any party and without discharging any party's liability
hereunder.
8. No Waiver by Lender. The liability, of Borrower hereunder shall be
unconditional and shall not be in any manner effected by any indulgence
whatsoever granted or consented to by the holder hereof, including but not
limited to any extension of time, renewal, waiver or other modification. No
failure on the part of Lender to exercise, and no delay in exercising, and no
course of dealing with respect to, any right, power or privilege under this
Note shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Note preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. Upon the occurrence of any Event of Default, the Lender may proceed
to protect and enforce its rights hereunder by suit in equity, action at law
or by other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Note, or may proceed to enforce
the payment of this Note, or to enforce any other legal or equitable right of
the Lender hereunder. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
9. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH WAIVES, AND
COVENANTS THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT (OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY N ANY FORUM N RESPECT OF ANY ACTION
BROUGHT ON, UNDER OR BY VIRTUE OF THIS NOTE OR IN ANY WAY CONNECTED WITH THIS
NOTE.
10. Governing Law; Severability. The provisions of this Note shall be
governed by and interpreted in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
State. The invalidity, illegality or unenforceability of any provision of this
Note shall not affect or impair the validity, legality or enforceability of
the remainder of this Note, and to this end, the provisions of this Note are
declared to be severable.
11. Notices. Any notice, request, demand, consent, approval or other
communication which Borrower or Lender is obligated or may elect to give
hereunder, shall be in writing, and shall be deemed to have been duly given
(a) three (3) days after being deposited in the United States mail, postage
prepaid, if sent by registered or certified mail
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(return receipt requested), (b) when delivered, if delivered personally, and (c)
on the following Business Day, if sent by prepaid overnight mail or prepaid
overnight courier, in each case, to the parties at the following addresses or
facsimile numbers, as applicable:
(a) If to Lender, at:
ImClone Systems Incorporated
180 Varick Street
New York, New York 10014
Attention: John B. Landes, General Counsel
with a copy to:
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
Attention: Laurie F. Golub, Esq.
(b) If to Borrower, at:
325 Spring Street LLC
c/o Savanna Partners
80 Fifth Avenue
New York, New York 10010
Attention: Christopher Schlank
with a copy to:
Solomon and Weinberg LLP
685 Third Avenue
New York, New York 10017
Attention: Jay Stark, Esq.
or at such other address or facsimile number as may be substituted by notice
given as herein provided.
12. Successors and Assigns. The rights, duties and obligations of
Borrower under this Note may not be assigned without the prior written consent
of the Lender. Notwithstanding the foregoing to the contrary, so long as all or
any portion of the Note remains outstanding, Borrower shall not assign its
rights, obligations and liabilities under this Note without the prior written
consent of Lender, which consent shall not be unreasonably withheld, delayed or
conditioned, and which consent shall be (a) granted, provided that Borrower is
assigning all of its interest in the Sublease (as defined herein in Article
13.4) to the proposed assignee, and such proposed assignee at the time of such
assignment, (i) has a
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net worth at least equal to the net worth of Borrower on the date hereof, (ii)
has a reasonably good reputation and character, and (iii) is a "single-purpose"
(but not necessarily "bankruptcy remote") entity, and (b) deemed granted if not
given or denied within ten (10) days after Borrower's request therefore. The
rights, duties and obligations of the Lender under this Note may be assigned
without the prior written consent of the Borrower, provided Lender, in
accordance with the terms of the Sublease, assigns all of its interest in the
Sublease (as defined in Section 13.4 herein) to the proposed assignee. The
provisions of this Note shall bind Borrower and its successors and assigns and
inure to the benefit of Lender and its successors and assigns.
13. Miscellaneous.
13.1 This Note may not be changed, amended, modified or
discharged orally, but only by a written instrument signed by Borrower and
Lender, and may be waived only by an instrument in writing signed by the party
waiving compliance.
13.2 Borrower hereby agrees to pay to Lender, on demand, all
reasonable costs and expenses of Lender incurred by or on behalf of Lender (a)
in connection with the enforcement and collection hereof, whether or not any
suit is brought on this Note, and (b) in the maintenance of the liens granted
Lender, in both cases, including without limitation reasonable attorneys' fees,
expenses and costs incurred by or on behalf of Lender in connection with (w) any
litigation or proceeding affecting this Note (including probate, appellate, and
bankruptcy proceedings), (x) any post-judgment proceedings to collect or enforce
any judgment or other relating to this Note, or (z) in preparation for the
commencement or defense of any action or proceeding. All such costs and expenses
shall be immediately due and payable to Lender, upon demand, with interest
thereon at the Default Rate from the date incurred by and on behalf of Lender.
This provision is separate and several and shall survive, the merger of this
provision into any judgment.
13.3 Anything in this Note to the contrary notwithstanding, in
no event shall Borrower be obligated to make any payment of interest or late
charges, and in no event shall Lender be entitled to receive payment of any such
interest or charges, if and to the extent that such payment would violate any
usury laws of the State of New York applicable to this Note. If payment of any
such interest or charges in made by Borrower and received by Lender and such
payment is in violation of such usury laws, the portion of such payment which
exceeds the maximum allowable by or under such usury laws shall not be or be
deemed to be interest or late charges, but shall be applied in reduction of the
Principal Sum.
13.4 Reference is made to that certain Sublease, dated as of
October __, 2001, by and between Borrower, as Sublandlord, and Lender, as
Subtenant (the "Sublease"). Lender acknowledges and agrees that payments by
Lender to Borrower of Fixed Rent and additional rent (as such terms are defined
in the Sublease) under the Sublease are to be used, in part, by Borrower to make
payments to Lender of principal and interest payable to Lender
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under this Note. Accordingly, anything in this Note to the contrary
notwithstanding, provided Borrower is not in default (beyond the expiration of
applicable notice and cure periods) of its obligations, as Sublandlord, under
the Sublease (a) in the event Lender, as Subtenant, defaults in its obligation
to pay Fixed Rent and/or additional rent under the Sublease when due, Borrower
shall not be liable to pay the monthly payment payable to Lender under this Note
for the applicable month until such time as such default is cured, and (b) in
the event the Sublease is terminated for any reason whatsoever except for a
default thereunder or hereunder by Borrower, as Sublandlord or Borrower,
respectively, no further payments shall be payable by Borrower to Lender under
this Note and Borrower shall be deemed to have fulfilled its obligations to pay
to Lender the entire unpaid balance of the Principal Sum, together with all
interest accrued and unpaid thereon provided Borrower is not otherwise in
default hereunder.
13.5 Provided that no Event of Default has occurred, Lender
shall not modify Schedule I to the lockbox arrangement without the written
consent of Borrower. Lender and Borrower agree that~ upon receipt of revised
bills for amounts due under Paragraphs 3(b) and 3(h) of the Overlease (as
defined in the Sublease) Lender and Borrower shall promptly revise Schedule I to
the lockbox arrangement in accordance therewith.
14. Security. This Note is secured by that certain Leasehold
Mortgage (the "Leasehold Mortgage") of even date herewith on the premises
demised pursuant to the Sublease which are located in the Borough of Manhattan,
City of New York, State of New York, and known as 325 Spring Street, New York
New York, as more particularly described in the Sublease (the "Subleased
Premises").
15. CONSENT TO JURISDICTION; PROCESS. BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN
NEW YORK COUNTY OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS NOTE. LENDER MAY IN ITS SOLE DISCRETION, ELECT THE STATE OF NEW YORK,
NEW YORK COUNTY, OR THE UNITED STATES OF AMERICA, FEDERAL DISTRICT COURT HAV1NG
JURISDICTION OVER NEW YORK COUNTY, AS THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO SUCH VENUE AS BEING AN
INCONVENIENT FORUM. IN ANY SUIT, ACTION OR PROCEEDING AGAINST BORROWER, SERVICE
OF PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH IN SECTION 11 HEREOF. NOTHING IN THIS SECTION SHALL AFFECT
LENDER'S RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW, OR LIMIT
LENDER'S RIGHT TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
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16. Non-Recourse. Lender's recovery against Borrower hereunder shall
be limited solely to the assets and property of Borrower from time except as
provided herein. Notwithstanding anything to the contrary contained in this
Note or the Leasehold Mortgage, except as provided otherwise in this Section
16, neither Borrower nor any direct or indirect member, shareholder, partner,
principal, affiliate, employee, officer, director, agent or representative of
Borrower (each, a "Related Party") shall have any personal liability for (i) the
payment of any sum of money which is or may be payable hereunder or under the
Note, including, but not limited to, the repayment of the Principal Sum, or (ii)
the performance or discharge of any covenants, obligations or undertakings of
Borrower hereunder, and no monetary or deficiency judgment shall be sought or
enforced against Borrower or any Related Party with respect thereto; provided,
however, that a judgment may be sought against Borrower or any Related Party to
enforce the rights of Lender, and Lender shall have full recourse to and the
right to proceed against the Borrower, the Sublease, including the rents and
other sums payable under the Sublease, and any other collateral given in
connection herewith. Notwithstanding the foregoing, nothing contained herein
shall impair the validity of the obligations hereunder or in any way affect or
impair the lien of the Leasehold Mortgage, or the right of Lender to enforce any
and all rights and remedies under and by virtue of the Note (limited, however,
as expressly provided otherwise above), including, without limitation, naming
Borrower as a party defendant in any foreclosure action. Additionally, the
provisions of this Section 16 shall not relieve Borrower from any personal
liability for, and Borrower shall be fully and personally liable for, (i) the
full recourse obligation to pay the amount due under this Note upon the
occurrence of any event set forth in the following clauses, and (ii) any
liabilities, costs, losses, damages, expenses (including, without limitation,
reasonable attorneys' fees and disbursements and court costs, if any), or claims
suffered or incurred by Lender by reason of or in connection with the occurrence
of any event set forth in any of the following clauses: (A) any fraud by
Borrower or any Related Party; (B) the intentional misapplication of any
insurance proceeds, condemnation awards or proceeds of eminent domain
proceedings, or other amounts or funds due to Lender under this Note; (C) the
intentional misapplication by Borrower or any Related Party (or at any such
person's direction) of monies held in or paid out from any account (including
any reserve, lock-box or escrow) maintained under this Note or in connection
herewith; (D)(1) Borrower filing a voluntary petition under the Bankruptcy Code
or any other federal or state bankruptcy or insolvency law, or (2) any Related
Party commencing, filing, soliciting, participating in or joining in the filing
of, an involuntary petition against Borrower under the Bankruptcy Code or any
other federal or state bankruptcy or insolvency law, or (3) Borrower filing an
answer consenting to or acquiescing in (actual as distinguished from implied or
constructive consent) any involuntary petition filed against it or against
Borrower by any other person under the Bankruptcy Code or any other federal or
state bankruptcy or insolvency law, or (4) Borrower making an assignment for the
benefit of creditors, or admitting its insolvency or inability to pay its debts
as they become due. Nothing contained herein is intended to limit the
obligations and personal liability of the guarantors under any guaranty,
executed by Borrower or any other Person for the benefit of Lender.
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17. Limitation on Liability. In no event shall Lender be liable to
Borrower for consequential damages, whatever the nature of a breach by Lender of
its obligations under this Note, the Leasehold Mortgage or any other documents
between Lender and Borrower (except as may be specifically provided for in the
Sublease), and Borrower, for itself and all Related Parties, hereby waives all
claims for consequential damages.
18. Authority. Borrower represents that the execution, delivery and
performance of this Note and the Leasehold Mortgage (a) has been duly
authorized, (b) does not conflict with any provisions of any instrument to which
Borrower is a party or by which Borrower is bound, and (c) constitutes a valid,
legal and binding obligation of Borrower, and (d) by the person executing the
Note and Leasehold Mortgage on behalf of Borrower has been duly authorized to
execute in the name of the Borrower.
IN WITNESS WHEREOF, Borrower has executed and delivered this
Note as of the day and year first set forth above.
325 SPRING STREET LLC,
a Delaware limited liability company
By: 325 Savanna LLC, its managing member
By: /s/ CHRISTOPHER SCHLANK
-------------------------------------
Name: Christopher Schlank
Title: Member
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ACKNOWLEDGMENT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On the 5 day of October, in the year 2001, before me, the
undersigned, a Notary Public in and for said State, personally
appeared Nicholas Bienstock, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.
/s/ MINDY SIMON
-------------------------------
Notary Public
MINDY R. SIMON
Notary Public, State of New York
No. 48-4989162
Qualified in Richmond County
Commission Expires 6/22/03
EXHIBIT A
IMCLONE SYSTEMS, INC.
NOTE SCHEDULE
PRINCIPAL AND INTEREST PAYMENTS
Promissory Note - Savanna Partners and ImClone Systems Inc.
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