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Exhibit 10.7
Document prepared by and
upon recordation to be
returned to:
Rex A. Palmer, Esq.
Mayer Brown LLP
71 South Wacker Drive
Chicago, Illinois 60606
OPEN-END FEE AND LEASEHOLD
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT
OF LEASES AND RENTS AND
FIXTURE FILING
executed on the dates set forth in the
acknowledgments hereto
and effective as of January 15, 2009
From
5100 NEVILLE ROAD, LLC,
a Delaware limited liability company, as Mortgagor
and
BRAD FOOTE GEAR WORKS, INC., an Illinois
corporation
formerly known as BFG Acquisition Corp., as Additional
Mortgagor
To
BANK OF AMERICA, N.A., as Mortgagee
THIS INSTRUMENT SECURES PRESENT AND FUTURE INDEBTEDNESS,
OBLIGATIONS AND ADVANCES UP TO A MAXIMUM PRINCIPAL AMOUNT OF
$72,000,000.
THIS INSTRUMENT IS ALSO A FINANCING STATEMENT FILED AS A FIXTURE
FILING PURSUANT TO 13 PA. C.S.A. § 9334 AND 13 PA. C.S.A.
§ 9501 OF THE PENNSYLVANIA UNIFORM COMMERCIAL CODE.
OPEN-END FEE AND LEASEHOLD
MORTGAGE, SECURITY AGREEMENT
AND FIXTURE FILING
OPEN-END FEE AND LEASEHOLD MORTGAGE, SECURITY AGREEMENT AND
FIXTURE FILING, executed on the dates set forth in the
acknowledgments hereto and effective as of January 15, 2009
(this " Mortgage "), made by 5100 NEVILLE ROAD, LLC, a
Delaware limited liability company (the " Mortgagor ") with
an address at 1309 South Cicero Avenue, Cicero, Illinois, 60650 and
BRAD FOOTE GEAR WORKS, INC, an Illinois corporation formerly known
as BFG Acquisition Corp. (the " Additional Mortgagor "),
with an address at 1309 South Cicero Avenue, Cicero, Illinois,
60650 to BANK OF AMERICA, N.A., a national banking association with
an address at One Federal Street, Boston, Massachusetts 02110 (the
" Mortgagee ").
Preliminary Statement
BFG Acquisition Corp. (now known as Brad Foote Gear
works, Inc.) and LaSalle Bank NI (now known as Bank of
America, N.A.) entered into a Loan and Security Agreement dated as
of January 17, 1997 (as heretofor amended, as amended by an
Omnibus Amendment Agreement of even date herewith and as hereafter
amended, modified and restated from time to time, the " Loan
Agreement "). Pursuant to the Loan Agreement the
Mortgagee has agreed to loan the Additional Mortgagor and its
affiliates(including the Mortgagor) up to the aggregate amount of
$36,974,322.98 pursuant to and subject to the terms of the
following promissory notes (as amended by an Omnibus Amendment
Agreement of even date herewith and as hereafter amended, modified
and restated from time to time collectively, the " Notes
"):
1.
$7,000,000 Revolving Line of Credit Note dated December 8,
2008 from the Additional Mortgagor to the order of Mortgagee (the "
Revolving Line of Credit Note ") due March 15,
2009.
2.
$11,000,000 Amended and Restated Equipment Line Note (Non-Revolving
Line With Conversion) dated November 10, 2006, from the
Additional Mortgagor to the order of Mortgagee (as modified by Note
Modification Agreement dated as of December 8, 2008, the
" Equipment Loan A Note ") which is payable in monthly
principal payments of $183,333.33 plus interest commencing
May 31, 2007 with a final payment due April 30, 2012.
3.
$9,000,000 Equipment Line Note (Non-Revolving Line With Conversion)
dated June 30, 2007, from the Additional Mortgagor to the
order of Mortgagee (as modified by Note Modification Agreement
dated as of December 8, 2008, the " Equipment Loan B
Note ") with monthly principal payments of $147,958.13 plus
interest commencing July 31, 2008 with a final payment due
June 30, 2013.
4.
$7,899,332.98 Consolidated Term Note dated February 1, 2006,
from the Additional Mortgagor to the order of Mortgagee (as
modified by Note Modification Agreement dated as of
December 8, 2008, the " Term Loan Note ") with monthly
principal payments of
$131,655.55 plus interest commencing February 28, 2006 with
a final payment due January 31, 2011.
5.
$2,075,000 Term Note dated January 31, 2008 from the Mortgagor
and 1309 South Cicero Avenue, LLC (collectively, the "
Subsidiaries ") to the order of Mortgagee (as modified by
Note Modification Agreement dated as of December 8, 2008, the
" Subsidiary Note ") payable in monthly principal payments
of $34,583.33 plus interest with a final payment due
January 31, 2013.
The Subsidiaries and the Additional Mortgagor heretofore or
hereafter may enter into interest rate, currency or commodity swap
agreements, cap agreements or collar agreements or other agreements
or arrangements designed to protect such Person against
fluctuations in interest rates, currency exchange rates or
commodity prices with the Mortgagee or its affiliates (as hereafter
amended, modified and restated from time to time collectively, the
" Hedging Agreements ") or receive treasury or cash
management services from the Mortgagee (the " Bank Services
").
Pursuant to the Loan Agreement the Mortgagor has executed and
delivered to the Mortgagee a Continuing Guaranty dated as of the
date hereof(the " Guaranty ") whereby the Mortgagor
guaranteed the obligations of the Additional Mortgagor under the
Loan Agreement, the Subsidiary Note, any Hedging Agreement and the
other Loan Documents or any Bank Services.
The Mortgagor is the record owner of the Land (defined
below).
It is a condition, among others, to the extension by the
Mortgagee of the term of the Revolving Line of Credit Note that the
Mortgagor shall have executed and delivered this Mortgage to the
Mortgagee.
NOW, THEREFORE, in consideration of the premises and to induce
the Mortgagee to amend the Loan Agreement and extend the term of
the loan evidenced by the Revolving Line of Credit Note, the
Mortgagor hereby agrees with the Mortgagee, as follows:
TO SECURE PAYMENT OF THE INDEBTEDNESS (DEFINED BELOW) INCLUDING
ALL THE AMOUNTS ADVANCED TO OR FOR THE BENEFIT OF THE MORTGAGOR
UNDER THE LOAN AGREEMENT AND THE SUBSIDIARY NOTE AND THE
OBLIGATIONS OF THE MORTGAGOR UNDER THE LOAN AGREEMENT AND THE OTHER
LOAN DOCUMENTS, THE GUARANTY, THE SUBSIDIARY NOTE AND THE OTHER
SUBSIDIARY LOAN DOCUMENTS, ALL HEDGING AGREEMENTS AND IN CONNECTION
WITH ANY BANK SERVICES THE MORTGAGOR HEREBY MORTGAGES, GRANTS,
ASSIGNS, TRANSFERS, WARRANTS AND SETS OVER TO THE MORTGAGEE, AND
GRANTS THE MORTGAGEE A SECURITY INTEREST IN:
(A) the
parcel(s) of real property described on Exhibit A
(the " Land "); all buildings, structures, Fixtures,
Equipment, and other improvements of every kind existing at any
time and from time to time on or under the Land, together with any
and all appurtenances to such buildings, structures or
improvements, including sidewalks, utility pipes, conduits and
lines, parking areas and roadways, and including all modifications,
alterations, renovations,
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improvements and other additions to or changes in the
Improvements at any time (" Improvements "); all agreements,
easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, hereditaments and other
rights and benefits at any time belonging or pertaining to the Land
or the Improvements, including, without limitation, the use of any
streets, ways, alleys, vaults or strips of land adjoining,
abutting, adjacent or contiguous to the Land and all permits,
licenses and rights, whether or not of record, appurtenant to the
Land (" Appurtenant Rights "; the Land, Improvements,
Appurtenant Rights, Fixtures and Equipment being collectively
referred to as the " Property ");
(B)
all the estate, right, title, claim or demand whatsoever of the
Mortgagor, in possession or expectancy, in and to the Property or
any part thereof;
(C)
all right, title and interest of the Mortgagor in and to all of the
fixtures, furnishings and fittings of every kind and nature
whatsoever, and all appurtenances and additions thereto and
substitutions or replacements thereof (together with, in each case,
attachments, components, parts and accessories) currently owned or
subsequently acquired by the Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in
connection with any operation or letting of the Property, (all of
the foregoing in this paragraph being referred to as the "
Fixtures ");
(D) all
right, title and interest of the Mortgagor in and to all of the
fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and all appurtenances and
additions thereto and substitutions or replacements thereof
(together with, in each case, attachments, components, parts and
accessories) currently owned or subsequently acquired by the
Mortgagor and now or subsequently attached to, or contained in the
Property, including but without limiting the generality of the
foregoing, all screens, awnings, shades, blinds, curtains,
draperies, artwork, carpets, rugs, storm doors and windows,
furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and
incinerating equipment, escalators, refrigerators, display cases,
elevators, loading and unloading equipment and systems, stoves,
ranges, laundry equipment, cleaning systems (including window
cleaning apparatus), telephones, communication systems (including
satellite dishes and antennae), televisions, computers, sprinkler
systems and other fire prevention and extinguishing apparatus and
materials, security systems, motors, engines, machinery, pipes,
pumps, tanks, conduits, appliances, fittings and fixtures of every
kind and description (all of the foregoing in this paragraph
being referred to as the " Equipment ");
(E)
all right, title and interest of the Mortgagor in and to all
substitutes and replacements of, and all additions and improvements
to, the Improvements and the Fixtures and Equipment, subsequently
acquired by the Mortgagor or constructed, assembled or placed by
the Mortgagor on the Land, immediately upon such acquisition,
release, construction, assembling or placement, including, without
limitation, any and all building materials whether stored at the
Property or offsite, and, in each such case, without any further
conveyance, mortgage, assignment or other act by the Mortgagor;
(F)
all right, title and interest of the Mortgagor in and to all
unearned premiums under insurance policies now or subsequently
obtained by the Mortgagee relating to the Property or the
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Fixtures and the Mortgagor’s interest in and to all
proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds:
and all awards and other compensation (" Condemnation Awards
"), including the interest payable thereon and the right to collect
and receive the same, made to the present or any subsequent owner
of the Property for the taking by eminent domain, condemnation or
otherwise, of all or any part of the Property or any easement or
other right therein;
(G)
all right, title and interest of the Mortgagor in and to all
consents, licenses, building permits, certificates of occupancy and
other governmental approvals relating to construction, completion,
occupancy, use or operation of the Property or any part
thereof;
(H) all
rights of the Mortgagor under all leases, licenses, occupancy
agreements, concessions or other arrangements, whether written or
oral, whether now existing or entered into at any time hereafter,
whereby any Person agrees to pay money to the Mortgagor or any
consideration for the use, possession or occupancy of, or any
estate in, the Land or any part thereof, and all rents, income,
profits, benefits, avails, advantages and claims against guarantors
under any thereof (all of the foregoing is herein referred to
collectively as the " Leases ");;
(I)
all rents, issues, profits, royalties, avails, income and other
benefits derived by the Mortgagor from the Land (all of the
foregoing is herein collectively called the " Rents ");
(J)
all Accounts, Chattel Paper, Deposit Accounts, Documents, General
Intangibles, Goods, Instruments, Inventory, Investment Property and
Securities Accounts (as each such term is defined in the Uniform
Commercial Code as in effect in the State of Illinois);
(K) all
proceeds, both cash and noncash, of the foregoing; and
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by the Mortgagor and
described in the foregoing clauses (A) through (I) are
collectively referred to as the " Mortgaged Property ");
provided , however , that notwithstanding anything
hereinabove to the contrary the maximum principal amount of the
Indebtedness secured hereby at any one time shall not exceed
$72,000,000, plus all costs of enforcement and collection of this
Mortgage, the Guaranty, the Subsidiary Note, the Loan Agreement and
the other Loan Documents, plus the total amount of any advances
made pursuant to the Loan Documents to protect the collateral and
the security interest and lien created hereby; together with
interest on all of the foregoing as provided in the Loan
Documents.
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby granted unto the Mortgagee, its successors and
assigns for the uses and purposes set forth, until all amounts owed
by and obligations of the Mortgagor to the Mortgagee under the Loan
Agreement, the Subsidiary Note, the Guaranty, the other Loan
Documents, the other Subsidiary Loan Documents and any Hedging
Agreements or in connection with any Bank Services (collectively,
the " Indebtedness ") are paid.
1.
Definitions . Capitalized terms used but not otherwise
defined in this Mortgage shall have the respective meanings
specified in the Loan Agreement .
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2.
Payment of Indebtedness . The Mortgagor shall pay the
Indebtedness in accordance with the terms of the Loan Agreement,
the Guaranty, the Subsidiary Note and each Hedging Agreement and
perform each term to be performed by it under the Loan Agreement,
the Guaranty, the Subsidiary Note, each Hedging Agreement and the
other Loan Documents and Subsidiary Loan Documents.
3.
Insurance . The Mortgagor will at all times maintain
or cause to be maintained on the Improvements and on all other
Mortgaged Property, all casualty insurance required at any time or
from time to time by the Loan Agreement. At the request of
the Mortgagee, Mortgagor shall deliver to and keep deposited with
the Mortgagee original certificates and copies of all such policies
of casualty insurance maintained on the Mortgaged Property and
renewals thereof, with premiums prepaid, and with standard
non-contributory mortgagee and loss payable clauses satisfactory to
the Mortgagee, and clauses providing for not less than 10
days’ prior written notice to the Mortgagee of cancellation
of such policies attached thereto in favor of the Mortgagee, its
successors and assigns. While no Event of Default has
occurred and is continuing any loss paid to the Mortgagee or
Mortgagor under any such policies may be applied by the Mortgagor
to rebuild or repair the damaged or destroyed Improvements or other
Mortgaged Property. The Mortgagor further agrees that, upon
the occurrence and during the continuance of an Event of Default,
any loss paid to the Mortgagee or Mortgagor under any of such
policies shall be applied, at the option of the Mortgagee, toward
pre-payment of the Indebtedness as provided in the Loan Agreement,
or to the rebuilding or repairing of the damaged or destroyed
Improvements or other Mortgaged Property, as the Mortgagee in its
sole and unreviewable discretion may elect. The Mortgagor hereby
empowers the Mortgagee, in its reasonably exercised discretion,
upon the occurrence and during the continuance of an Event of
Default, to settle, compromise and adjust any and all claims or
rights under any insurance policy maintained by the Mortgagor
relating to the Mortgaged Property. At all times other than
during the continuance of an Event of Default, the Mortgagor shall
have the exclusive right to settle, compromise, and adjust any and
all claims, rights, or proceeds under any insurance policy
maintained by the Mortgagor relating to the Mortgaged
Property. In the event of foreclosure of this Mortgage or
other transfer of title to the Land in extinguishment of the
indebtedness secured hereby, all right, title and interest of the
Mortgagor in and to any insurance policies then in force shall pass
to the purchaser or grantee. Nothing contained in this
Mortgage shall create any responsibility or obligation on the
Mortgagee to collect any amounts owing on any insurance policy or
resulting from any condemnation, to rebuild or replace any damaged
or destroyed Improvements or other Mortgaged Property or to perform
any other act hereunder. The Mortgagee shall not by the fact
of approving, disapproving, accepting, preventing, obtaining or
failing to obtain any insurance, incur any liability for or with
respect to the amount of insurance carried, the form or legal
sufficiency of insurance contracts, solvency of insurance
companies, or payment or defense of lawsuits, and the Mortgagor
hereby expressly assumes full responsibility therefor and all
liability, if any, with respect thereto.
4.
Eminent Domain . In case the Mortgaged Property, or
any part or interest in any thereof, is taken by condemnation, then
upon the occurrence and during the continuance of an Event of
Default, the Mortgagee is empowered to collect and receive all
Condemnation Awards which may be paid for any property taken or for
damages to any property not taken (all of which the Mortgagor
hereby assigns to the Mortgagee), and all Condemnation Awards so
received shall be forthwith applied by the Mortgagee, as it may
elect in its sole and unreviewable discretion, to
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the prepayment of the Indebtedness, or to the repair and
restoration of any property not so taken or damaged;
provided , however , as long as no Event of Default
has occurred and is continuing that any Condemnation Awards payable
by reason of the taking of less than all of the Mortgaged Property
shall be made available to the extent required, as determined by
the Mortgagee in its reasonable discretion, for the repair or
restoration of any Mortgaged Property not so taken. The
Mortgagor hereby empowers the Mortgagee, in the Mortgagee’s
reasonably exercised discretion, upon the occurrence and during the
continuance of an Event of Default to settle, compromise and adjust
any and all claims or rights arising under any condemnation or
eminent domain proceeding relating to the Mortgaged Property or any
portion thereof. At all times other than during the
continuance of an Event of Default, the Mortgagor shall have the
exclusive right to settle, compromise, and adjust any and all
claims, rights, or proceeds under any insurance policy maintained
by the Mortgagor relating to the Mortgaged Property.
5.
Assignment of Leases and Rent . All of the Mortgagor’s
interest in and rights under the Leases now existing or hereafter
entered into, and all of the Rents, whether now due, past due, or
to become due, and including all prepaid rents and security
deposits, and all other amounts due with respect to any of the
other Mortgaged Property, are hereby absolutely, presently and
unconditionally assigned and conveyed to the Mortgagee to be
applied by the Mortgagee in payment of all sums due with respect
to, the Indebtedness and all other sums payable under this
Mortgage. At all times other than during the continuance of
any Event of Default, the Mortgagor shall have a license to collect
and receive all Rents and other amounts, which license shall be
terminated at the sole option of the Mortgagee, without regard to
the adequacy of its security hereunder and without notice to or
demand upon the Mortgagor, upon the occurrence and during the
continuance of any Default. It is understood and agreed that
neither the foregoing assignment to the Mortgagee nor the exercise
by the Mortgagee of any of its rights or remedies under
Section 7 hereof shall be deemed to make the Mortgagee
a "mortgagee-in-possession" or otherwise responsible or liable in
any manner with respect to the Mortgaged Property or the use,
occupancy, enjoyment or any portion thereof, unless and until the
Mortgagee, in person or by agent, assumes actual possession
thereof. Nor shall appointment of a receiver for the
Mortgaged Property by any court at the request of the Mortgagee or
by a
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