Exhibit 10.23
MORTGAGE AND SECURITY
AGREEMENT
KNOW ALL MEN BY
THESE PRESENTS, that FLOTATION TECHNOLOGIES, INC., a Maine
corporation having a mailing address of 20 Morin Street, Biddeford,
Maine 04005, (the "Grantor"), in consideration of One Dollar
($1.00) and other valuable consideration paid by TD BANK, N.A. a
corporation organized under the laws of the United States of
America with a place of business at One Portland Square, Portland,
Maine, and a mailing address of P.O. Box 9540, Portland, Maine
04112-9540 (the "Grantee"), the receipt whereof is hereby
acknowledged, does hereby give, grant, bargain, sell and convey
unto TD BANK, N.A., its successors and assigns, forever, to secure
the Obligations as defined below, the following described
Premises:
Premises situated at or near 20 Morin Street, in
the City of Biddeford, County of York and State of Maine, more
particularly described in Schedule A attached hereto with
all buildings and improvements now or hereafter situated thereon
and all easements and rights appurtenant thereto, together with all
building materials and supplies and all other tangible personal
property intended for use in construction of buildings and other
improvements on the Premises, now and hereafter owned by the
Grantor and now affixed and to be affixed, or now and hereafter
located upon the Premises, together with all of Grantor's right,
title and interest under any contracts or agreements relating in
any way to the construction of any improvements on the Premises or
the marketing and/or sale of any portion of the Premises, including
without limitation all construction contracts and subcontracts,
design contracts, brokerage listing contracts, and all other
contracts and agreements between Grantor and any of Grantor's
general contractors, subcontractors, architects, engineers,
brokers, consultants, material providers or other parties providing
any goods or services in any connection with construction upon all
or any portion of the Premises, together with all plans,
specifications, drawings, surveys, engineering and all other site
reports, studies, assessments and marketing materials related to
the Premises, or to any portion thereof, and all governmental
permits, licenses, orders and approvals of whatever nature, related
in any way to all or any portion of the Premises, whether received
by Grantor or applied for and not yet received or not yet applied
for, together with all profits, proceeds, payments, sums of money
and accounts, including without limitation, earnest money deposits,
accounts receivable, contract rights, intangibles, notes, drafts,
acceptances, and all other evidences of receivables, and all rights
of Grantor now or hereafter acquired or earned by Grantor under
contracts for the sale of any interests in any real estate forming
all or any portion of the Premises, together with all contracts,
agreements, contract rights and general intangibles related thereto
now or hereafter acquired by Grantor as aforesaid provided that
nothing contained herein shall obligate Grantee to perform any
obligations of Grantor under such contracts, agreements, permits,
licenses, orders or approvals, all of which the Grantor hereby
agrees to perform well and punctually.
The Grantor
also conveys and grants hereby to the Grantee the following
articles of personal property now or hereafter situated on or
within the Premises, buildings and improvements, or used in
connection therewith: All plumbing, heating, lighting,
refrigerating, ventilating and air conditioning apparatus and
equipment, garbage incinerators and receptacles, elevators and
elevator machinery, boilers, tanks, motors, sprinkler and fire
extinguishing systems, door bell and alarm systems, screens,
awnings, screen doors, storm and other detachable windows and
doors, mantels, built-in cases, counters, and all other equipment,
machinery, furniture and furnishings, fixtures and articles of
personal property now or hereafter owned by Grantor and now or
hereafter affixed to, placed upon or used in connection with the
operation of said real estate, buildings and improvements, for
business and commercial purposes generally, and all other purposes,
together with cash proceeds and non-cash proceeds of all of the
foregoing, all of which are covered by this mortgage, whether or
not such property is subject to prior conditional sales agreements,
leases, chattel mortgages or other liens.
The said real
estate, buildings, improvements and the foregoing equipment,
machinery, furniture, furnishings, fixtures and personal property
are hereinafter referred to collectively as the
"Premises". This Mortgage and Security Agreement as it
may be affected by any amendments, subordinations, partial releases
or supplemental mortgages hereafter executed by or accepted by
Grantee is hereinafter referred to as the "Mortgage".
As further
security for payment of the Obligations, Grantor hereby grants,
transfers, sets over, conveys and assigns to Grantee:
a. All
conditional sales agreements, leases and use agreements of
machinery, equipment and other personal property of Grantor in the
categories hereinabove set forth under which Grantor is the
purchaser or lessee of, or entitled to use, such items, and Grantor
agrees to execute and deliver to Grantee specific separate
assignments thereof to Grantee upon terms satisfactory to Grantee,
when requested by Grantee; and nothing herein shall obligate
Grantee to perform any obligations of Grantor under such leases or
agreements, unless it so chooses, which obligations Grantor hereby
covenants and agrees to perform well and punctually. If
the lien of this Mortgage on any fixtures or personal property be
subject to a conditional sales agreement or chattel mortgage or
lease covering such property, then all the right, title and
interest of the Grantor in and to any and all deposits made thereon
or therefor are hereby assigned to Grantee, together with the
benefit of any payments now or hereafter made thereon.
b. All leases
and tenancies of the Premises and all Grantor's rights and
interests as the lessor or landlord under any and all written or
oral such leases and tenancies, whether such leases or tenancies
now exist or are hereafter created, including rents, profits,
revenues, royalties, bonuses, rights and benefits under any and all
leases or tenancies now existing or hereafter created of the
Premises or any part thereof, with the right to receive and apply
the same to said indebtedness, and Grantee may demand, sue for and
recover such payments, but shall not be required to do so;
provided, however, that so long as Grantor is not in default
hereunder, the right to receive and retain such rents, issues and
profits is reserved to Grantor. To carry out the
foregoing, Grantor agrees (1) to execute and deliver to Grantee
such conditional assignments of leases and rents applicable to the
mortgaged Premises as the Grantee may from time to time request,
while this mortgage and the debt secured hereby are outstanding,
which assignments shall be upon terms satisfactory to Grantee, and
further (2) not to anticipate or collect any of the rentals or
income under any such leases or tenancies more than thirty (30)
days in advance of the time the same shall become due, and not to
cancel, accept a surrender of, reduce any rentals under, or modify
any such leases or tenancies, or consent to an assignment or
subletting thereof, in whole or in part, without Grantee's prior
written consent. Nothing herein shall obligate the
Grantee to perform the duties of the Grantor as landlord or lessor
under any such leases or tenancies, which duties Grantor hereby
covenants and agrees to perform well and punctually.
c. All
judgments, awards of damages and settlements hereafter made as a
result or in lieu of any taking of the Premises or any interest
thereon or part thereof under the power of eminent domain, or for
any damage (whether caused by such taking, any casualty or
otherwise) to the Premises or the improvements thereon or any part
thereof, including any award for change of grade of
streets. Grantee may apply all such sums or any part
thereof so received on the indebtedness secured hereby in such
manner as it elects or, at its option, the entire amount or any
part thereof so received may be released. Grantor hereby
irrevocably authorizes and appoints Grantee its attorney-in-fact to
collect and receive any such judgments, awards and settlements from
the authorities or entities making the same, to appear in any
proceeding therefor, to give receipts and acquittances therefor,
and to apply the same to payment on account of the Obligations
secured hereby, whether then matured or not; and the Grantor will
execute and deliver to the Grantee on demand such assignments and
other instruments as the Grantee may require for said purposes and
will reimburse the Grantee for its cost (including reasonable
counsel fees) in the collection of such judgments and
settlements.
d. All fees,
charges, accounts or other payment for the use or occupancy of
rooms and other public facilities in hotels, motels or other
lodging facilities.
Receipt of
rents, awards, and any other moneys or evidences thereof, pursuant
to the provisions of the foregoing paragraphs a., b., c., or d., or
pursuant to any other terms or provisions of this Mortgage, and any
disposition of the same by Grantee shall not constitute a waiver of
the right of foreclosure by Grantee in the event of default or
failure of performance by Grantor hereunder, whether such receipt
or disposition shall occur before or after the commencement of such
foreclosure.
TO HAVE AND TO
HOLD all the aforegranted and bargained Premises, property, leases,
tenancies, rents and property income, contract rights, other
rights, awards, intangibles, and other personal property, with all
the privileges and rights appurtenant thereto (hereinafter referred
to collectively as the "Security"), to Grantee, its successors and
assigns, to its and their use and behoof forever; PROVIDED
NEVERTHELESS, that if Grantor pays to Grantee and fully performs
all of the Obligations, in accordance with all the terms and
conditions of this Mortgage and the Loan Documents, then this
Mortgage, shall be void, but otherwise shall remain in full
force.
The term
"Obligations" shall mean any and all liabilities, obligations, and
indebtedness of Grantor to Grantee presently existing or hereafter
arising, and whether evidenced by a writing or not and including,
without limitation, obligations to pay principal, interest, costs,
fees, or other charges, all obligations of Grantor to Grantee, if
any, as guarantor, endorser, accommodation party or surety for the
obligations of any Principal Debtor (described below), to Grantee,
and any and all other obligations of performance or forbearance,
all as required or regulated by applicable Loan
Documents. The term "Loan Documents" shall mean this
Mortgage and any other instrument, document or agreement
evidencing, securing, or governing the Obligations, whether now
existing or hereafter arising, including without limitation, the
documents listed below, as each such document may be amended,
extended, renewed or replaced by a written instrument executed by
the applicable parties:
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Commercial Note
from Grantor to Grantee dated February 13, 2009, in the original
principal amount of $2,160,000.00.
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The term Loan
Documents shall also include, without limitation, any promissory
note, line of credit agreement, guaranty, letter of credit
reimbursement agreement or other document, executed by Grantor
either on or about the date hereof or in the future which states
that it is or is intended to be secured by this Mortgage, including
those to be secured as a future obligation pursuant to paragraph 8
below.
Grantor
covenants and agrees with Grantee as follows:
1.
Estate of Grantor; Warranty Covenant. Grantor is
lawfully seized of an indefeasible estate in fee simple in the
Premises, free from encumbrances, except as may specifically be
noted herein, or in Schedule A attached hereto, and Grantor has
good right and power, and is duly authorized, to convey the
Security to Grantee to hold as aforesaid. Grantor shall
and will Warrant and Defend the Security to Grantee forever against
the claims and demands of all persons, except as
aforesaid.
2.
Payment of Secured Amounts. Grantor shall pay
all sums secured hereby when due and shall perform all Obligations
as required by the applicable Loan Documents.
3.
Payment of Encumbrances on the Security. Grantor
shall pay, when due, all taxes and assessments of every type or
nature, and any claim, lien or encumbrance which may be or may
become prior to this Mortgage, made, placed, levied or assessed
against the Security, or any portion thereof.
4.
Insurance. Grantor shall keep the Premises
insured against loss or damage by fire, the perils against which
insurance is afforded by the Extended Coverage Endorsement, and
such other risks and perils as Grantee in its discretion may
require from time to time, including, without limitation, insurance
against flood damage and business interruption. The
policy or policies of such insurance shall be in such form, shall
contain such terms and provisions, and shall be in such amounts as
Grantee may require, shall be issued by a company or companies
approved by Grantee, and shall name Grantee as mortgagee with loss
payable to Grantee, and shall, at the request of Grantee, provide
for payment of the full replacement value of the Premises in lieu
of a specified sum, which replacement value insurance shall be in
an amount at all times sufficient to keep Grantor from becoming a
co-insurer, which may be evidenced by any agreed amount or similar
affirmative statement from any insurer. Such policy or
policies of insurance shall be delivered to Grantee by
Grantor. Grantor shall also maintain comprehensive
general public liability insurance for personal injury and property
damage, with contractual liability endorsement, in such amounts as
Grantee may reasonably require from time to time; Grantor shall
deliver the policies providing such public liability insurance for
personal injury and property damage to the Grantee to be held by
the Grantee, except that certificates of insurance, addressed to
the Grantee, satisfactory in form and content to Grantee,
evidencing such public liability insurance for personal injury and
property damage may be delivered to the Grantee in lieu of the
policies therefor, provided that a copy of the underlying policy is
also delivered to the Grantee; the policies for such public
liability, personal injury and property damage insurance shall name
Grantee as an additional insured and shall be carried with such
companies and shall contain such other terms and conditions as
shall be satisfactory to Grantee, including an obligation upon any
such insurer to notify Grantee of any cancellation of any such
insurance coverage in advance thereof. Any and all
amounts received by Grantee as payee under any of such policies may
be applied by Grantee to the indebtedness secured hereby in such
manner as Grantee may, in its sole discretion, elect, or, at the
option of Grantee, the entire amount so received or any part
thereof may be released to Grantor. Upon foreclosure of
this Mortgage or other acquisition of the Premises or any part
thereof by Grantee, such policies naming Grantee as payee shall
become the absolute property of Grantee, but receipt of any
insurance proceeds and any disposition of the same by Grantee shall
not constitute a waiver of any rights of Grantee, statutory or
otherwise, and specifically shall not constitute a waiver of the
right of foreclosure by Grantee in the event of default or failure
of performance by Grantor of any covenant or agreement contained
herein or in any note secured hereby.
5.
Condition and Use of Premises. Grantor (i) shall
neither remove, demolish nor alter the design or structural
character of any building or structure now or hereafter erected
upon the Premises, other than such construction approved by
Grantee, unless the Grantee shall first consent thereto in writing;
(ii) shall maintain the Premises in good condition and repair;
(iii) shall not commit or suffer waste of any Security; (iv) shall
comply with all laws, ordinances, regulations, covenants,
conditions and restrictions affecting the ownership, use and
operation of the Security and shall not commit, suffer, or permit
any violation thereof.
6.
Grantee's Right to Pay Certain Expenses. If
Grantor fails to defend diligently against, or pay, any claim, lien
or encumbrance which is alleged to be prior to this Mortgage, or to
defend diligently against, or pay, any tax or assessment or
insurance premium when due, to keep the Premises in repair, or if
the Grantor commits or permits waste of any Security, or if there
be commenced any action or proceeding affecting this Mortgage or
the debt secured hereby, the Security or the title thereto, or
pertaining to any other mortgage or lien on the Security mortgaged
hereby or any indebtedness secured thereby, then Grantee, at its
option, may pay said claim, lien, encumbrance, tax, assessment or
premium, with right of subrogation thereunder, may make such
repairs and take such steps as it deems advisable to prevent or
cure such waste, and with respect to any such action or proceeding,
Grantee may appear in the action or proceeding, retain counsel
therein at the expense of Grantor, and take such action therein as
Grantee deems reasonably advisable, and for any one or more of the
above purposes Grantee may advance such sums of money as it deems
necessary. Grantee shall have no responsibility with
respect to the legality, validity or priority of any such claim,
lien, encumbrance, tax, assessment, premium, action or proceeding,
or with respect to the amount it deems necessary to be paid in
satisfaction thereof, so long as it acts
reasonably. Grantor shall pay to Grantee, immediately
upon demand therefor, all sums of money advanced or expended by
Grantee pursuant to this paragraph, and all fees and charges
(including reasonable attorney's fees) incurred by the Grantee
incident to the loan(s) secured by this Mortgage, incident to the
continued assurance of the security represented by this Mortgage,
or incident to the enforcement of the obligations of the Grantor
under this Mortgage, including without limitation all costs and
expenses incurred by Grantee in foreclosure proceedings hereunder
in the event that the Grantor obtains redemption after such
proceedings have been initiated, together with interest on all such
advancements, fees and charges, at the highest rate of interest per
annum (including any default interest rate) required by any of the
Loan Documents secured hereby; and all such sums advanced, and the
interest thereon, shall be secured hereby.
7.
Default, Possession, Appointment of a Receiver, and Certain
Other Default Remedies. The occurrence of any one
or more of the following events shall constitute a default
hereunder: (a) the insolvency of the Grantor or any Principal
Debtor, or (b) the making of any assignment for the benefit of
creditors of the Grantor or any Principal Debtor, or (c) the
issuance or filing of any attachment, levy, or other judicial
process on or against any of the Grantor's or any Principal
Debtor's assets; or (d) the appointment of a receiver, trustee or
custodian for all or any portion of the property of the Grantor or
any Principal Debtor; or (e) the commencement of any proceedings
under any state or federal bankruptcy or insolvency law or under
laws for relief of debtors, by or against the Grantor or any
Principal Debtor; or (f) the occurrence of such a change in the
condition or affairs (financial or otherwise) of the Grantor or any
Principal Debtor as, the opinion of the Grantee, materially impairs
the Security (if any) or the prospect of repayment of any amounts
outstanding hereunder; or (g) the death, incompetence, dissolution,
business failure (which term includes, without limitation, the
cessation of normal business operations) or termination of
existence of the Grantor or any Principal Debtor; or (h) the
failure of the Grantor or any Principal Debtor to pay their
respective debts as they mature; or (i) any representation or
statement made or furnished to Grantee by or on behalf of Grantor
or any Principal Debtor is false or misleading in any material
respect; or (j) any default in the payment of any sums due under
said Obligations when due, or default by the Grantor or any
Principal Debtor in performance of any other Obligations under this
Mortgage; or (k) default beyond any applicable cure period in the
payment, satisfaction or performance by the Grantor or any
Principal Debtor of any condition or obligation under any of the
Loan Documents or under any documents executed in connection with
any other obligations or liabilities of Grantor or any Principal
Debtor to Grantee. At any time after a default has
occurred:
a. Grantee is
authorized at any time, without notice, in its sole discretion, to
enter upon and take possession of the Premises or any part thereof,
and to perform any acts Grantee deems necessary or proper to
conserve the Security, and whether or not entry is made and
possession is taken as aforesaid, to demand, collect and receive
all rents, issues and profits thereof, including past due amounts
as well as those presently or thereafter
accruing. Grantee shall (after payment of all costs and
expenses incurred in connection therewith) have the right, to the
fullest extent permitted by law, but shall not be obliged, to apply
such rents, issues and profits received by it to any amounts
secured hereby, in such order as Grantee
determines. Grantee shall be liable to account only for
such rents, issues and profits actually received by Grantee;
and
b. Grantee
shall be entitled to have a receiver appointed to enter and take
possession of the Premises, collect the rents and profits therefrom
and apply the same as the court may direct; and
c. Grantee or
the receiver may also take possession of, and for these purposes
use, any and all personal property contained in the Premises and
used by Grantor in the rental or leasing thereof or any part
thereof.
d. Grantee may
cure any default for the account of Grantor, and, to the fullest
extent permissible under law, Grantee may apply any funds credited
by or due from Grantee to Grantor against the same (without any
obligation first to enforce any other rights of the Grantee,
including, without limitation, any rights under said Obligations or
Loan Documents secured hereby or this Mortgage, or any guarantee
thereof, and without prejudice to any such
rights). Without limiting the generality of the
foregoing, Grantor hereby authorizes Grantee to pay all taxes,
sewer use fees, water rates and assessments, with interest, costs
and charges accrued thereon, which may at any time be a lien upon
the Security, or any part thereof; to pay the premiums for any
insurance required hereunder; to incur and pay reasonable expenses
in protecting its rights hereunder and the security hereby granted;
to pay any balance due under any security agreement on any fixtures
and equipment included as a part of the collateral; and the payment
of all amounts so incurred shall be secured hereby as fully and
effectually as any other Obligation secured hereby and shall bear
interest until paid at the highest applicable rate of interest then
payable under the terms of any of the Loan Documents secured
hereby. To the fullest extent permissible under law,
Grantee may apply to any of these purposes or to the repayment of
any amounts so paid by Grantee any sums paid on any of the
Obligations or this Mortgage by Grantor as interest or
otherwise.
e. Grantee
shall also have such rights and remedies as may be given to Grantee
in said Loan Documents, including but not limited to, the right to
enter the mortgaged premises before and after any default by
Grantor, make inspections, complete or cause to be completed
construction thereon and to make the same tenantable or habitable
for human occupancy under requirements of all laws and ordinances
and the right to expend the balance of loan proceeds and additional
sums, necessary in the judgment of Grantee, in order to complete
such construction and make the same tenantable or habitable as
aforesaid; all such additional sums so expended, with interest
thereon at the highest rate of interest per annum that is required
by any of the Loan Documents, shall be fully secured hereby as
necessary to protect the security of this Mortgage.
All expenses
(including receiver's fees, counsel fees, costs and agent's
compensation) incurred pursuant to the powers contained in this
paragraph 7 shall be secured hereby. Grantor agrees that
exercise of such powers and disposition of funds pursuant to this
paragraph 7 shall not constitute a waiver of any foreclosure once
commenced nor preclude the later commencement of foreclosure for
breach hereof. The right to enter and take possession of
said property, to manage and operate the same, and to collect the
rents, issues and profits thereof, whether by a receiver or
otherwise, shall be cumulative to any other right or remedy
hereunder or afforded by law, and may be exercised concurrently
therewith or independent thereof. Grantor agrees that
any proceeds of the Security received by Grantee, including but not
limited to foreclosure sale proceeds, insurance proceeds and
condemnation proceeds may be applied by Grantee, whether or not
there is a default hereunder, to any one or more of the Obligations
secured hereby, regardless of whether any of such Obligations are
matured or unmatured, as the Grantee may, in its sole discretion,
determine.
8.
Further Advances by Grantee and Future Obligations of
Grantor. Upon request of Grantor, Grantee may from
time to time, at its sole option, make further advances to Grantor
to be secured hereby and Grantor and Grantee may, at their option,
enter into additional Loan Documents to be secured hereby with
respect to existing or future Obligations of Grantor to Grantee,
provided, however, that the total principal of the Obligations
secured hereby and remaining unpaid, including any such advances
and future Obligations but excluding protective advances, shall not
at any time exceed the sum of Two Million Five Hundred Thousand
Dollars ($2,500,000.00). Grantor shall execute and
deliver to Grantee a note or other agreement evidencing each and
every such further advance or future Obligations, which Loan
Documents shall contain such terms and conditions as Grantee may
require. Grantor shall pay when due all such further
advances and future Obligations with interest and other charges
thereon, as applicabl
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