This document
prepared by and
after Recording Return to:
Updike, Kelly
& Spellacy, P.C.
One State Street
P.O. Box 231277
Hartford, CT 06123-1277
Attn: Robert J. Martino, Esq.
Space Above for Recorder’s
Use
OPEN-END
MORTGAGE DEED AND SECURITY AGREEMENT
EDAC TECHNOLOGIES
CORPORATION
OPEN-END MORTGAGE DEED AND
SECURITY AGREEMENT
TO ALL PEOPLE TO
WHOM THESE PRESENTS SHALL COME, GREETINGS:
KNOW YE, that EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation, with a place of
business at 1806 Farmington Avenue, Farmington, Connecticut 06032
(hereinafter called the “Borrower”), for the
consideration of ONE DOLLAR ($1.00) and other good and valuable
consideration received to the Borrower’s full satisfaction
from TD BANK, N.A., a national banking association with an office
located at 102 West Main Street, New Britain, Connecticut
06050-0174 (hereinafter called the “Bank”), does hereby
give, grant, bargain, sell and confirm, with MORTGAGE COVENANTS
(hereinafter referred to as the “Mortgage”), unto the
Bank, its successors and assigns forever the real property and
improvements thereon known as 275 Richard Street, Newington,
Connecticut and described in more detail on Exhibit A
attached hereto and made a part hereof (the
“Property”).
TO HAVE AND TO
HOLD the above granted and bargained Property, with the privileges
and appurtenances thereof unto it, the said Bank, its successors
and assigns forever, to its and their own proper use and
behoof.
THE CONDITION OF
THIS DEED IS SUCH THAT:
WHEREAS, pursuant
to a Credit Agreement of even date herewith by and among Borrower,
GROS-ITE INDUSTRIES, INC., a Connecticut corporation, with a place
of business at 1806 Farmington Avenue, Farmington, Connecticut
06032, APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation,
with a place of business at 1806 Farmington Avenue, Farmington,
Connecticut 06032 (collectively with Borrower, the “Credit
Parties”) and Bank (the “Credit Agreement”)
, the Bank has made, inter alia, (i) a Mortgage Loan in
the amount of TWO MILLION SIX HUNDRED FORTY THOUSAND AND 00/100
DOLLARS ($2,640,000.00) (the “Mortgage Loan”), which
Mortgage Loan is evidenced by a certain Mortgage Note of even date
herewith in the original amount of TWO MILLION SIX HUNDRED FORTY
THOUSAND AND 00/100 DOLLARS ($2,640,000.00) (the “Mortgage
Note”), a copy of which is attached hereto as Exhibit
B and made a part hereof, (ii) a Term Loan in the amount
of FOUR MILLION THREE HUNDRED SIXTY THOUSAND AND 00/100 DOLLARS
($4,360,000.00) (the “Term Loan”), which Term Loan is
evidenced by a certain Term Note of even date herewith in the
original amount of FOUR MILLION THREE HUNDRED SIXTY THOUSAND AND
00/100 DOLLARS ($4,360,000.00) (the “Term Note”), a
copy of which is attached hereto as Exhibit C and made
a part hereof, and (iii) a Revolving Loan in the amount of
SEVEN MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS
($7,500,000.00) (the “Revolving Loan”, together with
the Mortgage Loan and the Term Loan, collectively, the
“Loan”), which Revolving Loan is evidenced by a certain
Revolving Credit Note of even date herewith in the original amount
of SEVEN MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS
($7,500,000.00) (the “Revolving Credit Note”, together
with the Mortgage Note and the Term Note, collectively, the
“Note”), a copy of which is attached hereto as
Exhibit D and made a part hereof; and
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WHEREAS, a
glossary of terms related to each Note is attached hereto as
Exhibit E ; and
WHEREAS, Credit
Parties have entered into certain ISDA Master Agreements (together
with the confirmation thereof and all schedules thereto, and as may
be amended or substituted from time to time, the “Interest
Rate Protection Agreement”) dated as of the date hereof with
the Bank in order to eliminate the risk with respect to fluctuation
of the interest rate in connection with the Mortgage Loan and Term
Loan, a copy of the confirmation forming a part of the Interest
Rate Protection Agreement related to the Mortgage Loan is attached
hereto as Exhibit F , and a copy of the confirmation
forming a part of the Interest Rate Protection Agreement related to
the Term Loan is attached hereto as Exhibit G ;
and
WHEREAS, the
amount and nature of the obligations of Borrower under the Interest
Rate Protection Agreement are set forth in and are determined
pursuant to the Interest Rate Protection Agreement, which has a
final maturity date of May 27,2014; and
WHEREAS, the
maximum amount of the obligations of Borrower, if any, under the
Interest Rate Protection Agreement secured hereby shall be ONE
MILLION AND NO/100 DOLLARS ($1,000,000.00); and
WHEREAS, advances
to be made by the Bank to or for the benefit of the Credit Parties
in respect of the Revolving Loan shall be made pursuant to the
terms of the Credit Agreement which shall constitute a commercial
revolving loan agreement within the meaning of
Section 49-2 of the Connecticut General Statutes, as amended;
and
WHEREAS, advances
made by the Bank in respect of the Loan are payable in the manner
set forth in the Note; and
WHEREAS, the
Credit Parties are justly indebted to the Bank pursuant to the
terms of the Note and the Credit Agreement subject to the following
additional terms and conditions:
The following
terms as used herein shall have the following meanings:
“
Building Service Equipment ” shall mean all apparatus,
fixtures and articles of personal property owned by the Borrower
now or hereafter attached to or used or procured for use in
connection with the operation or maintenance of any building,
structure or other improvement located on or included in the
Property, including, but without limiting the generality of the
foregoing, all engines, furnaces, boilers, stokers, pumps, heaters,
tanks, dynamos, motors, generators, switchboards, electrical
equipment, heating, plumbing, lifting and ventilating apparatus,
air-cooling and air-conditioning apparatus, gas and electrical
fixtures, elevators, escalators, fittings, and machinery and all
other equipment of every kind and description, used or procured for
use in the operation of the building standing on the Property
(except apparatus, fixtures or articles of personal property
belonging to lessees or other occupants of such building
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or to persons
other than the Borrower, unless the same be abandoned by any such
lessee or other occupant or person), together with any and all
replacements thereof and additions thereto.
“
Disposal ” shall have the meaning assigned to it in
Section 3.6 hereof.
“ Event
of Default ” shall mean (a) any Event of Default
under the Note or the other Loan Documents, (b) any default in
the payment or performance of the obligations of the Borrower
hereunder, or (c) any representation or warranty of the
Borrower hereunder proving to be untrue in any material
respect.
“
Hazardous Materials ” shall have the meaning assigned
to it in Section 2.6(b) hereof.
“ Hedging
Contracts ” means interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, or any
other agreements or arrangements entered into between Credit
Parties and Bank and designed to protect Credit Parties against
fluctuations in interest rates or currency exchange rates,
including without limitation, the Interest Rate Protection
Agreement.
“ Hedging
Obligations ” means, with respect to Credit Parties, all
liabilities of Credit Parties to Bank under Hedging
Contracts.
“ Loan
Documents ” shall mean the Credit Agreement, the Note,
the Hedging Contracts and all other documents, agreements or
instruments executed in connection therewith.
“
Note ” shall have the meaning assigned to it in the
recitals to this Mortgage.
“
Obligations ” shall mean all indebtedness,
liabilities, obligations, covenants and agreements of the Credit
Parties to the Bank now existing or hereafter arising or incurred
under the Credit Agreement, the Note, this Mortgage, the Hedging
Contracts or the other Loan Documents, whether individually or
collectively, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising thereunder or hereunder by contract,
operation of law or otherwise and whether before or after any
judgment relating to any of the foregoing.
“
Permitted Encumbrances ” shall mean the encumbrances
listed on Exhibit H attached hereto and incorporated
herein by reference as if fully set out herein.
“
Property ” shall mean the property described in
Exhibit A attached hereto and incorporated herein by
reference as if fully set out herein.
“
Property Income ” shall mean all rents, income,
profits, security deposits and other benefits to which the Borrower
may now or hereafter be entitled from any lease, tenancy or rights
of use of all or any part of the Property and/or the income
generated from the business operations conducted at or from the
Property.
“
Release ” shall have the meaning assigned to it in
Section 3.6 hereof.
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“
Spill ” shall have the meaning assigned to it in
Section 3.6 hereof.
SECTION 2
REPRESENTATIONS AND WARRANTIES
The Borrower
hereby represents, covenants and warrants to the Bank as
follows:
Section 2.1.
Title to Property . The Borrower warrants it has good, fee
simple title to the Property (as described in Exhibit A
annexed hereto) subject only to the Permitted Encumbrances and that
it shall warrant, defend and preserve such title and the rights
granted by this Mortgage with respect thereto against all claims of
all persons or entities.
Section 2.2.
Authority ; No Encumbrances . The Property is now
free and clear of all encumbrances whatsoever except Permitted
Encumbrances, and the Borrower has good right and lawful authority
to mortgage and convey the same in the manner and form hereby
mortgaged and conveyed.
Section 2.3.
No Conflicts . The execution and delivery of this Mortgage
does not, and the performance and observance of the terms hereof
will not, contravene any provision of existing law, ordinance,
rule, regulation or order of any Federal, state or local
governmental body, instrumentality or agency, and will not conflict
with or result in any breach of the terms, conditions or provisions
of, or constitute a default under or result in or permit the
creation or imposition of any charge or encumbrance upon any of the
properties or assets of the Borrower pursuant to, any indenture,
mortgage or other agreement or instrument to which the Borrower is
a party or by which its properties or assets are bound.
Section 2.4.
Governmental Filings . Other than the recording of this
Mortgage and the filing of uniform commercial code financing
statements with the appropriate recording and filing offices in the
State of Connecticut, no approval, authorization or other action
by, or filing with, any Federal, state, or local body,
instrumentality or agency, is required under existing law in
connection with the execution and delivery by the Borrower of this
Mortgage.
Section 2.5.
No Leases . Except as set forth in Exhibit C
attached hereto and made a part hereof Schedule B to
the Collateral Assignment of Leases, Rentals, and Property Income
executed by Borrower on the date hereof in connection with the Loan
(the “Collateral Assignment”), there are presently in
effect no leases of the Property or any part thereof.
Section 2.6.
Environmental Compliance . The Borrower has taken all
necessary steps to investigate the past and present condition and
usage of the Property and the operations conducted thereon and,
based upon such diligent investigation, makes the following
representations and warranties.
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(a)
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Except as set forth in any
environmental reports delivered by Borrower to the Bank (the
“Environmental Reports”), none of the Borrower, or any
operator of
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the Property,
or any operations thereon is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Section 6901 et seq .
(“RCRA”) and regulations promulgated thereunder, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Section 9601 et seq . as
amended (“CERCLA”), the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control
Act, or any state or local statute, regulation, ordinance, order or
decree relating to health, safety or the environment (hereinafter
“Environmental Laws”), which violation involves the
Property or would have a material adverse effect on the environment
or the business, assets or financial condition of the
Borrower.
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(b)
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The
Borrower has not received notice from any third party including,
without limitation, any Federal, state or local governmental
authority, (i) that it has been identified by the United
States Environmental Protection Agency (“EPA”) as a
potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 300
Appendix B (1986); (ii) that any hazardous waste, as
defined by 42 U.S.C. Section 9601(5), any hazardous substances
as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) or any
toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws (“Hazardous
Materials”) which it has generated, transported or disposed
of have been found at any site at which a Federal, state or local
agency or other third party has conducted or has ordered that the
Borrower conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or
(iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of
any third party’s incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the release of
Hazardous Materials.
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(c)
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Except as set forth in the
Environmental Reports, (i) no portion of the Property has been
used for the handling, processing, storage or disposal of Hazardous
Materials except in accordance with applicable Environmental Laws;
and no underground tank or other underground storage receptacle for
Hazardous Materials is located on any portion of the Property;
(ii) in the course of any activities conducted by the
Borrower, or the operators of their properties, no Hazardous
Materials have been generated or are being used on the Property,
except in accordance with applicable Environmental Laws;
(iii) there has been no past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping (a “Release”)
or threatened Release of Hazardous Materials on, upon, into or from
the Property, which Release would have a material adverse effect on
the value of any of the Property or adjacent properties or the
environment; (iv) to the best of
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the
Borrower’s knowledge, there have been no Releases on, upon,
from or into any real property in the vicinity of any of the
Property which, through soil or groundwater contamination, may have
come to be located on, and which would have a material adverse
effect on the value of, the Property; and (v) any Hazardous
Materials that have been generated on any of the Property have been
transported off-site only by carriers having an identification
number issued by the EPA, treated or disposed of only by treatment
or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities
have been and are, to the best of the Borrower’s knowledge,
operating in compliance with such permits and applicable
Environmental Laws.
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(d)
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Except as set forth in the
Environmental Reports, none of the Property is or shall be subject
to any applicable environmental clean-up responsibility law or
environmental restrictive transfer law or regulation, by virtue of
the transactions set forth herein and contemplated
hereby.
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(e)
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The
Borrower covenants and agrees that it will indemnify and hold the
Bank harmless from and against any and all expense, damage, loss or
liability incurred by the Bank (including, without limitation, all
costs of legal representation incurred by the Bank in connection
with enforcing the provisions hereof, or otherwise) arising from
the application of any law, including any so-called “Super
Fund,” “Transfer Act” or “Super Lien”
legislation, relating to the presence of Hazardous Materials on the
Property, whether such legislation is Federal, state or local in
nature. It is expressly acknowledged by the Borrower that,
notwithstanding anything to the contrary set forth herein, this
covenant of indemnification shall survive any foreclosure of the
lien and security interest of this Mortgage or the discharge of
this Mortgage and shall inure to the benefit of the Bank, its
successors and assigns.
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Section 2.7.
Absence of Litigation . There are no actions, suits,
proceedings or investigations, including, without limitation,
condemnation and eminent domain proceedings, pending or, to the
best of the Borrower’s knowledge, threatened, against or
affecting the Property, or which may involve or affect the validity
of this Mortgage, and the Borrower is not in default with respect
to any order, writ, injunction, decree or demand of any Federal,
state or local governmental body, instrumentality or agency
affecting the Property or the use and occupancy thereof.
Section 2.8.
Execution, Delivery and Enforceability . The Borrower is
duly authorized to make and enter into this Mortgage and to carry
out the transactions contemplated by the Credit Agreement, the Note
and the other Loan Documents. This Mortgage has been duly executed
and delivered by the Borrower and is the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its
terms, subject only to the effect of any applicable Bankruptcy,
insolvency, moratorium, reorganization or other similar laws
affecting creditors’ rights generally and the discretionary
nature of specific performance and other equitable
remedies.
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Section 2.9.
Compliance with Law . The Property is in compliance with all
applicable Federal, state and local laws, rules, ordinances and
regulations, including but not limited to those governing zoning,
land use, subdivision control, health, safety, fire protection and
protection of the environment.
Section 2.10.
Condition of the Property . The Property is in good order
and repair and is free of all defects other than such defects as
have been previously disclosed to and are acceptable to the
Bank.
SECTION 3
CERTAIN COVENANTS AND CONDITIONS
The Borrower
covenants and agrees as follows:
Section 3.1.
Governmental Charges . The Borrower shall pay before the
same become delinquent all taxes, charges, sewer use fees, water
rates and assessments of every name and nature, whether or not
assessed against the Borrower, if applicable or related to the
Property, or any interest therein, or applicable or related to any
of the Obligations, which, if unpaid, might by law become a lien or
charge upon all or any part of the Property; provided ,
however , that so long as no distraint, foreclosure sale or
other levy upon or transfer with respect to the Property or any
part thereof shall have been effected or threatened, the Borrower
shall not be required to pay any such taxes, charges, fees, rates
and assessments by reason of this Section 3.1 if (a) the
amount, applicability or validity thereof is currently being
contested by the Borrower in good faith by appropriate legal
proceedings, (b) the Borrower shall have set aside on its
books reserves (segregated to the extent required by sound
accounting principles and practices) reasonably deemed by the Bank
to be adequate with respect thereto, and (c) the Borrower
shall have provided to the Bank a bond or other security of such
nature and in such amount as the Bank deems sufficient as security
for payment thereof.
Section 3.2.
Provision For Payment of Governmental Charges and Other
Obligations . To assure the payment of all taxes, charges,
sewer use fees, water rates, ground rents and assessments of every
name and nature, or any other obligations which may have or acquire
priority over this Mortgage, and which are assessed or payable with
reference to the Property, the Borrower, if so requested by the
Bank, shall deposit with the Bank, on the first day of each month,
a sum determined by the Bank to be sufficient to provide, in the
aggregate, a fund adequate to pay any such amounts at least ten
(10) days before the same become delinquent; and whenever the
Bank determines sums accumulated under the provisions of this
Section 3.2 to be insufficient to meet the obligation for
which such deposits were made, the Borrower shall pay, on the
demand of the Bank, any amount required to cover the deficiency
therein. Every such deposit may, at the option of the Bank, be
applied directly against the obligation with reference to which it
was made, or, to the fullest extent permissible according to law,
any other obligation of the Borrower secured hereby. Such deposits
may, to the fullest extent permitted by law, be commingled with
other assets of the Bank and, in the discretion of the Bank,
invested by the Bank for its own account, without any obligation to
pay income from such investment, or interest on such deposits, to
the Borrower, or to account to the Borrower for such income in any
manner.
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Section 3.3.
Maintenance of Property; Alterations . Borrower shall keep
and maintain the Property in as good repair and condition as the
same now is or may hereafter be put (ordinary wear and tear
excepted), damage from casualty expressly not excepted, shall make
all such needful and proper repairs, replacements, additions and
improvements thereto as shall be necessary for the proper conduct
of its business thereon, and shall not permit or commit waste on
the Property. The Borrower will make or cause to be made, as and
when the same shall become necessary, all structural and
non-structural, exterior and interior, ordinary and extraordinary,
foreseen and unforeseen repairs, renewals and replacements
necessary to that end. The Borrower shall not permit removal or
alteration of anything which constitutes a part of the Property
without the consent of the Bank. The Borrower shall permit the Bank
to enter the Property at any reasonable time to determine whether
the Borrower is in compliance with its obligations under this
Mortgage.
Section 3.4.
Insurance . The Borrower agrees, at the Borrower’s
sole cost and expense, to keep the Property insured at all times
throughout the term of this Mortgage with policies of insurance as
follows:
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(a)
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casualty or physical hazard
insurance on an “all risks” basis, with broad form
earthquake coverage, and building code, valuable papers, extra
expenses, extended period of indemnity and electronic data
processing coverages, with a full replacement cost endorsement
(including builder’s risk during any period or periods of
time that construction or remodeling is being performed on the
Property) and an “agreed amount” clause, in an amount
equal to 100% of the full replacement cost of all improvements
(excluding only the reasonable value of footings and foundations)
and the Borrower’s contents therein, such amount to be
determined annually by an insurer or qualified appraiser selected
and paid for by the Borrower and acceptable to the Bank, and in any
event, in an amount sufficient to prevent the Borrower from
incurring any coinsurance liability;
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(b)
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if
at any time the Property or any portion thereof is located in a
“Flood Hazard Area” pursuant to the Flood Disaster
Protection Act of 1973 (or any successor thereto), flood insurance
in such total amount as the Bank shall reasonably require from time
to time (or the maximum amount available, if less); and
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(c)
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insurance with respect to other
insurable risks and coverages relating to the Property (including,
without limitation, commercial general public liability insurance
(broad form), loss of income (rent insurance or business
interruption insurance), boiler insurance, builder’s risk
insurance and worker’s compensation insurance) in such
amounts and containing such terms and conditions as the Bank may
reasonably require from time to time.
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The Borrower shall
deposit certified copies of all insurance policies (or certificates
thereof acceptable to the Bank) providing coverage applicable to
the Property, whether or not required by this Mortgage, with the
Bank forthwith after the binding thereof, and shall deliver to the
Bank new policies (or certificates acceptable to the Bank) for any
insurance about to expire at
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least thirty
(30) days before such expiration. All such insurance policies
(other than liability policies) shall be first payable in case of
loss to the Bank by means of a standard non-contributory mortgagee
clause, shall be written by such companies, on such terms, in such
form and for such periods and amounts as the Bank shall from time
to time approve, shall be primary and without right of contribution
from other insurance which may be available, shall waive any right
of setoff, counterclaim, subrogation, or any deduction in respect
of any liability of the Borrower and the Bank, shall provide that
with respect to the Bank, the insurance shall not be invalidated by
any action or inaction by the Borrower including without limitation
any representations made by the Borrower in the procurement of such
insurance, and shall provide that such policies shall not be
canceled or amended without at least thirty (30) days prior
written notice to the Bank. All public liability insurance policies
shall include the Bank as an additional named insured. All such
insurance policies shall provide that all losses thereunder shall
be adjusted by the Borrower, so long as no Event of Default has
occurred and is continuing; provided , however , that
in no event shall the Borrower approve or consent to any final
adjustment in an amount exceeding ONE HUNDRED THOUSAND AND NO/100
DOLLARS ($10
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