Exhibit 4.22
OPEN END MORTGAGE AND SECURITY
AGREEMENT
KNOW ALL MEN BY THESE PRESENTS
THAT SHOPSMITH, INC. (collectively the “Mortgagor”),
an Ohio corporation , whose address is 6530 Poe Avenue,
Dayton, OH 45414 , for the consideration of Seven Hundred
Eighteen Thousand and 00/100 Dollars ($718,000.00) received or to
be received to Mortgagor’s full satisfaction and to Mortgagor
or on Mortgagor’s behalf paid or to be paid by NATIONAL
CITY BANK , a national banking association, successor by merger
to the Provident Bank, having its principal place of business
located at 6 North Main Street, Dayton, OH 45412, Attention:
Commercial Loan Division, Locator 21-2215 , (the
“Bank:), gives, grants, bargains, sells, assigns and conveys
unto Bank, its successors and assigns, the following described real
property, appurtenances and rights:
Situated in the City of Vandalia, Montgomery
County, Ohio as is more particularly described on Exhibit A
which is attached to and made a part of the Mortgage
Together
with, all and singular, the right,
title and interest of Mortgagor, including any after acquired title
or reversion, in and to the ways, easements, streets, alleys,
passages, water, water courses, riparian rights, minerals,
royalties, rights, liberties and privileges in any way appertaining
to the Premises; and
Together
with, all rents, issues, proceeds,
income, revenues and profits accruing and to accrue from the
Premises; and
Together
with, all buildings and improvements
of every kind and description now or hereafter constructed or
placed thereon or therein and all materials intended for
construction, reconstruction, alteration and repairs of such
improvements now or hereafter erected thereon or therein, all of
which materials shall be deemed to be included within the property
subject to this Mortgage immediately upon the delivery thereof to
the premises, and all fixtures in which Mortgagor now has or at any
time hereafter acquires an interest and which are attached to or
contained in and used in connection with the premises, and all
renewals or replacements thereof or articles in substitution
therefore, whether or not the same are or shall be attached to the
buildings or other improvements in any manner; it being mutually
agreed that all the aforesaid property owned by Mortgagor and
placed by it on the Premises shall, so far as permitted by law, be
deemed to be fixtures and a part of the realty, security for the
indebtedness and covered by this Mortgage, and as to the balance of
the property aforesaid, this Mortgage is a security agreement for
the purpose of creating hereby a security interest in the property,
securing the indebtedness, for the benefit of Bank; and
Together
with, all right, title and interest
now owned or hereafter acquired by Mortgagor in and to any leases
for equipment of any kind or nature used in connection with the
Premises; and Together with, all rewards and other compensation
heretofore or hereafter to be made to the present and all
subsequent owners of the property subject to this Mortgage for any
taking by eminent domain, either permanent or temporary, of all or
any part of property or any easement or appurtenance thereof,
including severance and consequential damage and change in grade of
streets, which awards and compensation are hereby assigned to the
Bank.
The property mentioned above is
referred to as “the Premises” to the extent the same is
realty and as “the Collateral” to the extent the same
is personalty. The Premises and the Collateral are collectively
referred to as “Mortgage Property”, except where the
reference is to the Premises or the Collateral
specifically.
To Have and to Hold
the Mortgaged Property, with the
appurtenances thereunto belonging, unto Bank, its successors and
assigns, forever, against all lawful claims and demands
whatsoever.
Mortgagor represents to Bank, its
successors and assigns, that at and until the ensealing of these
presents, Mortgagor is the owner of the Premises and has good right
to bargain, sell and convey the same in manner and form as above
written, and Mortgagor will execute, acknowledge and deliver any
further assurances as may be necessary or required hereto to
evidence or confirm the interest in the Premises granted by this
Mortgage.
The Condition of this Mortgage
is , Whereas Mortgagor
has executed and delivered this Mortgage for the purpose of
securing the performance of the covenants and agreements contained
in this Mortgage and in any loan agreement made with respect to any
loan secured hereby, and to secure the payment when due
of:
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(a) the principal and
interest of the promissory note (“the Note”), bearing
even date herewith executed by Mortgagor, in the principal sum of
Six Hundred Thousand and 00/100 Dollars ($600,000.00) , with
interest at the rate specified in the Note, the balance of the Note
being due and payable on August 15, 2005 or such earlier date
as in the Note provided; a letter of credit dated ___herewith
executed by Mortgagor in the amount of One Hundred Eighteen
Thousand and 00/100 Dollars ($118,000.00) .
(b) all sums expended or
advanced by Bank pursuant to any term or provision of this Mortgage
or to any other agreement delivered in connection with this
transaction;
(c) all unpaid advances of
Bank with respect to the Mortgaged Property for the payment of
taxes, assessments, insurance premiums or costs incurred in the
protection or operation of the Mortgaged Property as provided in
Section 5301.233 of the Ohio Revised Code;
(d) any and all obligations
and liabilities of Borrower to Bank, whether absolute or
contingent, whether now existing or hereafter created, arising,
evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) under
(i) any agreement, device or arrangement designed to protect
Borrower from fluctuations of interest rates, exchange rates or
forward rates, including, but not limited to, dollar-denominated or
cross-currency exchange agreements, forward currency exchange
agreements, interest rate caps, collars or floors, forward rate
currency or interest rate options, puts, warrants, swaps,
swaptions, U.S. Treasury locks and U.S. Treasury options,
(ii) any other interest rate hedging transactions, such as,
but not limited to, managing the Borrower’s interest rate
risk associated with any pending or potential capital market
transactions such as fixed rate bond issues and (iii) any and
all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
(e) the unpaid balances of
any loan advances made this date or subsequent to recordation
hereof and all other liabilities, obligations and indebtedness of
Mortgagor to Bank, direct or contingent, now or hereafter owing by
Mortgagor to Bank to the extent that the total unpaid loan
indebtedness secured hereby, exclusive of the interest thereon and
amounts referenced in clause (c) above, does not exceed the
maximum amount specified in this mortgage which is Seven Hundred
Eighteen Thousand and 00/100 Dollars ($718,000.00) .
And Whereas
, Mortgagor further covenants and
agrees as follows:
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1.
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To
pay promptly the principal and interest on the indebtedness
evidenced by the Note at the time and in the manner herein and in
the Note provided.
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2.
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In
order more fully to protect the security of this Mortgage, in the
Event of Default not cured within any applicable grace period, to
pay to Bank, if so required by Bank, in addition to the payments of
principal and interest under the terms of the Note and concurrently
therewith until the Note is fully paid, the following
sums:
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(a)
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a
sum equal to taxes and assessments, both general and special, next
due upon the Mortgaged Property;
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(b)
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the
premiums that will next become due and payable on policies of
insurance covering the Mortgaged Property and required under the
provisions hereof.
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Sums due for taxes and insurance
premiums shall be divided by the number of payment dates to elapse
before the date such taxes, assessments and insurance premiums,
respectively, will become due and payable. These sums shall be held
by Bank in trust, but without interest accruing thereon, to pay
each of the particular items.
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3.
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To
keep the Mortgaged Property free from statutory liens of every kind
except current taxes and assessments not yet due and payable; to
pay, before delinquency and before any payment for nonpayment
attaches thereto, all taxes, assessments, and other governmental or
municipal or public dues, charges, fines or impositions which are
or may be levied against the Mortgaged Property of any part
thereof, and, except when payment for all such items has
theretofore been made under paragraph 2 hereof, to timely deliver
to Bank receipted bills evidencing payment therefor.
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4.
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To
keep the improvements now existing or hereafter erected on or on
the Mortgaged Property insured against loss or damage by, or
abatement of rental income, resulting from fire and “all
risk” perils. Mortgagor covenants to maintain flood insurance
as required by the Flood Disaster Protection Act of 1973, as
amended, and to maintain any additional flood insurance reasonably
required by the Bank. All perils insured, with the exception of
flood, shall be in an amount not less than the replacement value of
the Mortgaged Property, and in any event, in an amount necessary to
prevent the operation of any coinsurance provision contained in any
policy of such insurance. Mortgagor agrees to pay promptly when due
any premiums on such insurance and further agrees, if requested by
the Bank, to furnish a certificate from the company carrying such
insurance acknowledging that such insurance is adequate in any
amount to prevent the operation of any coinsurance provision
contained therein. All such insurance shall be carried in companies
approved by the Bank in its reasonable discretion and the policies
and renewals thereof shall be deposited with and held by the Bank
and have attached thereto standard non-contributing mortgagee
clauses (in favor of and entitling the Bank to collect any and all
proceeds payable under such insurance) as well as the standard
waiver of subrogation endoresement, all to be in a form acceptable
to the Bank.
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If any such loss or damage occurs
as described herein to the improvements in or on the Premises,
Mortgagor shall give prompt notice to the Bank and the insurance
carrier. Mortgagor shall be entitled to adjust, compromise, and
collect any such losses, subject to the following conditions:
(a) Mortgagor obtains the written approval of Bank as to the
amount of the losses, which approval shall not be unreasonably
withheld or delayed; (b) an Event of Default has not occurred
and is not then continuing under any of the terms, covenants and
conditions of this Mortgage, the Note, or any other instrument
3executed in connection with or to additionally secure the
indebtedness evidenced by the Note; (c) Bank shall first be
given satisfactory proof, in accordance with the plans and
specifications therefor previously approved by Bank, that such
improvements have been fully restored, or by the expenditures of
such money will be fully restored, free and clear of all
mechanic’s and materialman’s liens; (d) if such
proceeds shall be insufficient to restore the said improvements,
Mortgagor shall deposit promptly with Bank funds which, together
with the insurance proceeds, shall be sufficient to restore and
rebuild the improvements on or in the Premises; and (e) the
excess of the insurance proceeds above the amount necessary to
complete such restoration shall be applied as hereinbefore
provided, at the option of Bank, as a credit upon the indebtedness
secured hereby. If Mortgagor does not meet the foregoing
provisions, Mortgagor authorizes Bank to collect, adjust and
compromise any losses under any of the insurance aforesaid. After
deducting costs of collection, Bank shall be entitled to apply the
proceeds, at its option, as follows: (x) a credit upon any
portion, as selected by Bank, of the indebtedness secured hereby;
or (y) in restoration of the improvements, in which event the
Bank shall not be obligated to see to the proper application
thereof nor shall the amount so released or used be deemed a
payment on any indebtedness secured hereby; or (z) so deliver
same to the owner of the Mortgaged Property. Under no circumstances
shall Bank become obligated to take any action to restore the
improvements so damaged.
In the event of foreclosure of
this Mortgage, or other transfer of title to the Mortgaged Property
in lieu of foreclosure, all right, title and interest of Mortgagor
in and to any insurance policies then in force shall pass to the
purchaser or grantee thereof.
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5.
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If
any action shall be commenced or any written notice shall be
received for the taking by exercise of the power of eminent domain
of title to or the temporary use of the Mortgaged Property, or any
part thereof, the Mortgagor will promptly give written notice
thereof to the Bank describing the nature and extent of the
proposed taking. Any proceeds received from any award made in such
eminent domain proceedings (or conveyance in lieu thereof) are
pledged by Mortgagor as additional security for the payment of the
Note and shall , if received prior to the release and discharge of
this Mortgage, be made available to Mortgagor in the same manner
and under the same conditions as insurance proceeds under paragraph
4 hereof.
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6.
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That no other building or other
improvement on or in the Premises shall be structurally or
materially altered, removed or demolished, nor shall any fixtures
or appliances on, in or about the buildin
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