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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 30, 1998
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EDAC TECHNOLOGIES CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Wisconsin
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(State or Other Jurisdiction of Incorporation)
0-14275 39-1515599
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(Commission File Number) (I.R.S. Employer
Identification No.)
1806 New Britain Avenue
Farmington, Connecticut 06032
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(Address of Principal Executive (Zip Code)
Offices)
860-677-2603
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On June 30, 1998, Apex Acquisition Corporation, a Connecticut
corporation ("Apex Acquisition"), which is a newly-formed, wholly-owned
subsidiary of Edac Technologies Corporation (the "Company"), consummated the
acquisition of substantially all of the assets of Apex Machine Tool Company,
Inc., a Connecticut corporation ("Apex"), pursuant to the terms of an Asset
Purchase Agreement dated as of May 13, 1998 (the "Asset Purchase Agreement") by
and among the Company, Apex Acquisition Corp., a Wisconsin corporation (which
subsequently assigned its rights under the Asset Purchase Agreement to Apex
Acquisition), Apex, Gerald S. Biondi, James G. Biondi and Michael Biondi. Upon
completion of the acquisition, Apex Acquisition changed its name to Apex Machine
Tool Company, Inc.
Pursuant to the Asset Purchase Agreement, Apex Acquisition
paid $17,138,000 in cash for substantially all of the assets of Apex. In
addition, Apex Acquisition purchased certain real estate located at 17 and 21
Spring Lane in Farmington, Connecticut, from the shareholders of Apex for
approximately $2.7 million payable pursuant to a promissory note (the "Note").
The Note bears interest at the rate of 10.12% per annum with interest payable
monthly and principal payable in full on January 1, 2000. In addition, Apex
Acquisition agreed to purchase certain real estate located at 55 Spring Lane in
Farmington, Connecticut, from the Apex shareholders if certain pre-closing
conditions are satisfied. If the closing conditions are satisfied, the purchase
price for the 55 Spring Lane property will be approximately $1.1 million. As
required by the purchase agreements, the Company guaranteed all of the
obligations of Apex Acquisition under the real estate purchase agreement and the
Asset Purchase Agreement, including, but not limited to, payment of the Note.
The purchase price for Apex's assets and the real estate owned
by its shareholders was determined pursuant to arm's-length negotiations between
the parties. Prior to the acquisition, neither Apex nor any of its affiliates
had any material relationship with the Company or any of its affiliates.
Pursuant to the Asset Purchase Agreement, effective June 30, 1998, James G.
Biondi was elected as a director of the Company.
To finance the acquisition, the Company entered into an
eleventh amendment to its loan agreement with Fleet National Bank. Pursuant to
this amendment, the Company's revolving credit facility with Fleet National Bank
was increased from $9 million to $13 million and the Company received a term
loan in the amount of $14 million. Copies of the various loan documents with
Fleet National Bank are attached as exhibits hereto and incorporated herein by
reference.
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The assets acquired by Apex Acquisition were used by Apex in
its business of manufacturing engineered tools and molds. Apex Acquisition
intends to continue to use the assets for that purpose.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
The following financial statements will be filed in an
amendment to this Form 8-K no later than September 14, 1998:
(i) The audited financial statements of Apex Machine Tool
Company, Inc. as of and for the year ended December 31, 1997.
(ii) The audited financial statements of Apex Machine Tool
Company, Inc. as of and for the year ended December 31, 1996.
(iii) The audited financial statements of Apex Machine Tool
Company, Inc. as of and for the six months ended June 30, 1998.
(b) Pro Forma Financial Information.
The following financial statements will be filed in an
amendment to this Form 8-K no later than September 14, 1998:
(i) Pro Forma Consolidated Balance Sheet for Edac
Technologies Corporation and Apex Machine Tool Company, Inc. as of December
31, 1997.
(ii) Pro Forma Consolidated Income Statement for Edac
Technologies Corporation and Apex Machine Tool Company, Inc. for the year ended
December 31, 1997.
(iii) Pro Forma Consolidated Income Statements for Edac
Technologies Corporation and Apex Machine Tool Company, Inc. for the six months
ended June 30, 1998 and 1997.
(c) Exhibits.
99.1 Asset Purchase Agreement dated as of May 13, 1998 by
and among Edac Technologies Corporation, Apex
Acquisition Corp., Apex Machine Tool Company, Inc.,
Gerald S. Biondi, James G. Biondi and Michael Biondi.
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99.2 Purchase Agreement dated as of May 13, 1998 by and
between Edac Technologies Corporation, Gerald S.
Biondi, James G. Biondi and Michael Biondi providing
for the acquisition of the real estate located at 17
and 21 Spring Lane, Farmington, Connecticut.
99.3 Guaranty Agreement dated as of June 30, 1998 by and
among Edac Technologies Corporation, as guarantor,
Apex Acquisition Corporation, Gerald S. Biondi, James
G. Biondi and Michael Biondi pursuant to which Edac
Technologies Corporation has guaranteed all of the
obligations of Apex Acquisition Corporation under the
real estate purchase agreement.
99.4 Promissory note payable by Apex Acquisition
Corporation to Gerald S. Biondi, James G. Biondi and
Michael Biondi under the real estate purchase
agreement.
99.5 Purchase agreement dated as of May 13, 1998 by and
between Edac Technologies Corporation, Gerald S.
Biondi and James G. Biondi providing for the
acquisition, after the satisfaction of certain
pre-closing conditions, by Edac Technologies
Corporation or its wholly-owned subsidiary of the
property located at 55 Spring Lane, Farmington,
Connecticut.
99.6 Eleventh Amendment to Loans and Security Agreement,
Modification of Notes and Reaffirmation of Guaranties
dated as of June 30, 1998 by and among Fleet National
Bank, Edac Technologies Corporation, Gros-Ite
Industries, Inc. and Apex Acquisition Corporation.
99.7 Second Amended and Restated Promissory Note dated as
of June 30, 1998 in the original principal amount of
$13 million payable by Edac Technologies Corporation
to Fleet National Bank.
99.8 Term Promissory Note dated June 30, 1998 in the
principal amount of $14 million payable by Edac
Technologies Corporation to Fleet National Bank.
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99.9 Fourth Modification of Construction to Permanent Loan
Promissory Note and Open-End Construction to Permanent
Mortgage Deed dated as of June 30, 1998 by and among
Edac Technologies Corporation and Fleet National Bank.
99.10 Ninth Modification Agreement to Open-End Mortgage Deed
dated as of June 30, 1998 by and between Edac
Technologies Corporation and Fleet National Bank.
99.11 Guaranty Agreement dated as of June 30, 1998 from each
of Apex Acquisition Corporation and Gros-Ite Industries,
Inc. to Fleet National Bank.
99.12 Open-End Mortgage Deed, Security Agreement, Collateral
Assignment of Rents and Financing Statement dated as of
June 30, 1998 by and between Edac Technologies
Corporation and Fleet National Bank.
99.13 Security Agreement dated as of June 30, 1998 by and
between Apex Acquisition Corporation and Fleet National
Bank.
99.14 Hazardous Substances Indemnity Agreement dated as of
June 30, 1998 by and among Edac Technologies
Corporation, Apex Acquisition Corporation, Gros-Ite
Industries, Inc. and Fleet National Bank.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Edac Technologies Corporation has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
EDAC TECHNOLOGIES CORPORATION
Date: July 14, 1998
BY /s/ Edward J. McNerney
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Edward J. McNerney, President
and Chief Executive Officer
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ASSET PURCHASE AGREEMENT
BY AND AMONG
APEX ACQUISITION CORP.,
APEX MACHINE TOOL COMPANY, INC.,
GERALD S. BIONDI,
JAMES G. BIONDI AND MICHAEL BIONDI
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TABLE OF CONTENTS
ASSET PURCHASE AGREEMENT
ARTICLE I - PURCHASE AND SALE OF ASSETS 1
1.1 Purchased Assets 1
1.2 Excluded Assets 3
1.3 Closing 4
1.4 Real Estate 4
ARTICLE II - LIABILITIES 4
2.1 Assumption of Liabilities 4
2.2 Non-Assumed Liabilities 6
ARTICLE III - PURCHASE PRICE 6
3.1 Purchase Price 6
3.2 Form of Closing Payment 7
3.3 Purchase Price Adjustment 7
3.4 Allocation of Purchase Price 8
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
OF SELLER AND THE SHAREHOLDERS 8
4.1 Corporate Organization 8
4.2 Authorization 9
4.3 No Conflict 9
4.4 Enforceability 9
4.5 Financial Statements; Corporate Records 9
4.6 Absence of Undisclosed Liabilities 10
4.7 Accounts Receivable 10
4.8 Inventory 11
4.9 Business Changes 11
4.10 Leases 13
4.11 Condition of Leased Real Property 13
4.12 Reserved 13
4.13 Leased Real Estate 13
4.14 Title to Purchased Assets 14
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4.15 Condition of Purchased Assets 14
4.16 Contracts and Leases 14
4.17 Litigation 15
4.18 Environmental Matters 15
4.19 Government Licenses and Permits 19
4.20 Certain Third-Party Agreements 19
4.21 Taxes 20
4.22 Employee Benefit Plans 20
4.23 Labor Matters 22
4.24 Employment Contracts 22
4.25 Intangible Assets 22
4.26 Unlawful Payments 23
4.27 Compliance with Law 23
4.28 Insurance 23
4.29 Subsidiaries 24
4.30 Transactions with Certain Persons 24
4.31 Products Liability; Warranties 24
4.32 Brokerage 25
4.33 Representations and Warranties True and Correct 25
ARTICLE V - REPRESENTATIONS AND WARRANTIES
OF BUYER 25
5.1 Organization 25
5.2 Authority 26
5.3 No Conflict 26
5.4 Enforceability 26
5.5 Brokerage 26
5.6 Warranties True and Correct 26
5.7 Solvency 26
5.8 SEC Reports 27
ARTICLE VI - COVENANTS OF SELLER AND THE
SHAREHOLDERS 27
6.1 Access to Books and Records After Closing 27
6.2 Operation of Business 27
6.3 Preservation of Business 29
6.4 Insurance and Maintenance of Property 29
6.5 Compliance with Laws 29
6.6 Reserved 29
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6.7 Fulfill Conditions 29
6.8 Employees 29
6.9 Release of Security Interests 30
6.10 Change of Corporate Name 30
6.11 Documents Executed by Seller 30
6.12 Other Deliveries of Seller 30
6.13 Documents Executed by the Shareholders 31
6.14 Collection of the Receivables 31
6.15 Transfer Taxes 31
6.16 Access to Information and Documents 31
ARTICLE VIA - ENVIRONMENTAL COVENANTS 32
ENVIRONMENTAL COVENANTS OF SELLER
AND THE SHAREHOLDERS 32
6A.1 Connecticut Transfer Act 32
6A.2 Comprehensive Environmental Response,
Compensation, and Liability Information System 32
6A.2A Seller's and Shareholders' Remediation Rights 33
6A.3 Known Environmental Issues 33
6A.4 Pre-Closing Environmental Issues 33
6A.5 Shareholders' Cooperation with Buyer 33
6A.6 Covenant Not to Sue; Comfort Letter 34
6A.7 Termination of Shareholders' and Seller's
Obligations 34
ENVIRONMENTAL COVENANTS OF BUYER 34
6A.8 Buyer's Environmental Responsibility Post-Closing 34
6A.9 Buyer's Cooperation with Shareholders 34
6A.10 Access 35
6A.11 Communications and Coordination with Agencies 35
ARTICLE VII - COVENANTS OF EDAC AND BUYER 36
7.1 Record Retention 36
7.2 Certified Resolutions 37
7.3 Deliveries 37
7.4 Insurance 37
7.5 Election as Director 37
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7.6 Secretarial Support 37
7.7 Property Management 37
7.8 Commercially Reasonable Efforts; Notice
of Breach 38
7.9 Nonassignable Agreements 38
7.10 Product Liability Insurance 38
7.11 Employment; Severance Liability 39
7.12 Benefit Plans 39
ARTICLE VIII - CONDITIONS PRECEDENT TO SELLER'S
OBLIGATION TO CLOSE 39
8.1 Representations and Warranties 39
8.2 Performance of Covenants and Obligations 40
8.3 Proceedings and Instruments Satisfactory 40
8.4 No Litigation 40
8.5 Regulatory Filings and Approvals 40
8.6 Adverse Change 40
8.7 Assignment and Assumption of Specified Contracts 40
8.8 Opinion of Counsel 41
8.9 Consummation of Transactions Contemplated
by Real Estate Purchase Agreements 41
ARTICLE IX - CONDITIONS PRECEDENT TO BUYER'S
OBLIGATION TO CLOSE 41
9.1 Representations and Warranties 41
9.2 Performance of Covenants and Obligations 41
9.3 Proceedings and Instruments Satisfactory 41
9.4 Adverse Change 42
9.5 No Litigation 42
9.6 Consents, Approvals, Certifications, Licenses
and Permits 42
9.7 Good Standing Certificates 42
9.8 Opinion of Counsel 42
9.9 Financing 43
9.10 Regulatory Filings and Approvals 43
9.11 Audited Financial Statements 43
9.12 Environmental Matters 43
9.13 Equipment Transfer 43
9.14 Real Estate Purchase Agreements 43
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ARTICLE X - INDEMNIFICATION BY SELLER AND THE
SHAREHOLDERS 44
10.1 Indemnification 44
10.2 Procedures 45
10.3 Payment 46
10.4 Survival of Indemnification 46
10.5 Basket Payment 47
10.6 Remedies Exclusive 47
10.7 Limitation on Claims 47
10.8 Maximum Exposure 47
10.9 Actual Knowledge 47
ARTICLE XI - INDEMNIFICATION BY BUYER 48
11.1 Indemnification 48
11.2 Procedures 48
11.3 Payment 50
11.4 Survival of Indemnification 50
11.5 Basket Payment 50
11.6 Remedies Exclusive 51
11.7 Limitation on Claims 51
11.8 Actual Knowledge 51
11.9 Maximum Exposure 51
ARTICLE XII - MISCELLANEOUS 51
12.1 Termination 51
12.2 Effect of Termination 51
12.3 Further Assurances 52
12.4 Amendment 52
12.5 Waiver 52
12.6 Notices 52
12.7 Benefit/Assignment 53
12.8 Expenses 53
12.9 Public Announcement 54
12.10 Specific Performance 54
12.11 Entire Agreement 54
12.12 Arbitration Procedure 54
12.13 Headings 56
12.14 Severability 56
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12.15 Knowledge 56
12.16 No Strict Construction 56
12.17 Exclusive Dealing 57
12.18 Parties in Interest 57
12.19 Counterparts 57
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SCHEDULES
Schedule 1.1(a) Machinery and Equipment
Schedule 1.1(b) Leases
Schedule 1.1(c) Contracts, Agreements and Commitments
Schedule 1.1(e) Licenses and Permits
Schedule 1.1(k) Vehicles, Etc.
Schedule 1.2 Excluded Assets
Schedule 2.1(c) Certain Agreements of Seller
Schedule 3.3 November 30 Balance Sheet
Schedule 3.4 Purchase Price Allocation
Schedule 4.5 Financial Statements
Schedule 4.6 Absence of Undisclosed Liabilities
Schedule 4.7 Accounts Receivable
Schedule 4.9 Business Changes
Schedule 4.10 Leases
Schedule 4.11 Condition of Leased Real Property
Schedule 4.13 Leased Real Property
Schedule 4.14 Title to Purchased Assets
Schedule 4.16 Contracts and Leases
Schedule 4.17 Litigation
Schedule 4.18 Environmental Matters
Schedule 4.22 Employee Benefit Plans
Schedule 4.24 Employment Contracts
Schedule 4.25 Intangible Assets
Schedule 4.27 Compliance with Law
Schedule 4.28 Insurance
Schedule 4.29 Subsidiaries
Schedule 4.30 Transactions with Certain Persons
Schedule 4.31 Products Liability Warranties
Schedule 6.2 Operation of Business
EXHIBITS
Exhibit A Form of Real Estate Purchase Agreement
Exhibit B Form of General Bill of Sale
Exhibit C Form of Assignment and Assumption
Agreement
Exhibit D Form of Noncompetition Agreement (Seller)
Exhibit E Form of Noncompetition Agreement
(Shareholder)
Exhibit F Form of Consulting Agreement
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Exhibit G Form of Opinion of Seller's Counsel
Exhibit H Form of Opinion of Buyer's and Edac's
Counsel
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made this ___ day
of _______________, 1998, by and among EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation ("Edac"), APEX ACQUISITION CORP., a Wisconsin corporation
and a wholly-owned subsidiary of Edac ("Buyer"), APEX MACHINE TOOL COMPANY,
INC., a Connecticut corporation ("Seller") and GERALD S. BIONDI, JAMES G. BIONDI
and MICHAEL BIONDI, being all of the shareholders of Seller (collectively, the
"Shareholders").
RECITALS
A. Seller is engaged in the business of manufacturing engineered tools
and molds in Farmington, Connecticut (the "Business").
B. Seller desires to sell to Buyer and Buyer desires to purchase from
Seller, in accordance with the terms of this Agreement, substantially all of the
assets owned by Seller and used in connection with the operation of the
Business.
AGREEMENTS
In consideration of the recitals and the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Purchased Assets. Subject to the terms and conditions set forth in
this Agreement, Seller shall sell and transfer to Buyer, and Buyer shall
purchase from Seller, at the Closing (as defined in section 1.3 hereof), all of
Seller's right and title to and interest in all assets, properties and rights of
every kind, wherever located and regardless of whether reflected on the books of
Seller, which are owned by Seller as of the Closing, including, without
limitation, the Business as a going concern, except only the assets excluded
pursuant to section 1.2 hereof (collectively, the "Purchased Assets"). The
Purchased Assets shall include, without limitation, the following:
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(a) all machinery, equipment, leasehold improvements, supplies, tools,
fixtures, furniture, furnishings and other personal property of Seller
including, without limitation, those items listed on Schedule 1.1(a) attached
hereto and, in addition, a Leblond Mikino Vertical Machine Center #LM380 (the
"Vertical Machine Center"), which shall be purchased by Seller from Gerald S.
Biondi and James G. Biondi prior to the Closing (as defined in section 1.3
hereof) for $138,000;
(b) all rights of Seller under the leases of real property, equipment
and other tangible personal property listed on Schedule 1.1(b) attached hereto,
and all other leases entered into by Seller in the ordinary course of business
between the date of this Agreement and the Closing Date (as defined in section
1.3 hereof) (all such leases referenced in this section 1.1(b) shall be referred
to collectively hereinafter as the "Assumed Leases");
(c) all rights of Seller under (including, without limitation, all
Seller's right to receive goods and services and to assert claims and to take
other action with respect to breaches, defaults and other violations pursuant
to) all of the following contracts, bookings, commitments and other agreements
to which Seller is a party:
(i) all contracts, including customer contracts,
bookings and commitments in existence as of the Closing;
(ii) all other contracts, bookings, commitments and
other agreements relating to the Business that are listed on Schedule 1.1(c);
(iii) all contracts, bookings, commitments and other
agreements entered into in the ordinary course of business of Seller which
involve payments or receipts by Seller of less than $25,000 per year in the case
of any single contract, but no more than $100,000 per year in the aggregate; and
(iv) all contracts, bookings, commitments and other
agreements entered into after the date of this Agreement and prior to the
Closing Date in the ordinary course of Seller's business.
The Assumed Leases and the contracts referred
to in subsections (i), (ii), (iii) and (iv) of this section 1.1(c) are referred
to in this Agreement as the "Assumed Contracts." The Assumed Contracts shall not
include, however, and Buyer shall not assume any of the contracts listed on
Schedule 1.2 under the heading "Excluded Contracts" or, unless Buyer, in its
sole
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discretion, decides otherwise, any contract which is not an Assumed Contract
(collectively, the "Excluded Contracts"). Notwithstanding the foregoing, if
Seller inadvertently omits to include on Schedule 1.1(c) any contract, booking,
commitment or other agreement (the "Omitted Contracts"), Buyer will nonetheless
assume each Omitted Contract which is not materially adverse to Seller or the
Business.
(d) all of Seller's goodwill, patents, licenses, trade names,
trademarks, service marks, current telephone numbers, trade secrets,
confidential information, customer lists, techniques, know-how, causes of action
and all other intangible assets (collectively, the "Intangible Assets");
(e) to the extent transferable, all of Seller's rights in all
government licenses, approvals, permits, certifications, consents and
authorizations, all of which as of the date hereof are listed on Schedule 1.1(e)
attached hereto (collectively, the "Licenses and Permits");
(f) all of Seller's inventories of whatever kind, including,
without limitation, finished goods, work-in-process and raw materials, and all
such items that Seller has ordered but not physically received on or prior to
the Closing Date (collectively, the "Inventory");
(g) all records, computer software and documents, computer
source codes, books, customer and member lists, sales leads and all other sales
and marketing information, credit information and correspondence, plans and
specifications, drawings and all other records and documents used in connection
with the operation of the Business (collectively, the "Documents");
(h) all prepaid rent, utilities, deposits and other prepaid
expenses and advance payments (collectively, the "Prepaid Assets");
(i) all trade and other accounts receivable, all notes
receivable and all other amounts receivable (collectively, the "Receivables");
(j) all warranty rights, guaranty rights, causes of actions,
judgments and claims and similar rights of Seller against vendors, suppliers,
engineers or other third parties; and
(k) all automobiles, trucks, trailers, automotive equipment
and other vehicles owned, leased or used by Seller in connection with the
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operation of the Business, including, without limitation, those listed on
Schedule 1.1(k) attached hereto.
1.2 Excluded Assets. Notwithstanding the provisions of section 1.1
above, the Purchased Assets shall not include, and Seller shall retain: (a) the
assets listed on Schedule 1.2 attached hereto; (b) Seller's cash and cash
equivalents as of the Closing Date; (c) all corporate records of Seller,
including, without limitation, shareholder records, stock records, stock
transfer journals, board of directors and shareholder minutes, payroll and
financial information necessary for the preparation of Seller's tax returns and
satisfaction of other reporting requirements, documents for transactions entered
into not in the ordinary course of business or unrelated to the Business or the
Purchased Assets; (d) the rights which accrue or will accrue to Seller under
this Agreement; (e) the rights to any of Seller's claims for any federal, state,
local or foreign tax refunds; (f) the rights of Seller under the contracts and
agreements listed in Schedule 1.2 under the heading "Excluded Contracts"; and
(g) the rights to any claims which Seller may have against any person with
respect to any of the Excluded Assets or the Non-Assumed Liabilities (as defined
in section 2.2 below) (collectively, the "Excluded Assets").
1.3 Closing. Subject to the terms of this Agreement, the closing (the
"Closing") of the transactions contemplated by this Agreement shall take place
at 10:00 a.m. (eastern standard time) on June 30, 1998, at the offices of
Murtha, Cullina, Richter and Pinney, LLP, CityPlace I, 185 Asylum Street,
Hartford, Connecticut, or such other time and place as Seller and Buyer may
agree in writing (the "Closing Date").
1.4 Real Estate. Concurrently with the execution and delivery of this
Agreement, Buyer and the Shareholders shall enter into two separate Real Estate
Purchase Agreements in the forms attached hereto as Exhibit A (individually, a
"Real Estate Purchase Agreement" and collectively, the "Real Estate Purchase
Agreements"), one providing for the purchase and sale of the real property
located at 17 Spring Lane and 21 Spring Lane and the other providing for the
purchase and sale of the real property located at 55 Spring Lane, Farmington,
Connecticut (collectively, the "Real Property"). The transactions contemplated
by the Real Estate Purchase Agreement for 17 and 21 Spring Lane shall be
consummated at the Closing simultaneously with the transactions contemplated by
this Agreement and the transactions contemplated by the Real Estate Purchase
Agreement for 55 Spring Lane shall be consummated at the time specified therein.
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ARTICLE II
LIABILITIES
2.1 Assumption of Liabilities. Except as set forth in section
2.2, at the Closing, Buyer shall assume and shall agree to pay, perform
and discharge all of the liabilities and obligations (whether incurred, accrued,
arising or known before or after the Closing, and whether or not reflected or
provided for, or required to be reflected or provided for, on the Closing
Balance Sheet as defined in section 3.3) which relate to or arise out of the
Business or the operation, condition or use of any Purchased Asset prior to the
Closing (collectively, the "Assumed Liabilities"). The Assumed Liabilities shall
include, but not be limited to, all liabilities and obligations which at any
time relate to or arise out of the following:
(a) any demands, claims, actions or causes of action
("Claims"), whether for personal injuries or property, consequential or other
damages of any kind, asserted in respect of products manufactured or sold before
the Closing by Seller or any predecessor thereof;
(b) the obligations of Seller under the Assumed Contracts;
(c) the obligations of Seller under the agreements, identified
on Schedule 2.1(c) hereto, between Seller and certain individuals currently
employed by Seller for severance, disability and other payments to be made,
after the Closing, following the termination by Buyer of any such individual's
employment;
(d) to the extent applicable to any of the employees of the
Business, each bonus, severance or termination agreement, hospitalization,
retirement, medical or other medical, life or other insurance, supplemental
employment benefit, profit sharing, pension or retirement plan, agreement,
program or arrangement and each other employee benefit plan or other welfare
plan, agreement, program or arrangement, whether formal or informal, maintained
by Seller as of the Closing Date;
(e) any Claims against the Business or Seller which are
asserted by any employees of Seller or their beneficiaries, heirs or assignees,
which Claims relate to events occurring, or actions taken or omitted to be
taken, before or after the Closing;
(f) any taxes, charges, fees, levies and other assessments
imposed by any governmental body, including income, gross receipts, excise,
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property, sales, withholding, social security, occupation, use, service, service
use, license, payroll, transfer, franchise and recording taxes, charges, fees,
levies or assessments so imposed (whether computed on a separate, consolidated,
unitary, combined or any other basis) (collectively, "Taxes") other than (i) any
Taxes that constitute federal, state or local income or franchise Taxes related
to the Business and attributable to the period before the Closing Date; (ii) any
transfer Taxes as set forth in section 6.15; and (iii) any interest, fines,
penalties or additional amounts attributable to or imposed on or in connection
with any Taxes which are not assumed by Buyer pursuant to this section or which
arise out of or in connection with any actions taken by Seller prior to the
Closing Date. The Taxes which Buyer will assume pursuant to this paragraph
2.1(f) are referred to in this Agreement as the "Assumed Taxes"; and
(g) subject to the provisions of Article VIA and the
provisions of the Real Estate Purchase Agreements, compliance or noncompliance
with, or any Claims (whether for personal injuries or property, consequential or
other damages of any kind) or investigation, proceeding or order of, by or
before any person in connection with, any federal, state, local or foreign law
or regulation (or any permit, consent or order issued thereunder) relating to
occupational safety or to pollution or protection of human health or the
environment, including such laws and regulations relating to emissions,
discharges, releases or threatened releases of any chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum or petroleum products
(collectively, "Materials of Environmental Concern") or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of such Materials of Environmental Concern.
2.2 Non-Assumed Liabilities. Notwithstanding anything to the contrary
contained in section 2.1 above, Seller shall retain, and shall continue to be
responsible after the Closing Date for, the "Non-Assumed Liabilities," which
term shall mean, and be strictly limited to, the liabilities and obligations
which at any time relate to or arise out of the following:
(a) the Excluded Assets;
(b) any Taxes other than the Assumed Taxes; and
(d) any liabilities or obligations which relate to, or arise
out of, Seller's existing line of credit with Webster Bank;
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(e) any liabilities or obligations under any of the Excluded
Contracts; and
(f) the liabilities and obligations of Seller and/or the
Shareholders under Article VIA and/or the provisions of the Real Estate Purchase
Agreements.
ARTICLE III
PURCHASE PRICE
3.1 Purchase Price. The purchase price for the Purchased Assets (the
"Purchase Price") shall be (a) $17,138,000 (the "Closing Payment"), plus (b)
Buyer's assumption of the Assumed Liabilities, subject to the adjustment
described in section 3.3 hereof.
3.2 Form of Closing Payment. At the Closing, Buyer shall pay to Seller,
by cashier's check or wire transfer of immediately available funds to an account
designated by Seller, an amount equal to the Closing Payment.
3.3 Purchase Price Adjustment.
(a) The Purchase Price shall be adjusted up or down to the
extent of any increase or decrease in (i) the Adjusted Net Asset Value of Seller
as determined based on the Closing Balance Sheet (as defined in this section
3.3) from (ii) the Adjusted Net Asset Value of Seller as determined based on the
adjusted November 30 balance sheet attached hereto as Schedule 3.3 (the
"November 30 Balance Sheet"). The term "Adjusted Net Asset Value of Seller," as
used in this section 3.3, means the difference between the book value of the
Purchased Assets and the Assumed Liabilities, each as determined in accordance
with the accounting principles reflected in the November 30 Balance Sheet.
Notwithstanding the foregoing, the Adjusted Net Asset Value of Seller will be
determined without regard to the Vertical Machine Center or Seller's leasehold
improvements or any accumulated depreciation associated with either such asset.
In addition, the Adjusted Net Asset Value of Seller as determined based on the
Closing Balance Sheet (y) will be calculated after deduction of all depreciation
and amortization through March 31, 1998 but no depreciation or amortization
after March 31, 1998 shall be included in the calculation and (z) will not
include any income tax liabilities notwithstanding the fact that an aggregate of
$229,522 of such income tax liabilities are included in the Adjusted Net Asset
Value of Seller as shown on the November 30 Balance Sheet.
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(b) Within 45 days after the Closing Date, Seller shall prepare and
deliver to Buyer a balance sheet, dated as of the Closing Date (the "Preliminary
Balance Sheet"), prepared in accordance with the accounting principles reflected
on the November 30 Balance Sheet. Seller and its accountants shall permit Buyer
to review all accounting records and work papers and computations used by them
in the preparation of the Preliminary Balance Sheet. If Buyer does not provide
Seller with written notice of a dispute concerning the Preliminary Balance Sheet
("Notice of Dispute") within 30 days after Buyer's receipt of the Preliminary
Balance Sheet, then the Preliminary Balance Sheet shall constitute the Closing
Balance Sheet for purposes of this Agreement notwithstanding any subsequent
audit of Seller's financial statements covering the period from January 1, 1998
through the Closing Date to be performed by Bennett and Katz, LLC. If Buyer
provides Seller with written notice of a dispute within the aforementioned
30-day period, then, for a period of 30 days thereafter (the "Review Period"),
Buyer and Seller shall endeavor in good faith to reach agreement on the form of
the Closing Balance Sheet. If Buyer and Seller are unable to reach agreement
during the Review Period on the form of the Closing Balance Sheet, then the
dispute shall be submitted to an independent public accounting firm mutually
agreeable to Buyer and Seller, which public accounting firm shall resolve any
and all disputes with respect to the Closing Balance Sheet. If Buyer and Seller
are unable to agree upon an independent public accounting firm to be selected to
resolve the dispute, they shall each name one firm and the two firms so named
shall choose a third independent public accounting firm which shall resolve the
dispute. Such determination shall be made within 60 days after the dispute is
submitted to the independent public accounting firm in accordance with the terms
of this section and shall be final and binding upon Buyer and Seller in the
absence of manifest error. Buyer and Seller shall bear equally all fees and
costs associated with any determination pursuant to this section of the Closing
Balance Sheet by an independent public accounting firm. The final balance sheet
dated as of the Closing Date is referred to herein as the "Closing Balance
Sheet."
3.4 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets in the manner described on Schedule 3.4
attached hereto (the "Allocation"), and the parties shall execute an IRS Form
8594 prepared by Buyer on a basis consistent with Schedule 3.4. The parties
acknowledge that the Allocation was the result of arm's length negotiation,
considering the relative value of the Purchased Assets. The parties shall
cooperate with one another to preserve the Allocation if challenged by the
Internal Revenue Service or any other party, including, without limitation, the
Connecticut Department of Revenue.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF SELLER AND THE SHAREHOLDERS
In order to induce Buyer to enter into this Agreement, Seller
and the Shareholders, jointly and severally, make the following representations
and warranties, each of which shall be deemed independently material and relied
upon by Buyer, regardless of any investigation made by Buyer:
4.1 Corporate Organization. Seller is a corporation, validly existing
and in good standing under the laws of the State of Connecticut and has all
corporate power and authority to own, operate and lease its respective
properties and carry on the Business as currently conducted. Seller is duly
licensed and qualified to do business in and is in good standing as a foreign
corporation in each jurisdiction where the conduct of the Business requires it
to be so licensed and qualified, except to the extent any failure to be so
licensed and qualified would not have a material adverse effect on the financial
condition, results of operations or prospects of the Business ("Material Adverse
Effect"). Seller has delivered to Buyer true and complete copies of Seller's
Certificate of Incorporation (including all amendments thereto) and By-Laws.
4.2 Authorization. Seller has all necessary corporate power to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby, and the execution and delivery of this Agreement by Seller and the
performance by Seller of the obligations to be performed hereunder have been
duly authorized by the Board of Directors and shareholders of Seller.
4.3 No Conflict. Except as set forth in Schedule 4.16, the execution
and delivery of this Agreement do not, and the consummation of the transactions
contemplated hereby will not: (a) conflict with or violate any provisions of the
Certificate of Incorporation or By-Laws of Seller; (b) conflict with or violate
any provisions of, or result in the maturation or acceleration of, any
obligations under any contract, agreement, instrument, document, lease, license,
permit, indenture, or obligation or any law, statute, ordinance, rule,
regulation, guideline, code, order, arbitration award, judgment or decree, to
which Seller or any of the Shareholders is subject or to which Seller or any of
the Shareholders is a party; or (c) violate any restriction or limitation, or
result in the termination or loss of any right (or give any third party the
right to cause such termination or loss), of any kind to which Seller is bound;
excluding from paragraph (b) any and all purchase orders from customers to which
Seller is a party and excluding from paragraph (b) and (c) such conflicts and
violations as would not, individually or in
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the aggregate, have a Material Adverse Effect or prevent or delay the
consummation of the transactions contemplated hereby.
4.4 Enforceability. This Agreement and all other agreements and
documents executed by Seller and the Shareholders pursuant hereto are, or upon
the execution thereof will be, valid and binding obligations of Seller and the
Shareholders, respectively, enforceable against them in accordance with their
terms.
4.5 Financial Statements; Corporate Records. Seller has delivered to
Buyer true and correct copies of the audited financial statements of Seller for
the year ended December 31, 1997 and the unaudited financial statements of
Seller for each of the years ended December 31, 1995 and 1996 (including balance
sheets, statements of income, stockholders' equity and cash flow) (collectively,
the "Financial Statements"). Except as set forth on Schedule 4.5, the Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a basis consistent with that of prior periods, based on
information derived from the books and records of Seller and the Financial
Statements fairly present in all material respects the financial position and
results of operations of the Business as of the dates thereof. The statements of
income included as part of the Financial Statements do not contain any material
items of special or nonrecurring income or any other material income not earned
in the ordinary course of business except as expressly specified therein. Except
as set forth on Schedule 4.5, the unaudited condensed internal statement of
income for the 11-month period ended November 30, 1997 (the "November 30 Income
Statement") and the November 30 Balance Sheet, both of which are set forth on
Schedule 4.5 attached hereto, fairly present in all material respects the
financial position and results of operations of the Business as of the dates
thereof. The November 30 Income Statement does not contain any material items of
special or nonrecurring income or any other material income not earned in the
ordinary course of business. Seller's books of account, as well as its minute
books and stock records, are complete and correct and have been maintained in
accordance with commercially reasonable business practices.
4.6 Absence of Undisclosed Liabilities. There are no liabilities or
obligations, direct or indirect, absolute or contingent, known or unknown, or
any outstanding evidence of indebtedness arising out of or relating to Seller,
the Business or the Purchased Assets, including liabilities or obligations
arising out of any act, omission, transaction, circumstance, sale of goods or
services, state of facts or other condition which occurred or existed on or
before the date of this Agreement whether or not due or payable, that are
required to be set forth or
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reflected on the November 30 Balance Sheet, except: (a) as fully
reflected or as specifically reserved against on the November 30 Balance
Sheet; and (b) liabilities incurred in the ordinary course of business after
November 30, 1997, consistent with Seller's prior practice, which, in the
aggregate, do not result in any material adverse change in the financial
condition of the Business or the Purchased Assets from that set forth on the
November 30 Balance Sheet. Seller has no knowledge of any circumstance or event
which could reasonably form the basis for the assertion of any liability or
obligation other than as specified in sections 4.6(a) or (b) of this Agreement
or as set forth in Schedule 4.6. Except as set forth on Schedule 4.6 or as
properly and actually reflected as a liability on the Closing Balance Sheet,
none of Seller's employees is now, or will with the passage of time hereafter
become, entitled to receive any vacation time, vacation pay or severance pay
attributable to services rendered prior to the Closing Date.
4.7 Accounts Receivable. The Receivables reflected on the November 30
Balance Sheet arose in the ordinary course of business and represented amounts
payable to Seller for goods actually sold or services actually performed. The
Receivables reflected on the November 30 Balance Sheet have been, or in the
ordinary course will be, collected by Seller at the aggregate recorded amounts
thereof, less the reserve for bad debts reflected on the November 30 Balance
Sheet, and are not subject to any counterclaims or setoffs. On or prior to the
Closing Date, Seller will provide Buyer with a complete and accurate list of
Receivables of Seller as of a date within one week of the Closing Date. The
Receivables on such list and the Receivables reflected on the Closing Balance
Sheet have arisen in the ordinary course of business and represent amounts
payable by a buyer for goods actually sold or services actually performed and
are current and collectible at the aggregate recorded amounts thereof, less any
reserve for bad debts reflected on the Closing Balance Sheet.
4.8 Inventory. The Inventory is of a quality and quantity usable and
saleable in the ordinary course of business consistent with past practice
without discount for obsolescence. The value at which Seller carries the
Inventory on the November 30 Balance Sheet reflects Seller's customary inventory
valuation policy consistently applied. None of the Inventory has been consigned
to others. The Inventory is sufficient and adequate for, but is not in excess of
the level appropriate to, the customary conduct of the Business as it previously
has been conducted. Seller has not made any purchase commitment for Inventory in
excess of normal, ordinary and usual requirements.
4.9 Business Changes. Except as set forth on Schedule 4.9 attached
hereto, since November 30, 1997, there has not been:
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(a) any material adverse change in the condition (financial or
otherwise) or in the operations, assets or business prospects of Seller, any
material damage, destruction or loss (whether or not covered by insurance) to
the Business or the Purchased Assets, or any material transaction outside the
ordinary course of business affecting Seller, the Business or the Purchased
Assets, including, without limitation, any material adverse change in Seller's
revenues, costs, or in Seller's relations with its employees, agents, customers
or suppliers;
(b) any sale, lease, transfer, assignment, abandonment or
other disposition of any asset of Seller which, if owned on the Closing Date,
would be a Purchased Asset, except for dispositions in the ordinary course of
business;
(c) any payment of any material liability other than (i)
liabilities then required to be discharged or satisfied, (ii) current
liabilities shown on the November 30 Balance Sheet and (iii) current liabilities
incurred since the November 30 Balance Sheet Date in the ordinary course of
business and consistent with past practices;
(d) any indebtedness incurred by Seller for money borrowed;
(e) any intercompany loans or payments, dividends or transfers
of cash or other assets by Seller made outside the ordinary course of business;
(f) any material deviation from the ordinary and usual course
of conducting the Business (including, without limitation, Inventory purchasing
practices) in contemplation of the transactions contemplated by this Agreement;
(g) any capital expenditures in excess of $50,000 in any
single transaction or in excess of $100,000 in the aggregate;
(h) any mortgage, pledge or creation of any lien, charge,
security interest or other encumbrance on any of Seller's assets;
(i) except for negotiations with respect to this Agreement,
any negotiations or contract for the sale of the Business or any part thereof,
or for the purchase of another business, whether by merger, consolidation,
exchange of capital stock or otherwise;
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(j) any notice (written or otherwise) that any customer of
Seller which accounts for 5% or more of Seller's total net sales for the prior
12 months may terminate or materially alter its relationship with Seller or any
notice of termination or potential termination of any other contract, lease or
relationship, including relationships with suppliers, which, in any case or in
the aggregate, has or is reasonably likely to have a Material Adverse Effect
upon the Business or the Purchased Assets;
(k) any change or modification of Seller's accounting methods
or practices or Seller's banking arrangements;
(l) any payment of dividends, or declaration of payment of
dividends, to Seller's shareholders, nor has Seller redeemed, or obligated
itself to redeem, any of its shares of capital stock or other securities;
(m) any encounter with any labor union organizing activity,
any actual or threatened employee strikes, work stoppages, slow-downs or
lockouts or any material change in the relations of Seller with its employees,
agents, customers or suppliers;
(n) any change in the rate of compensation, commission, bonus
or other direct or indirect remuneration, or any extra compensation, pension,
severance or vacation pay, payable or paid or promised to pay (whether orally or
in writing), conditionally or otherwise, to any shareholder, director, officer,
employee, sales distributor or agent of Seller except for any such changes that
were made in the ordinary course of business consistent with past practices; or
(o) any failure by Seller to replenish its inventories and
supplies in a normal and customary manner consistent with its prior practice,
any purchase commitment in excess of the normal, ordinary and usual requirements
of the Business or at any price in excess of the then current market price, or
any other change in the selling, pricing, advertising or personnel practices
inconsistent with Seller's prior practice.
4.10 Leases. Seller does not own any real property. Schedule
4.10 attached hereto sets forth the following: (a) an accurate summary
description of all real properties leased or rented by Seller (the "Leased Real
Property"); and (b) a true, correct and complete copy of each and every lease,
contract, option, agreement or enforceable right or obligation of Seller
relating to or affecting the Leased Real Property to which Seller is a party or
by which the Leased Real
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Property (or any portion thereof) is otherwise bound or affected, including a
summary of any oral or written modifications thereto. All of the leases,
contracts, options, agreements and enforceable rights or obligations referenced
in subsection (b) of this section (collectively, the "Leases") are valid,
binding and in full force and effect, and there is no default by Seller or, to
the knowledge of Seller, any other party thereunder. The Leases will be
terminated without penalty to Buyer at Closing.
4.11 Condition of Leased Real Property. To Seller's best
knowledge, except as set forth on Schedule 4.11 attached hereto, there are no
structural or nonstructural defects in any of the buildings or other
improvements situated on the Leased Real Property and all building systems,
structures, fixtures and improvements, owned, leased or used by Seller are in
all material respects in good condition and working order (reasonable wear and
tear excepted) and are adequate in quality and quantity for the normal operation
of the Business as presently conducted. Seller and the Shareholders have no
notice or knowledge of any capital expenditures required on the Leased Real
Property (excluding normal repairs made consistently with past practice and
which are required to be expensed for federal income tax purposes) in the 12
months following the Closing Date in an amount exceeding $25,000 in the
aggregate, nor are any such expenditures planned.
4.12 Reserved.
4.13 Leased Real Property. Except as set forth in Schedule 4.13, each
parcel of the Leased Real Property is the subject of a written lease agreement,
and there are no oral terms or past practice inconsistent with the written terms
thereof. All such leases are valid and binding agreements, enforceable in
accordance with their respective terms, and are in full force and effect. Seller
has performed all obligations required to be performed by it to date under each
such lease and is not in breach or default in any respect thereunder, and there
has been no event which, with the giving of notice or the lapse of time or both,
would become a breach or default thereunder. To the knowledge of Seller and the
Shareholders, no lessor or landlord to any of such leases is in breach or
default thereunder.
4.14 Title to Purchased Assets. Except as set forth on Schedule 4.14
attached hereto, seller has good, indefeasible and marketable title to all of
the Purchased Assets, free and clear of all mortgages, security interests, title
retention agreements, options to purchase, rights of first refusal, liens,
encumbrances, restrictions and other burdens; except for (i) liens or
limitations on the use of any
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such properties or assets or irregularities in title thereto which,
individually and in the aggregate, do not and will not detract from the value
of, or impair the use of, such properties or assets by Buyer in the operation
of the Business in any material respect, (ii) liens for current taxes,
assessments or governmental charges or levies on property not yet due and
delinquent and (iii) inchoate liens arising in the ordinary course of business
with respect to matters not yet due and delinquent (collectively, the
"Permitted Liens"). All of the Purchased Assets are located at Seller's
facilities at the Leased Real Property.
4.15 Condition of Purchased Assets. To Seller's knowledge, no
maintenance outside the ordinary course of business is needed with respect to
the Purchased Assets. To Seller's knowledge and except as explicitly indicated
on the schedules hereto, none of the Purchased Assets or other assets owned,
leased, occupied or operated by Seller in connection with the Business is, nor
is the ownership, leasing, occupancy or operation thereof, in violation of any
law, ordinance, code, rule or regulation. To Seller's knowledge, the Purchased
Assets are in all respects in good condition and working order (reasonable wear
and tear excepted) and are adequate, in quality and quantity, for the operation
of the Business as presently conducted. Except as explicitly indicted on the
schedules hereto, Seller has not received any notice from any governmental body
or other person claiming any violation of any law, ordinance (zoning or
otherwise), code, rules or regulation or requiring, or calling attention to the
need for, any work, repairs, construction, alterations or installation on or in
connection with the Purchased Assets or the Business, with respect to which
Seller has not complied.
4.16 Contracts and Leases. Seller does not have any oral or written
enforceable rights or obligations or contracts with respect to the Business or
the Purchased Assets other than the Assumed Contracts and the Excluded
Contracts. Each of the Assumed Contracts is legally valid and binding and in
full force and effect with respect to the parties thereto and, to the knowledge
of Seller, none of the other parties to any of the Assumed Contracts is in
default thereof. Seller has no notice or knowledge of any claimed breach of any
of the Assumed Contracts or of the occurrence of any event which after the
passage of time or the giving of notice or both would constitute a default by
Seller or any other party to any Assumed Contract. Except as set forth on
Schedule 4.16, none of the rights of Seller under the Assumed Contracts will be
impaired in any respect by the execution by Seller of this Agreement or
consummation of the transactions contemplated by this Agreement. Except as set
forth on Schedule 4.16, the Assumed Contracts are validly assignable and all of
the rights of Seller thereunder will be enforceable by Buyer after Closing
without the consent or agreement of any other party except for consents
delivered by Seller at Closing. Seller has
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delivered to Buyer copies of all the Assumed Contracts, which copies are
true and complete and include all amendments, modifications and supplements.
4.17 Litigation. Except as set forth on Schedule 4.17 attached hereto,
there is not now, and there has not been within the last three years, any
litigation, proceeding or investigation pending, or, to Seller's and the
Shareholders' knowledge, threatened against or relating to Seller, its
properties or business, or the transactions contemplated by this Agreement.
Schedule 4.17 discloses, with respect to each item described thereon, the name
or title of the action (and parties or potential parties thereto), a description
of the nature of the action and an estimate of the maximum liability of Seller
in the event of an adverse result. Except as so described, Seller and the
Shareholders know of no state of facts or circumstances which reasonably could
be expected to ripen into litigation, proceeding or investigation or adversely
affect the properties, business or prospects of Seller. Except as described on
Schedule 4.17, there is no outstanding order, decree or stipulation issued by
any federal, state or local authority to which Seller is a party or subject and
which adversely affects or may adversely affect its properties, business or
prospects.
4.18 Environmental Matters.
(a) Definitions. For purposes of this section 4.18 and the
other relevant provisions of this Agreement, the following terms have the
following meanings:
(i) Reserved.
(ii) "Environmental Claim" means and includes any
investigation, notice of violation, demand, allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien, proceeding or
claim (whether administrative, judicial or private in nature) arising: [a]
pursuant to, or in connection with, an actual or alleged violation of any
Environmental Law; [b] in connection with any Hazardous Substances or actual or
alleged activity associated with any Hazardous Substances; [c] from any
abatement, removal, remedial, corrective or other response action in connection
with any Hazardous Substances, Environmental Law or other order or directive of
any federal, state or local governmental authority; or [d] from any actual or
alleged damage, injury, threat or harm to health, safety, natural resources or
the environment.
(iii) "Environmental Law" means any local, state or
federal statute, rule, regulation, order, code, directive or ordinance and any
binding
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judicial or administrative interpretation thereof or requirements thereunder
pertaining to: [a] the regulation and protection of the environment, and health
and safety as it relates to Hazardous Substances; [b] the protection or use of
surface water and ground water; [c] the management, manufacture,possession,
presence, use, generation, transportation, treatment, storage, disposal,
release, threatened release, abatement, removal, remediation or handling of, or
exposure to, any Hazardous Substances; or [d] pollution (including any release
to air, land, surface water and ground water); and includes, without
limitation, the Connecticut Transfer Act, C.G.S. Section 22a-134 et seq., and
the following federal statutes (and their implementing regulations and the
analogous state statutes and regulations): the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq.; the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984,
42 U.S.C. Section 6901 et seq.; the Federal Water Pollution Control Act of
1972, as amended by the Clean Water Act of 1977, 33 U.S.C. Section 1251 et
seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. Section
2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986,
42 U.S.C. Section 11001 et seq.; the Clean Air Act of 1966, as amended by the
Clean Air Act Amendments of 1990, 42 U.S.C. Section 7401 et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C. Section 136
et seq.; the Oil Pollution Act of 1990, as amended, 33 U.S.C. Section 1701 et
seq.; the National Environmental Policy Act of 1970, as amended, 42 U.S.C.
Section 4321 et seq.; the Hazardous Material Transportation Act, as amended,
59 U.S.C. Section 5101 et seq.; the Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. Section 300(f) et seq.; the Atomic Energy Act of 1954, as
amended, 42 U.S.C. Section 2014 et seq.; and the Federal Land Policy and
Management Act of 1976, as amended, 43 U.S.C. Section 1701 et seq.
(iv) "Environmental Permit" means any permit, license,
exemption, authorization or decision of any federal, state or local governmental
authority (including local sewerage districts) with jurisdiction over any
Environmental Law.
(v) "Hazardous Substances" means any substance,
chemical, compound, product, solid, gas, liquid, waste, by-product,
pollutant, contaminant or material which is hazardous or toxic, and includes,
without limitation, asbestos or any substance containing asbestos,
polychlorinated biphenyls, petroleum (including crude oil or any fraction
thereof), and any hazardous or toxic waste, material or substance regulated
under any federal, state or local statute, regulation, rule, order, code,
directive or ordinance.
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(b) Representations and Warranties.
(i) Schedule 4.18 attached hereto (A) is true, accurate
and complete and (B) describes: [a] all Environmental Permits relating to the
Environmental Laws or Hazardous Substances which are held by Seller (the "Seller
Environmental Permits"); [b] in general terms, to the best knowledge of Seller,
the storage, use or generation of Hazardous Substances by Seller, at any time,
on the Real Property; [c] any storage, use or generation of Hazardous Substances
on the Real Property which Seller or the Shareholders have notice or knowledge
of; [d] all above- or below-ground storage tanks, surface impoundments and
septic systems on the Real Property, including, to the best knowledge of Seller,
all products and materials ever to have been stored in such tanks; and [e] all
off-site waste treatment, storage and disposal companies presently or, to the
best knowledge of Seller, previously used by Seller or the Business since 1980.
(ii) The Seller Environmental Permits are in full force
and effect and, to the knowledge of Seller and the Shareholders, constitute all
material permits, licenses, approvals and consents relating to the Environmental
Laws or Hazardous Substances required for the conduct of the Business as
presently conducted and used in compliance with the Environmental Laws. To the
knowledge of Seller, no applications for permits or reports filed by Seller in
connection with any Environmental Law or Environmental Permit contained any
untrue statement of material fact or omitted any statement of material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Seller has filed all reports, returns and
other filings required to be filed by Seller with respect to the Real Property
and the Business under Environmental Laws and the Environmental Permits
(collectively, the "Environmental Filings"), except as described on Schedule
4.18 and except for any Environmental Filings the failure of which to file or be
filed would not, individually or in the aggregate, have a Material Adverse
Effect on Seller or the Business.
(iii) The Business and the Real Property (to the extent
operated by Seller) have been and are being operated by Seller in accordance
with the Environmental Laws and the Seller Environmental Permits. Except as set
forth on Schedule 4.18, Seller has not received any notice nor do Seller or the
Shareholders have any knowledge that the Business or the Real Property are not
in compliance with all Environmental Laws and Seller Environmental Permits and
no proceeding for the suspension, revocation or cancellation of any Seller
Environmental Permit is pending or, to the knowledge of
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Seller and the Shareholders, threatened. Except as set forth on
Schedule 4.18, there are no actions pending, or to the knowledge of Seller and
the Shareholders, actions, claims or investigations threatened against Seller,
the Business or the Real Property, which in any case asserts or alleges any of
the following: [a] that Seller, the Business or the Real Property violated any
Environmental Law or Seller Environmental Permit or is in default with respect
to any Seller Environmental Permit or any order, writ, judgment, variance,
award or decree of any government authority relating to any Environmental Law;
[b] that Seller, the Shareholders or the Business is required to clean up or
take remedial or other response action due to the presence, disposal, discharge
or other release of any Hazardous Substance related to the Business or the Real
Property and located on the Real Property or elsewhere; or [c] that Seller, the
Shareholders or the Business is required to contribute to the cost of any past,
present or future cleanup or remedial or other response action which arises out
of or is related to the disposal, discharge or other release of any Hazardous
Substance by Seller or the Business. Except as set forth in Schedule 4.18,
Seller, the Business and the Real Property are not subject to any judgment,
stipulation, order, decree or agreement arising under the Environmental Laws.
(iv) Except as set forth in Schedule 4.18, with respect
to the period during which Seller or the Shareholders owned or occupied the Real
Property and, to the knowledge of Seller and the Shareholders, with respect to
the time before Seller or the Shareholders owned or occupied the Real Property:
[a] no Hazardous Substances have been present, treated, recycled or disposed of
(intentionally or unintentionally) on, under or at the Real Property; [b] there
has been no release or threatened release of any Hazardous Substance on or from
the Real Property; [c] there have not been nor are there now any materials
containing asbestos or PCBs on the Real Property; and [d] there have been no
activities on the Real Property that would subject Buyer or any subsequent owner
of the Real Property to damages, penalties, injunctive relief or cleanup costs
under any Environmental Laws or common law theory of liability.
(v) Except as described on Schedule 4.18, with respect
to the period during which Seller or the Shareholders owned or occupied the Real
Property, all treatment, recycling or disposal of Hazardous Substances has been
conducted off the Real Property and in compliance with all Environmental Laws
and Seller Environmental Permits in effect at the time of the treatment,
recycling or disposal.
(vi) Except as set forth in Schedule 4.18, Seller and
the Shareholders: [a] have no material liability for response, remedial or
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corrective action, natural resources damage, or any other harm related to the
Business or the Real Property pursuant to any Environmental Law, including, but
not limited to, off-site liability related to the Business or the Real Property;
[b] are not subject to, have no notice or knowledge of, and are not required to
give any notice of any Environmental Claim involving the Business or the Real
Property; [c] have no knowledge of any condition or occurrence at the Business
or Real Property which could reasonably form the basis of an Environmental Claim
against Seller, the Shareholders, the Business or Real Property; and [d] have
not received any written or oral request for information under section 104 of
the Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. Section 9604) or comparable state laws.
(vii) Except as set forth on Schedule 4.18(b)(vii), the
Real Property is not subject to, and Seller and the Shareholders have no
knowledge of, any imminent, restriction on the ownership, occupancy, use or
transferability of the Real Property in connection with any [a] Environmental
Law or [b] release, threatened release or disposal of any Hazardous Substances.
(viii) To the best knowledge of Seller, Seller and the
Shareholders have provided or otherwise made available to Buyer any and all
material reports, records, data, site assessments or any other documents
concerning Hazardous Substances or compliance with any Environmental Law, all of
which are listed on Schedule 4.18 (collectively, the "Environmental Reports").
4.19 Government Licenses and Permits. Seller has all domestic and
foreign governmental licenses and permits (including, but not limited to, all
Environmental Permits) necessary to conduct the Business as presently conducted
and own and use the Purchased Assets. All of such licenses and permits are in
full force and effect. No proceeding is pending or, to the knowledge of Seller,
threatened regarding the revocation or limitation of any such governmental
license or permit and, to the knowledge of Seller, there is no basis or grounds
for any such revocation or limitation.
4.20 Certain Third-Party Agreements. To the best knowledge of Seller,
none of the shareholders of Seller nor any of the officers, directors, employees
or consultants of Seller have entered into any agreement which is now in effect
with any person, corporation, partnership or business organization (other than
Seller) requiring such person to assign any interest in any invention or trade
secrets related to the Business or to keep confidential any such trade secrets
or containing any prohibition or restriction on competition or solicitation of
customers.
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4.21 Taxes. All federal, state, county and local income, excise, sales,
transfer, use, gross receipts, ad valorem, payroll and other taxes, fees and
assessments imposed on Seller and payable by Seller, and all federal and state
payroll taxes required to be withheld and paid by Seller, have been or will be
duly, timely and fully reported, paid and discharged.
4.22 Employee Benefit Plans.
(a) Schedule 4.22 attached hereto lists (i) all "employee pension
benefit plans," as such term is defined in section 3(2) of the Employee
Retirement Income Security Act of 1974 ("ERISA") without regard to any
exemptions from any requirements thereunder issued by the United States
Department of Labor in regulations or otherwise, maintained, sponsored or
contributed to by Seller, and (ii) any terminated "employee pension benefit
plan" previously maintained, sponsored or contributed to by Seller which, as of
the Closing Date, has not distributed all of its assets in full satisfaction of
accrued benefits (collectively, the "Pension Plans").
(b) Seller has made available to Buyer true and complete copies of
(i) all documents governing each of the Pension Plans in effect on the Closing
Date; (ii) the most recent annual report prepared on the appropriate Internal
Revenue Service Form 5500 series, including all required attachments, for each
of the Pension Plans subject to such reporting requirements; and (iii) the most
recent determination letter issued by the Internal Revenue Service concerning
the qualification of any Pension Plan pursuant to section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
(c) None of the assets of Seller are subject to any lien,
constructive or otherwise, arising under ERISA section 4068.
(d) Except as set forth in Schedule 4.22, each profit sharing
and/or stock plan of Seller has received from the Internal Revenue Service a
favorable determination letter relating to the tax qualification of such plans
under Code section 401(a). Such Plans have operated in accordance with the
requirements of the Code in all material respects, including but not limited to,
compliance with sections 401(k)(3) and 401(m) of the Code.
(e) Schedule 4.22 attached hereto lists all "employee welfare
benefit plans," as defined in ERISA section 3(1) without regard to any
exemptions from any requirements thereunder issued by the United States
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Department of Labor in regulations or otherwise, maintained, sponsored or
contributed to by Seller (the "Welfare Plans"). The term "Welfare Plans" shall
also include any terminated employee welfare benefit plan previously maintained,
sponsored or contributed to by Seller which, as of the Closing Date, has not
distributed all of its assets. Seller has made available to Buyer true and
complete copies of the documents governing each of the Welfare Plans as in
effect on the Closing Date.
(f) Schedule 4.22 lists all plans or programs to provide fringe
benefits to Seller's employees (other than Pension Plans and Welfare Plans)
including, but not limited to, vacation, sick leave, disability, medical,
hospitalization, life insurance and other insurance plans or related benefits
(the "Fringe Benefit Plans"). Seller has made available to Buyer true and
complete copies of the documents governing each Fringe Benefit Plan.
(g) Seller has no direct or indirect, formal or informal, plan,
fund or program to change any Pension Plan, Welfare Plan or Fringe Benefit Plan
that would affect any Seller employees to be to be hired by Buyer. Seller has
made no material modification, within the meaning of ERISA section 102 and the
regulations thereunder, to any existing Pension Plan or Welfare Plan which is
not set forth in the Pension Plan or Welfare Plan documents provided to Buyer.
Seller has no liability (whether accrued, contingent or otherwise) under any
Pension Plan, Welfare Plan or Fringe Benefit Plan except as disclosed on
Schedule 4.22 or as fully reflected on the November 30 Balance Sheet and
liabilities arising after the November 30 Balance Sheet in the ordinary course
of business, consistent with past practice and which are not materially greater
than such liabilities reflected on the November 30 Balance Sheet.
(h) Except as disclosed on Schedule 4.22, Seller has never been
obligated to contribute to any multi-employer plan within the meaning of ERISA
section 3(37).
For purposes of this section 4.22, "Seller" shall include Seller
and all members of any controlled group of corporations (within the meaning of
Code section 414(b), relevant Treasury Regulations and Pension Benefit Guaranty
Corporation regulations issued pursuant to ERISA section 4001), any group of
trades or businesses under common control (within the meaning of Code section
414(c), relevant Treasury Regulations and Pension Benefit Guaranty Corporation
regulations issued pursuant to ERISA section 4001) and any affiliated service
group (within the meaning of Code section 414(m) and relevant Treasury
Regulations and proposed Treasury Regulations) of which Seller is a member.
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4.23 Labor and Employment Matters. Seller is not a party to or
bound by any union collective bargaining agreements, letters of understanding or
any other labor contract. Seller is not, with respect to the Business, a party
to any pending arbitration or grievance proceeding or other claim relating to
any labor contract nor, to the knowledge of Seller, is any such action
threatened and, to the knowledge of Seller, no set of facts would constitute a
basis for any such action. Seller is not bound by any court, administrative
agency, tribunal, arbitral, commission or board decree, order, judgment,
decision, arbitration agreement or settlement relating to (a) collective
bargaining agreements, (b) terms and conditions of employment, (c) employment
discrimination, (d) attempts to organize a collective bargaining unit, (e)
employment torts, (f) employee benefits, (g) wrongful discharge, (h) plant
closing/mass layoff, (i) work-related injury or illness or other worker's
compensation claims, (j) employment contract, (k) noncompete or trade secret
agreement, (l) workplace health and safety, (m) family and medical leave, (n)
unemployment compensation, (o) wage/hour claims, (p) employee right-to-know
laws, (q) jury duty or military leave, (r) immigration, (s) civil rights, (t)
unfair labor practice, (u) government contracts or (v) other labor or
employment-related claims (collectively, for purposes of this paragraph,
"Labor/Employment Claims"), which in any case may materially and adversely
affect Seller, the Business or the Purchased Assets. Seller has no notice or
knowledge of any Labor/Employment Claim or other labor or employment-related
investigation, claim or allegation against Seller and, to Seller's best
knowledge, no set of facts exists which would constitute a basis for such an
action. All of Seller's material labor or employment policies are in writing,
and Seller has furnished Buyer with true and correct copies of all such written
labor or employment policies. Seller has made all required payments to the
appropriate governmental authorities with respect to applicable unemployment
compensation reserve accounts for Seller employees.
4.24 Employment Contracts. Except as set forth on Schedule 4.24
attached hereto, Seller has no employment contract with any person, nor any
contract with any employee, involving termination, retirement or termination
pay, deferred compensation, profit sharing or pension plans, employee benefit
plans or other employee benefits or post-employment benefits of any kind.
Schedule 4.24 lists: (a) the names, job descriptions, total compensation of each
employee of Seller; (b) the fringe benefits currently furnished to such persons;
and (c) all loans, leases and other financial arrangements to or from Seller
with any employee.
4.25 Intangible Assets. Schedule 4.25 attached hereto contains a true
and complete list of all patents, trademarks, trade names, service marks and
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licenses relating to the Business and all pending applications and applications
to be filed therefor used in the operation of the Business, all of which are
fully assignable and are being transferred pursuant to the terms of this
Agreement free and clear of any adverse claims or interests. All other trade
secrets, confidential information, know-how and formulas used in the Business
are fully assignable and are being transferred hereunder free and clear of any
adverse claims or interests. No licenses, sublicenses, covenants or agreements
have been granted or entered into by Seller relating to any such patents,
trademarks, trade names, service marks, licenses, applications trade secrets,
formulas and other confidential information. To the best knowledge of Seller, no
other patents, trademarks, trade names, service marks, copyrights, licenses, or
applications therefor are necessary for the operation of the Business as
presently operated. The Business and the use of its products by customers does
not infringe upon the rights of any third party, and, to the best knowledge of
Seller, there exists no basis for any claim of infringement of any patents,
trademarks, trade names, service marks, copyrights, licenses or intangible
assets of others.
4.26 Unlawful Payments. Neither Seller nor to the best knowledge of
Seller, any officer, director, shareholder, employee or agent of Seller has made
any payment of cash or other consideration to any person, entity or government
that was unlawful under the laws of the United States or any state or other
government having appropriate jurisdiction.
4.27 Compliance with Law. The operation of the Business and the use of
the Purchased Assets and the Real Property do not violate and, during the prior
three years, have not violated any applicable international, federal, state,
local laws or ordinances (excluding zoning ordinances) or any other rule or
regulation of any international, federal, state or local agency or body,
including, without limitation, all energy, safety, health, export, import,
antidiscrimination, antitrust, wage and hour and price and wage control laws,
orders, rules or regulations applicable to the Business and the Purchased
Assets. Schedule 4.27 attached hereto lists all citations issued to Seller in
the past three years from any federal, state, municipal or local agency or body.
All such citations that have been issued have been properly remedied.
4.28 Insurance. Schedule 4.28 attached hereto contains a description of
each policy of insurance owned or held by Seller currently in effect (including
without limitation, policies for fire and casualty, liability, worker's
compensation, business interruption, umbrella coverage, products liability,
medical, disability and other forms of insurance) specifying the insurer, amount
of coverage, type of insurance, policy number, deductible limits and any pending
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claim in excess of $1,000, whether or not covered by insurance (the
"Insurance"). The Insurance is in full force and effect, all premiums with
respect thereto covering all periods up to and including the date hereof have
been paid, and no notice of cancellation or termination has been received by
Seller with respect to any such policy. The Insurance is sufficient for
compliance with all requirements of law and all agreements to which Seller is a
party. To Seller's knowledge, the policies evidencing the Insurance are valid,
outstanding and enforceable policies subject to the terms and conditions
contained therein, and there has not occurred any act or omission of Seller
which could result in cancellation of any such policy prior to its scheduled
expiration date. Seller has not received any notice from or on behalf of any
insurance carrier issuing any such policy that: (a) insurance rates will
hereafter be substantially increased; (b) that there will hereafter be no
renewal of any such policy; or (c) that alteration of any personal or real
property or purchase of additional equipment, or modification of any method of
doing business, is required or suggested.
4.29 Subsidiaries. Seller has no interest, direct or indirect, and has
no commitment to purchase any interest, direct or indirect, in any other
corporation, partnership, joint venture or other business enterprise or entity.
Except as set forth on Schedule 4.29, the Business has not been conducted
through any other direct or indirect subsidiary or affiliate of any Shareholder.
4.30 Transactions with Certain Persons. Except as set forth on Schedule
4.30 attached hereto, during the past one year, Seller has not, directly or
indirectly, purchased or leased from others or otherwise acquired any property
or obtained any services from or sold, leased to others, or otherwise disposed
of any property or furnished any services to, or otherwise dealt with (except
with respect to remuneration for services rendered as a director, officer or
employee of Seller), (a) any Shareholder or (b) any person, firm or corporation
which, directly or indirectly, alone or together with others, controls or is
controlled by or is under common control with Seller or any Shareholder. Seller
does not owe any amount to, or have any contract with or commitment to, any of
the Shareholders, directors, officers, employees or consultants (other than
compensation for current services not yet due and payable and reimbursement of
expenses arising in the ordinary course of business), and none of such person
owes any amount to Seller. Except as set forth on Schedule 4.30 attached hereto,
no part of the property or assets of any Shareholder or any direct or indirect
subsidiary or affiliate of any Shareholder is used by Seller.
4.31 Products Liability; Warranties. Except as otherwise set forth on
Schedule 4.31 attached hereto: (i) there exists no (a) to the best knowledge of
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Seller, latent defect in the manufacture of any of Seller's products or (b)
pending or, to the knowledge of Seller, threatened action, suit, inquiry,
proceeding or investigation by or before any court or governmental or regulatory
or administrative agency or commission relating to any product alleged to have
been manufactured, distributed or sold by Seller to others, and alleged to have
been defective or improperly manufactured or in breach of any express or implied
product warranty ("Products Liability"); (ii) there exists no pending or, to the
knowledge of Seller, threatened Products Liability claims; and (iii) to the best
of Seller's knowledge, there is no valid basis for any such suit, inquiry,
action, proceeding, investigation or claim. Schedule 4.31 sets forth the
material terms and conditions of all express product warranties under which
Buyer may have liability after the Closing. Seller is insured against product
liabilities, in accordance with the insurance policies identified on Schedule
4.31 (including a statement of the name of the insurer, the type of policy, the
amounts of coverage and the applicable deductible limits).
4.32 Brokerage. Neither Seller nor any Shareholder has incurred, or
made commitments for, any brokerage, finder's or similar fee in connection with
the transactions contemplated by this Agreement.
4.33 Representations and Warranties True and Correct. To the best
knowledge of Seller, there exists no fact, condition or threatened development
of any nature not otherwise disclosed in this Agreement or on the schedules to
this Agreement that would be reasonably likely to have a Material Adverse
Effect. No warranty or representation by Seller contained in this Agreement or
in any writing to be furnished pursuant hereto or previously furnished to Buyer
contains or will contain any untrue statement of fact or omits or will omit to
state any fact required to make the statements herein or therein contained, in
light of the circumstances in which they were made, not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
In order to induce Seller to enter into this Agreement, Edac
and Buyer, jointly and severally, make the following representations and
warranties, each of which shall be deemed independently material and relied upon
by Seller, regardless of any investigation made by Seller:
5.1 Organization. Each of Edac and Buyer is a corporation validly
existing under the laws of the State of Wisconsin and has all corporate power
and authority to own its property and carry on its business as currently
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conducted. Each of Edac and Buyer is duly licensed and qualified to do business
as a foreign corporation in each jurisdiction where the conduct of its business
requires it to be so licensed and qualified, except to the extent any failure to
be so licensed and qualified would not have a Material Adverse Effect on Edac or
Buyer, as the case may be.
5.2 Authority. Each of Edac and Buyer has all necessary corporate power
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and the execution and delivery of this Agreement by each of
Edac and Buyer and the performance by each of Edac and Buyer of its obligations
to be performed hereunder have been duly authorized by all necessary corporate
action of Edac and Buyer, respectively.
5.3 No Conflict. The execution and delivery of this Agreement do not,
and the consummation of the transactions contemplated hereby will not: (a)
conflict with or violate any provisions of the Articles of Incorporation or
By-Laws of Edac or Buyer; (b) conflict with or violate any provisions of, or
result in the maturation or acceleration of, any obligations under any contract,
agreement, instrument, document, lease, license, permit, indenture, or
obligation or any law, statute, ordinance, rule, regulation, guideline, code,
order, arbitration award, judgment or decree, to which each of Edac and Buyer is
subject or to which each of Edac and Buyer is a party; or (c) violate any
restriction or limitation, or result in the termination or loss of any right (or
give any third party the right to cause such termination or loss), of any kind
to which each of Edac and Buyer is bound or has.
5.4 Enforceability. This Agreement and all other agreements and
documents executed by each of Edac and Buyer pursuant hereto are, or upon the
execution thereof will be, valid and binding obligations of Edac and Buyer, as
the case may be, enforceable against Buyer in accordance with their terms.
5.5 Brokerage. Neither Edac nor Buyer has not incurred, nor made
commitment for, any brokerage, finder's or similar fee in connection with the
transactions contemplated by this Agreement.
5.6 Warranties True and Correct. To the knowledge of each of Edac and
Buyer, no warranty or representation by Edac or Buyer contained in this
Agreement or in any writing to be furnished pursuant hereto or previously
furnished to Seller contains or will contain any untrue statement of fact or
omits or will omit to state any fact required to make the statements herein or
therein contained, in light of the circumstances under which they were made, not
misleading.
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5.7 Solvency. At the Closing, after giving effect to any changes in
Buyer's and/or Edac's assets and liabilities as a result of the transactions
contemplated hereby, (i) the fair saleable value of Buyer's and Edac's assets,
on a collective basis, would exceed its stated liabilities (including identified
contingent liabilities), (ii) Buyer (with the guaranty of Edac to the extent of
the transactions contemplated hereby) would be able to pay its debts as they
mature, following the consummation of the transactions contemplated hereby and
(iii) the capital remaining in Buyer after Closing would not be unreasonably
small in relation to its business or any contemplated or undertaken transaction.
Buyer shall provide Seller with a copy, addressed to Seller, of any solvency
letter required in connection with the Closing by any bank or other institution
providing any of Edac's or Buyer's financing for the transactions contemplated
hereby.
5.8 SEC Reports. Since December 31, 1994, Edac has filed all reports,
registration statements and other filings, together with any amendments required
to be made with respect thereto, that it has been required to file with the
Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as
amended (the "1933 Act") and the Securities Exchange Act of 1934, as amended
(the "1934 Act"). All reports, registration statements and other filings
(including all exhibits, notes and schedules thereto and documents incorporated
by reference therein) filed by Edac are sometimes hereinafter collectively
referred to as the "Edac SEC Reports." Edac has heretofore delivered to Seller
true and complete copies of all of the Edac SEC Reports that have been filed
with the SEC prior to the date hereof. As of (i) with respect to all of the Edac
SEC Reports other than registration statements filed under the 1933 Act, the
respective dates of their filing with the SEC and (ii) with respect to all
registration statements filed under the 1933 Act, the respective effective
dates, the Edac SEC Reports complied or comply, as the case may be, in all
material respects with the rules and regulations of the SEC and did not or will
not, as the case may be, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein not misleading.
ARTICLE VI
COVENANTS OF SELLER AND THE SHAREHOLDERS
Seller hereby covenants and agrees with Buyer as follows:
6.1 Access to Books and Records After Closing. For a period of seven
years following the Closing Date (the "Section 6.1 Record Retention Period"),
Seller shall maintain in a reasonably accessible place any books and
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records not delivered to Buyer hereunder relating to the Business.
During the Section 6.1 Record Retention Period, Seller shall provide Buyer and
its authorized representatives with reasonable access to such books and records
during normal business hours and upon written request (and at Buyer's expense)
shall provide copies of such books and records to Buyer or its authorized
representatives.
6.2 Operation of Business. Except as set forth on Schedule 6.2, from
the date of this Agreement and until the Closing Date, without the express prior
written consent of Buyer, Seller shall not:
(a) grant or promise any increase in compensation to any
shareholder, officer or director, or any general increase in the rate of
compensation of its non-shareholder employees, or any sub-group of employees,
nor, by means of any bonus, profit-sharing, incentive compensation payment,
pension, retirement, medical hospitalization, life insurance or other insurance
plan or plans, or otherwise, increase in any amount the benefits or compensation
of any such employees, directors or officers, except, however, ordinary merit
increases not unusual in character or amount made in the ordinary course of
business and consistent with past practice to employees who are not shareholders
of Seller;
(b) enter into, amend, renew or extend any employment contract or
collective bargaining agreements;
(c) sell or dispose of any asset (other than inventory in the
ordinary course of business) having a book value or current estimated market
value in excess of $25,000 for any single asset or $50,000 for all assets sold
or disposed of under this section 6.2(c), or encumber, mortgage or pledge any of
its assets whatsoever;
(d) make any capital expenditures, or enter into any lease of
capital equipment or real estate, involving an amount in excess of $25,000 to
any one person, or $50,000 in the aggregate to all persons;
(e) enter into any other contract with any other person involving
total payments or expenditures to any single person of more than $50,000 on any
single contract, or $100,000, in the aggregate of all such contracts with the
same or related parties, or which is not entered into in the ordinary course of
business;
(f) enter into any transaction, or create, assume, incur or
guarantee any indebtedness, other than entered into or incurred pursuant to the
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Assumed Contracts or in the ordinary course of business since the date of this
Agreement;
(g) discharge or satisfy any lien or encumbrance, or pay or satisfy
any obligation or liability (absolute, contingent, accrued or otherwise) other
than (i) in the ordinary course of business and consistent with past practice,
or (ii) that discharged, paid or satisfied pursuant to liens, obligations or
liabilities disclosed on the November 30 Balance Sheet or any schedule attached
hereto (and not in excess of the amount disclosed thereon);
(h) authorize or issue any shares of capital stock or other
securities convertible into capital stock, or declare or pay any dividend or
make any sale of, or distribution with respect to, capital stock or directly or
indirectly redeem, purchase or otherwise acquire any capital stock;
(i) change any accounting procedures or practices or its financial
structure;
(j) make any amendments to or changes in its Certificate or of
Incorporation or By-Laws;
(k) perform any act, or attempt to do any act, or permit any act or
omission to act, which will cause a breach of any contract, agreement,
instrument, document, lease, license, permit, indenture or other obligation to
which Seller is a party or to which it is bound; or
(l) engage in any transaction of the types described in section
4.30 hereof or any other transaction outside the ordinary course of business.
6.3 Preservation of Business. From the date of this Agreement and until
the Closing Date, Seller shall carry on the Business diligently and
substantially in the ordinary course of business consistent with past practice
and shall use commercially reasonable efforts to keep Seller's business
organization intact.
6.4 Insurance and Maintenance of Property. From the date of this
Agreement and until the Closing Date, Seller shall maintain in effect all the
Insurance, and shall operate, maintain and repair all of its property in a
manner consistent with past practice.
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6.5 Compliance with Laws. From the date of this Agreement and until the
Closing Date, Seller shall use commercially reasonable efforts to comply with
all applicable laws, statutes, ordinances, rules, regulations, guidelines,
orders, arbitration awards, judgments and decrees applicable to, or binding
upon, Seller of the Business or any of the Purchased Assets.
6.6 Reserved.
6.7 Fulfill Conditions. Seller shall use its commercially reasonable
efforts to cause to be fulfilled on or prior to the Closing each of the
conditions set forth in Article VIII hereof.
6.8 Employees. Seller shall terminate the employment of all of its
employees as of the Closing Date except for Gerald Biondi, Michael Biondi and
James Biondi. Seller authorizes Buyer to hire, on or after the Closing Date,
such employees of Seller employed immediately prior to the Closing Date.
6.9 Release of Security Interests. Seller shall on or prior to the
Closing Date deliver to Buyer such documents as are necessary to terminate and
release all security interests and other encumbrances on the Purchased Assets or
any portion thereof, except for the security interests and encumbrances listed
on Schedule 6.9 and the Permitted Liens, which documents shall be in form and
substance acceptable to Buyer and shall include without limitation, all
documents necessary to terminate of record any such security interest or
encumbrance.
6.10 Change of Corporate Name. Seller shall take all action that is
necessary to authorize the amendment of Seller's Certificate of Incorporation to
change the corporate name of Seller to a name which does not include the word
"Apex".
6.11 Documents Executed by Seller. On the Closing Date, Seller shall
duly execute and deliver to Buyer: (a) General Bill of Sale in the form of
Exhibit C attached hereto, (b) an Assignment and Assumption Agreement in the
form of Exhibit D attached hereto (the "Assignment and Assumption Agreement");
(c) a Noncompetition Agreement in the form of Exhibit E attached hereto; (d)
assignments (in form and substance reasonably satisfactory to Buyer's counsel)
assigning to Buyer the following: (i) all intellectual property rights,
including trademarks, trade names, slogans, patents, inventions, patent
applications, copyrights and copyright applications; (ii) all Assumed Contracts;
(iii) all assignable insurance policies then in effect; and (iv) all assignable
Licenses and Permits; and (e) a certificate of amendment to Seller's Certificate
of Incorporation
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changing Seller's name as required by section 6.10, together
with a check for the requisite filing fee, including any fee to expedite the
filing.
6.12 Other Deliveries of Seller. On the Closing Date, Seller shall
deliver to Buyer the following: (a) resolutions of Seller's shareholders and
Board of Directors authorizing and approving the execution, delivery and
performance of this Agreement and the transactions contemplated hereby,
certified by the Secretary or the President of Seller; (b) current Uniform
Commercial Code and state, local and federal tax, sales and unemployment
compensation tax, judgment, bankruptcy and similar lien searches showing no
liens, security interests, claims or judgments against the assets of Seller,
other than as set forth on the schedules attached to this Agreement; (c) all
consents for the assignment of the Assumed Contracts (excluding customer
purchase orders) and the Permits and Licenses, which are necessary in order for
the same to be assigned to Buyer upon their present terms, and Seller shall pay
all fees, charges and other costs that are required or imposed in connection
with obtaining any such consent; (d) an affidavit that Seller is not a "foreign
person" within the meaning of section 1445 of the Code and which shows Seller's
federal taxpayer identification number, in form and substance acceptable to
counsel for Buyer; and (e) all other documents reasonably requested by Buyer's
counsel to consummate the transactions contemplated by this Agreement.
6.13 Documents Executed by the Shareholders. On the Closing Date, each
Shareholder (or the applicable shareholder) shall execute and deliver to Buyer:
(a) a Noncompetition Agreement in form and substance as Exhibit F attached
hereto; (b) the Real Estate Purchase Agreements and (c) all other documents
reasonably requested by Buyer's counsel to consummate the transactions
contemplated by this Agreement. In addition, at the Closing, Gerald S. Biondi
shall execute and deliver to Buyer a Consulting Agreement in form and substance
as Exhibit G attached hereto (the "Consulting Agreement").
6.14 Collection of the Receivables. Buyer shall have full power and
authority to collect for its account all Receivables, and to endorse, without
recourse to Seller, in the name of Seller, any checks or other instruments of
payment received on account of payment of any such Receivables; provided,
further, that if Seller receives any payment on account of any such Receivables,
Seller shall transfer and deliver such payment (endorsed where necessary) to
Buyer, promptly after receipt.
6.15 Transfer Taxes. Seller shall pay all sales and other transfer
taxes, resulting from the transactions contemplated by this Agreement, except
for
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any transfer tax relating to the sale of any motor vehicles included within
the Purchased Assets.
6.16 Access to Information and Documents. During the period prior to
Closing, Buyer shall have the right to conduct environmental due diligence
investigations as to Seller, the Business, operations and the Real Property,
which investigations may include, but shall not be limited to, access to the
Real Property for sampling and collection of information, interviews with
Seller's management, employees or other representatives (such interviews shall
be subject to prior approval by Seller, which approval shall not be unreasonably
withheld), and review of records of governmental entities with respect to
matters which Buyer may determine in its sole discretion are necessary to be
evaluated. Such right of access and investigation, if any, shall be subject to
all of the terms and conditions of that certain License for Access dated March
4, 1998, between the parties, the term of which is hereby extended until the
Closing Date or the date of termination of this Agreement. Buyer agrees to
notify Seller in advance of the need, if any, to conduct additional
environmental site assessments. Seller shall promptly reimburse Buyer for
one-half of all out-of-pocket expenses incurred by Buyer in connection with all
such environmental due diligence, subject to a maximum payment by Seller of
$15,000.
ARTICLE VIA
ENVIRONMENTAL COVENANTS
ENVIRONMENTAL COVENANTS OF SELLER AND THE SHAREHOLDERS
6A.1 Connecticut Transfer Act. The Shareholders shall be responsible
for full compliance with the provisions of section 22a-134 et seq. of the
Connecticut General Statutes (hereinafter the "Transfer Act"), including without
limitation (i) the determination as to the applicability of the Transfer Act to
the transfer of the Real Property contemplated by this Agreement, (ii) the
signing and filing of any appropriate Transfer Act form with the Connecticut
Department of Environmental Protection ("DEP"), (iii) the payment of any
Transfer Act form filing fee, (iv) the performance of any remediation or other
activities required to comply with any Transfer Act form filed with the DEP in
accordance with any applicable DEP regulations or required by the DEP in
connection with any such Transfer Act form filing, and (v) the payment of all
costs, liabilities and expenses directly or indirectly related to the foregoing
subparagraphs (i) through (iv), inclusive.
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6A.2 Comprehensive Environmental Response, Compensation, and Liability
Information System. As indicated in the Environmental Reports, a number of
properties in the Farmington Industrial Park, including the Real Property at 21
Spring Lane and 55 Spring Lane, are listed on the United States Environmental
Protection Agency's ("EPA") Comprehensive Environmental Response, Compensation,
and Liability Information System ("CERCLIS"). For the five-year period beginning
on the date of Closing and ending on the fifth anniversary of the date of
Closing, Seller and the Shareholders, jointly and severally, shall be
responsible for all Losses (as defined in Section 10.1) associated with any
Environmental Claim or other Losses directly or indirectly relating to, arising
out of or resulting from the fact that the Real Property at 21 Spring Lane and
55 Spring Lane are included on CERCLIS, including, but not limited to, any
Comprehensive Environmental Response, Compensation and Liability Act action or
claim asserted by any governmental agency or third party (a "CERCLA Claim")
against Seller, the Shareholders, Buyer or Edac during such five-year period;
provided, however, that Seller and the Shareholders shall not be responsible for
any portion of such Environmental Claim or Losses to the extent that it relates
to or was caused by activities of the Buyer or Edac or any tenants of Buyer or
Edac after the Closing Date.
6A.2A Seller's and Shareholders' Remediation Rights. In the course of
performing any investigation or remediation activities which may be required
pursuant to this Article, Seller and the Shareholders shall have the right to
(a) appeal, by appropriate and diligent actions, any determination by a
regulatory agency concerning the appropriate requirements for remediation; and
(b) seek application of any alternative or site specific remediation standards
or any variances approved by a regulatory agency that Seller or Shareholders
deem necessary or desirable, provided that the application of such alternative
or site specific remediation standards or of such variance shall be consistent
with the use of the Real Property for commercial or industrial purposes.
6A.3 Known Environmental Issues. For the five-year period beginning on
the date of Closing and ending on the fifth anniversary of the date of Closing,
Seller and the Shareholders, jointly and severally, shall be responsible for any
Environmental Claim, or Losses related to any Environmental Claim, to the extent
such Environmental Claim, or Losses related to such Environmental Claim,
directly or indirectly arise out of, result from or relate to any of the
contamination or noncompliance with Environmental Laws specified in the
Environmental Reports; provided, however, that Seller and the Shareholders shall
not be responsible for any portion of any Environmental Claim, or Losses related
to any Environmental Claim, to the extent that the same relates to or was caused
by
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activities of the Buyer or Edac or any tenants of Buyer or Edac after the
Closing Date.
6A.4 Pre-Closing Environmental Issues. Seller and the Shareholders
shall be fully responsible for the performance of any remediation or other
activities required under Environmental Laws in connection with any spill or
other release of any Hazardous Substances which occurs on, at, or under, or
which migrates onto, any of the Real Property between the date of this Agreement
and the date of Closing.
6A.5 Shareholders' Cooperation with Buyer. In the course of performing
their obligations under this Article, the Seller and the Shareholders shall keep
the Buyer fully apprised of both the schedule for and scope of any necessary
investigation and remediation activities contemplated by this Article, and shall
take all reasonable steps to ensure that any necessary investigation and
remediation activities do not unreasonably interfere with use of the property by
Buyer or Edac. Seller and Shareholders shall provide all data and information
with respect to any necessary investigation and remediation activities,
including copies of draft data, information or reports, to Buyer, and provide
Buyer with full opportunity to make reasonable comments and recommendations to
Shareholders and Seller regarding such materials, which comments and
recommendations shall be considered in good faith by Shareholders and Seller but
shall not be binding on the Shareholders or Seller. Shareholders shall provide
Buyer with a minimum of forty-eight (48) hours prior notice of any meetings
between Shareholders and representatives of regulatory agencies such that Buyer
and/or its representatives has the opportunity to attend such meetings for the
sole purpose of observing such meetings.
6A.6 Covenant Not to Sue: Comfort Letter. During the five-year period
referenced in section 6A.2 above, Seller and the Shareholders shall cooperate
with and assist Buyer, at Buyer's cost, in the event that Buyer elects to seek,
under relevant provisions of Environmental Law, a "covenant not to sue" from the
DEP, a "comfort letter" from the EPA, or other similar forms of government
assistance from which Buyer may be eligible as the result of Buyer's
consummation of the transaction contemplated by this Agreement.
6A.7 Termination of Shareholders' and Seller's Obligations.
Notwithstanding any other provision of this Agreement to the contrary, the
obligations of Seller and Shareholders pursuant to this Article VIA shall
terminate on the date that is the fifth anniversary of the Closing Date.
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ENVIRONMENTAL COVENANTS OF BUYER
6A.8 Buyer's Environmental Responsibility Post-Closing. Buyer covenants
that on and after the Closing Date it will be solely responsible for full
compliance with, and will be fully responsible for any failure of its tenants to
comply with, all applicable Environmental Laws and will be solely responsible
for maintaining compliance with all material Environmental Permits required for
the ongoing operation of the Real Property for Buyer's businesses. Buyer shall
be fully responsible for the performance of any remediation or other activities
required under Environmental Laws in connection with any spill or other release
of any Hazardous Substance which occurs on, at or under any of the Real Property
resulting from its ownership or operation of the Business or Real Property or
spill or other release of any Hazardous Substances which migrates onto any of
the Real Property after the Closing.
6A.9 Buyer's Cooperation with Shareholders.
(a) Buyer shall use commercially reasonable efforts not to
interfere with or increase the cost of the performance of the Shareholders'
obligations under this Article, and shall cooperate, at Shareholders' cost, with
any appeal by the Shareholders of any determination by a regulatory agency
regarding the appropriate standards for remediation, and any application by the
Shareholders for any alternative or site specific remediation standards, or any
variances, consistent with industrial or commercial use sought by the
Shareholders from the DEP and/or the EPA; provided, however, that Buyer shall
not be required to take any action or refrain from taking any action which it
reasonably believes, after consultation with counsel, would constitute a
violation of law by Buyer or a violation of law for which Buyer is reasonably
likely to have responsibility.
(b) Buyer acknowledges that Seller and Shareholders intend to
complete their obligations pursuant to this Article in a way that minimizes any
necessary investigation or remediation costs but that is in full compliance with
all applicable Environmental Laws. In the event that the Buyer interferes with
the Seller's or Shareholders' efforts to complete their obligations under this
Article in a way that minimizes any necessary remediation costs and such action
constitutes a breach by Buyer of section 6A.9, or Buyer modifies its operations
or activities in a way that materially increases the Seller's or Shareholders'
cost of compliance, Buyer shall reimburse the Seller or Shareholders for any
additional costs the Seller or Shareholders would not have otherwise incurred in
complying with their obligations pursuant to this Article.
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6A.10 Access. Buyer shall grant the Shareholders and their agents
reasonable access along materially the same terms as Seller provided Buyer
access to Seller's facilities under the License for Access dated March 4, 1998
to perform Shareholders' obligations pursuant to this Article. Buyer also shall
grant the Shareholders and their agents reasonable access necessary for the
Shareholders to pursue any actions against third parties, including but not
limited to Howmet Corporation and insurance carriers, relating to any
environmental liabilities incurred by the Shareholders.
6A.11 Communications and Coordination with Agencies. In recognition of
the desirability of coordinating communications with environmental agencies,
unless otherwise required by applicable law, Buyer shall allow the Seller or
Shareholders to serve as the sole liaison with any regulatory agencies involved
in any of the matters which are the responsibility of the Seller or Shareholders
pursuant to this Article; provided, however, that Buyer may attend any meetings
between Seller or Shareholders and representatives of regulatory agencies for
the sole purpose of observing such meetings. In the event that Buyer
communicates with any regulatory agency in a manner that interferes with the
Seller's or Shareholders' efforts to complete their obligations under this
Article in the most cost effective manner possible, and such communication
constitutes a breach by Buyer of Section 6A.9 of this Article, Buyer shall
reimburse the Seller or Shareholders for any additional costs the Seller or
Shareholders would not have otherwise incurred in performing their obligations
under this Article. Notwithstanding anything in this Agreement to the contrary,
if (a) any CERCLA Claim is made directly against Buyer or Edac, and Seller and
the Shareholders do not agree, by assuming control of the defense of such CERCLA
Claim after receipt of the notice required pursuant to this Agreement, that all
Losses incurred in connection with such CERCLA Claim are fully covered by
Seller's and the Shareholders' indemnification obligations to the Article X
Indemnitees hereunder; (b) a CERCLA Claim is made against Seller and/or the
Shareholders and such CERCLA Claim, on its face, raises issues concerning the
allocation of potential environmental related liabilities between the periods
before and after the Closing or, in defending such a CERCLA Claim, Seller or the
Shareholders posit defenses which raise such allocation issues; and/or (c) a
criminal investigation or complaint concerning environmental matters is made
which involves Edac and/or the Buyer; Edac, Buyer and its representatives shall
be free to take whatever actions they deem appropriate to protect their
interests, including but not limited to, having discussions with any regulatory
agency, and any such actions by Buyer, Edac or its representatives will not in
any way affect the Article X Indemnitees' rights to indemnification from Seller
and the Shareholders pursuant to this Agreement.
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6A.12 Buyer acknowledges that the nature of any investigation or
remediation activities to be performed by Seller and Shareholders pursuant to
this Agreement (the "Remedition Process") is that the Remediation Process is
likely to involve substantial discussions with representatives of regulatory
agencies concerning the nature and scope of activities required pursuant to
applicable law and regulations, and potentially discretionary decisions by
representatives of such regulatory agencies and/or an LEP. Buyer further
acknowledges and agrees that notwithstanding the "compliance with applicable
law" provisions of Section 6A.9 and 6A.11 hereof, Buyer shall not utilize the
nature of the Remediation Process as a reason for involving itself in or
interfering with the activities of the Seller or Shareholders, except in the
manner contemplated by Section 6A.5, in complying with their obligations
pursuant to this Agreement.
ARTICLE VII
COVENANTS OF EDAC AND BUYER
In order to induce Seller to enter into this Agreement, Edac and Buyer
hereby covenant and agree with Seller as follows:
7.1 Record Retention. For a period of seven years after the Closing
Date (the "Section 7.1 Record Retention Period"), Buyer shall maintain in a
reasonably accessible place the books and records delivered by Seller hereunder
relating to the Business. During the Section 7.1 Record Retention Period, Buyer
shall provide Seller and its authorized representatives with reasonable access
to such books and records during normal business hours and upon written request
(and at Seller's expense) shall provide copies of such books and records to
Seller or its representatives.
7.2 Certified Resolutions. On the Closing Date, each of Buyer and Edac
shall deliver to Seller a copy of the resolutions of each of Buyer's and Edac's
Board of Directors, authorizing and approving the execution of this Agreement
and the performance by Buyer and Edac of the transactions contemplated hereby,
certified by the Secretary or the President of Buyer and Edac, respectively.
7.3 Deliveries. On the Closing Date, Buyer (or Edac, as the case may
be) shall: (a) have executed and delivered to Seller, the Assignment and
Assumption Agreement, (b) have executed and delivered to Seller and the
Shareholders, the Noncompetition Agreement, (c) have executed and delivered to
Gerald S. Biondi, a Consulting Agreement and (d) have executed and delivered to
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the applicable shareholders, the Real Estate Purchase Agreements and related
documents.
7.4 Insurance. From and after the Closing, Buyer shall, at Buyer's
cost, provide James G. Biondi, Gerald S. Biondi and Michael Biondi with family
plan health insurance that is substantially similar to the insurance coverage
that is offered by Seller to its employees as of the date of this Agreement;
provided, however, that Buyer's obligation to furnish such health insurance
shall, with respect to each individual, terminate on December 31, 2004.
7.5 Election as Director. At the Closing, James G. Biondi shall, unless
he indicates in writing his intent otherwise, be elected as a member of the
Board of Directors of Edac. If James G. Biondi is elected as a director of Edac,
(a) Edac shall maintain its current directors' and officers' liability coverage
or such other coverage determined by the Board of Directors of Edac from time to
time, at all times during which James G. Biondi serves as a member of the Board,
and (b) James G. Biondi shall be entitled to the same rights regarding
indemnification and advancement of expenses as enjoyed by the other directors of
Edac. If James G. Biondi or his counsel do not approve of the existing director
indemnification or insurance, he shall not be required to serve as a director
and Edac shall not be required to nominate him to the slate of directors.
7.6 Secretarial Support. For a period of four years after the Closing
Date, Buyer shall provide James G. Biondi with 15 hours of secretarial support
per week.
7.7 Property Management. With respect to the property currently owned
by James G. Biondi in West Haven, Connecticut, for a period of four years from
and after the Closing Date, Buyer shall provide, or arrange for the provision
of, up to five hours of property management services per week for the property
owned by James Biondi in West Haven, Connecticut.
7.8 Commercially Reasonable Efforts; Notice of Breach.
(a) Subject to the terms and conditions herein provided, prior to
the Closing, each of Edac and Buyer shall use its commercially reasonable
efforts to take, or cause to be taken, all action and do, or cause to be done,
all reasonable things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective as expeditiously as practicable,
the transactions contemplated by this Agreement. In furtherance of the
foregoing, Edac and Buyer agree to use commercially reasonable efforts in
seeking to
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procure, on commercially reasonable terms and conditions, the
financing required to consummate the transactions contemplated by this
Agreement.
(b) Prior to the Closing, each of Edac and Buyer shall give prompt
notice to Seller of any information actually known to each of Edac and Buyer
(regardless of the source from which such information is learned or derived) or
any act or omission which causes Edac or Buyer to believe that (i) any
representation or warranty made by them or Seller may be untrue or incorrect in
any material respect or (ii) they or Seller may not have complied in any
material respect with any covenant contained herein which is required to be
performed or complied with hereby.
7.9 Nonassignable Agreements.
(a) If, as of the Closing, any consent that is required to effect
the assignment to Buyer of any lease included in the Assumed Contracts shall not
have been obtained, then such lease shall not be assigned to Buyer at that time
and at the Closing, Seller shall sublease to Buyer (to the extent permissible
under such lease) the property leased thereunder, on the same terms and
conditions as appear in such lease.
(b) If any consent to the assignment of any Assumed Contract,
other than a lease, or to the sublease of any leased property is
required but not obtained as of the Closing, then no such agreement or lease
(collectively, the "Nonassigned Agreements") shall be assigned to Buyer at that
time. In such event, Buyer shall perform the obligations of Seller under each
Nonassigned Agreement on behalf of Seller and Seller will use its reasonable
best efforts (without being required, in connection therewith, to incur any
material cost or expense) to enter into an arrangement designed to provide
Buyer with the benefits inuring under such Nonassigned Agreement.
7.10 Product Liability Insurance. For seven year after the Closing
Date, Buyer shall maintain product liability insurance, naming Seller and the
Shareholders as an additional named insured, covering Products Liability with
such carriers, in such amounts and upon such terms Buyer reasonably deems
appropriate. At the Closing and prior to the renewal or replacement of any such
product liability insurance coverage, Buyer shall deliver to Seller a
certificate of the insurer or the insurer's authorized agent, in form and
substance reasonably satisfactory to Seller, evidencing such insurance and
providing that Seller will receive 30 days written notice prior to the
termination or expiration of such insurance.
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7.11 Employment; Severance Liability.
(a) On or before the Closing Date, Buyer shall offer employment,
commencing on the Closing Date, to each person employed as of such date by
Seller in the Business (other than the Shareholders), which employment shall in
each case be offered at wage and benefit levels which Buyer determines in good
faith to be comparable to those maintained by Seller as of the Closing Date for
such employees.
(b) Effective on the Closing Date, Buyer shall assume all
obligations (including any relating to periods ending before or on the Closing
Date) for severance pay or similar benefits which may arise in connection with
(i) the failure of Buyer to comply with section 7.11(a) hereof or (ii) the
termination or severance, from and after the Closing Date (and whether or not
resulting from or in connection with the transactions contemplated hereby), of
the employment of any person employed by Buyer in connection with the Business.
From and after the Closing Date, Buyer shall, in accordance with Article XI
hereof, indemnify, defend and hold harmless Seller against all Losses in
connection with such obligations.
7.12 Benefit Plans. As soon as practicable after the Closing,
Buyer shall, where applicable and reasonably practicable, amend each of the
Assumed Benefit Plans to cause Buyer to be substituted for Seller as the sponsor
thereof.
ARTICLE VIII
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
The obligations of Seller under this Agreement are, at the option
of Seller, subject to the fulfillment at Closing of each of the following
conditions:
8.1 Representations and Warranties. The representations and warranties
in this Agreement made by each of Edac and Buyer shall be true and correct in
all respects as of and at the Closing Date with the same force and effect as
though said representations and warranties had been again made on the Closing
Date, and Seller shall have been furnished a certificate signed by the President
of each of Edac and Buyer to that effect.
8.2 Performance of Covenants and Obligations. Each of Edac and Buyer
shall have performed and complied with all of its covenants and obligations
under this Agreement which are to be performed or complied with by it
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prior to or on the Closing Date, and Seller shall have been furnished a
certificate signed by the President of each of Edac and Buyer to that effect.
8.3 Proceedings and Instruments Satisfactory. All proceedings corporate
or otherwise, to be taken in connection with the transactions contemplated by
this Agreement, and all documents incident thereto, shall be reasonably
satisfactory in form and substance to Seller; and each of Edac and Buyer shall
have made available to Seller for examination the originals or true and correct
copies of all documents which Seller reasonably may request in connection with
the transactions contemplated by this Agreement.
8.4 No Litigation. No investigation, suit, action or other proceeding
shall be threatened or pending before any court or governmental agency in which
it is sought to restrain, prohibit or obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
8.5 Regulatory Filings and Approvals. Each of Edac and Buyer shall have
made such filings and obtained such approvals as may be required in connection
with the transactions contemplated by this Agreement, and the waiting periods,
if any, applicable to the transactions contemplated hereby shall have expired or
been terminated.
8.6 Adverse Change. From and after the date of this Agreement and until
the Closing Date, Seller and the Shareholders (in their reasonable opinion)
shall have determined that there has been no material adverse change in the
business of Edac from that disclosed in the Edac SEC Reports filed with the SEC
on or before the date of this Agreement, other than changes resulting from (a)
changes in general economic or market conditions, (b) changes in any laws or
regulations affecting the business or prospects of Edac or (c) matters affecting
the aerospace industry generally.
8.7 Assignment and Assumption of Specified Contracts. Buyer and/or Edac
shall have assumed all of the continuing obligations of Seller and the
Shareholders under that certain Assistance Agreement by and between the State of
Connecticut acting by the Department of Economic Development and Seller
(together with all related documents and agreements, the "Assistance
Agreement"), and the State of Connecticut shall have released Seller and each of
the Shareholders from all such continuing obligations under the Assistance
Agreement. Notwithstanding the foregoing, this condition precedent shall be
deemed to have been satisfied if Edac and Buyer agree to fully indemnify Seller
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and the Shareholders for any liabilities or obligations associated with the
Assistance Agreement or the failure to obtain from the State of Connecticut the
release of Seller and each of the Shareholders from all such continuing
obligations under the Assistance Agreement.
8.8 Opinion of Counsel. Edac and Buyer shall have delivered to Seller
and the Shareholders the legal opinion of Reinhart, Boerner, Van Deuren, Norris
& Rieselbach, s.c., counsel to Edac and Buyer, in substantially the form of
Exhibit I attached hereto.
8.9 Consummation of Transactions Contemplated by Real Estate Purchase
Agreements. The transactions contemplated by the Real Estate Purchase Agreement
for 17 and 21 Spring Lane shall have been consummated to the reasonable
satisfaction of Seller and the Shareholders and Buyer shall not have exercised
its termination right under the Real Estate Purchase Agreement for 55 Spring
Lane.
ARTICLE IX
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
The obligations of Buyer under this Agreement are, at the option of
Buyer, subject to the fulfillment at Closing of each of the following
conditions:
9.1 Representations and Warranties. The representations and warranties
in this Agreement made by Seller and the Shareholders shall be true and correct
in all respects as of and at the Closing Date with the same force and effect as
though said representations and warranties had been again made on the Closing
Date, and Buyer shall have been furnished a certificate signed by the President
of Seller and the Shareholders.
9.2 Performance of Covenants and Obligations. Seller and the
Shareholders shall have performed and complied with all of their covenants and
obligations under this Agreement which are to be performed or complied with by
them prior to or on the Closing Date, and Buyer shall have been furnished a
certificate signed by the President of Seller and the Shareholders to that
effect.
9.3 Proceedings and Instruments Satisfactory. All proceedings corporate
or otherwise, to be taken in connection with the transactions contemplated by
this Agreement, and all documents incident thereto, shall be satisfactory in
form and substance to Buyer; and Seller shall have made available to Buyer for
examination the originals or true and correct copies of all documents
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which Buyer reasonably may request in connection with the transaction
contemplated by this Agreement.
9.4 Adverse Change. From and after the date of this Agreement and until
the Closing Date, Buyer (in its reasonable opinion) shall have determined that
there has been no material adverse change in the Business or the Purchased
Assets from that disclosed to Buyer in this Agreement other than changes
resulting from (a) changes in general economic or market conditions, (b) changes
in any laws or regulations affecting the Business or (c) matters affecting the
aerospace industry generally.
9.5 No Litigation. No investigation, suit, action or other proceeding
shall be threatened or pending before any court or governmental agency in which
it is sought to restrain, prohibit or obtain damages or other relief in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
9.6 Consents, Approvals. Certifications, Licenses and Permits. All
necessary consents, approvals, certifications, licenses and permits with respect
to the transactions contemplated hereby, including, without limitation, the
transfer of the Purchased Assets to Buyer, the absence of which would have a
material and adverse effect on Buyer's rights under this Agreement, or which
would constitute a breach pursuant to the provision of, or which would result in
the termination or loss of any material right under, any material contract,
agreement, instrument, document, lease, license, certification, permit,
indenture or other obligation (excluding customer purchase orders), or without
which Buyer would be precluded or materially impeded from conducting the
Business or obtaining the benefit of the Purchased Assets, shall have been
received by Buyer on or before the Closing Date.
9.7 Good Standing Certificates. Seller shall have delivered to Buyer a
certificate of status (or certificates of status) relative to Seller, certified
by the Secretary of State of each state or jurisdiction in which Seller is
organized or qualified, and, in each case, dated not more than 10 days prior to
the Closing Date.
9.8 Opinion of Counsel. On the Closing Date, Seller and the
Shareholders shall have delivered to Buyer the legal opinion of Murtha, Cullina,
Richter and Pinney LLP, Seller's and the Shareholders' counsel, in substantially
the form of Exhibit H attached hereto.
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9.9 Financing. Buyer shall have received financing for the transactions
contemplated by this Agreement on commercially reasonable terms and conditions
satisfactory to Buyer.
9.10 Regulatory Filings and Approvals. Seller shall have made such
regulatory filings and obtained such regulatory approvals as may be required in
connection with the transactions contemplated by this Agreement, and any waiting
periods applicable to the transactions contemplated hereby shall have expired or
been terminated.
9.11 Audited Financial Statements. On or prior to the Closing Date,
Seller shall have provided to Buyer audited financial statements of Seller for
the year ended December 31, 1997, prepared in accordance with generally accepted
accounting principles and accompanied by a report and opinion thereon by Bennett
and Katz, LLC, independent certified public accountants. Seller shall pay all
fees and costs associated with the preparation of such 1997 financial
statements.
9.12 Environmental Matters. (a) Prior to Closing, Buyer shall not have
identified any environmental condition or potential environmental liabilities
and costs, other than those arising out of the information included in the
Environmental Reports, which, in Buyer's reasonable opinion, could have or
create, individually or in the aggregate, a material adverse effect on Buyer,
Seller, the Business or the Purchased Assets; and (b) all Environmental Permits
necessary for the Business, operations and the Real Property and any operations
or activities thereon shall be in effect, valid and properly transferable and
Seller and the Shareholders shall use all reasonably available means to assist
in transferring such Environmental Permits to Buyer.
9.13 Equipment Transfer. Seller shall have purchased the Vertical
Machine Center from James G. Biondi and Gerald S. Biondi for no more than
$138,000.
9.14 Real Estate Purchase Agreements. The transactions contemplated by
the Real Estate Purchase Agreement for 17 and 21 Spring Lane shall have been
consummated to the reasonable satisfaction of Buyer and Buyer shall not have
exercised its termination right under the Real Estate Purchase Agreement for 55
Spring Lane.
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ARTICLE X
INDEMNIFICATION BY SELLER AND THE SHAREHOLDERS
10.1 Indemnification. Notwithstanding the Closing, and regardless of
any investigation made at any time by or on behalf of Buyer or Edac, Seller, its
successors and the Shareholders hereby agree to jointly and severally indemnify,
defend and hold Edac, Buyer, each fiduciary of Buyer's employee benefit plans,
each of Edac's and Buyer's subsidiaries, shareholders, affiliates, officers,
directors, employees, agents, successors and assigns (Edac, Buyer and such
persons are collectively referred to hereinafter as the "Article X
Indemnitees"), harmless from and against any demand, claim, damage, liability,
loss, cost, deficiency or expense (including, but not limited to, interest,
penalties, costs of preparation and investigation, and the reasonable fees,
disbursements and expenses of attorneys, accountants and other professional
advisors) and, in the event of any Environmental Claims or indemnification
provided herein for matters related to Environmental Laws or Hazardous
Substances, also including, but not limited to, removal, response, cleanup and
remedial costs and modification costs (collectively, "Losses"), imposed on or
incurred by any of the Article X Indemnitees or the Purchased Assets, directly
or indirectly, arising out of, resulting from or relating to any of the
following and regardless of whether or not such Losses constitute Assumed
Liabilities:
(a) any inaccuracy in or breach of any representation or warranty
of Seller and/or the Shareholders pursuant to this Agreement, including, without
limitation, section 4.18, in any respect (including schedules and documents
delivered pursuant hereto), whether or not the Article X Indemnitees relied
thereon;
(b) any failure by Seller or any Shareholder to duly perform or
observe any term, provision, covenant or agreement to be performed or observed
by Seller or any Shareholder pursuant to this Agreement or any document
contemplated by this Agreement; or
(c) any and all liabilities or obligations of Seller other than
the Assumed Liabilities and/or Excluded Assets.
The obligations of Seller and the Shareholders to indemnify and
hold the Article X Indemnitees harmless as described in this section 10.1 shall
survive the Closing and the consummation of the transactions contemplated by
this Agreement, as provided in section 10.4 hereof.
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10.2 Procedures.
(a) Buyer shall give Seller (who shall in turn notify the
Shareholders) prompt written notice (the "Section 10.2 Notice") of any written
claim, demand, assessment, action, suit or proceeding to which the indemnity set
forth in this Article X applies. If the document evidencing such claim or demand
is a court pleading, Buyer shall give the Section 10.2 Notice, including a copy
of such pleading, within five days after Buyer's receipt of such pleading,
otherwise Buyer shall give the Section 10.2 Notice within 10 days after the date
Buyer receives written notice of such claim. The failure of Buyer to give timely
notice of any matter which may give rise to an indemnification claim shall not
affect the rights of the Article X Indemnitees to collect such Loss from Seller
and the Shareholders so long as such failure to so notify does not materially
adversely affect Seller's or the Shareholders' ability to defend such Loss
against a third party.
(b) If the Article X Indemnitees request for indemnification
arises from the claim of a third party, Seller may, at its option, assume
control of the defense of any such claim, or any action or litigation resulting
from such claim. Failure by Seller to notify the Article X Indemnitees of its
election to defend a complaint by a third party within 15 days after receipt of
the Section 10.2 Notice shall be deemed a waiver by Seller of its right to
respond to such complaint. Failure by Seller to notify the Article X Indemnitees
within 20 days after receipt of the Section 10.2 Notice shall be deemed a waiver
by Seller of its right to assume control of the defense of such claim, action or
litigation. If Seller assumes control of the defense of such claim, action or
litigation resulting therefrom, Seller shall take all reasonable steps necessary
in the defense or settlement of such claim or litigation resulting therefrom and
Seller and the Shareholders shall hold the Article X Indemnitees, to the extent
provided in this section 10.2, harmless from and against all Losses arising out
of or resulting from any settlement approved by Seller or any judgment in
connection with such claim, action or litigation. Notwithstanding Seller's
assumption of the defense of such third-party claim or demand, the Article X
Indemnitees shall have the right to participate in the defense of such
third-party claim or demand at its own expense. Seller shall not, in the defense
of such claim or litigation, consent to entry of any judgment against any of the
Article X Indemnitees or enter into any settlement, involving any of the Article
X Indemnitees, except in either case with written consent of the Article X
Indemnitees, which consent shall not be unreasonably withheld. The Article X
Indemnitees shall furnish Seller in reasonable detail all information the
Article X Indemnitees may have with respect to any such third-party claim and
shall make available to Seller and its representatives all records and other
similar materials which are reasonably required in the defense of such
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third-party claim and shall otherwise cooperate with and assist Seller in the
defense of such third-party claim.
(c) If Seller does not assume control of the defense of any such
third-party claim, action or litigation resulting therefrom, the Article X
Indemnitees may defend against such claim, action or litigation in such manner
as it may reasonably deem appropriate, and Seller and the Shareholders shall
indemnify the Article X Indemnitees from any Loss indemnifiable under section
10.1 hereof incurred in connection therewith. Seller shall not be obligated to
the Article X Indemnitees for any settlement or consent to a stay of judgment
made by any Article X Indemnitees if such settlement or consent is entered into
without the prior written consent of Seller which consent shall not be
unreasonably withheld or delayed.
(d) If Seller shall pay any amount hereunder in settlement of any
such claim, action or litigation against any of the Article X Indemnitees, such
Article X Indemnitees shall assign all their related rights against third
parties to Seller.
10.3 Payment. The Article X Indemnitees shall be entitled to
recover any Losses pursuant to this Article X by means of set off, in good
faith, of any such Losses against payments or amounts due to Seller or the
Shareholders, including, but not limited to, any amounts payable pursuant to the
Real Estate Purchase Agreements and any promissory notes related thereto. Should
the Article X Indemnitees subsequently be found not to be entitled to
indemnification under this Article X, the Article X Indemnitees shall pay Seller
or the Shareholders, as the case may be, as full and complete liquidated damages
and not as a penalty, such disallowed offset amount and interest on the amount
so offset calculated from the later of the date of setoff or the maturity date
of the obligations to Seller or Seller's Shareholders, as the case may be, to
the date of payment, at the annual rate of 8%, and the obligations to Seller or
the Shareholders, as the case may be, shall continue in full force and effect
without any right of Seller or the Shareholders, as the case may be, applicable
upon default resulting from the Article X Indemnitees' setoff.
10.4 Survival of Indemnification. No demand or claim for
indemnification pursuant to sections 10.1(a) hereof shall be made after 24
months following the Closing Date, except as follows: (a) claims for
indemnification for representations and warranties contained in sections 4.14
and 4.18 may be made up to the fifth anniversary of the Closing Date; (b) claims
for indemnification for representations and warranties contained in section 4.21
may be brought at any
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time until the underlying tax obligation is barred by the applicable
period of limitation under federal and state laws relating thereto (as such may
be extended by waiver); and (c) claims for indemnification for intentional or
knowing breaches of the representations and warranties contained in Article IV
may be made at any time until the claim is barred by the applicable period of
limitation under federal and state laws relating thereto. Demands or claims for
indemnification pursuant to Section 10.1(b) and/or 10.1(c) shall survive in
accordance with their terms.
10.5 Basket. No indemnification shall be payable by Seller or the
Shareholders pursuant to section 10.1(a) hereof unless the aggregate Losses
incurred by all of the Article X Indemnitees exceed $200,000 and then only for
the excess over $100,000.
10.6 Remedies Exclusive. Except (a) to the extent that specific
performance of any provision of this Agreement is sought pursuant to section
12.10, (b) for Claims related to intentional or knowing breaches of the
representations and warranties of Seller contained in this Agreement or (c) for
Claims related to fraud, from and after the Closing, the remedies provided in
this Article X shall be the sole and exclusive remedies of the Article X
Indemnitees with respect to Losses for which indemnification is provided in
Article X and shall preclude the Article X Indemnitees from (a) seeking any
other remedy in respect of any such Loss and (b) asserting any rights and
seeking any remedies whatsoever (whether for misrepresentation or breach of
warranty or in tort or otherwise) in respect of Losses in any way related to
this Agreement or the transactions contemplated hereby for which no
indemnification is provided.
10.7 Limitation on Claims. In case any event shall occur which would
otherwise entitle Buyer to assert a Claim for indemnification hereunder, no Loss
shall be deemed to have been sustained by Buyer to the extent of (a) any tax
savings realized by Buyer with respect thereto, or (b) any proceeds received by
Buyer from any insurance policies with respect thereto.
10.8 Maximum Exposure. In no event shall the aggregate indemnity
payments made by Seller and the Shareholders under section 10.1(a) exceed
$5,000,000, less any amounts paid by Seller and/or the Shareholders pursuant to
any indemnification provisions of the Real Estate Purchase Agreements.
10.9 Actual Knowledge. Neither Seller nor the Shareholders shall be
liable under this Article X for a Loss resulting from a breach of any
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representation or warranty if Seller or any Shareholder can establish that Buyer
had actual knowledge on or before the Closing Date of such breach.
ARTICLE XI
INDEMNIFICATION BY BUYER
11.1 Indemnification. Notwithstanding the Closing, and regardless of
any investigation made at any time by or on behalf of Seller, Edac, Buyer and
their successors hereby covenant and agree to jointly and severally indemnify,
defend and hold Seller, each fiduciary of Seller's employee benefit plans, each
of Seller's subsidiaries, shareholders, affiliates, officers, directors,
employees, agents, successors and assigns (Seller and such persons are
collectively referred to hereinafter as the "Article XI Indemnitees") harmless
from and against any Losses imposed on or incurred by any Article XI Indemnitee,
directly or indirectly, arising out of, resulting from or relating to:
(a) any inaccuracy in, or breach of, any representation or
warranty of Edac or Buyer pursuant to this Agreement in any respect (including
schedules and documents delivered pursuant hereto), whether or not the Article
XI Indemnitee relied thereon;
(b) any failure by Edac or Buyer to perform or pay as due the
Assumed Liabilities; or
(c) any failure of Edac or Buyer to duly perform or observe any
term, provision, covenant or agreement to be performed or observed by Edac or
Buyer pursuant to this Agreement or any document contemplated by this Agreement.
The obligations of Edac and Buyer to indemnify and hold the
Article XI Indemnitees harmless as described herein shall survive Closing and
the consummation of the transactions contemplated by this Agreement, as provided
in section 11.4 hereof.
11.2 Procedures.
(a) Seller shall give Buyer (who in turn shall notify Edac) prompt
written notice (the "Section 11.2 Notice") of any written claim, demand,
assessment, action, suit or proceeding to which the indemnity set forth in this
Article XI applies. If the document evidencing such claim or demand is a court
pleading, Seller shall give the Section 11.2 Notice, including a copy of such
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pleading, within five days after receipt of such pleading, otherwise, Seller
shall give the Section 11.2 Notice within 30 days after the date Seller receives
written notice of such claim. Failure to give timely notice of a matter which
may give rise to an indemnification claim shall not affect the rights of the
Article XI Indemnitees to collect such Loss from Edac and Buyer so long as such
failure to so notify does not materially adversely affect their ability to
defend such Loss against a third party.
(b) If Seller's request for indemnification arises from the claim
of a third party, Buyer may, at its option, assume control of the defense of any
such claim, or any action or litigation resulting from such claim. Failure by
Buyer to notify Seller of its election to defend a complaint by a third party
within 5 days after receipt of the Section 11.2 Notice shall be deemed a waiver
by Buyer of its right to respond to such complaint. Failure by Buyer to notify
Seller within 20 days after receipt of the Section 11.2 Notice thereof shall be
deemed a waiver by Buyer of its right to assume control of the defense of such
claim, action or litigation. If Buyer assumes control of the defense of such
claim, action or litigation resulting therefrom, Buyer shall take all reasonable
steps necessary in the defense or settlement of such claim or litigation
resulting therefrom and Edac and Buyer shall hold the Article XI Indemnitees, to
the extent provided in this Article XI, harmless from and against all Losses
arising out of or resulting from any settlement approved by Buyer or any
judgment in connection with such claim or litigation. Notwithstanding Buyer's
assumption of the defense of such third-party claim or demand, the Article XI
Indemnitees shall have the right to participate in the defense of such
third-party claim or demand at its own expense. Buyer shall not, in the defense
of such claim, action or litigation, consent to entry of any judgment against
any of the Article XI Indemnitees or enter into any settlement, involving any of
the Article XI Indemnitees, except in either case with written consent of the
Article XI Indemnitees, which consent shall not be unreasonably withheld. The
Article XI Indemnitees shall furnish Buyer in reasonable detail all information
the Article XI Indemnitees may have with respect to any such third-party claim
and shall make available to Buyer and its representatives all records and other
similar materials which are reasonably required in the defense of such
third-party claim and shall otherwise cooperate with and assist Buyer in the
defense of such third-party claim.
(c) If Buyer does not assume control of the defense of any such
third-party claim, action or litigation resulting therefrom, the Article XI
Indemnitees may defend against such claim, action or litigation in such manner
as it may reasonably deem appropriate, and Edac and Buyer shall indemnify the
Article XI Indemnitees from any Loss indemnifiable under section 11.1 hereof
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incurred in connection therewith. Buyer shall not be obligated to the Article XI
Indemnitees for any settlement or consent to a stay of judgment made by the
Article XI Indemnitees if such settlement or consent is entered into without the
prior written consent of Buyer which consent shall not be unreasonably withheld
or delayed.
(d) If Buyer shall pay any amount hereunder in settlement of any
such claim or litigation against any Article XI Indemnitee, such Article XI
Indemnitee shall assign all of its related rights against third parties to
Buyer.
11.3 Payment. The Article XI Indemnitees shall be entitled to recover
any Losses pursuant to this Article XI by means of set off, in good faith, of
any such Losses against payments or amounts due to Edac or Buyer. Should the
Article XI Indemnitees subsequently be found not to be entitled to
indemnification under this Article XI, the Article XI Indemnitees shall pay Edac
or Buyer, as the case may be, as full and complete liquidated damages and not as
a penalty, such disallowed offset amount and interest on the amount so offset
calculated from the later of the date of setoff or the maturity date of the
obligations to Edac or Buyer, as the case may be, to the date of payment, at the
annual rate of 8%, and the obligations to Edac or Buyer, as the case may be,
shall continue in full force and effect without any right of Edac or Buyer
applicable upon default resulting from the Article XI Indemnitees' setoff.
11.4 Survival of Indemnification. No demand or claim for
indemnification pursuant to section 11.1(a) hereof shall be made after 24 months
following the Closing Date, except that Claims for indemnification related to
intentional or knowing breaches of the representations and warranties contained
in Article V may be made at any time until the claim is barred by the applicable
period of limitation under federal and state laws relating thereto. Demands or
claims for indemnification pursuant to Section 11.1(b) and/or 11.1(c) shall
survive in accordance with their terms.
11.5 Basket Payment. No indemnification shall be payable by Buyer
pursuant to section 11.1(a) hereof unless the aggregate Losses incurred by
Seller exceeds $200,000 and then only for the excess over $100,000.
11.6 Remedies Exclusive. Except (a) to the extent that specific
performance of any provision of this Agreement is sought pursuant to section
12.10, (b) for Claims related to intentional or knowing breaches of the
representations and warranties of Buyer in this Agreement or (c) for Claims
related to fraud, from and after the Closing, the remedies provided in this
Article XI shall
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be the sole and exclusive remedies of the Article XI Indemnitees with
respect to Losses for which indemnification is provided in Article XI and shall
preclude the Article XI Indemnitees from (a) seeking any other remedy in
respect of any such Loss and (b) asserting any rights or seeking any remedies
whatsoever (whether for misrepresentation or breach of warranty or in tort or
otherwise) in respect of Losses in any way related to this Agreement or the
transactions contemplated hereby for which no indemnification is provided.
11.7 Limitation on Claims. In case any event shall occur which would
otherwise entitle Seller to assert a Claim for indemnification hereunder, no
Loss shall be deemed to have been sustained by Seller to the extent of (a) any
tax savings realized by Seller with respect thereto, or (b) any proceeds
received by Seller from any insurance policies with respect thereto.
11.8 Actual Knowledge. Neither Edac nor Buyer shall be liable under
this Article XI for a Loss resulting from a breach of any representation or
warranty if Buyer can establish that Seller had actual knowledge on or before
the Closing Date of such breach.
11.9 Maximum Exposure. In no event shall the aggregate indemnity
payments made by Buyer under section 11.1(a) exceed $5,000,000.
ARTICLE XII
MISCELLANEOUS
12.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) by mutual written consent of Buyer and Seller;
(b) by written notice from Buyer or Seller to the other if the
Closing shall not have occurred on or before August 31, 1998; provided, that any
party that has breached any provision hereunder, which breach has resulted in
the failure of a condition precedent to either party's obligations to close the
transactions contemplated by this Agreement, shall not be entitled to terminate
this Agreement except with the written consent of the other party hereto; or
(c) by written notice from Buyer or Seller to the other if any
court of competent jurisdiction in the United States shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or otherwise
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prohibiting the consummation of the transactions contemplated hereby and such
order, decree, ruling or other action shall have become final and nonappealable.
12.2 Effect of Termination. Upon the termination of this Agreement in
accordance with section 12.1 hereof, this Agreement, other than sections 12.8,
12.9, 12.11 and 12.17 hereof, shall forthwith become null and void and have no
effect, without any liability on the part of any party or its officers,
directors, employees, affiliates or shareholders; provided, however, that
nothing contained in this section 12.2 shall relieve any party of any liability
for its breach of this Agreement.
12.3 Further Assurances. Upon reasonable request, from time to time,
Seller shall (or shall direct its directors, shareholders and officers to, if
appropriate) execute and deliver all documents, make all rightful oaths, testify
in any proceedings and do all other acts which may be necessary or desirable in
the opinion of Buyer to protect, defend or record the right, title or interest
of Buyer in and to the Purchased Assets or to aid in the prosecution, defense or
other litigation of such rights arising from such right, title or interest, all
without further consideration.
12.4 Amendment. This Agreement may only be amended by a written
agreement signed by the parties hereto.
12.5 Waiver. The failure of Seller or Buyer to insist, in any one or
more instances, upon performance of any of the terms or conditions of this
Agreement, shall not be construed as a waiver or relinquishment of any rights
granted hereunder or the future performance of any such term, covenant or
condition.
12.6 Notices. Any notice to be given hereunder shall be deemed given
and sufficient if in writing and delivered by hand or by reputable overnight
courier, mailed by registered or certified mail or telecopied, in the case of
Seller or the Shareholders, to:
Apex Machine Tool Company, Inc.
21 Spring Lane
Farmington, Connecticut 06032
Attn: Mr. James G. Biondi
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with a copy to:
Murtha, Cullina, Richter and Pinney
CityPlace I
185 Asylum Street
Hartford, Connecticut 06103-3469
Attn: Richard S. Smith, Jr., Esq.
and, in the case of Buyer, to:
Edac Technologies Corporation
1806 New Britain Avenue
Farmington, Connecticut 06032
Attn: Edward J. McNerney, President
with a copy to:
Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, WI 53202
Attn: Daniel J. Brink, Esq.
Facsimile No. 414-298-1000
or to such other address as Seller, the Shareholders or Buyer may designate by
notice in writing to the other.
12.7 Benefit/Assignment. This Agreement shall be binding upon and
inure to the benefit and burden of and shall be enforceable by Buyer,
its successors and assigns, and Seller, the Shareholders, their respective
successors and assigns. Notwithstanding anything in this Agreement to the
contrary, both Buyer and Edac shall be fully responsible for all of Buyer's
obligations to Seller and the Shareholders under this Agreement. This Agreement
may not be assigned by any party without the written consent of the others,
except that Buyer may assign its rights under this Agreement and any of the
other agreements contemplated hereby to any wholly-owned subsidiary of Edac,
provided that Edac shall continue to be responsible for Buyer's obligations
under any agreement so assigned.
12.8 Expenses. Except as otherwise specifically provided in this
Agreement, all expenses incurred by Seller or Buyer in connection with the
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transactions contemplated hereby, including, without limitation, legal and
accounting fees shall be the responsibility of and for the account of the party
who ordered the particular service or incurred the particular expense. The
parties agree that Seller will pay the fees and costs associated with the
preparation of Seller's audited financial statements for the year ended December
31, 1997 and Buyer will pay the fees and costs associated with the preparation
of (a) Seller's audited financial statements for the year ended December 31,
1996; (b) if requested by Buyer, Seller's audited financial statements for the
year ended December 31, 1995; and (c) Seller's audited financial statements for
the period from January 1, 1998 through the Closing Date.
12.9 Public Announcement. No public announcement of the transactions
contemplated hereby shall be made by way of press release, disclosure to the
trade or otherwise except with the mutual approval of the parties.
12.10 Specific Performance. Except as otherwise provided in this
Agreement, in the event of any controversy concerning the rights or obligations
under this Agreement, such rights or obligations shall be enforceable in a court
of equity by a decree of specific performance. Such remedy shall, however, be
cumulative and nonexclusive and shall be in addition to any other remedy which
the parties may have.
12.11 Entire Agreement. This Agreement and the schedules and other
documents to be delivered pursuant hereto constitute the entire agreement among
the parties hereto and there are no agreements, representations or warranties
which are not set forth herein, except the confidentiality agreement among the
parties dated February 10, 1998, and the License for Access Agreement dated
March 4, 1998, both of which shall continue in full force in accordance with
their terms (as amended hereby). All prior negotiations, agreements and
understandings are superseded hereby. The introductory language, the recitals
and all schedules and exhibits attached hereto shall be deemed incorporated
herein by reference.
12.12 Arbitration Procedure.
(a) The parties agree that the arbitration procedure set forth
below shall be the sole and exclusive method for resolving and remedying claims
for damages arising out of the provisions of Articles X and XI hereof (the
"Disputes"). Nothing in this section 12.12 shall prohibit a party hereto from
instituting litigation to enforce any other provision of this Agreement or a
Final Determination (as defined below) or availing itself of the other remedies
set forth
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below. The parties hereby agree and acknowledge that, except as
otherwise provided in this section or in the Commercial Arbitration Rules of
the American Arbitration Association as in effect from time to time, the
arbitration procedures and any Final Determination hereunder shall take place
in Hartford, Connecticut, and be governed by, and shall be enforced pursuant to
the Uniform Arbitration Act and applicable provisions of, Connecticut law.
(b) If any party asserts that there exists a Dispute, such party
shall deliver a written notice to each other party involved therein specifying
the nature of the asserted Dispute and requesting a meeting to attempt to
resolve the same. If no such resolution is reached within 25 business days after
such delivery of such notice, the party delivering such notice of Dispute (the
"Disputing Person") may, within 45 business days after delivery of such notice,
commence arbitration hereunder by delivering to each other party involved
therein a notice of arbitration (a "Notice of Arbitration") and by filing a copy
of such Notice of Arbitration with the Hartford, Connecticut, office of the
American Arbitration Association. Such Notice of Arbitration shall specify the
matters as to which arbitration is sought, the nature of any Dispute, the claims
of each party to the arbitration and shall specify the amount and nature of any
damages, if any, sought to be recovered as a result of any alleged claim, and
any other matters required by the Commercial Arbitration Rules of the American
Arbitration Association as in effect from time to time to be included therein,
if any. In no event shall a Notice of Arbitration be made after the date when
institution of legal or equitable proceedings based upon such claim be barred by
this Agreement or the applicable statute of limitations.
(c) Seller and Buyer each shall select one independent arbitrator
expert in the subject matter of the Dispute (the arbitrators so selected shall
be referred to herein as "Seller's Arbitrator" and "Buyer's Arbitrator,"
respectively). If either party fails to select an independent arbitrator as set
forth herein within 20 days from delivery of a Notice of Arbitration, then the
matter shall be resolved by the arbitrator selected by the other party. Seller's
Arbitrator and Buyer's Arbitrator shall select a third independent arbitrator
expert in the subject matter of the dispute, and the three arbitrators so
selected shall resolve the matter according to the procedures set forth in this
section. If Seller's Arbitrator and Buyer's Arbitrator are unable to agree on a
third arbitrator within 20 days after their selection, Seller's Arbitrator and
Buyer's Arbitrator shall each prepare a list of three independent arbitrators.
Seller's Arbitrator and Buyer's Arbitrator shall each have the opportunity to
designate as objectionable and eliminate one arbitrator from the other
arbitrator's list within seven days after submission thereof, and the
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third arbitrator shall then be selected by lot from the arbitrators
remaining on the lists submitted by Seller's Arbitrator and Buyer's Arbitrator.
(d) The arbitrator(s) selected pursuant to section 12.12 (c)
hereof shall determine the allocation of the costs and expenses of arbitration
based upon the percentage which the portion of the contested amount not awarded
to each party bears to the amount actually contested by such party. For example,
if Buyer submits a claim for $1,000, and if Seller contests only $500 of the
amount claimed by Buyer, and if the arbitrator(s) ultimately resolves the
dispute by awarding Buyer $300 of the $500 contested, then the costs and
expenses of arbitration will be allocated 60% (i.e., 300 / 500) to Seller and
40% (i.e. 200 / 500) to Buyer.
(e) The arbitration shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association as in effect from time
to time, except as otherwise set forth herein or as modified by the agreement of
all of the parties to this Agreement. The arbitrator(s) shall so conduct the
arbitration that a final result, determination, finding, judgment and/or award
(the "Final Determination") is made or rendered as soon as practicable, but in
no event later than 90 business days after the delivery of the Notice of
Arbitration nor later than 10 days following completion of the arbitration. The
Final Determination must be agreed upon and signed by the sole arbitrator or by
at least two of the three arbitrators (as the case may be). The Final
Determination shall be final and binding on all parties and there shall be no
appeal from or reexamination of the Final Determination, except for fraud,
perjury or gross misconduct by an arbitrator prejudicing the rights of any party
and to correct manifest clerical errors.
(f) Buyer and Seller may enforce any Final Determination in any
state or federal court having jurisdiction over the Dispute. For the purpose of
any action or proceeding instituted with respect to any Final Determination,
each party hereto hereby irrevocably submits to the jurisdiction of such courts,
irrevocably consents to the service of process by registered mail or personal
service and hereby irrevocably waives, to the fullest extent permitted by law,
any objection which it may have or hereafter have as to personal jurisdiction,
the laying of the venue of any such action or proceeding brought in any such
court and any claim that any such action or proceeding brought in such court has
been brought in an inconvenient forum.
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12.13 Headings. The section headings in this Agreement are inserted for
convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement.
12.14 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
12.15 Knowledge. Any reference in this Agreement to the "knowledge" of
Seller or words of similar meaning shall mean all information known or which
would have been known after reasonable investigation by the Seller or any of the
Shareholders.
12.16 No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties
and no presumption or burden of proof will arise favoring or disfavoring any
person by virtue of the authorship of any of the provisions of this Agreement.
12.17 Exclusive Dealing. In consideration of the substantial
expenditures of time, effort and expense to be undertaken by Buyer in connection
with its due diligence review and the preparation and negotiation of this
Agreement with Seller, Seller agrees that from the date of this Agreement and
until this Agreement is terminated in accordance with its terms, Seller and its
officers, directors, employees, shareholders, agents, representatives, advisors,
investment bankers, attorneys or accountants shall not solicit, initiate,
facilitate or encourage offers or expressions of interest from any other party
to acquire Seller, enter into negotiations regarding the terms of any sale of
Seller, permit access to Seller's premises or provide any information to any
third party for purposes of reviewing Seller's business or operations in
connection with the potential sale of Seller or enter into any oral or written
agreement to sell stock or assets of Seller or engage anyone to enter into such
an agreement. Seller shall notify Buyer within 48 hours following receipt of any
offer to purchase any of Seller's assets or stock.
12.18 Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the parties hereto and
their respective successors and assigns any rights or remedies under or by
virtue of this Agreement.
59
<PAGE> 69
12.19 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument, provided that all such counterparts
contain the signatures of all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
EDAC TECHNOLOGIES
CORPORATION
BY_______________________________
Edward J. McNerney,
Chief Executive Officer
APEX ACQUISITION CORP.
BY_______________________________
Its_____________________________
APEX MACHINE TOOL COMPANY, INC.
BY_______________________________
Its_____________________________
_________________________________
Gerald S. Biondi
_________________________________
James G. Biondi
_________________________________
Michael Biondi
60
<PAGE> 70
EXHIBIT A
REAL ESTATE PURCHASE AGREEMENTS
<PAGE> 71
EXHIBIT B
GENERAL BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, by this General Bill of Sale
made and entered into as of the ____ day of ____________, 1998, APEX MACHINE
TOOL COMPANY, INC., a Connecticut corporation ("Seller"), for good and valuable
consideration paid by APEX ACQUISITION CORP., a Wisconsin corporation ("Buyer"),
the receipt and sufficiency of which are hereby acknowledged, pursuant to the
terms of the Asset Purchase Agreement dated _____________, 1998, by and among
Seller, Buyer, Gerald S. Biondi, James G. Biondi and Michael Biondi (the
"Purchase Agreement"), does hereby bargain, grant, sell, convey, assign,
transfer and deliver to Buyer and its successors and assigns, all of the right,
title and interest of Seller in and to the Purchased Assets as defined in
section 1.1 of the Purchase Agreement.
The provisions of this General Bill of Sale are subject, in
all respects, to the terms and conditions of the Purchase Agreement, all of
which shall survive the execution and delivery of this General Bill of Sale.
This General Bill of Sale is executed pursuant to section 6.11
of the Purchase Agreement.
Dated as of the date first above written.
APEX MACHINE TOOL COMPANY, INC.
BY _______________________________
Its______________________________
<PAGE> 72
EXHIBIT C
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made and entered
into as of the ____ day of __________, 1998, by and between APEX MACHINE TOOL
COMPANY, INC., a Connecticut corporation ("Seller"), and APEX ACQUISITION CORP.,
a Wisconsin corporation ("Buyer").
RECITALS
A. Seller and Buyer are parties to an Asset Purchase Agreement
dated ____________, 1998 (the "Purchase Agreement"), which provides, among other
things, for the purchase by Buyer of substantially all of the assets owned by
Seller and used in connection with the operation of Seller's business.
B. All capitalized terms that are not defined in this
Agreement have the meaning assigned to them under the Purchase Agreement.
AGREEMENTS
In consideration of the recitals and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Assignment of Rights. Seller hereby assigns to Buyer all of
Seller's right, title and interest in and to the Assumed Contracts, Intangible
Assets and Licenses and Permits.
2. Acceptance of Assignment; Assumption of Liabilities. Buyer
hereby accepts Seller's assignment of the Assumed Contracts, Intangible Assets
and Licenses and Permits and agrees to pay, perform and discharge the Assumed
Liabilities.
3. Applicability of Terms and Conditions of Purchase
Agreement. Notwithstanding anything to the contrary contained herein, this
Agreement is subject to the provisions of this Agreement are subject, in all
respects, to the terms and conditions of the Purchase Agreement and all of the
representations and warranties, covenants and agreements contained therein.
<PAGE> 73
4. Further Assurances. Upon reasonable request, from time to
time, Buyer and Seller shall execute or cause to be executed such documents, and
shall take or cause to be taken such actions, as may be reasonably required to
carry out the terms of this Agreement.
5. Headings; Incorporation of Provisions. All section headings
of this Agreement are inserted for convenience only and shall not modify or
affect the construction or interpretation of any provision of this Agreement.
The introductory language and the recitals shall be deemed to be incorporated
herein by reference.
6. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but both of which taken
together shall constitute one and the same instrument.
Dated as of the date first above written.
APEX MACHINE TOOL COMPANY, INC.
BY ________________________________
Its ______________________________
APEX ACQUISITION CORP.
BY ________________________________
Its ______________________________
2
<PAGE> 74
EXHIBIT D
NONCOMPETITION AGREEMENT (SELLER)
THIS NONCOMPETITION AGREEMENT is made and entered into as of
the ___ day of ___________, 1998, by and between APEX ACQUISITION CORP., a
Wisconsin corporation (the "Company"), EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation ("Edac"), and Apex Machine Tool Company, Inc., a
Connecticut corporation ("Seller").
RECITALS
A. Prior to the date of this Agreement, Seller was engaged in
the business of manufacturing engineered tools and molds (the "Business").
B. The Company is purchasing substantially all of the assets
of Seller pursuant to an Asset Purchase Agreement dated _________________, 1998
(the "Purchase Agreement").
C. From and after the date of this Agreement, the Company will
conduct the Business.
D. Seller acknowledges that an important part of the
consideration the Company is receiving in connection with the transactions
contemplated by the Purchase Agreement is the agreement by Seller to be bound by
the terms and conditions set forth herein, and that the execution and delivery
of this Agreement by Seller is a condition to the obligation of Edac to
consummate the transactions contemplated by the Purchase Agreement.
AGREEMENTS
In consideration of the recitals, the mutual agreements herein
contained and the mutual agreements contained in the Purchase Agreement, the
parties hereto agree as follows:
1. Noncompetition. Seller shall not, at any time during the
Noncompetition Period (as defined in section 2(a) hereof), directly or
indirectly, whether as an agent, investor, employer, consultant, representative,
trustee, partner, proprietor or otherwise, do any of the following:
(a) solicit or accept from any person or entity who
is a customer of the Company and/or Edac (any such person or entity is
hereinafter
<PAGE> 75
referred to individually as a "Customer" and collectively as the "Customers")
any business to the extent that solicitation or acceptance of such business
would constitute competing with the Business;
(b) request or advise any of the Customers, or any
suppliers or other business contacts of the Company and/or Edac who currently
have or have had business relationships with the Company and/or Edac within the
two-year period preceding the date of this Agreement, or within the two-year
period preceding the date of the making of such request or the giving of such
advice, to withdraw, curtail or cancel any business relations with the Company
and/or Edac;
(c) induce or attempt to induce any sales
representative, consultant, employee or agent of the Company and/or Edac to
terminate his/her employment relationship or other contractual relationship,
whether oral or written, with the Company and/or Edac;
(d) except only as provided in section 4 hereof, use,
disclose, divulge or transmit, or cause to be used, disclosed, divulged or
transmitted, to any third party, any Confidential Information (as defined in
section 2(b) hereof); and
(e) participate in, become associated with, provide
assistance to, engage in or have a financial or other interest in any business,
activity or enterprise that is competitive with the Business; provided, however,
that the ownership of less than 1% of the stock of a corporation whose shares
are traded in a recognized stock exchange or in the over-the-counter market,
even though such corporation may be a competitor of the Company and/or Edac,
shall not be prohibited by this Agreement.
2. Certain Definitions.
(a) Noncompetition Period. The term "Noncompetition
Period," as used in this Agreement, means the period commencing on the date of
this Agreement and ending at the close of business on the fifth anniversary of
the date of this Agreement.
(b) Confidential Information. The term "Confidential
Information," as used in this Agreement, means any and all of the following as
it relates to Seller and/or the Business: (i) all historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
and personnel training techniques and materials, however documented; (ii) all
product
2
<PAGE> 76
specifications, data, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned
manufacturing or distribution methods and processes, customers lists, current
and anticipated customer requirements, price lists, market studies, business
plans, computer software and programs (including object code and source code),
computer software and database technologies, systems, structures and
architectures (and related processes, formulae, composition, improvements,
devices, inventions, discoveries, concepts, ideas, designs, methods and
information); and (iii) all information (whether or not part of the foregoing),
however documented, that constitutes a trade secret as defined under the
Uniform Trade Secrets Act, codified at sections 35-50 through 35-58 of the
Connecticut General Statutes ("Trade Secret"). Notwithstanding the foregoing,
the term "Confidential Information" shall not include information that becomes
generally available to the public other than as a result of disclosure by
Seller.
3. Trade Secrets. Notwithstanding anything contained in this
Agreement (other than section 4 hereof) to the contrary, with respect to any
Confidential Information that constitutes a Trade Secret, Seller shall not, use,
disclose, divulge or transmit, or cause to be used, disclosed, divulged or
transmitted, to any third party, such information as long as it remains a Trade
Secret.
4. Permitted Disclosure of Confidential Information. The
restrictions set forth in section 1(d) and section 3 hereof shall not apply to
any disclosure of Confidential Information or a Trade Secret, as the case may
be, required to be made under applicable law or regulation or by order of a
court or governmental authority acting within its jurisdiction, provided that
prior to such disclosure, Seller shall have provided the Company with written
notice of such disclosure requirement and the Company shall have had a
reasonable opportunity to contest such requirement.
5. Reasonableness of Restrictions; Adequacy of Consideration.
The parties acknowledge and agree that the restrictions contained in this
Agreement are reasonable and that the consideration provided herein is
sufficient to fully and adequately compensate the parties for agreeing to such
restrictions.
6. Specific Performance. Seller acknowledges and agrees that
irreparable injury to the Company may result if Seller breaches any covenant of
Seller contained in this Agreement and that the remedy at law for the breach of
any such covenant will be inadequate. Accordingly, if Seller engages in any act
in violation of the provisions of this Agreement, the Company shall be entitled,
in
3
<PAGE> 77
addition to such other remedies and damages as may be available to it by law
or under this Agreement, to injunctive relief to enforce the provisions of this
Agreement.
7. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of and shall be enforceable by
and against the Company and Seller, and their respective successors and assigns;
provided, however, that this Agreement may not be assigned by Seller. This
Agreement may be assigned by the Company.
8. Sale, Consolidation or Merger. In the event of a
consolidation or merger of the Company with or into another corporation or
entity, or the sale, assignment or transfer of substantially all of the
operating assets of the Company to another corporation, entity or individual,
the successor-in-interest shall by acquiring such assets be bound by this
Agreement and shall be deemed to have assumed all rights and liabilities of the
Company under this Agreement.
9. Common Law of Torts and Trade Secrets. Nothing in this
Agreement shall be construed to limit or negate the common law of torts or trade
secrets where such law provides the Company with broader protection than that
provided herein.
10. Waiver. The failure of either party to insist, in any one
or more instances, upon performance of the terms, covenants or conditions of
this Agreement shall not be construed as a waiver or a relinquishment of any
right granted hereunder or of the future performance of any such term, covenant
or condition.
11. Notices. Any notice given hereunder shall be deemed
sufficient if addressed in writing and delivered via registered or certified
mail, overnight courier or facsimile transmission, in the case of the Company
to:
Apex Acquisition Corp.
c/o Edac Technologies Corporation
1806 New Britain Avenue
Farmington, Connecticut 06032
Attn: Edward J. McNerney, President
Facsimile No. 860-674-2718
4
<PAGE> 78
with a copy to: Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 N. Water St., Suite 2100
Milwaukee, WI 53202
Attn: Daniel J. Brink, Esq.
Facsimile No. 414-298-8097
and in the case of Seller, to:
________________________________
________________________________
________________________________
________________________________
with a copy to: Murtha, Cullina, Richter and Pinney LLP
CityPlace I
185 Asylum Street
Hartford, Connecticut 06032
Attn: Mark F. Korber, Esq.
Facsimile No. 860-240-6150.
or to such other persons or addresses as the parties shall furnish to each other
in writing in accordance with the terms of this section. Notice via registered
or certified mail or via overnight courier shall be deemed given upon receipt at
the address of the receiving party stated above (or such other address as may be
stated by such party pursuant to the terms of this section), except that if
delivery is refused or cannot be made for any reason, then such notice shall be
deemed given on the third day after it is sent. Notice via facsimile
transmission shall be deemed given upon receipt (by the party sending such
notice) of a confirmation page indicating that the facsimile transmission was
received at the number of the receiving party stated above (or at such other
number as may be provided pursuant to the terms of this section).
12. Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions of
this Agreement or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If the final
judgment of a court of competent jurisdiction declares that any term or
provision of this Agreement is invalid or unenforceable, the parties hereto
agree that the court making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration or
5
<PAGE> 79
area of the term or provision, to delete specific words or phrases or
to replace any invalid or unenforceable term or provision with a term or
provision that is valid or enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
13. Amendment. This Agreement may be amended only by an
agreement in writing signed by the parties hereto.
14. Governing Law; Construction. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Connecticut (regardless of such state's conflict of laws principles), and
without reference to any rules of construction regarding the party responsible
for the drafting thereof.
15. Headings. All section headings herein are inserted for
convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement.
16. Entire Agreement; Incorporation of Terms. This Agreement
represents the full and complete understanding of the parties with respect to
the subject matter thereof. The introductory language and the recitals are
incorporated into this Agreement by reference.
17. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but both of which taken
together shall constitute one and the same instrument.
Dated as of the date first above written.
APEX ACQUISITION CORP.
BY ____________________________
Its __________________________
EDAC TECHNOLOGIES CORPORATION
BY ____________________________
Its __________________________
6
<PAGE> 80
APEX MACHINE TOOL COMPANY, INC.
BY ____________________________
Its __________________________
7
<PAGE> 81
EXHIBIT E
NONCOMPETITION AGREEMENT (SHAREHOLDER)
THIS NONCOMPETITION AGREEMENT is made and entered into as of
the ___ day of ___________, 1998, by and between APEX ACQUISITION CORP., a
Wisconsin corporation (the "Company"), and EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation ("Edac") ("Shareholder").
RECITALS
A. The Company is purchasing substantially all of the assets
of Apex Machine Tool Company, Inc., a Connecticut corporation ("Seller"),
pursuant to an Asset Purchase Agreement dated ___________________, 1998 (the
"Purchase Agreement").
B. Prior to the date of this Agreement, Seller was engaged in
the business of manufacturing engineered tools and molds (the "Business").
C. Shareholder has provided important services to Seller in
the past and has significant knowledge regarding Seller and the Business.
D. From and after the date of this Agreement, the Company will
conduct the Business.
E. Shareholder acknowledges that an important part of the
consideration the Company is receiving in connection with the transactions
contemplated by the Purchase Agreement is the agreement by Shareholder to be
bound by the terms and conditions set forth herein, and that the execution and
delivery of this Agreement by Shareholder is a condition to the obligation of
Edac to consummate the transactions contemplated by the Purchase Agreement.
AGREEMENTS
In consideration of the recitals, the mutual agreements herein
contained and the mutual agreements contained in the Purchase Agreement, the
parties hereto agree as follows:
1. Noncompetition. Shareholder shall not, at any time during
the Noncompetition Period (as defined in section 2(a) hereof), directly or
<PAGE> 82
indirectly, whether as an agent, investor, employer, consultant, representative,
trustee, partner, proprietor or otherwise, do any of the following:
(a) solicit or accept from any person or entity who
is a customer of the Company and/or Edac (any such person or entity is
hereinafter referred to individually as a "Customer" and collectively as the
"Customers") any business to the extent that solicitation or acceptance of such
business would constitute competing with the Business;
(b) request or advise any of the Customers, or any
suppliers or other business contacts of the Company and/or Edac who currently
have or have had business relationships with the Company and/or Edac within the
two-year period preceding the date of this Agreement, or within the two-year
period preceding the date of the making of such request or the giving of such
advice, to withdraw, curtail or cancel any business relations with the Company
and/or Edac;
(c) induce or attempt to induce any sales
representative, consultant, employee or agent of the Company and/or Edac to
terminate his/her employment relationship or other contractual relationship,
whether oral or written, with the Company and/or Edac;
(d) except as provided in section 4 hereof or in any
written consulting agreement between Shareholder and the Company, use, disclose,
divulge or transmit, or cause to be used, disclosed, divulged or transmitted, to
any third party, any Confidential Information (as defined in section 2(b)
hereof); and
(e) participate in, become associated with, provide
assistance to, engage in or have a financial or other interest in any business,
activity or enterprise that is competitive with the Business; provided, however,
that the ownership of less than 1% of the stock of a corporation whose shares
are traded in a recognized stock exchange or in the over-the-counter market,
even though such corporation may be a competitor of the Company and/or Edac,
shall not be prohibited by this Agreement.
2. Certain Definitions.
(a) Noncompetition Period. The term "Noncompetition
Period," as used in this Agreement, means the period commencing on the date of
this Agreement and ending at the close of business on the fifth anniversary of
the date of this Agreement.
2
<PAGE> 83
(b) Confidential Information. The term "Confidential
Information," as used in this Agreement, means any and all of the following as
it relates to Seller and/or the Business: (i) all historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
and personnel training techniques and materials, however documented; (ii) all
product specifications, data, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned manufacturing
or distribution methods and processes, customers lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer software
and database technologies, systems, structures and architectures (and related
processes, formulae, composition, improvements, devices, inventions,
discoveries, concepts, ideas, designs, methods and information); and (iii) all
information (whether or not part of the foregoing), however documented, that
constitutes a trade secret as defined under the Uniform Trade Secrets Act,
codified at sections 35-50 through 35-58 of the Connecticut General Statutes
("Trade Secret"). Notwithstanding the foregoing, the term "Confidential
Information" shall not include information that becomes generally available to
the public other than as a result of disclosure by Shareholder.
3. Trade Secrets. Notwithstanding anything contained in this
Agreement (other than section 4 hereof) to the contrary and except as provided
in any written consulting agreement between Shareholder and the Company, with
respect to any Confidential Information that constitutes a Trade Secret,
Shareholder shall not use, disclose, divulge or transmit, or cause to be used,
disclosed, divulged or transmitted, to any third party, such information as long
as it remains a Trade Secret.
4. Permitted Disclosure of Confidential Information. The
restrictions set forth in section 1(d) and section 3 hereof shall not apply to
any disclosure of Confidential Information or a Trade Secret, as the case may
be, required to be made under applicable law or regulation or by order of a
court or governmental authority acting within its jurisdiction, provided that
prior to such disclosure, Shareholder shall have provided the Company with
written notice of such disclosure requirement and the Company shall have had a
reasonable opportunity to contest such requirement.
5. Reasonableness of Restrictions; Adequacy of Consideration.
The parties acknowledge and agree that the restrictions contained in this
3
<PAGE> 84
Agreement are reasonable and that the consideration provided herein is
sufficient to fully and adequately compensate the parties for agreeing to such
restrictions.
6. Specific Performance. Shareholder acknowledges and agrees
that irreparable injury to the Company may result if Shareholder breaches any
covenant of Shareholder contained in this Agreement and that the remedy at law
for the breach of any such covenant will be inadequate. Accordingly, if
Shareholder engages in any act in violation of the provisions of this Agreement,
the Company shall be entitled, in addition to such other remedies and damages as
may be available to it by law or under this Agreement, to injunctive relief to
enforce the provisions of this Agreement.
7. Know-how. Nothing contained in this Agreement shall
prohibit Shareholder's use of general skills and know-how, as long as such use
does not result in a violation of section 1 and/or section 3 hereof.
8. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of and shall be enforceable by and against the
Company and Shareholder, and their respective successors and assigns; provided,
however, that this Agreement may not be assigned by Shareholder. This Agreement
may be assigned by the Company.
9. Sale, Consolidation or Merger. In the event of a
consolidation or merger of the Company with or into another corporation or
entity, or the sale, assignment or transfer of substantially all of the
operating assets of the Company to another corporation, entity or individual,
the successor-in-interest shall by acquiring such assets be bound by this
Agreement and shall be deemed to have assumed all rights and liabilities of the
Company under this Agreement.
10. Common Law of Torts and Trade Secrets. Nothing in this
Agreement shall be construed to limit or negate the common law of torts or trade
secrets where such law provides the Company with broader protection than that
provided herein.
11. Waiver. The failure of either party to insist, in any one
or more instances, upon performance of the terms, covenants or conditions of
this Agreement shall not be construed as a waiver or a relinquishment of any
right granted hereunder or of the future performance of any such term, covenant
or condition.
12. Notices. Any notice given hereunder shall be deemed
sufficient if addressed in writing and delivered via registered or certified
mail, overnight courier or facsimile transmission, in the case of the Company
to:
4
<PAGE> 85
Apex Acquisition Corp.
c/o Edac Technologies Corporation
1806 New Britain Avenue
Farmington, CT 06032
Attn: Edward J. McNerney, President
Facsimile No. 860-674-2718
with a copy to: Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 N. Water St., Suite 2100
Milwaukee, WI 53202
Attn: Daniel J. Brink, Esq.
Facsimile No. 414-298-8097
and in the case of Shareholder, to:
________________________________
________________________________
________________________________
________________________________
with a copy to: Murtha, Cullina, Richter and Pinney LLP
CityPlace I
185 Asylum Street
Hartford, Connecticut 06032
Attn: Mark F. Korber, Esq.
Facsimile No. 860-240-6150.
or to such other persons or addresses as the parties shall furnish to each other
in writing in accordance with the terms of this section. Notice via registered
or certified mail or via overnight courier shall be deemed given upon receipt at
the address of the receiving party stated above (or such other address as may be
stated by such party pursuant to the terms of this section), except that if
delivery is refused or cannot be made for any reason, then such notice shall be
deemed given on the third day after it is sent. Notice via facsimile
transmission shall be deemed given upon receipt (by the party sending such
notice) of a confirmation page indicating that the facsimile transmission was
received at the number of the receiving party stated above (or such other number
as may be provided pursuant to the terms of this section).
13. Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the
5
<PAGE> 86
validity or enforceability of the remaining terms and provisions of
this Agreement or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If the final
judgment of a court of competent jurisdiction declares that any term or
provision of this Agreement is invalid or unenforceable, the parties hereto
agree that the court making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration or area of the term or
provision, to delete specific words or phrases or to replace any invalid or
unenforceable term or provision with a term or provision that is valid or
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified after the expiration of the time within which the judgment may be
appealed.
14. Amendment. This Agreement may be amended only by an
agreement in writing signed by the parties hereto.
15. Governing Law; Construction. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Connecticut (regardless of such state's conflict of laws principles), and
without reference to any rules of construction regarding the party responsible
for the drafting thereof.
16. Headings. All section headings herein are inserted for
convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement.
17. Entire Agreement; Incorporation of Terms. This Agreement
represents the full and complete understanding of the parties with respect to
the subject matter hereof. The introductory language and the recitals are
incorporated into this Agreement by reference.
18. Counter parts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but both of which taken
together shall constitute one and the same instrument.
Dated as of the date first above written.
APEX ACQUISITION CORP.
BY _______________________
Its _____________________
6
<PAGE> 87
EDAC TECHNOLOGIES CORPORATION
BY __________________________
Its ________________________
_____________________________
[SHAREHOLDER]
7
<PAGE> 88
EXHIBIT F
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is made and entered into as of the
___ day of __________, 1998, by and between APEX ACQUISITION CORP., a Wisconsin
corporation (the "Company"), EDAC TECHNOLOGIES CORPORATION, a Wisconsin
corporation ("Edac"), and GERALD S. BIONDI ("Consultant").
RECITALS
A. The Company is engaged in, among other things, the business
of manufacturing and engineered tools and molds (the "Business").
B. Consultant is a shareholder of Apex Machine Tool Company,
Inc., a Connecticut corporation ("Seller"), which, as of the date hereof, has
sold substantially all of its assets to the Company pursuant to the terms of an
Asset Purchase Agreement dated ______________, 1998 (the "Purchase Agreement").
C. Prior to the date of this Agreement, Seller was engaged in
the conduct of the Business by or on behalf of Seller.
D. Consultant has provided important services to Seller in the
past and Consultant's experience and knowledge of the Business are of great
value to the Company.
E. The Company desires to retain Consultant in a consulting
capacity and Consultant desires to be so retained pursuant to the terms and
conditions of this Agreement.
AGREEMENTS
In consideration of the recitals and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Consulting Services. During the Consulting Period (as
defined in section 2 hereof), Consultant shall act as a consultant to the
Company with respect to all aspects of the Business, including, without
limitation, _____________________ (the "Consulting Services"). The Consulting
Services
<PAGE> 89
shall be provided when and as reasonably requested by the Company
giving due regard to the limited nature of Consultant's duties hereunder;
provided, however, that Consultant shall not be required to devote more than 80
hours per month to the business and affairs of the Company. In the event that,
for whatever reason, Consultant is requested in writing to devote more than 80
hours during any calendar month to the business and affairs of the Company, he
shall be entitled to receive, and the Company shall be required to pay, extra
compensation calculated at the rate of $110 per hour.
2. Consulting Period. Consultant shall provide the Consulting
Services during the period commencing as of the date of this Agreement and
ending at the close of business on the first anniversary of the date of this
Agreement (the "Consulting Period").
3. Confidential Information.
(a) Nondisclosure of Confidential Information. The parties
hereto acknowledge and agree that as a previous officer, director and
shareholder of Seller, and as a consultant to the Company, Consultant has had
and will have access to, and has been entrusted and will be entrusted with,
Confidential Information (as defined in section 3(c) hereof), and that the
Company would suffer great loss and injury if Consultant disclosed any
Confidential Information or used any Confidential Information to compete with
the Company. Accordingly, except as necessary in connection with the performance
by Consultant of the Consulting Services (but subject to the requirements set
forth in the last sentence of this subsection) and except as provided in section
3(e) hereof, Consultant shall not, during the Consulting Period and for a period
of two years thereafter, directly or indirectly, whether individually or as an
employee, principal, agent, owner, trustee, beneficiary, distributor, partner,
co-venturer, investor, consultant or in any other capacity, use or disclose, or
cause to be used or disclosed, any Confidential Information, whether such
information was owned by Seller or the Company prior to, or developed by the
Company subsequent to, its relationship with Consultant, and regardless of the
fact that Consultant may have participated in the discovery and development of
such Confidential Information. Except only as provided in section 3(e) hereof,
Consultant shall not, in connection with his performance of the Consulting
Services, disclose or cause to be disclosed to any third party any Confidential
Information, unless such third party is an officer or director of the Company or
is under similar obligations of confidentiality with respect to the Company.
2
<PAGE> 90
(b) Nondisclosure of Trade Secrets. Notwithstanding
anything contained in this Agreement (other than section 3(e) hereof) to the
contrary, Consultant shall not, directly or indirectly, whether individually or
as an employee, principal, agent, owner, trustee, beneficiary, distributor,
partner, co-venturer, investor, consultant or in any other capacity, except as
necessary in connection with the performance by Consultant of the Consulting
Services (but subject to the requirements set forth in the last sentence of this
subsection), use or disclose, or cause to be used or disclosed, any Confidential
Information of the Company which constitutes a trade secret as defined under the
Uniform Trade Secrets Act, codified at sections 35-50 through 35-58 of the
Connecticut General Statutes ("Trade Secret"), as long as such information
remains a Trade Secret. Except only as provided in section 3(e) hereof,
Consultant shall not, in connection with his performance of the Consulting
Services, disclose or cause to be disclosed to any third party any Confidential
Information which constitutes a Trade Secret, unless such third party is an
officer or director of the Company or is under similar obligations of
confidentiality with respect to the Company.
(c) Reasonableness of Terms; Adequacy of Consideration.
Consultant acknowledges and agrees that the terms of this section 3 are
reasonable and necessary for the protection of the Company and the Business.
Consultant further acknowledges and agrees that the consideration provided for
herein and the consideration Consultant will ultimately receive as a shareholder
of Seller in connection with the transactions contemplated by the Purchase
Agreement is sufficient to fully and adequately compensate Consultant for
agreeing to the terms and conditions of this Agreement.
(d) Definition of Confidential Information. The term
"Confidential Information," as used in this Agreement, means any and all of the
following as it relates to the Company, Seller and/or the Business: (i) all
historical financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans, the names and
backgrounds of key personnel, and personnel training techniques and materials,
however documented; (ii) all product specifications, data, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution methods and
processes, customers lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures and architectures (and related processes, formulae,
composition, improvements, devices, inventions, discoveries, concepts, ideas,
designs, methods and information); and (iii) all
3
<PAGE> 91
information (whether or not part of the foregoing), however documented,
which constitutes a Trade Secret. Notwithstanding the foregoing, the term
"Confidential Information" shall not include information concerning the
Company, Seller and/or the Business that becomes generally available to the
public other than as a result of disclosure by Consultant.
(e) Permitted Disclosure. The restrictions set forth in
sections 3(a) and 3(b) hereof shall not apply to any disclosure of Confidential
Information or a Trade Secret, as the case may be, required to be made under
applicable law or regulation or by order of a court or governmental authority
acting within its jurisdiction, provided that prior to such disclosure,
Consultant shall have provided the Company with written notice of such
disclosure requirement and the Company shall have had a reasonable opportunity
to contest such requirement.
4. Compensation; Reimbursement of Expenses. In
consideration of the performance by Consultant of the Consulting Services, the
Company shall pay to Consultant annual compensation of $100,000, payable in
weekly installments during the Consulting Period, in accordance with the
Company's standard payroll practices. Reasonable travel and telephone expenses
and other reasonable out-of-pocket expenses incurred by Consultant in connection
with the performance of the Consulting Services shall be reimbursed to
Consultant monthly, to the extent consistent with the Company's reimbursement
policies.
5. Product Development by Consultant. During the Consulting
Period, any product, process, or invention of any kind whatsoever developed by
Consultant, whether acting alone or in conjunction with others, which relates to
the Business or the Company's operations, shall be the sole and exclusive
property of the Company. Consultant shall inform the Company of any product
developments made or conceived by Consultant which relate to the Business or the
Company's operations and shall execute such documents as may be reasonably
requested by the Company to evidence transfer of such property to the Company.
6. Know-how. Nothing contained in this Agreement shall
prohibit Consultant's use of general skills and know-how, as long as such use
does not result in a violation of section 3 hereof.
7. Common Law of Torts and Trade Secrets. Nothing in this
Agreement shall be construed to limit or negate the common law of torts or trade
secrets where such law provides the Company with broader protection than that
provided herein.
4
<PAGE> 92
8. Specific Performance. Consultant acknowledges and agrees
that irreparable injury to the Company may result if Consultant breaches any
covenant of Consultant contained herein and that the remedy at law for the
breach of any such covenant will be inadequate. Accordingly, if Consultant
engages in any act in violation of the provisions of this Agreement, the Company
shall be entitled, in addition to such other remedies and damages as may be
available to it by law or under this Agreement, to injunctive relief to enforce
the provisions of this Agreement.
9. Governing Law; Construction. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Connecticut (regardless of such state's conflict of laws principles), and
without reference to any rules of construction regarding the party responsible
for drafting thereof.
10. Waiver. The failure of any party to insist, in any one or
more instances, upon performance of any of the terms or conditions of this
Agreement, shall not be construed as a waiver or a relinquishment of any right
granted hereunder for the future performance of any such term, covenant or
condition.
11. Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions of
this Agreement or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If the final
judgment of a court of competent jurisdiction declares that any term or
provision of this Agreement is invalid or unenforceable, the parties hereto
agree that the court making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration or area of the term or
provision, to delete specific words or phrase or to replace any invalid or
unenforceable term or provision with a term or provision that is valid or
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified after the expiration of the time within which the judgment may be
appealed.
12. Amendment. This Agreement may be amended only by an
agreement in writing signed by all of the parties hereto.
13. Notice. Any notice given hereunder shall be deemed
sufficient if addressed in writing and delivered via registered or certified
mail, overnight courier or facsimile transmission, in the case of the Company
to:
5
<PAGE> 93
Apex Acquisition Corp.
c/o Edac Technologies Corporation
1806 New Britain Avenue
Farmington, CT 06032
Attn: Edward J. McNerney, President
Facsimile No. 860-674-2718
with a copy to: Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, WI 53202
Attn: Daniel J. Brink, Esq.
Facsimile No. 414-298-8097
and in the case of Consultant, to:
Gerald S. Biondi
_____________________________________
_____________________________________
_____________________________________
with a copy to: Murtha, Cullina, Richter and Pinney LLP
CityPlace I
185 Asylum Street
Hartford, CT 06103-3469
Attn: Richard S. Smith, Jr., Esq.
Facsimile No. 860-240-6150
or to such other person or address as each party shall furnish to the other in
writing in accordance with the terms of this section. Notice via registered or
certified mail or via overnight courier shall be deemed given upon receipt at
the address of the party stated above (or such other address as may be stated by
such party pursuant to the terms of this section), except that if delivery is
refused or cannot be made for any reason, then such notice shall be deemed given
on the third day after it is sent. Notice via facsimile transmission shall be
deemed given upon receipt (by the party sending such notice) of a confirmation
page indicating that the facsimile transmission was received at the number of
the receiving party stated above (or at such other number as may be provided
pursuant to the terms of this section).
6
<PAGE> 94
14. Benefit; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
successors, assigns and beneficiaries in interest; provided, however, that
Consultant may not assign this Agreement without the prior written consent of
the Company. This Agreement may be assigned by the Company.
15. Entire Agreement, Incorporation of Terms. This Agreement
represents the full and complete understanding of the parties with respect to
the subject matter hereof. The introductory language and the recitals are
incorporated into this Agreement by reference.
16. Headings. All section headings herein are inserted for
convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement.
17. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but both of which taken
together shall constitute one and the same instrument.
Dated as of the date first above written.
APEX ACQUISITION CORP.
BY______________________________
Its____________________________
EDAC TECHNOLOGIES CORPORATION
BY______________________________
Its____________________________
________________________________
Gerald S. Biondi
7
<PAGE> 95
EXHIBIT G
FORM OF OPINION OF
MURTHA, CULLINA, RICHTER & PINNEY, LLP
<PAGE> 96
EXHIBIT H
________________, 1998
Apex Machine Tool Company, Inc.
21 Spring Lane
Farmington, CT 06032
Mr. Gerald S. Biondi
Mr. James G. Biondi
Mr. Michael Biondi
c/o Apex Machine Tool Company
Gentlemen:
We have acted as counsel to Edac Technologies Corporation , a
Wisconsin corporation ("Edac"), and Apex Acquisition Corp., a Wisconsin
corporation ("Buyer") in connection with the execution and delivery of the
following documents:
1. The Asset Purchase Agreement dated as of ___________, 1998
by and among Edac, Buyer, Apex Machine Tool Company, Inc., a Connecticut
corporation ("Seller") and Gerald S. Biondi, James G. Biondi and Michael Biondi
(the "Purchase Agreement").
2. The General Bill of Sale dated as of the date of this
opinion letter executed by Seller.
3. The Assignment and Assumption Agreement dated as of the
date of this opinion letter between Buyer, Edac and Seller.
4. The Noncompetition Agreement dated as of the date of this
opinion letter between Buyer, Edac and Seller.
5. The Noncompetition Agreements dated as of the date of this
opinion letter between Buyer, Edac and each of Gerald S. Biondi, James G. Biondi
and Michael Biondi.
<PAGE> 97
Apex Machine Tool Company
_____________, 1998
Page 2
6. The Consulting Agreement dated as of the date of this
opinion letter between Buyer, Edac and Gerald S. Biondi.
7. The Purchase Agreement dated as of the date of this opinion
letter between Gerald S. Biondi, James G. Biondi, Michael Biondi, Buyer and Edac
related to the purchase of the real estate located at 17 and 21 Spring Lane,
Farmington, Connecticut.
8. The Purchase Agreement dated as of the date of this opinion
letter between Gerald S. Biondi, James G. Biondi, Buyers and Edac related to the
purchase of the real estate located at 55 Spring Lane, Farmington, Connecticut.
9. The Assignment and Assumption of Lease between Gerald S.
Biondi and James G. Biondi as assignors and Apex Acquisition Corp. as assignee,
of even date herewith.
10. The Mortgage of even date herewith between Gerald S.
Biondi, James G. Biondi and Michael Biondi, related to the real estate located
at 17 and 21 Spring Lane, Farmington, Connecticut.
11. A Promissory Note dated as of the date hereof in the
principal amount of $_____________ payable by Buyer to the Shareholders.
The documents referenced at paragraphs 1 through 11 above are
referred to collectively as the "Transaction Documents." This opinion letter is
given pursuant to section 8.6 of the Purchase Agreement. Capitalized terms not
otherwise defined herein have the meanings assigned to them in the Purchase
Agreement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of all such records of Edac, agreements and
other instruments, certificates of officers and representatives of Edac,
certificates of public officials and other documents which we have deemed
necessary as a basis for the opinions expressed in this letter. As to various
questions of fact material to
2
<PAGE> 98
Apex Machine Tool Company
___________________, 1998
Page 3
our opinions, we have relied upon certificates of officers of Edac. In rendering
the opinions expressed in this letter, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as copies
or drafts of documents to be executed, the due execution of the Transaction
Documents by, and the enforceability of the Transaction Documents against, the
parties thereto other than Edac and Buyer.
Whenever this letter refers to matters within our "knowledge,"
"known to us" or of which we "know," such reference is limited to (1) facts
within our actual knowledge after an inquiry of the attorneys and legal
assistants of this firm who have provided legal services to Edac or Buyer within
the past 12 months and (2) facts represented to us in the certificates of
officers of Edac and Buyer attached hereto (the "Officers' Certificates"). We
have made no other inquiry or investigation as to factual matters.
Based on the foregoing and upon such additional investigation
of law as we have deemed necessary, it is our opinion that:
1. Edac is a corporation existing under the laws of the State
of Wisconsin and, based solely on a certificate issued by the Department of
Financial Institutions of the State of Wisconsin ("DFI"): (a) Edac has filed
with DFI during its most recently completed reporting year the required annual
report; (b) Edac is not the subject of a proceeding under Wisconsin Statutes
section 180.1421 to cause its administrative dissolution; (c) no determination
has been made by DFI that grounds exist for such action; (d) no filing has been
made with DFI of a decree of dissolution with respect to Edac; and (e) Articles
of Dissolution of Edac have not been filed with DFI.
2. Buyer is a corporation existing under the laws of the State
of Wisconsin and, based solely on a certificate issued by DFI: (a) Buyer has not
yet completed its initial report year and, accordingly, has not filed an annual
report with DFI; (b) Buyer is not the subject of a proceeding under Wisconsin
Statutes section 180.1421 to cause its administrative dissolution; (c) no
determination has
3
<PAGE> 99
Apex Machine Tool Company
___________________, 1998
Page 4
been made by DFI that grounds exist for such action; (d) no filing has
been made with DFI of a decree of dissolution with respect to Buyer under
Wisconsin Statutes section 180.1431; and (e) Buyer has not filed Articles of
Dissolution with DFI.
3. Each of Edac and Buyer has the corporate power and
corporate authority to enter into and perform each of the Transaction Documents
to which it is a party, to own its properties and assets, and to carry on its
business as it is currently being conducted. The Transaction Documents have been
duly authorized by all necessary corporate action on the part of each of Edac
and Buyer and have been duly executed and delivered by each of Edac and Buyer.
4. Assuming that the law of the State of Connecticut is
identical to the law of the State of Wisconsin, each of the Transaction
Documents to which Edac and Buyer is a party constitutes a legal, valid and
binding obligation of Edac and/or Buyer, as the case may be, and is enforceable
against Edac and/or Buyer, as the case may be, in accordance with its terms, (a)
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally; (b) subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law; and (c) subject to the qualification that certain
provisions of such documents are or may be unenforceable in whole or in part
under the laws of the State of Wisconsin, but the inclusion of such provisions
does not affect the validity of any such documents as a whole and each of such
documents contain legally adequate provisions for the realization of the
principal legal rights and benefits afforded by it.
5. The execution and delivery of the Transaction Documents to
which Edac and Buyer is a party and the performance by Edac and/or Buyer, as the
case may be, of their respective terms do not and will not conflict with or
result in a violation of any of the following: (a) the Articles of Incorporation
or By-Laws of Edac or Buyer; (b) any order, writ, judgment or decree known to us
to which Edac or Buyer is subject; or (c) any agreement known to us under which
Edac or Buyer has borrowed money or, in the case of Edac, any other agreement
which is included as an exhibit to Edac's Form 10-K for the year ended December
31, 1997.
4
<PAGE> 100
Apex Machine Tool Company
_______________, 1998
Page 5
6. To our knowledge, there is no action, suit, investigation
or proceeding pending or threatened before any court or administrative agency
against or involving Edac or Buyer which challenges the validity of the
Transaction Documents to which Edac or Buyer is a party.
The opinions expressed in this letter are limited to the laws
of the State of Wisconsin and the federal laws of the United States. This
opinion is rendered solely for your information and assistance in connection
with the transaction described above and may not be relied upon by any other
person or for any other purpose without our prior written consent.
Yours very truly,
REINHART, BOERNER, VAN DEUREN,
NORRIS & RIESELBACH, s.c.
BY
Daniel J. Brink
5
<PAGE> 1
PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of this ______ day of May,
1998, by and between EDAC TECHNOLOGIES CORPORATION ("Buyer"), and Gerald S.
Biondi, James G. Biondi and Michael Biondi (collectively "Sellers").
RECITALS
WHEREAS, Sellers are the owners of the real estate at 17 Spring Lane,
Farmington, Connecticut ("17 Spring Lane") and 21 Spring Lane, Farmington,
Connecticut ("21 Spring Lane"); and
WHEREAS, Sellers desire to sell to Buyer and Buyer desires to purchase
from Sellers the Property, as hereinafter defined, or so much thereof as
Sellers are able to convey to Buyer as herein provided, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and covenants contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Right of First Refusal Relating to 17 Spring Lane. Sellers state, and
Buyer acknowledges that Sellers have so stated, that pursuant to that certain
lease dated July 5, 1995 between Sellers, as Lessor, and Goldstar Medical
Services, Inc. ("Goldstar"), as Tenant (the "Goldstar Lease"), Goldstar has a
right of first refusal with respect to the sale of 17 Spring Lane under the
same terms and conditions as would apply to the sale of that property under
this Agreement. Pursuant to the Goldstar Lease, Goldstar must exercise its
right of first refusal within thirty (30) days after receipt of notice from
Sellers that Sellers have received a bona fide offer for the sale of 17 Spring
Lane which Sellers are willing to accept (such notice must include the terms of
such sale). Promptly following execution of this Agreement, Sellers will
deliver to Goldstar a Notice of Intent to Sell in the form of the Notice
attached hereto as Exhibit A and shall seek to have Goldstar either confirm its
exercise of its right of first refusal or waive such right with respect to the
sale of 17 Spring Lane hereunder as soon as possible. Sellers and Buyer agree
that (i) if Goldstar fails to exercise its right of first refusal as provided
in the Goldstar
<PAGE> 2
Lease or if Goldstar shall waive its right of first refusal with respect to the
sale of 17 Spring Lane hereunder, then 17 Spring Lane shall be included in the
property to be sold hereunder and the term "Property" as used herein shall
include 17 Spring Lane for all purposes and (ii) if Goldstar exercises its
right of first refusal as provided in the Goldstar Lease, then, 17 Spring Lane
shall not be included in the property to be sold hereunder and the term
"Property" as used herein shall not include 17 Spring Lane.
2. Conveyance. As used herein the term "Property" shall mean (i) if
Goldstar does not timely exercise its right of first refusal discussed in
Section 1 above, the term "Property" shall mean 17 Spring Lane and 21 Spring
Lane collectively and (ii) if Goldstar timely exercises its right of first
refusal, the term "Property" shall mean 21 Spring Lane only. On the Closing
Date, as hereinafter defined, Sellers shall execute a Limited Warranty Deed
with covenants against Sellers' acts conveying the Property to Buyer subject to
(i) the Goldstar Lease without any right of first refusal or any other tenant
purchase rights relating to the conveyance pursuant to this Agreement
(encumbering 17 Spring Lane only) and (ii) the other Permitted Encumbrances as
defined in Section 6.1 hereof.
3. Closing.
3.1. Date of Closing. The closing ("Closing") of the purchase and
sale of the Property shall take place simultaneously with the Closing under the
Asset Agreement, as defined in Section 4.1 hereof, ("Closing Date"), time being
of the essence, in the offices of Murtha, Cullina, Richter and Pinney LLP,
CityPlace I, 185 Asylum Street, Hartford, Connecticut 06103 or at such other
time or place or on such other date as shall be mutually agreed upon in writing
by the parties. All transactions contemplated herein shall be effective as of
12:01 a.m. of the Closing Date.
3.2. Purchase Price.
3.2.1. If the Property being conveyed hereunder shall include 17
Spring Lane and 21 Spring Lane, the Purchase Price for the Property shall be
$2,715,700 in the aggregate, which aggregate amount shall be allocated (a)
$465,700 to 17 Spring Lane and (b) $2,250,000 to 21 Spring Lane.
-2-
<PAGE> 3
3.2.2. If the Property being conveyed hereunder shall include
only 21 Spring Lane, the Purchase Price for the Property shall be $2,250,000.
3.2.3. As used herein, the term "Purchase Price" shall mean the
price to be paid for the Property as provided in this Section 3.2.
3.2.4. Sellers shall be responsible for any state or local real
estate conveyance taxes assessed by any applicable government or municipality.
3.3. Closing Deliveries by Buyer. At the Closing, Buyer shall deliver
to Sellers the following items, each executed, witnessed and acknowledged as
appropriate:
3.3.1. A Note ("Note") in the amount of the Purchase Price less
any net adjustments, if any, which are payable by Sellers to Buyer as specified
in Section 3.6 hereof, such Note shall be in form and substance identical to
that attached hereto as Exhibit B and incorporated herein by reference with all
blanks filled in with the appropriate information.
3.3.2. Certified copies of resolutions of Buyer's Board of
Directors authorizing and approving the execution of this Agreement and all
other documents required to be delivered to Buyer hereunder and the performance
by Buyer of the transactions contemplated hereby and thereby.
3.3.3. A closing certificate executed by Buyer stating that all
representations and warranties made by Buyer are true and correct in all
material respects as of the Closing Date and that Buyer has performed and
complied in all material respects with all of its covenants and obligations
required under this Agreement as of the Closing Date.
3.3.4. A bank or certified check or wire transfer of funds to an
account designated by Sellers in an amount required to pay the adjustments, if
any, which are payable by Buyer to Sellers pursuant to Section 3.6 hereof.
3.3.5. A mortgage ("Mortgage") encumbering the Property securing
Buyer's obligations under the Note. The Mortgage shall be in form and substance
identical to that
-3-
<PAGE> 4
attached hereto as Exhibit C and incorporated herein by reference.
3.3.6. An Assignment of Leases ("Assignment of Leases")
encumbering all leases existing with respect to the Property on the Closing Date
or thereafter, which Assignment of Leases shall secure Buyer's obligations under
the Note. The Assignment of Leases shall be in form and substance identical to
that attached hereto as Exhibit D and incorporated herein by reference.
3.3.7. A Lender's title insurance policy issued by a Title
Insurance Company licensed to do business in the State of Connecticut chosen by
Buyer and reasonably acceptable to Sellers (the "Title Company"). Such policy
shall (i) insure the Mortgage as a first priority Mortgage on the Property
subject only to those matters to which Buyer's title from Sellers is subject and
(ii) be in the full amount of the Purchase Price.
3.3.8. If the Property includes 17 Spring Lane (i) an assignment
and assumption of lease and security deposit in the form of the Assignment and
Assumption of Lease attached hereto as Exhibit E with all blanks filled in with
the appropriate information (the "17 Spring Lane Assignment of Lease") pursuant
to which (I) Sellers assign to Buyer all of Sellers' right, title, interest and
obligation in, to and under the Goldstar Lease, (II) Buyer assumes the
obligations of Sellers under the Goldstar Lease from and after the Closing Date;
(III) Sellers indemnify Buyer from any loss, cost, expense or liability incurred
by Buyer by reason of any landlord defaults under the Goldstar Lease existing
prior to the Closing Date and (IV) Buyer indemnifies Sellers from any loss,
cost, expense or liability incurred by Sellers by reason of any landlord
defaults under the Goldstar Lease arising from and after the Closing Date; and
(ii) a tenant notification letter in the form of the letter attached hereto as
Exhibit F with all blanks filled in with the appropriate information (the "17
Spring Lane Tenant Notification Letter") notifying Goldstar of the sale of 17
Spring Lane to Buyer.
3.4. Closing Deliveries by Sellers. At the Closing, Sellers shall
deliver, or cause to be delivered, the following items, each executed, witnessed
and acknowledged as appropriate, to Buyer:
-4-
<PAGE> 5
3.4.1. The Limited Warranty Deed required by Section 2.
3.4.2. If the Property includes 17 Spring Lane, (i) the 17
Spring Lane Assignment of Lease and (ii) the 17 Spring Lane Tenant Notification
Letter.
3.4.3. All such documents as are necessary to terminate and
release encumbrances which effect the Property being conveyed other than
Permitted Encumbrances.
3.4.4. A closing certificate executed by Sellers stating that
all representations and warranties made by Sellers are true and correct in all
material respects as of the Closing Date; and that Sellers have performed and
complied in all material respects with all of their covenants and obligations
required under this Agreement as of the Closing Date.
3.4.5. Such affidavits and certificates as may be reasonably and
customarily required by the Title Company to delete title exceptions relating to
(i) parties in possession other than tenants under the Goldstar Lease and (ii)
possible mechanics liens with respect to work done at the request of the
Sellers.
3.4.6. A Non-Foreign Status Certification.
3.4.7. State and local transfer tax forms detailing the transfer
tax due, if any, together with checks, in appropriate amounts, payable to the
Connecticut Department of Revenue Services and the Town of Farmington in payment
of required conveyance taxes.
3.4.8. A Form 1099-S.
3.4.9. Any form required pursuant to Section 8.1 hereof.
3.5. Mutual Deliveries. At the Closing Buyer and Sellers shall
deliver a separate Closing Statement for each of 17 Spring Lane (if included in
the sale) and 21 Spring Lane, each consistent with the prorations required
pursuant to Section 3.6 hereof, showing the disbursement of the net closing
proceeds, payoff amounts sufficient to release encumbrances on the Property
being conveyed other than Permitted Encumbrances, the real estate
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conveyance taxes and such other disbursements and adjustments as are usual and
customary including, without limitation, proration of rent and security
deposits.
3.6. Prorations.
3.6.1. Real Property Taxes. Any real property taxes with
respect to the Property shall be prorated on the Closing Date in the manner
which is customary with the Hartford County Bar Association. Real estate taxes
on property in Farmington, Connecticut are payable semi-annually on July 1 and
January 1 based upon the Grand List established as of October 1 occurring
immediately prior to the aforesaid July 1 payment (for example, taxes on the
October 1, 1997 Grand List are payable in two installments: one-half on July 1,
1998 and one-half on January 1, 1999). Real estate taxes with respect to 21
Spring Lane shall be prorated as of the Closing Date with Sellers being
responsible for a portion of the real estate taxes on the Grand List then
currently in effect (the total taxes due with respect to 21 Spring Lane herein
called the "Current Grand List Amount") equal to the product of the number of
days from the most recently occurring July 1 prior to the Closing Date to, but
not including, the Closing Date times a fraction, the numerator of which is the
Current Grand List Amount and the denominator of which is 365. Buyer shall be
responsible for the portion of the Current Grand List Amount equal to the
product of the number of days from, and including, the Closing Date to, and
including, the next succeeding June 30 times a fraction, the numerator of which
is the Current Grand List Amount and the denominator of which is 365. Sellers
and Buyer acknowledge that Goldstar is responsible for the payment of real
estate taxes effecting 17 Spring Lane during the term of the Goldstar Lease;
therefore, there shall be no adjustment of real estate taxes between Sellers and
Buyer with respect to 17 Spring Lane.
3.6.2. Assessments. If on the Closing Date any assessment for
benefit is a lien on 21 Spring Lane, Sellers shall pay the same, except that if
such assessment is payable in installments or may be paid in installments
without penalty (other than interest), Buyer shall pay any and all such
installments which shall become due and payable or which may be paid without
penalty (other than interest) after the Closing Date and the installment
relating to the current fiscal year (with any interest thereon) shall be
apportioned as of the day immediately preceding the Closing Date. Sellers and
Buyer acknowledge that
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Goldstar is responsible for the payment of assessments on 17 Spring Lane which
are due during the term of the Goldstar Lease; therefore, there shall be no
adjustment between Sellers and Buyer with respect to any assessments for benefit
with respect to 17 Spring Lane.
3.6.3. Utilities. Sellers shall endeavor to obtain meter
readings on the day immediately preceding the Closing Date with respect to
utilities supplied to 21 Spring Lane, and if such readings are obtained, then
Sellers shall pay the bills therefor for the period to, but not including, the
Closing Date. If Sellers are unable to obtain meter readings as of the day
immediately preceding the Closing Date, such utilities shall be prorated at the
Closing Date based upon the most recent utility bills, and reprorated between
Sellers and Buyer upon issuance of the actual bills therefor. Sellers and Buyer
acknowledge that Goldstar is responsible for the payment of all utilities
supplied to 17 Spring Lane during the term of the Goldstar Lease; therefore,
there shall be no adjustment of utilities between Sellers and Buyer with respect
to 17 Spring Lane.
3.6.4. Rent. Rents with respect to the Property shall be
adjusted in the following manner:
3.6.4.1 Rents received by Sellers for the calendar month
in which the Closing shall occur shall be adjusted at the Closing as of the
day preceding the Closing Date.
3.6.4.2 Rents received by Buyer or Sellers after the
Closing for the calendar month in which the Closing shall occur shall be
adjusted as of the day preceding the Closing Date, and Buyer or Sellers, as
the case may be, shall remit or cause to be remitted to the other its pro
rata share of such rents promptly after receipt thereof;
3.6.4.3 Except as provided in Section 3.6.4.2 above,
with respect to the adjustment of rents received by Buyer after the date of
Closing for the calendar month in which the Closing shall occur, no
adjustment shall be made for delinquent rent owing to Sellers on the date
of Closing, unless such payments are in excess of amounts necessary to
bring a tenant current for rent owed after the
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Closing. Sellers shall retain title to all such delinquent rents, if any.
3.6.5. Association Assessments. Any property owners association
assessment due on the Property which are not paid directly by Goldstar shall be
prorated on the Closing Date through the day immediately preceding the Closing
Date.
3.6.6. Contractual Obligations, Sellers shall perform all obligations
under all service contracts of Sellers affecting or involving the Property to be
assumed by Buyer, as evidenced in writing by Buyer prior to the Closing Date and
Buyer shall perform all obligations under all such contracts following the
Closing Date. If any payments under such contracts are not paid through the day
preceding the Closing Date, or are prepaid before the Closing Date for periods
from and after the Closing Date, such amounts shall be prorated through the day
preceding the Closing Date and credited or debited against the Purchase Price,
as appropriate.
4. Representations and Warranties of Sellers.
4.1. General. In order to induce Buyer to enter into this Agreement,
Sellers, jointly and severally make the following representations and
warranties, each of which shall survive the Closing for a period of twenty-four
(24) months except for intentional breaches of the representations and
warranties for which claims may be made at any time until the claim is barred by
the applicable period of limitation under federal and state laws relating
thereto. Sellers shall indemnify Buyer for breach of such representations and
warranties as provided in Section 7 hereof. In no event shall the aggregate
indemnity payments required to be made by Sellers for all claims hereunder
exceed Five Million Dollars ($5,000,000) minus (i) any amounts paid by Apex
Machine Tool Company, Inc. ("Apex") or any of the Sellers pursuant to
indemnifications under the Asset Purchase Agreement ("Asset Agreement") dated
the date hereof between Apex Acquisition Corp., Buyer, Apex and Sellers and (ii)
any amounts paid by Gerald S. Biondi and/or James G. Biondi pursuant to
indemnifications under the Purchase and Sale Agreement dated the date hereof
between Buyer, Gerald S. Biondi and James G. Biondi relating to 55 Spring Lane,
Farmington, Connecticut.
4.2. Enforceability; Conflicting Obligations. This Agreement and all
other agreements of Sellers contemplated hereby
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are or, upon the execution and delivery thereof, will be the valid and binding
obligations of Sellers enforceable against Sellers in accordance with their
terms. Except for Goldstar's right of first refusal under the Goldstar Lease,
which is triggered by the execution of this Agreement as provided in Section 1
above (but only until such time as Goldstar either fails to exercise or waives
such first refusal rights), the execution and delivery of this Agreement does
not, and the consummation of the sale and purchase of the Property contemplated
hereby will not, conflict with or violate any provisions of, or result in the
acceleration of, any obligations under any mortgage, lien, lease, order,
arbitration award, judgment, or decree, or any other agreement or other
instrument to which Sellers are subject or to which they are a party or violate
any restriction or limitation of any kind to which they are bound, including any
law, rule, regulation or guideline. Except as described herein, there are no
approvals or consents of third parties necessary for the sale of the Property,
or the transfer of the benefit and enjoyment thereof to Buyer under this
Agreement.
4.3. Litigation. Except as otherwise disclosed in the Asset
Agreement, there is no litigation, proceeding or governmental investigation
pending or, to the knowledge of Sellers, threatened against Sellers relating to
the transactions contemplated by this Agreement or to the Property. Except as
otherwise disclosed in the Asset Agreement, there is no outstanding order,
decree or stipulation issued by any federal, state or local authority to which
Sellers are a party which adversely affects or may adversely affect the Property
or Buyer's enjoyment thereof following the Closing.
4.4. Sellers' Representations and Warranties. Sellers represent and
warrant to Buyer that (i) Sellers have not received any written notice of any
assessments for public improvements against the Property or any written notice
or order by any governmental, regulatory or administrative authority, any
insurance company which has issued a policy with respect to any of such
properties or any board of fire underwriters or other body exercising similar
functions that: (a) relates to violations of building, safety or fire ordinances
or regulations; (b) claims any defect or deficiency with respect to any of the
Property; or (e) requests the performance of any repairs, alternations or other
work to or in any of the Property or in the streets bounding the same; and (ii)
Sellers have not received any written
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notice of any condemnation, expropriation, eminent domain or similar proceeding
affecting all or any portion of the aforesaid Property.
5. Representations and Warranties of Buyer.
5.1. General. In order to induce Sellers to enter into this
Agreement, Buyer makes the following representations and warranties, each of
which shall survive the Closing and shall be deemed to be independently material
and relied upon by Sellers, regardless of any investigation made by, or
information known to, Sellers. Buyer shall indemnify Sellers for breach of such
representations and warranties as provided in Section 7 hereof.
5.2. Organization. Buyer is a corporation duty organized, validly
existing, and in good standing under the laws of the State of Wisconsin. Buyer
possesses all necessary franchises, powers, permits, and authorizations
(collectively, "Governmental Authorizations") to own all of its properties and
assets, and to carry on its business as now being conducted and as of the
Closing Date shall possess all Governmental Authorizations to own the Property
and to carry out its business therein.
5.3. Enforceability, Conflicting Obligations. This Agreement, and all
other agreements of Buyer contemplated hereby are, or upon the execution and
delivery thereof will be, the valid and binding obligations of Buyer enforceable
against it in accordance with their terms. The execution and delivery of this
Agreement does not, and the consummation of the sale and purchase of the
Property contemplated hereby will not, conflict with or violate any provisions
of the Articles of Incorporation or Bylaws of Buyer, nor any provisions of, or
result in the acceleration of, any material obligations under any mortgage,
lien, lease, law, rule, regulation, guideline, order, arbitration award,
judgment or decree, or any other instrument to which Buyer is subject or to
which it is a party or violate any restriction or limitation of any to which it
is bound, including any law, rule, regulation or guideline.
5.4. Authorization. Buyer has all necessary power and authority to
enter into and perform the actions contemplated by this Agreement in accordance
with the terms and conditions hereof. The execution and delivery of this
Agreement, and the
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performance by Buyer of its obligations contained in this Agreement, have been
duly approved by Buyer's Board of Directors.
5.5. Litigation. There is no litigation, proceeding or governmental
investigation pending or threatened against Buyer relating to the transactions
contemplated by this Agreement. There is no outstanding order, decree or
stipulation issued by any federal state or local authority to which Buyer is a
party which adversely affects or may adversely affect the purchase of the
Property by Buyer or the performance of Buyer's obligations under the documents
to be delivered by Buyer as required hereby, including but not limited to the
Note, the Mortgage, the Assignment of Leases or the 17 Spring Lane Assignment of
Lease.
6.1. Title.
(i) Title to the Property at Closing shall be fee simple title,
free and clear of all liens, encumbrances, easements or other matters effecting
title except those items set forth on Exhibit G attached hereto (the "Permitted
Encumbrances").
(ii) If at the Closing, Sellers are unable to convey title to the
Property free and clear of all encumbrances except the Permitted Encumbrances,
then Sellers shall have the right, by written notice to Buyer, to extend the
date of Closing for thirty (30) days to effect a cure of the offending title
condition(s). If Sellers do not so elect to postpone the Closing as provided in
this Section 6.1(ii) so as to have additional time to cure a title defect or if
at the end of such extension period title to the Property is not free and clear
of all encumbrances except the Permitted Encumbrances, then Buyer shall have the
option: (a) of accepting such title as Seller can convey without an abatement
in the Purchase Price or (b) of terminating this Agreement by written notice to
Sellers. If Buyer shall exercise its right to terminate this Agreement pursuant
to this Section 6.1(ii), all obligations and liabilities of the parties hereto
by reason of this Agreement (except those obligations and liabilities
specifically set forth herein to survive termination) shall be deemed at an end.
6.2. Investigations and Contingencies.
(i) For purposes of this Agreement, the term "Contingency Period"
shall mean the period commencing on the date
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of this Agreement and ending at 5:00 p.m., Hartford, Connecticut time, on the
thirtieth (30th) day following the date hereof (or if such thirtieth (30th) day
following the date hereof is not a Business Day (as hereinafter defined) then on
the next succeeding Business Day. For purposes of this Agreement, the term
"Business Day" shall mean any day other than a Saturday, Sunday or any other day
on which the banks in Hartford, Connecticut are closed.
(ii) At any time during the Contingency Period, subject to the terms
of this Section 6.2(ii), Buyer shall have the right, personally or through its
engineers, surveyors, architects or such other parties as Buyer shall designate,
to enter the Property to survey the Property and to inspect the physical
components of the Property (the "Investigations"). Such Investigations shall be
made at Buyer's sole cost and expense. In conducting such Investigations, Buyer
covenants and agrees: (i) to provide Sellers with at least twenty-four (24)
hours notice (telephonic or otherwise) of the date or dates on which Buyer
desires to conduct an Investigation; (ii) to repair all damages to the Property
resulting from any such Investigations; and (iii) to indemnify and hold harmless
Sellers from any and all damages and/or injuries to third persons caused by such
Investigations, which indemnity shall survive the termination of this Agreement
and the Closing. Buyer agrees that it shall take no action in derogation of the
rights of the tenants at the Property. Sellers shall have the right to have a
representative accompany Buyer or Buyer's representatives during any such
Investigation if Sellers so desire. Before Buyer or any of Buyer's
representatives, agents or contractors shall be allowed access to the Property,
Buyer shall provide Sellers with a copy of a policy of public liability and
property damage insurance with respect to the Property, or a certificate of
insurance with respect thereto, in which: (A) the limits shall not be less than
$1,000,000 single limit and (B) Sellers shall be named as additional insureds.
Such insurance shall be issued by insurers of recognized responsibility,
licensed to do business in the State of Connecticut and otherwise in
commercially reasonable form and substance. Buyer shall not cause any physically
invasive investigations of the Premises to be conducted without the written
consent of Sellers, which consent shall not be unreasonably withheld, delayed or
conditioned.
(iii) Buyer agrees that all reports and other information generated
by Buyer and Buyer's agents and consultants shall be kept confidential and shall
not be disclosed to any
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other persons, other than Buyer's attorneys, advisors and prospective lenders
who shall agree to keep such information confidential. Notwithstanding the
foregoing, Buyer may disclose such information if required by law or pursuant to
a court order or subpoena, provided that Buyer shall first notify Seller of any
such required disclosure.
(iv) If during the Contingency Period, Buyer discovers (a) that any
of the buildings or other improvements located on the Property or the current
use of the Property are in violation of any applicable zoning regulations; (b)
that any of the Permitted Encumbrances are located on the Property in such a
manner that they interfere, or the exercise of the rights of holders of such
Permitted Encumbrances would cause interference, with the use of any of the
buildings located on the Property; (c) that any of the buildings located on the
Property are located in a flood plain, flood plain hazard area or designated
wetlands area; (d) that any of the buildings or other improvements encroach over
the boundary lines or set-back lines of the Property; (e) that there are any
structural or mechanical defects or conditions in the buildings on the Property
which reasonably could have a materially adverse effect on the value of the
Property or reasonably could impair the health and safety of future occupants of
the Property; (f) the Property does not have access to a publicly dedicated
street; or (g) public utilities required to operate the mechanical facilities at
the Property are not available to the Property, then in any such event, Buyer
shall have the right to terminate this Agreement by giving Sellers written
notice thereof (the "Buyer's Notice") on or before 5:00 p.m. Hartford,
Connecticut time, on the last day of the Contingency Period. The Buyer's Notice
shall set forth the reason for such termination. Buyer's failure to deliver the
Buyer's Notice on or before 5:00 p.m. Hartford, Connecticut time, on the last
day of the Contingency Period shall be deemed a waiver of Buyer's right to
terminate this Agreement pursuant to this Section 6.2.
(v) If Buyer elects to terminate this Agreement pursuant to this
Section 6.2, all rights and liabilities of the parties hereto by reason of this
Agreement (except those obligations and liabilities specifically set forth
herein to survive termination) shall be deemed at an end.
(vi) If Buyer terminates this Agreement as provided in this Section
6.2, or if Sellers terminate this Agreement due to a
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default by Buyer hereunder, Buyer shall provide Sellers with the product of the
Investigations (including written reports and the like) without cost to Sellers.
The provisions of this Section 6.2(vi) shall survive termination of this
Agreement.
6.3 Title Review.
(i) For purposes of this Agreement, the term "Title Review Period"
shall mean the period commencing on the date of this Agreement and ending at
5:00 p.m., Hartford, Connecticut time on the fifth (5th) Business Day following
the date hereof. If during the Title Review Period, Buyer is dissatisfied with
Sellers' title to the Property, then Buyer shall have the right to terminate
this Agreement by giving Sellers written notice thereof (the "Title Notice") on
or before 5:00 p.m. Hartford, Connecticut time on the last day of the Title
Review Period. The Title Notice shall set forth the reason for such
termination. Buyer's failure to deliver the Title Notice on or before 5:00
p.m., Hartford, Connecticut time, on the last day of the Title Review Period
shall be deemed a waiver of Buyer's right to terminate this Agreement pursuant
to this Section 6.3.
(ii) If Buyer elects to terminate this Agreement pursuant to this
Section 6.3, all rights and liabilities of the parties hereto by reason of this
Agreement (except those obligations and liabilities specifically set forth
herein to survive termination) shall be deemed at an end.
7. Procedure for Claims and Indemnification.
7.1. Buyer and Sellers acknowledge that claims with respect to any
indemnification obligations shall be made in accordance with, and governed by,
the applicable terms and conditions set forth in Article X and XI of the Asset
Agreement, as the case may be, subject however, to any modifications thereto
resulting from specific provisions herein, with the same force and effect as if
such terms and conditions were set forth herein with such changes therein as are
necessary to reflect the inclusion of such terms and conditions herein dealing
with the subject matter of this Agreement as opposed to that of the Asset
Agreement.
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8. Environmental Covenants Of Sellers And Buyer.
8.1 Connecticut Transfer Act. As an express condition to Buyer's
obligation to close, Sellers shall be responsible for full compliance with the
provisions of Section 22a-134 et seq. of the Connecticut General Statutes (the
"Transfer Act"), including without limitation (i) the determination as to the
applicability of the Transfer Act to the transfer of the Property contemplated
by this Agreement, (ii) the signing and filing of any appropriate Transfer Act
form with the Connecticut Department of Environmental Protection ("DEP"), (iii)
the payment of any Transfer Act form filing fee, (iv) the performance of any
remediation or other activities required to comply with any Transfer Act form
filed with the DEP in accordance with any applicable DEP regulations or required
by the DEP in connection with any such Transfer Act form filing, and (v) the
payment of all costs, liabilities and expenses directly or indirectly related to
the foregoing subparagraphs (i) through (iv), inclusive.
8.2 Comprehensive Environmental Response, Compensation, and Liability
Information System. As indicated in the Environmental Reports, a number of
properties in the Farmington Industrial Park, including 21 Spring Lane, are
listed on the United States Environmental Protection Agency's ("EPA")
Comprehensive Environmental Response, Compensation, and Liability Information
System ("CERCLIS"). For the five year period beginning on the Closing Date and
ending on the fifth anniversary of the Closing Date (such date the
"Environmental Termination Date"), Sellers shall be responsible for all costs
and liabilities associated with any Environmental Claim or other Losses directly
or indirectly relating to or arising out of the fact that the Property is
included on CERCLIS, including but not limited to any Comprehensive
Environmental Response, Compensation, and Liability Act action or claim (a
"CERCLA Claim"), asserted by any governmental agency or third party against
Sellers or Buyer on or before the Environmental Termination Date; provided,
however, that Sellers shall not be responsible for any portion of any
Environmental Claim, or Losses related to any Environmental Claim, to the extent
that the same relates to or was caused by activities of the Buyer or Apex
Acquisition Corp., or any tenants of Buyer or Apex Acquisition Corp., on the
Property or on surrounding properties after the Closing Date.
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8.3. Sellers' Remediation Rights. In the course of performing any
investigation or remediation activities, including any post-remediation or other
groundwater monitoring activities, Sellers shall have the right to (a) appeal by
appropriate and diligent actions any determination by a regulatory agency
concerning the appropriate requirements for remediation and (b) seek application
of any alternative or site specific remediation standards or any variances
approved by a regulatory agency that Sellers deem necessary or desirable,
provided that the application of such alternative or site specific remediation
standards or of such variance shall be consistent with the use of the Property
for commercial or industrial purposes.
8.4. Known Environmental Issues. Until the Environmental Termination
Date, Sellers, jointly and severally, shall be responsible for any Environmental
Claim, or Losses related to such Environmental Claim, which directly or
indirectly arise out of, result from, or relate to, any of the contamination or
non-compliance with Environmental Laws identified in the Environmental Reports;
provided, however, that Sellers shall not be responsible for any portion of any
Environmental Claim, or Losses related to any Environmental Claim, to the extent
that the same relates to or was caused by activities of the Buyer or Apex
Acquisition Corp., or any tenants of Buyer or Apex Acquisition Corp, after the
Closing Date.
8.5. Pre-Closing Environmental Issues. Sellers shall be fully
responsible for the performance of any remediation or other activities required
under Environmental Laws in connection with any spill or release of any
Hazardous Substances which occurs on, at or under, or which migrates onto the
Property between the date of this Agreement and the Closing Date.
8.6. Sellers' Cooperation With Buyer. In the course of performing
their obligations under this Section 8, Sellers shall keep Buyer fully apprised
of both the schedule for, and scope of, any necessary investigation and
remediation activities contemplated by this Section 8, and shall take all
reasonable steps to ensure that any necessary investigation and remediation
activities do not unreasonably interfere with use of the Property by Buyer or
Apex Acquisition Corp. Sellers shall provide all data and information with
respect to any necessary investigation and remediation activities, including
copies of draft data, information or reports, to Buyer, and provide Buyer with
full opportunity to make reasonable comments and recommendations to
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Sellers regarding such materials, which comments and recommendations shall be
considered in good faith by Sellers but shall not be binding on Sellers. Sellers
shall provide Buyer with a minimum of forty-eight (48) hours prior notice of any
meetings between Sellers and representatives of regulatory agencies such that
Buyer and/or its representatives has the opportunity to attend such meetings for
the sole purpose of observing such meetings.
8.7. Covenant Not To Sue; Comfort Letter. Until the Environmental
Termination Date, Sellers shall cooperate with and assist Buyer, at Buyer's
cost, in the event that Buyer elects to seek, under relevant provisions of
Environmental Law, a "covenant not to sue" from the DEP, a "comfort letter" from
the EPA or other similar forms of government assistance for which Buyer may be
eligible as the result of Buyer's consummation of the transactions contemplated
by this Agreement.
8.8. Termination of Sellers' Obligations. Notwithstanding any other
provision of this Agreement to the contrary, the obligations of Sellers pursuant
to this Section 8 shall terminate on the Environmental Termination Date, and
Sellers shall have no further obligations whatsoever with respect to the
Property.
8.9. Buyer's Environmental Responsibility Post-Closing. Buyer
covenants that on and after the Closing Date, it will be solely responsible for
full compliance with, and will be solely responsible for any failure of its
tenants to comply with all applicable Environmental Laws and will be solely
responsible for maintaining full compliance with all material Environmental
Permits required for the ongoing operation of the Property for Buyer's
businesses. Buyer shall be fully responsible for the performance of any
remediation or other activities required under Environmental Law in connection
with any spill or other release of any Hazardous Substances which occurs on, at
or under the Property, or which migrates from surrounding properties, resulting
from Buyer's ownership or operation of the Property, or the operations or
activities of Buyer's tenants, after the Closing.
8.10. Buyer's Cooperation With Sellers. (i) Buyer shall use
commercially reasonable efforts not to interfere with or increase the cost of
the performance of Sellers' obligations under this Section 8, and shall
cooperate, at Sellers' cost, with
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any appeal by Sellers of any determination by a regulatory agency regarding the
appropriate standards for any remediation, and any application by Sellers for
any alternative or site specific remediation standards, or any variances,
consistent with industrial or commercial use sought by Sellers from the DEP
and/or the EPA; provided, however, that Buyer shall not be required to take any
action or refrain from taking any action which it reasonably believes, after
consultation with counsel, would constitute a violation of law by Buyer or a
violation of law for which Buyer is reasonably likely to have responsibility.
(ii) Buyer acknowledges that Sellers intend to complete their
obligations under this Section 8 in a way which minimizes any necessary
investigation or remediation costs but that is in full compliance with all
applicable Environmental Laws. In the event that Buyer interferes with Sellers'
efforts to complete their obligations under this Section 8, including but not
limited to completion of either pre-Closing or post-Closing investigation or
remediation activities, or if Buyer modifies its operations or activities in a
way that materially increases the cost of performing Sellers' obligations, and
such action constitutes a breach by Buyer of Section 8.10, Buyer shall reimburse
Sellers for any additional costs Sellers would not have otherwise incurred in
performing their obligations under this Section 8.
8.11. Intentionally omitted.
8.12. Access. Buyer shall grant Sellers and their agents reasonable
access to the Property along materially the same terms as Sellers provided Buyer
access to Sellers' Property under the License for Access dated March 4, 1998 to
perform any necessary investigation and/or remediation activities required by
this Section 8. Buyer also shall grant Sellers and their agents reasonable
access to the Property as necessary for Sellers to pursue any actions against
third parties, including but not limited to Howmet Corporation and insurance
carriers, relating to any environmental liabilities incurred by Sellers.
8.13. Communications and Coordination With Agencies. In recognition
of the desirability of coordinating communications with environmental agencies,
unless otherwise required by applicable law, Buyer shall allow Sellers to serve
as the sole liaison with any regulatory agencies involved in any of the matters
which are the responsibility of Sellers pursuant to this
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Section 8; provided, however, that Buyer may attend any meetings between Sellers
and representatives of regulatory agencies for the sole purpose of observing
such meetings. In the event that Buyer communicates with any agency in a manner
that interferes with Sellers' efforts to complete their obligations pursuant to
this Section 8 in the most cost effective manner possible, and such
communication constitutes a breach by Buyer of Section 8.10 hereof, including
but not limited to the completion of investigation and remediation activities in
a way that minimizes the costs of such activities, Buyer shall reimburse Sellers
for any additional costs Sellers would not have otherwise incurred in performing
their obligations pursuant to this Section 8. Notwithstanding anything in this
Agreement to the contrary, if (a) any CERCLA Claim is made directly against
Buyer or Apex Acquisition Corp., and Sellers do not agree, by assuming control
of the defense of such CERCLA Claim after receipt of the notice required
pursuant to the Asset Agreement, that all Losses incurred in connection with
such CERCLA Claim are fully covered by Sellers' indemnification obligations to
the Article X Indemnitees of the Asset Agreement; (b) a CERCLA Claim is made
against Sellers and such CERCLA Claim, on its face, raises issues concerning the
allocation of potential environmental related liabilities between the periods
before and after the Closing or, in defending such a CERCLA Claim, Sellers posit
defenses which raise such allocation issues; and/or (c) a criminal investigation
or complaint concerning environmental matters is made which involves Apex
Acquisition Corp. and/or the Buyer, Apex Acquisition Corp., Buyer and its
representatives shall be free to take whatever actions they deem appropriate to
protect their interests, including but not limited to, having discussions with
any regulatory agency, and any such actions by Buyer, Apex Acquisition Corp. or
its representatives will not in any way affect the rights of Buyer or Apex
Acquisition Corp. to indemnification from Sellers pursuant to the Asset
Agreement.
8.14. Definitions. Capitalized terms used in this Section 8 but not
otherwise defined in this Agreement shall have the meanings ascribed to them in
the Asset Agreement.
8.15. Buyer Acknowledgment. Buyer acknowledges that the nature of
any investigation or remediation activities to be performed by Sellers pursuant
to this Agreement (the "Remediation Process") is that the Remediation Process is
likely to involve substantial discussions with representatives of regulatory
agencies concerning the nature and scope of activities required
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pursuant to applicable law and regulations, and potentially discretionary
decisions by representatives of such regulatory agencies and/or an LEP. Buyer
further acknowledges and agrees that notwithstanding the "compliance with
applicable law" provisions of Section 8.10 and Section 8.13 hereof, Buyer shall
not utilize the nature of the Remediation Process as a reason for involving
itself in, or interfering with, the activities of the Sellers, except in the
manner contemplated by Section 8.6 hereof, in complying with their obligations
pursuant to this Agreement.
9. MISCELLANEOUS.
9.1. Benefit and Assignment. This Agreement shall be binding upon
and, except as otherwise provided herein, inure to the benefit of, the parties
hereto, their heirs, successors, assignees, wholly owned subsidiaries, and
beneficiaries in interest. Neither Buyer nor Sellers may assign any of its
rights under this Agreement without the prior written consent of the other,
which consent may be withheld in such party's sole discretion; provided,
however, Buyer shall have the right to designate a wholly owned subsidiary of
Buyer to take title to the Property at the Closing so long as Buyer guarantees
to Sellers, pursuant to a written guarantee in form and substance satisfactory
to Sellers, the full and prompt performance of all of such designee's
obligations under the Note, Mortgage, Assignment of Leases, and the 17 Spring
Lane Assignment or Lease. In the event of the appointment of such a designee to
take title to the Property at the Closing, such designee's name shall be
substituted for the name "EDAC Technologies Corporation" on the transaction
documents which are attached as Exhibits hereto . No assignment approved of by
either party shall relieve the other party of its obligations under this
Agreement.
9.2. Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
9.3. Expenses. Except as otherwise herein provided, all expenses
incurred in connection with this Agreement or the transactions herein provided
for shall be paid by either Sellers or by Buyer, whichever incurs the same.
9.4. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall
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<PAGE> 21
be deemed an original but all of which together shall constitute one and the
same instrument.
9.5. Headings. All section headings in this Agreement are inserted
for convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement.
9.6. Exhibits. All of the Exhibits referred to herein are intended
to be and are hereby specifically incorporated herein by reference.
9.7. Amendment, Modification and Waiver. This Agreement may not be
modified, amended or supplemented except by mutual written agreement of all the
parties hereto. Either party may waive in writing any term or condition
contained herein and intended to be for its benefit; provided, however, that no
waiver shall be deemed or construed as a future or continuing waiver of any term
or condition. Each amendment, modification, supplement or waiver shall be in
writing and signed by the party to be charged.
9.8. Notices. Any notices to be given hereunder shall be deemed
given and sufficient if in writing and delivered by hand or reputable overnight
courier, mailed by registered or certified mail or telecopies, in the case of
Sellers, to:
Apex Machine Tool Company, Inc.
c/o James G. Biondi
4 Laurel Crest Drive
Burlington, Connecticut 06013
Facsimile No.: 860-673-5020
With a copy to:
Murtha, Cullina, Richter and Pinney LLP
CityPlace I
185 Asylum Street
Hartford, Connecticut 06103-3469
Attn: Richard S. Smith, Jr., Esquire
Facsimile No.: 860-240-6150
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<PAGE> 22
And, in the case of Buyer, to:
Edac Technologies Corporation
1806 New Britain Avenue
Farmington, Connecticut 06032
Attn: Edward J. McNerney, President
Facsimile No.: 860-674-2718
With a copy to:
Reinhart, Boerner, Van Deuren
Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, Wisconsin 53202
Attn: Daniel J. Brink, Esquire
Facsimile No.: 414-298-8097
or to such other address as Sellers or Buyer may designate by notice in writing
to the other. Notices shall be deemed given upon receipt.
9.9. Damage Prior to Closing. Sellers shall maintain the Property
until the earlier of Closing or occupancy by Buyer in materially the same
condition as of the date hereof. If, prior to the earlier of closing or
occupancy by Buyer, any one or more of the buildings on the Property is damaged
in an aggregate amount of not more than $150,000, Sellers shall be obliged to
repair such damage. If Sellers are unable to repair such damage prior to the
Closing, Sellers shall promptly notify Buyer in writing and (i) if such damage
is to the buildings on 21 Spring Lane, Buyer shall have the option of
terminating this Agreement and (ii) if such damage is to the buildings on 17
Spring Lane, but not to buildings on 21 Spring Lane, Buyer shall have the
option, exercisable by written notice to Sellers, of excluding 17 Spring Lane
from this Agreement, but in such event, continuing the purchase of 21 Spring
Lane hereunder. If the damage shall exceed such sum, Sellers shall promptly
notify Buyers in writing of the damage and (x) if such damage is to the
buildings on 21 Spring Lane, Buyer shall have the option, exercisable by written
notice to Sellers, of terminating this Agreement and (y) if such damage is to
buildings on 17 Spring Lane but not to buildings on 21 Spring Lane, Buyer shall
have the option, exercisable by written notice to Sellers, of excluding 17
Spring Lane from this Agreement but in such event, continuing the purchase of 21
Spring Lane hereunder. At the Closing, Buyer shall be entitled to any
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insurance proceeds relating to the damage to any damaged portion of the Property
acquired by Buyer as provided herein, plus a credit towards the purchase price
equal to the amount of Seller's deductible on such policy.
9.10. Mutual Contingency. Buyer's and Sellers' obligations to close
the purchase and sale of the Property are contingent on the simultaneous closing
of the transaction contemplated by the Asset Agreement provided however, that if
the failure to close the Asset Agreement is due (i) to the default of Buyer,
Buyer will be obligated to close this transaction and (ii) to the default of
Apex, Sellers shall be obligated to close this transaction.
9.11. Default. If either Buyer or Sellers default under this
Agreement, the non-defaulting party shall have all remedies available at law and
in equity.
9.12. Attorney's Fees. In the event of any litigation arising out of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees and costs.
9.13. Extension of Goldstar Lease. Sellers agree that they shall not
take any action to extend the Goldstar Lease unless the same is currently
required in the Goldstar Lease.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
BUYER:
EDAC TECHNOLOGIES CORPORATION
By: _________________________
President
SELLERS:
_____________________________
Gerald S. Biondi
(SIGNATURES CONTINUED ON NEXT PAGE)
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<PAGE> 24
___________________________
James G. Biondi
___________________________
Michael Biondi
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<PAGE> 25
SCHEDULE A
Description of Premises
<PAGE> 26
SCHEDULE B
Note
<PAGE> 27
EXHIBIT D
ASSIGNMENT OF LEASES AND RENTALS
This ASSIGNMENT OF LEASES AND RENTALS (hereinafter referred to as the
"Assignment") is made this ________ day of _________________, 1998, by EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation with a place of business at
1806 New Britain Avenue, Farmington, Connecticut 06032 (hereinafter referred to
as "Borrower") to GERALD S. BIONDI, an individual residing at
_______________________________, JAMES G. BIONDI, an individual residing at
_____________________________ and MICHAEL BIONDI, an individual residing at
______________________________ (collectively, the "Lender").
WHEREAS, Borrower is the owner of certain real property and improvements
thereon located in the Town of Farmington, County of Hartford, and State of
Connecticut, more particularly described in Exhibit A attached hereto (which
real property and improvements are hereinafter referred to as the "Premises");
and
WHEREAS Lender is the holder of a certain Mortgage Deed, Assignment of
Leases and Security Agreement (hereinafter referred to as the "Mortgage") of
even date herewith, executed and delivered by Borrower and intended to be
recorded in the land records of the Town of Farmington, Connecticut, which
Mortgage secures the debt evidenced by a certain Promissory Note of even date
herewith made by Borrower to Lender in the principal sum of $__________________
(hereinafter referred to as the "Note"); and
WHEREAS Lender has required that Borrower execute and deliver this
Assignment, as further security for the Note and the obligations secured by the
Mortgage.
NOW, THEREFORE, in consideration of the foregoing and the sum of One
Dollar ($1.00) and other valuable considerations paid to Borrower by Lender,
receipt and sufficiency of which are hereby acknowledged, Borrower agrees as
follows:
1. Assignment. Borrower hereby transfers, assigns, and sets over unto
Lender all present leases of space in the Premises as identified in Exhibit B
attached hereto and, whether or not so identified, any and all leases,
subleases, rentals or occupancy
<PAGE> 28
agreements, oral or written, and all of the right, title and interest of
Borrower in and to any and all guaranties made in connection with such leases,
subleases, rentals or occupancy agreements, and whether made in contravention of
this assignment or not, for the use and occupancy of any part or all of the
Premises, whether such leases are now in existence or may exist at any time or
times in the future during the term of this Assignment, and any renewals or
extensions thereof, whether or not recorded (all of which present and future
leases, subleases, rentals, occupancy agreements, and guaranties, whether or not
identified in Exhibit B, are made subject to this Assignment and are hereinafter
referred to by and included within the terms "Lease" or "Leases", together with
all of the right, title, and interest of Borrower in and to all rents, income,
issues, proceeds, and profits from the Leases and from the Premises intending
hereby to assign to Lender all of the interest of Borrower in the leases, and
all rents, income, issues, proceeds, and profits arising therefrom and from the
Premises, including any security deposits held pursuant to the terms of the
Leases, cancellation fees or charges, all sums of money payable by a tenant
under any Lease on account of a termination or default by the tenant, sums
payable on account of leases in any bankruptcy or insolvency proceedings
involving the tenants thereunder, and all sums whatsoever to be paid by any
tenant to Borrower (all items of payment by a tenant referred to in this
paragraph of whatever nature, collectively, "Tenant Payments")
2. Obligations Secured. This Assignment is given as security for (a)
payment of the principal indebtedness evidenced by the Note, with interest
thereon; (b) payment of all other sums, with interest thereon, payable under
the provisions of the Note, the Mortgage or this Assignment (collectively, the
"Loan Documents"); and (c) the performance and observance by Borrower of all of
the covenants, representations, and agreements contained in the Note, the Loan
Documents, and any and all Leases.
3. Representations by Borrower. Borrower represents that, as to each of
the existing Leases (a) Borrower has good right and authority to assign such
Lease to Lender and the execution of this assignment by the Borrower has been
duly authorized by all requisite partnership action; and (b) Borrower has
neither done, nor omitted to do, any act which might prevent or limit Lender
from exercising its rights under this assignment.
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<PAGE> 29
4. Borrower's Covenants.
(a) Borrower shall not, without Lender's prior written consent in each
instance, which consent shall not be unreasonably withheld (i) accept any
payment of rent in advance for more than each current month, or (ii) enter into,
materially modify, terminate or accept the surrender of any Lease, or (iii)
waive or release the tenant under any Lease from the performance or observance
of any material obligation or condition of such Lease, or (iv) exercise any
option arising on any casualty or condemnation available to Landlord under any
Lease, unless required under such Lease; or (v) give any consent sought by any
tenant under any Lease. Lender agrees that its consent to any proposed leases
shall not be unreasonably withheld.
(b) Borrower shall not, unless in each instance Lender's written
consent be first obtained, which consent shall not be unreasonably withheld (i)
assign or pledge, or contract (expressly or by implication) to assign or pledge,
any Lease, or the right to sue for, collect and receive any rents, additional
rents or other sums in any of said Leases provided to be paid to Borrower
thereunder, or the right to receive, hold and apply any bonds and security in
any of said Leases provided to be furnished to the landlord thereunder, or the
right to enforce any of the agreements, terms, covenants or conditions of said
Leases or to give notice thereunder; (ii) subordinate any of said Leases to any
mortgage (other than the Mortgage), deed of trust, or other encumbrance or
permit, consent or agree to such subordination, or (iii) convey or transfer or
suffer or permit a conveyance or transfer of the premises demised thereby or of
any interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, any tenants under any of the
Leases.
(c) Borrower shall, at its own cost and expense, unless and until
Lender takes possession and control of the Premises; (i) promptly and fully
perform each and every material covenant, condition, promise, and obligation on
the part of the landlord to be performed under and pursuant to the terms of each
Lease, and shall not suffer or permit there to exist any default in such
performance on the part of such landlord or permit any event to occur which
would give the tenant under any such Lease the right to terminate the same or
claim any deduction or offset
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<PAGE> 30
against rent, (ii) appear in and defend any action growing out of, or in any
manner connected with, any such Leases or the obligations or liabilities of
Borrower as landlord or of the tenant or guarantor thereunder; (iii) enforce,
short of termination unless Lender otherwise consents, the performance and
observance of each and every material covenant and condition of the Leases to be
performed or observed by the tenants thereunder; and (iv) at the reasonable
request of Lender exercise any option available to the Borrower as landlord
under said Leases arising on any casualty or condemnation.
(d) Borrower shall furnish to Lender, within five (5) days after the
receipt thereof, or the mailing or service thereof by Borrower, as the case may
be, a copy of each notice of default which Borrower shall give to or receive
from any tenant of the Premises or of any part or parts thereof based upon the
occurrence, or alleged occurrence, of any default or defaults in the performance
of any covenant, condition, promise or obligation provided for in any Lease.
(e) Borrower shall, upon reasonable request from Lender, furnish
Lender within five (5) business days of such request with true and complete
copies of all Leases then in effect.
5. Future Leases.
(a) Borrower shall furnish to Lender a true and complete copy of each
Lease, or renewal or extension of Lease, hereafter made by Borrower with respect
to space in the Premises, within five (5) business days after delivery of each
such Lease, or renewal or extension of Lease, by the parties thereto.
(b) Borrower will from time to time, upon reasonable demand of Lender,
confirm in writing the assignment to Lender of any or all Leases hereafter made
affecting the Premises or any part or parts thereof, and such written
confirmation shall be in such form as Lender shall reasonably require and as
necessary to make the same recordable, and shall contain the representations
required pursuant to Section 3 of this Assignment.
(c) All agreements and obligations to pay commissions or fees in
connection with the leasing of any portion of the Premises shall be subject and
subordinate to the Mortgage and
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<PAGE> 31
this Assignment and shall not be enforceable against Lender or any purchaser at
a foreclosure sale under the Mortgage, or their respective successors.
6. Collection of Rents. Notwithstanding the present assignment effected
hereby and only so long as there is no default (other than those which may have
arisen due to a Permitted Set-Off, as defined in the Mortgage) by Borrower
which is continuing beyond applicable grace and cure periods in any payment or
obligation secured hereby, Borrower may receive, collect, and enjoy the rents
(but not in advance except for each current month), income, issues proceeds,
and profits payable to Borrower in the ordinary course from the Premises or
from the Leases, or both, or either, but as a trust fund for payment of all
amounts due under the Note and the Loan Documents, including, but not limited
to principal and interest, taxes, assessments, insurance premiums, maintenance,
operating and utility charges relating to the Premises before using the same
for any other purpose. Following any default hereunder which continues beyond
any applicable grace and cure periods, Borrower shall (i) deliver all security
deposits received by tenants under the Leases to Lender, which security
deposits Lender shall hold under the terms of the Leases, (ii) not interfere
with Lender's collection of the rents due under the Leases, and (iii) apply all
rents received by Borrower to the debt secured hereby.
7. Events of Default. As used herein, the term "Event of Default" shall
include the following:
(a) any default in the performance of any obligation required to be
performed or observed by Borrower hereunder or any breach or violation of any
covenant under this Assignment, which default, breach, or violation continues
for more than fifteen (15) days after written notice thereof from Lender to
Borrower; or
(b) any Event of Default as defined in the Mortgage.
8. Remedies. (a) If an Event of Default occurs, Lender may, at its option,
with written notice thereof to Borrower, and without regard to the adequacy of
security for the indebtedness secured hereby, with or without bringing any
action or proceeding, either in person or by an agent or by a receiver to be
appointed by a court, enter upon, take possession of, manage,
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<PAGE> 32
repair and operate the Premises or any part thereof, and otherwise exercise ail
rights of the landlord under the Leases; make, cancel, enforce or modify Leases,
obtain and evict tenants, fix or modify rents, and do any acts which Lender
deems proper to protect the security hereof, and either with or without taking
possession of said property, in its own name sue for or otherwise collect and
receive all rents, income, issues, proceeds, and profits, including those past
due and unpaid, and apply the same, less costs and expenses of operation and
collection (including without limitation attorneys' fees), upon any indebtedness
secured hereby or by the mortgage, in such order or priority as Lender may
elect. Lender may exercise its rights under this Section 8 as often as any
Event of Default may occur. Immediately upon Lender's request after the
occurrence of an Event of Default, Borrower shall turn over to Lender all
security deposits required under any of the Leases, which shall be held and
applied by Lender in accordance with the provisions of the Leases governing such
security deposits.
(b) Any default by Borrower under this Assignment or any breach or
violation of any representation or covenant under this Assignment which shall
continue for more than fifteen (15) days after notice thereof from Lender to
Borrower shall at the option of Lender constitute an Event of Default under the
Mortgage, as if the provisions of this assignment were fully set forth in the
Mortgage, entitling Lender to all rights and remedies contained in the Mortgage;
provided, however, that if (i) the curing of such default cannot be accomplished
with due diligence within said fifteen (15) day period, and (ii) Borrower
commences to cure such default promptly after receipt of notice thereof from
Lender and thereafter diligently and continuously prosecutes the cure of such
default, and (iii) the extension of the period for effecting a cure will not
result in any material impairment of the Premises or any portion thereof, the
value thereof or Lender's lien thereon, then such period of fifteen (15) days
shall be extended for such period of time as is reasonably necessary for
Borrower so acting to cure such default but in no event for more than an
additional thirty (30) days; provided further, however, such extended cure
period shall not be applicable to any default which may be cured by the payment
of money.
9. Payment of Rent to Lender. A written demand on any tenant by Lender
(with written copy to Borrower detailing the
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Event of Default) for payment of rent to Lender shall be sufficient warrant to
said tenant to pay rent, income, issues, proceeds, and profit to Lender without
necessity for consent by Borrower or any obligation of said tenant to inquire as
to the evidence of a default by Borrower, notwithstanding any claim by the
Borrower to the contrary, and Borrower hereby irrevocably authorizes, directs
and requires all tenants of the Premises to honor this Assignment and comply
with any such demand by Lender, until further written notice by Lender
authorizing the tenant to resume rent payments to Borrower. Borrower shall have
no claim against any tenant for any amounts paid to Lender hereunder. Borrower
shall not interfere in any way with Lender's collection of the rents pursuant to
this Assignment. This Section 9 shall not, however, relieve Lender of any
liability it may have in connection with any improper notice delivered by Lender
to any tenant of Borrower.
10. Lender not Liable. Nothing contained herein or in the Mortgage shall
be construed, expressly or by implication, to obligate Lender, prior to the
time when Lender acquires title to the Premises, to perform any of the
covenants of Borrower as landlord under any of the Leases hereinabove assigned
or to pay any sum of money or damages therein provided to be paid by Borrower,
each and all of which covenants and payments Borrower agrees to perform and
pay.
Lender shall not be liable for any loss sustained by Borrower resulting
from Lender's failure to let the Premises after an Event of Default or from any
other act or omission of Lender in managing the Premises after an Event of
Default unless such loss is caused by the gross negligence, willful misconduct
or bad faith of Lender. Borrower hereby agrees to indemnify and save Lender
harmless against and from any liability or expense incurred by Lender hereunder
or under any of the Leases, provided such liability or expense is not the result
of Lender's gross negligence, willful misconduct, bad faith, breach of this
Agreement or Lender's own action prior to the date hereof acting as landlord
under the lease with Goldstar, Inc., and Borrower agrees to reimburse Lender for
any such expenses including attorney's fees, on demand, with interest at the
Default Rate, as defined in the Note.
11. Right to Protect Security. If Borrower fails to make any payment or
to do any act as herein provided beyond any
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<PAGE> 34
applicable grace or cure period, then the Lender, but without obligation so to
do and without notice to or demand on Borrower, and without releasing Borrower
from any obligation hereof, may make or do the same in such manner and to such
extent as the Lender may deem necessary to protect the security hereof,
including specifically, without limiting its general powers, the right to appear
in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of the Lender, and also the right to perform and
discharge each and every obligations, covenant and agreement of the Landlord in
the Leases contained; and in exercising any such powers to pay necessary costs
and expenses, employ counsel and incur and pay reasonable attorney's fees.
Borrower shall pay immediately upon demand all sums expended by the Lender under
the authority hereof, together with interest thereon at the Default Rate, as
defined in the Note, and the same shall be added to the said indebtedness and
shall be secured hereby and by the Mortgage.
12. No Waiver. No waiver by Lender of any breach by Borrower of any
covenant or condition contained herein, nor any failure by Lender to exercise
any right or remedy in respect of any breach hereunder, shall constitute a
waiver or relinquishment for the future of any such covenant or condition or of
any subsequent breach of any such covenant or condition, or bar any right or
remedy of Lender in respect of any such subsequent breach. If Lender shall
from time to time suffer or permit Borrower to sue for, collect or receive any
rent, additional rent or other sums in said Leases provided to be paid to the
Borrower thereunder, or to receive, hold or apply any bonds or security
thereunder, or to enforce any of the agreements, terms, covenants or conditions
thereunder or to give notices thereunder, neither such sufferance nor
permission shall constitute a waiver or relinquishment by Lender of its rights
hereunder, which rights are hereby assigned to Lender, with respect to any
subsequent rent, additional rent or any other sums payable to Borrower under
said Leases or with respect to any subsequent receipt, holding or application
of bonds or security or any subsequent enforcement of such agreements, terms,
covenants or conditions or any subsequent notice.
Any action of Lender hereunder shall not constitute a waiver of or be
deemed to cure any default by Borrower hereunder or under the Note or Mortgage,
and shall not affect or prejudice any other rights or remedies of Lender, which
other rights or
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<PAGE> 35
remedies may be exercised by Lender prior to, concurrently with or subsequent to
action hereunder; and any action by Lender under the Note or the Mortgage or any
other instrument, or the release of any party liable thereunder, or any
extension or indulgence with respect thereto, shall not affect or prejudice
Lender's rights hereunder.
13. Assignment by Lender; Foreclosure. Lender may assign Lender's
interest in the Leases hereby assigned to any subsequent holder of the Mortgage
or to any party who acquires title to the Premises in foreclosure. After a
foreclosure of the Mortgage, neither Lender nor any assignee of the landlord's
interest in said Leases shall be liable to account to Borrower for any rents or
income thereafter collected.
14. Termination. This Assignment shall continue in full force and effect
until full payment of all amounts secured hereby, as evidenced by the recording
of a full release of the Mortgage.
15. Notification of Assignment. Lender shall be entitled to notify any
tenant of the existence of this Assignment at any time, even in the absence of
any default by Borrower.
16. Notices. All notices to any party hereto shall be given by personal
delivery or delivered by registered or certified mail, return receipt
requested, or by nationally recognized overnight carrier, with postage or
carrier charges prepaid and addressed to each party at the address herein set
forth or such other address of which any party may give the other notice in
writing in the manner provided in this section and such delivery shall be
deemed given upon receipt or refusal to accept, or upon return to sender due to
impossibility of delivery. Notwithstanding the address for the Borrower herein,
notice or demand delivered to the address of one or more of the persons,
corporations or other entitles which shall at the time hold the record title to
the premises secured by the Mortgage, shall constitute notice or demand
delivered to the Borrower as may be required by any provision of this
Assignment. For purposes of this Assignment, the addresses of the Borrower and
the Lender are as follows:
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<PAGE> 36
Borrower: _________________________________
_________________________________
_________________________________
_________________________________
Lender: _________________________________
_________________________________
_________________________________
_________________________________
17. Miscellaneous. The provisions hereof shall be construed in accordance
with the laws of the State of Connecticut. This Assignment shall bind
Borrower, its successors and assigns, and inure to the benefit of Lender, its
heirs, executors, administrators, successors and assigns. The covenants of
Borrower herein shall run with the land. The word "Borrower" as used herein
shall mean not only the original Borrower named in the first paragraph of this
instrument, but also all future owners of the Premises, and the word "Lender"
as used herein shall mean not only the original Lender named in the first
paragraph of this instrument, but also all future holders of this Assignment.
The words "Borrower" and "Lender", together with any pronoun or pronouns in
connection therewith (and the possessive form of any such pronoun or pronouns),
shall include the singular, plural, masculine, feminine and neuter, as the
context may require whenever used, the singular number shall include the
plural, the plural the singular, and the use of any gender shall include all
genders. This Assignment may not be changed orally, but only by an agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
18. BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS ASSIGNMENT IS
A PART IS A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION AND WAIVES
ANY RIGHT TO (1) NOTICE AND PRIOR HEARING ON THE RIGHT OF LENDER, OR ITS
SUCCESSORS OR ASSIGNS, TO OBTAIN A PREJUDGMENT REMEDY UNDER CHAPTER 903a OF THE
CONNECTICUT GENERAL STATUTES, REV. 1958, AS AMENDED, OR AS THE SAME MAY BE
AMENDED; (2) NOTICE AND PRIOR HEARING OR OTHER PROCESS ALLOWED UNDER ANY STATE
OR FEDERAL CONSTITUTION, STATUTE OR OTHER LAW, NOW OR HEREAFTER AFFECTING
PREJUDGMENT REMEDIES AND (3) ANY REQUIREMENT THAT LENDER POST A BOND IN ORDER
TO OBTAIN ANY PREJUDGMENT REMEDY.
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19. BORROWER FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THE NOTE OR ANY OTHER LOAN DOCUMENT; ALL RIGHTS TO THE
BENEFITS OF ANY MORATORIUM, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW PROVIDED
OR WHICH MAY HEREAFTER BE PROVIDED BY ANY FEDERAL OR STATE STATUTE, INCLUDING
BUT NOT LIMITED TO EXEMPTIONS PROVIDED BY OR ALLOWED UNDER THE BANKRUPTCY
REFORM ACT OF 1978, AS THE SAME MAY BE AMENDED, BOTH AS TO ITSELF PERSONALLY
AND AS TO ALL OF ITS PROPERTY, WHETHER REAL OR PERSONAL, AGAINST THE
ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS EVIDENCED BY THE NOTE, THIS
ASSIGNMENT OR ANY OF THE OTHER LOAN DOCUMENTS AND ANY AND ALL EXTENSIONS,
RENEWALS AND MODIFICATIONS THEREOF; AND THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT, AT
LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THE NOTE, THIS
ASSIGNMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
20. BORROWER ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS
ASSIGNMENT AND IN ALL OF THE OTHER LOAN DOCUMENTS HAVE BEEN SPECIFICALLY
REQUESTED BY LENDER AND HAVE BEEN GRANTED BY BORROWER TO INDUCE LENDER TO
PROVIDE CREDIT TO BORROWER UNDER THE TERMS OF THIS ASSIGNMENT AND THAT SUCH
WAIVERS HAVE BEEN KNOWINGLY AND VOLUNTARILY GIVEN ONLY AFTER CONSIDERATION OF
THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS ATTORNEY.
IN WITNESS WHEREOF, Borrower has caused this Assignment to be executed as
of the day and year first written above.
Signed, Sealed and Delivered
In the Presence of: EDAC TECHNOLOGIES CORPORATION
______________________________ By: ____________________________
Name: Name:
Title:
______________________________ Hereunto Duly Authorized
Name:
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<PAGE> 38
STATE OF CONNECTICUT :
ss ______________, 1998
COUNTY OF HARTFORD :
Personally appeared ___________________, ________________ of EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation, signer and sealer of the
foregoing instrument and acknowledged the same to be his/her free act and deed
as such Officer and the free act and deed of that corporation, before me.
_____________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires
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<PAGE> 39
EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF LEASE
KNOW ALL MEN BY THESE PRESENTS:
THAT GERALD S. BIONDI, JAMES G. BIONDI and MICHAEL BIONDI (collectively,
the "Assignors") hereby transfer, assign and set over unto EDAC TECHNOLOGIES
CORPORATION, a Wisconsin corporation ("Assignee") all of Assignor's right,
title, interest and obligation in, to and under that certain Lease dated July
5, 1995 between Assignors, as Lessor, and Goldstar Medical Services, Inc.
("Goldstar"), as Tenant (the "Lease"). The Lease and all amendments and
modifications thereto are attached hereto and incorporated herein by reference
as Exhibit A.
TO HAVE AND TO HOLD the Lease, together with any and all security
deposits, prepaid rents, rights and appurtenances thereto in anywise belonging
to Assignors unto Assignee, its successors and assigns FOREVER, and Assignors
do hereby bind themselves and successors and assigns to WARRANT AND FOREVER
DEFEND all and singular the Lease unto Assignee, its successors, and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof by, through or under Assignors, but not otherwise.
Assignors certify that Goldstar has not paid rent more than one month in
advance and that Assignors are not in default under the Lease. Assignors
indemnify and hold Assignee harmless from and against any loss, cost, damage or
expense arising from claims made by Goldstar under the Lease hereby assigned
based upon events occurring prior to the Effective Date (hereinafter defined)
or for any inaccuracies contained herein.
Assignee, by its acceptance hereof, hereby (i) accepts said assignment;
(ii) assumes and agrees to keep, perform, fulfill, or cause to be performed and
fulfilled, all the terms, covenants, conditions, duties and obligations of
landlord contained in the Lease arising on and after the Effective Date
(hereinafter defined) and (iii) agrees to indemnify and hold Assignors harmless
from and against any loss, cost, damage or expenses arising from claims made by
Goldstar or any successor or assign under the Lease hereby assigned based upon
events occurring on or after the Effective Date (hereinafter defined)
(including
<PAGE> 40
specifically, without limitation, the obligations of the landlord under the
Lease with respect to security deposits delivered to Assignee on the date
hereof, but not otherwise).
Notwithstanding the date of execution of this Assignment and Assumption of
Lease, it is the intention of Assignors and Assignee that this Assignment and
Assumption of Lease be effective as of __________ A.M., Farmington, Connecticut
time on _____________, 1998 (the "Effective Date").
This Assignment and Assumption of Lease may be executed in one or more
counterparts, each of which together shall be deemed to be one and the same
instrument.
IN WITNESS WHEREOF, Assignors and Assignee have caused this Assignment and
Assumption of Lease to be duly executed as of this ______ day of
_______________, 1998.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: ASSIGNORS:
_______________________________ _______________________________
Name: Gerald S. Biondi
_______________________________
Name:
_______________________________ _______________________________
Name: James G. Biondi
_______________________________
Name:
_______________________________ _______________________________
Name: Michael Biondi
_______________________________
Name:
-2-
<PAGE> 41
ASSIGNEE:
EDAC TECHNOLOGIES CORPORATION
_______________________________ By: _______________________________
Name: Name:
Title:
Hereunto Duly Authorized
_______________________________
Name:
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, GERALD S. BIONDI, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed, before me.
____________________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires: _____________________
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, JAMES G. BIONDI, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed, before me.
____________________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires: _____________________
-3-
<PAGE> 42
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, MICHAEL BIONDI, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed, before me.
____________________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires: _____________________
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, EDAC TECHNOLOGIES CORPORATION , a Wisconsin
corporation, signer and sealer of the foregoing instrument and acknowledged the
same to be his free act and deed, as such officer, and the free act and deed of
that corporation, before me.
____________________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires: _____________________
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<PAGE> 43
EXHIBIT F
TENANT NOTIFICATION LETTER
____________, 1998
Goldstar Medical Services, Inc.
17 Spring Lane
Farmington, Connecticut 06032
Re: Sale of 17 Spring Lane, Farmington, Connecticut
Dear Tenant:
Please be advised that:
1. EDAC TECHNOLOGIES CORPORATION ("Purchaser") has purchased the captioned
property (the "Property") from GERALD S. BIONDI, JAMES G. BIONDI and MICHAEL
BIONDI ("Sellers").
[2. In connection with such purchase, Sellers have transferred your
security deposit in the amount of $___________ (the "Security Deposit") to
Purchaser. Purchaser specifically acknowledges the receipt of and sole
responsibillity for the return of the security deposit.] IF APPLICABLE.
[3. All rental and other payments that become due subsequent to the date
hereof should be payable to Purchaser and should be delivered to the following
address unless you are otherwise notified by Purchaser in writing:
_________________________________
_________________________________
_________________________________
SELLERS:
_________________________________
Gerald S. Biondi
<PAGE> 44
_________________________________
James G. Biondi
_________________________________
Michael Biondi
PURCHASER:
EDAC TECHNOLOGIES CORPORATION
By: _____________________________
Name:
Title:
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<PAGE> 45
EXHIBIT G
PERMITTED ENCUMBRANCES
I. 17 Spring Lane, Farmington, Connecticut
1. Any and all provisions of any ordinance, municipal regulation or
public or private law.
2. Real estate taxes to the Town of Farmington (subject, however, to
proration as provided in Section 3.6.1 of the Agreement.
3. Such state of facts as an accurate survey may reveal.
4. Pole Line Easement from Milton Nahum, Trustee to The Hartford Electric
Light Company dated December 30, 1960 and recorded February 14, 1961 in Volume
152 at Page 149 of the Farmington Land Records, and as shown in Map Volume 29
at Page 8 of the Farmington Land Records.
5. Pole Line Easement from West Hartford Village, Incorporated to the
Hartford Electric Light Company dated November 12, 1962 and recorded November
14, 1962 in Volume 161 at Page 246 of the Farmington Land Records (Note: No map
recorded in the Land Records).
6. Grant of Storm Water Easement from Servend, Inc. to F.I.P. Corporation
dated June 18, 1968 and recorded August 2, 1968 in Volume 190 at Page 216 of
the Farmington Land Records, and as shown on map or plan recorded in Map Volume
40 at Page 14 of the Farmington Land Records.
7. Terms and provisions of a Drainage Easement set forth in Grant of
Easement from Fisher Family Properties to Servend, Inc. dated September 9, 1981
and recorded on September 18, 1981 in Volume 283 at Page 893 of the Farmington
Land Records.
8. Easement for Sanitary Sewer Line and Water Line from Servend Food
Services, Inc. to Centennial Inns, Inc. dated June 23, 1988 and recorded July
22, 1988 in Volume 381 at Page 90 of the Farmington Land Records (Note: No map
recorded in the Land Records).
<PAGE> 46
9. 40' Building Line as shown on a map entitled "Map of Land to be
conveyed to Servend Food Services, Inc. Spring Land - Farmington, Connecticut
Scale 1"=40' May, 1987", made by Hodge Surveying Associates, P.C. referred to in
Warranty Deed from Servend Food Services, Inc. to William Delfino, Thomas
Delfino and Martin Stein, d/b/a Industrial Builders and Realty Company dated
June 29, 1989 and recorded June 30, 1989 in Volume 396 at Page 706 of the
Farmington Land Records (Note: No map recorded in the Land Records).
10. The following drainage and utility easements relating to Farmington
Industrial Park insofar as the same may specifically affect the above-described
premises:
(a) Grant of an Easement from Jams E. Thomas to The American Telephone
& Telegraph Co. dated August 31, 1904 and recorded in the Farmington Land
Records in Volume 86 at Page 37, and Right-of-Way from James E. Thomas to
American Telephone and Telegraph Company dated September 5, 1904 and
recorded in the Farmington Land Records in Volume 73 at Page 568.
(b) Right-of-Way set forth in Warranty Deed from Burton A. Harris to
G. Lewis Wells dated June 28, 1948 and recorded in the Farmington Land
Records in Volume 102 at Page 208.
(c) Grant of Easement from Oscar J. Nelson and Gunhild M. Nelson to
The Connecticut Power Company dated March 27, 1950 and recorded in the
Farmington Land Records in Volume 104 at Page 415.
11. Riparian Rights, if any, in and to the brook crossing the northerly
portion of the premises.
12. Certificate of Special Permit Granted by the Farmington Town Plan and
Zoning Commission Pursuant to Public Act 75-317, dated October 11, 1994 and
recorded November 18, 1994 in Volume 491 at Page 744 of the Farmington Land
records.
13. Notice of Lease by and between James G. Biondi, Michael Biondi and
Gerald S. Biondi, as Landlords, and Goldstar Medical Services, Inc., as Tenant,
dated November 29, 1995 and recorded in Volume 511 at Page 545 of the
Farmington Land Records.
-2-
<PAGE> 47
14. Assignment of Lease from Goldstar Medical Services, Inc., as Lessee,
and James G. Biondi, Gerald S. Biondi, and Michael Biondi, as Lessors, to The
Bank of Boston Connecticut dated November 28, 1995 and recorded in Volume 511
at Page 549 of the Farmington Land Records.
15. Lessor's Agreement by and between James G. Biondi, Gerald S. Biondi,
and Michael Biondi, as Lessors, and The Bank of Boston Connecticut (Bank),
Small Business Association (SBA) and Donald F. Bouchard d/b/a Goldstar Medical
Services and Goldstar Medical Services, Inc. (Borrower) dated November 17, 1995
and recorded in Volume 511 at Page 552 of the Farmington Land Records.
16. Any other caveats, easements, covenants and/or nonmonetary
encumbrances of record prior to the date of this Agreement provided the same do
not render title to the Property unmarketable. No matter shall be construed as
an encumbrance or defect in title so long as such matter is not construed as
such under the Standards of Title of the Connecticut Bar Association whenever
the standards shall be applicable.
II. 21 Spring Lane, Farmington, Connecticut
1. Any and all provisions of any ordinance, municipal regulation or
public or private law.
2. Real estate taxes to the Town of Farmington (subject, however, to
proration as provided in Section 3.6.1 of the Agreement.
3. Such state of facts as an accurate survey may reveal.
4. The First Parcel is subject to a 40' building line, utility easement,
and a 40' mutual driveway as shown on said map or plan entitled "Map of Land to
be conveyed to JAMES A. BIONDI Spring Lane Farmington, Connecticut Scale 1"=50'
August, 1968 certified substantially correct Edward F. Reuber, W.F. Grunewald
Surveyors Merton Hodge & Assoc. Engrs. & Surveyors," recorded in the Farmington
Land Records in Map Volume 39 at Page 48.
5. The First Parcel is subject to pole line and utility easements as
follows:
-3-
<PAGE> 48
(a) Pole Line Easement from Milton Nahum, Trustee to The Hartford
Electric Light Company dated December 30, 1960 and recorded February 14,
1961 in the Farmington Land Records in Volume 152 at Page 149.
(b) Pole Line Easement from F.I.P. Corporation and Milton Nahum,
Trustee, to The Hartford Electric Light Company dated June 10, 1965 and
recorded June 16, 1965 in the Farmington Land Records in Volume 174 at Page
102.
(c) Pole Line Easement from Milton Nahum, Trustee, and F.I.P.
Corporation and to The Hartford Electric Light Company dated May 19, 1967
and recorded May 24, 1967 in the Farmington Land Records in Volume 183 at
Page 562.
(d) Utility easement for underground facilities from F.I.P.
Corporation and Milton Nahum, Trustee, to The Hartford Electric Light
Company dated January 18, 1968 and recorded February 20, 1968 in the
Farmington Land Records in Volume 188 at Page 5.
6. The First Parcel is subject to driveway rights, covenants and
restrictions concerning the common driveway, water and has rights, future
utility, water and drainage easements, and building area ratios as set forth in
Warranty Deed from F.I.P. Corporation to James A. Biondi dated and recorded
August 8, 1968 in the Farmington Land Records in Volume 190 at Page 130. Any
covenants and restrictions reserved in favor of F.I.P. Corporation, Fisher
Family Properties and/or James G. Biondi, Gerald S. Biondi and Michael J.
Biondi contained in any deeds from or to them were assigned to The
Farmington-Plainville Industrial Park Association, Inc. by Assignments dated
December 18, 1991 and recorded on April 6, 1992 in Volume 438 at Page 984 and
Volume 438 at Page 987 of the Farmington Land Records.
7. The Second Parcel has a Restricted Non-Pollution Area as shown on map
or plan entitled "Map showing proposed land exchange between James A. Biondi &
Roger J. & Hazel Fredericks westerly of Spring Lane, Farmington, Connecticut
Scale 1"=40' October 1984 Edward F. Reuber, Surveyor Hodge Surveying
Associates, P.C." which map is on file in the Farmington Land Records in
Cabinet 61 as Map No. 4101.
-4-
<PAGE> 49
8. The Third Parcel is subject to pole line and utility easements as
follows:
(a) Pole Line Easement from Milton Nahum, Trustee to The Hartford
Electric Light Company dated December 30, 1960 and recorded February 14,
1961 in the Farmington Land Records in Volume 152 at Page 149.
(b) Pole Line Easement from F.I.P. Corporation and Milton Nahum,
Trustee, to The Hartford Electric Light Company dated June 10, 1965 and
recorded June 16, 1965 in the Farmington Land Records in Volume 174 at Page
102.
(c) Pole Line Easement from Milton Nahum, Trustee, and F.I.P.
Corporation and to The Hartford Electric Light Company dated May 19, 1967
and recorded May 24, 1967 in the Farmington Land Records in Volume 183 at
Page 562.
(d) Utility easement for underground facilities from F.I.P.
Corporation and Milton Nahum, Trustee, to The Hartford Electric Light
Company dated January 18, 1968 and recorded February 20, 1968 in the
Farmington Land Records in Volume 188 at Page 5
9. The Third Parcel is subject to Covenants and Restrictions concerning
the common driveway referred to in connection with the First Parcel, to water
and gas lines, to future utility and water and drainage easement, and
concerning the building area ratios as set forth in Warranty Deed from F.I.P.
Corporation to J. F. Fredericks Tool Co., Incorporated dated and recorded
August 21, 1968 in the Farmington Land Records in Volume 190 at Page 454. Any
covenants and restrictions reserved in favor of F.I.P. Corporation, Fisher
Family Properties and/or James G. Biondi, Gerald S. Biondi and Michael J.
Biondi contained in any deeds from or to them were assigned to The
Farmington-Plainville Industrial Park Association, Inc. by Assignments dated
December 18, 1991 and recorded on April 6, 1992 in Volume 438 at Page 984 and
Volume 438 at Page 987 of the Farmington Land Records.
10. Any other caveats, easements, covenants and/or nonmonetary
encumbrances of record prior to the date of this Agreement provided the same do
not render title to the Property unmarketable. No matter shall be construed as
an encumbrance or defect in title so long as such matter is not construed as
such
-5-
<PAGE> 50
under the Standards of Title of the Connecticut Bar Association whenever the
standards shall be applicable.
-6-
<PAGE> 51
EXHIBIT C
MORTGAGE DEED, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
THIS MORTGAGE DEED, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT, made this
______ day of _____________, 1998, by and between EDAC TECHNOLOGIES
CORPORATION, a Wisconsin corporation having an office at 1806 New Britain
Avenue, Farmington, Connecticut (the "Mortgagor"), and GERALD S. BIONDI of
_____________, Connecticut and JAMES G. BIONDI of ____________, Connecticut
having a mailing address of ________________________, Connecticut _____
(collectively the "Mortgagee").
WITNESSETH
That for good and valuable consideration and to secure the payment of an
indebtedness in the sum of ________________________
_________________________________________ DOLLARS ($_____________) lawful money
of the United States to be paid according to a certain Promissory Note of even
date herewith and by this reference made a part hereof, as said note may be
hereinafter amended, modified or extended (the "Note") and all other
obligations and liabilities due or to become due the Mortgagee hereunder, under
the Note or other Loan Documents as herein defined, all amounts, sums and
expenses paid hereunder by the Mortgagee according to the terms hereof and all
other obligations and liabilities of the Mortgagor under this Mortgage and the
Note, together with all interest on the said indebtedness, obligations,
liabilities, amounts, sums and expenses (all of the aforesaid, collectively,
the "Indebtedness"), the Mortgagor hereby mortgages, gives, grants, bargains,
sells, warrants, conveys, aliens, remises, releases, assigns, sets over and
confirms to the Mortgagee, its successors and assigns forever:
All those certain lots, pieces or parcels of land more particularly
described in Schedule A annexed hereto and by this reference made a part
hereof;
TOGETHER with the buildings and improvements now or hereafter located on
said land and all right, title and interest, if any, of the Mortgagor in and to
the streets and roads, opened
<PAGE> 52
or proposed, abutting said land to the center lines thereof, and strips and
gores within or adjoining said land, the air space and right to use said air
space above said land, all rights of ingress and egress on or within said land,
all easements now or hereafter affecting said land, royalties and all rights
appertaining to the use and enjoyment of said land, including, without
limitation, air, lateral support, alley, drainage, mineral, water, oil and gas
rights (said land, together with said building and improvements, the property
and other rights, privileges and interests encumbered or conveyed hereby,
collectively, the "Premises");
TOGETHER with all fixtures, including, without limitation, all gas and
electric fixtures, radiators, heaters, boilers, elevators and motors, bathtubs,
sinks, toilets, basins, pipes, faucets and other air-conditioning, plumbing,
and heating fixtures, refrigerating plant, carpeting, and appurtenances in
which the Mortgagor now or hereafter has a possessory or title interest, and
all building material, supplies and equipment now or hereafter delivered to the
Premises and intended to be installed therein; all other fixtures of whatever
kind and nature at present contained in or hereafter affixed to any building
standing on the Premises in which the Mortgagor has a possessory or title
interest; and all renewals or replacements thereof or articles in substitution
thereof; and all proceeds and profits thereof, all of which shall be deemed to
be fixtures and an accession to the freehold and a part of the realty as
between the parties hereto, and all persons claiming by, through or under them,
and shall be deemed to be a portion of the security for the Indebtedness. If
the lien of the Mortgage on any fixtures be subject to a lease agreement,
conditional sales agreement or chattel mortgage covering such property, then,
in the event of any default hereunder, all the right, title and interest of the
Mortgagor in and to any and all deposits made thereon or therefor are hereby
assigned to the Mortgagee, together with the benefit of any payments now or
hereafter made thereon (the items set forth in this paragraph and in the next
eight immediately succeeding paragraphs being sometimes hereinafter
collectively referred to as the "Collateral," and the Collateral and the
Premises being hereinafter collectively referred to as the "Mortgaged
Property"). Notwithstanding anything to the contrary herein, Collateral does
not include any items which are not related to fixtures and specifically
excludes machinery and equipment;
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<PAGE> 53
TOGETHER with all interests, estates or other claims, both in law and in
equity, which the Mortgagor now has or may hereafter acquire in the Premises;
TOGETHER with all rights and easements, expressed or implied to use and
maintain for the benefit of the Mortgaged Property all drains, basins, sewers,
pipes, conduits, wires, and other facilities that furnish utility or other
services to the same;
TOGETHER with all sales agreements, and other agreements affecting the
sale of the Mortgage Property now or hereinafter entered into and the deposits
under purchase or sales or issuing from the Mortgaged Property;
TOGETHER with the right, in the name and on behalf of Mortgagor, to appear
in and defend any action or proceeding brought with respect to the lien created
hereby on the Mortgaged Property and to commence any action or proceedings to
protect the interest of the Mortgagee therein;
TOGETHER with all leases, lettings, tenancies and licenses of the Premises
or any part thereof now or hereafter entered into and all right, title and
interest of the Mortgagor thereunder, including, without limitation, rights,
incomes, profits, revenues, royalties, bonuses, accounts, contract rights and
general intangibles under any and all of such leases, lettings, tenancies or
licenses, and the right to receive and collect the same payable thereunder;
TOGETHER with all unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor with respect to
the Mortgaged Property and all judgments, awards of damages and settlements
hereafter made as a result of or in lieu of any taking of the Premises or any
part thereof or any interest therein under the power of eminent domain, or for
any damage (whether caused by such taking or otherwise) to the Premises or the
improvements thereon or any part thereof or interest therein, including any
award for change of grade of streets;
TOGETHER with all proceeds of the conversion, voluntary or involuntary, of
the Mortgaged Property or any part thereof into cash or liquidated claims,
including, without limitation, proceeds of hazard and title insurance, subject
to the terms and conditions of this Mortgage; and
-3-
<PAGE> 54
TOGETHER with all right, title and interest of the Mortgagor in and to all
options, extensions, improvements, betterments, renewals, substitutions and
replacements of, and all additions and appurtenances to, the Mortgaged Property,
hereafter acquired by, or released to, the Mortgagor, or constructed, assembled
or placed by the Mortgagor on the Mortgaged Property, and all conversions of the
security constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and in
each such case, without any further mortgage, conveyance, assignment or other
act by the Mortgagor, shall become subject to the lien of this Mortgage as fully
and completely, and with the same effect, as though now owned by the Mortgagor
and specifically described herein;
TO HAVE AND TO HOLD the Mortgaged Property, with all the privileges and
appurtenances to the same belonging, unto the Mortgagee and its successors and
assigns to their use and behoof forever.
AND the Mortgagor covenants and agrees with the Mortgagee as follows:
ARTICLE I
Representations and Covenants of the Mortgagor
Section 1.1. Payment of the Indebtedness. Except with respect to
Permitted Set-Offs as defined in Section 4.7 hereof, the Mortgagor will
punctually pay the Indebtedness in immediately available funds as provided
herein, in the Note or in any other loan documents (the "Loan Documents")
delivered to the Mortgagee in connection with the loan (the "Loan") evidenced
by the Note, all in the coin and currency of the United States of America which
is legal tender for the payment of public and private debts.
Section 1.2. Title to the Mortgaged Property. The Mortgagor warrants
that: (a) the Mortgagor has fee simple title to the premises described in
Schedule A and good indefeasible title to the balance of the Mortgaged
Property, free and clear of liens and encumbrances, except those exceptions to
title set forth in the policy of title insurance insuring the lien of this
Mortgage; (b) it has full power and lawful authority to encumber the Mortgaged
Property in the manner and form herein set forth; (c) it owns or will own all
the Collateral now or hereafter
-4-
<PAGE> 55
affixed to and/or used in connection with, the Premises, including any
substitutions or replacements thereof, free and clear of liens and claims; (d)
this Mortgage is and will remain a valid and enforceable first lien on the
Mortgaged Property; (e) it will preserve such title and will forever WARRANT AND
DEFEND the same to the Mortgagee and will forever WARRANT AND DEFEND the
validity and priority of the lien hereof against the claims of all persons and
parties whomsoever; and (f) that this covenant shall not be extinguished by any
foreclosure hereof but shall run with the Premises.
Section 1.3. Maintenance of the Mortgaged Property. The Mortgagor shall
maintain the Mortgaged Property in good repair, shall comply with the
requirements of any governmental authority claiming jurisdiction over the
Mortgaged Property within 30 days after an order containing such requirement
has been issued by any such authority and promptly shall repair, restore,
replace or rebuild any part of the Mortgaged Property which may be damaged or
destroyed by any casualty whatsoever or may be affected by any condemnation
proceeding, and Mortgagor shall complete and pay for, within reasonable time,
any structure that at any time is in the process of construction on the
Premises. If at any time the then existing use or occupancy of any part of the
Premises shall, pursuant to any zoning or other law, ordinance or regulation,
be permitted only so long as such use or occupancy shall continue, the
Mortgagor shall promptly advise the Mortgagee thereof and shall not cause or
permit such use or occupancy to be discontinued without the prior written
consent of the Mortgagee, which consent shall not be unreasonably withheld.
The Mortgagor shall not, without the prior written consent of the Mortgagee,
which consent shall not be unreasonably withheld, threaten, commit, permit or
suffer to occur any waste, material alteration, demolition or removal of the
Mortgaged Property or any part thereof; provided, however, that fixtures
included within the Collateral may be removed from the Premises if the
Mortgagor concurrently therewith replaces same with similar items of equal or
greater value, free of any lien, charge or claim of superior title and by such
removal and replacement Mortgagor shall be deemed to have subjected such
property to the lien of this Mortgage, and; provided further, however, that
fixtures included within the Collateral which are no longer necessary for the
operation of the Mortgaged Property need not be so replaced by Mortgagor .
Mortgagor shall immediately notify Mortgagee of any such replacement and shall
further execute such mortgage,
-5-
<PAGE> 56
security agreement or other documents as Mortgagee may require with respect
thereto.
Section 1.4. Insurance; Restoration. The Mortgagor shall keep the
buildings and improvements now or hereafter located within the Premises insured
against damage by fire and the other hazards covered by a standard fire, broad
form extended coverage and vandalism and malicious mischief insurance policy
for the full insurable value thereof (which, unless the Mortgagee shall
otherwise agree in writing, shall mean the full repair and replacement value
thereof without reduction for depreciation or co-insurance). In addition, the
Mortgagee may require the Mortgagor to carry such other insurance, in such
amounts as may from time to time be reasonably required by institutional
lenders, against insurable risks which at the time are commonly insured against
in the case of premises similarly situated, due regard being given to the site
and the type of building, construction, location, utilities and occupancy or
any replacements or substitutions therefor, including, without limitation, war
risk, nuclear explosion, demolition and contingent liability from the operation
of "nonconforming" improvements on the Premises and earthquake. The Mortgagor
shall additionally keep the buildings and improvements now or hereafter located
in or on the Premises insured against loss by flood if the Premises are located
in an area identified by the Secretary of Housing and Urban Development as an
area having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968 (and any successor act
thereto) in an amount at least equal to the outstanding Indebtedness or the
maximum limit of coverage available with respect to the buildings under said
Act, whichever is less, which policy or policies shall have endorsed thereon a
long-form, non-contributory mortgagee clause in the name of the Mortgagee, so
and in such manner and form that the Mortgagee shall at all times have and hold
the said policy or policies as collateral and further security for the payment
of the Indebtedness until the full payment of the Indebtedness. The proceeds
of insurance paid on account of any damage or destruction to the Premises or
any part thereof shall be paid over to the Mortgagee to be applied as
hereinafter provided.
(a) The Mortgagee shall have the option in its sole discretion to
apply any insurance proceeds it may receive pursuant to this Section 1.4 to the
payment of the Indebtedness or to allow all or a portion of such proceeds to be
used for the
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restoration of the Premises. If any insurance proceeds are used for the
restoration of the Premises, then such use shall be governed as hereinafter
provided in subparagraphs (b), (c), (d), (e) and (f).
(b) In the event of damage or destruction to the Premises, the
Mortgagor shall give prompt written notice thereof to the Mortgagee and shall,
to the extent permitted by law, promptly commence and diligently continue to
repair, restore and rebuild the Premises so damaged or destroyed (the "work") to
restore the Premises in full compliance with all legal requirements and so that
the Premises shall be at least equal in value and general utility as they were
prior to the damage or destruction.
(c) The Mortgagor shall perform the work diligently and in good
faith.
(d) All insurance proceeds recovered by the Mortgagee on account
of damage or destruction to the Premises which the Mortgagee elects to be used
for the restoration of the Premises, less the cost, if any, of such recovery and
of paying out such proceeds (including attorneys' fees), shall, upon the written
request of the Mortgagor, be applied by the Mortgagee to the payment of the cost
of the work referred to in subparagraph (b) above and shall be paid out from
time to time to the Mortgagor or, upon the happening of an Event of Default, at
the Mortgagee's option, directly to the contractor, subcontractors, materialmen,
laborers, engineers, architects and other persons rendering services or
materials for the work, as said work progresses except as otherwise hereinafter
provided, but subject to the following conditions, any of which the Mortgagee
may waive:
(1) If the work to be done is structural, an architect chosen by
Mortgagor and reasonably satisfactory to Mortgagee (the
"Architect") shall be in charge of the work;
(2) Each request for payment shall be made on seven days prior notice
to the Mortgagee and shall be accompanied by a certificate of the
Architect if one is required under subparagraph (d)(1) above,
otherwise by the President or Chief Financial Officer of the
Mortgagor, stating that (i) all of the work completed has been
done in compliance with the plans
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and specifications approved by the Architect, if applicable, and
in accordance with all provisions of law; (ii) the sum requested
is justly required to reimburse the Mortgagor for payments by the
Mortgagor to, or is justly due to, the contractor, subcontractors,
materialmen, laborers, engineers, architects or other persons
rendering services or materials for the work (giving a brief
description of such services and materials), and that when added
to all sums, if any, previously paid out by the Mortgagee does not
exceed the value of the work done to the date of such certificate;
and (iii) the amount of such proceeds remaining in the hands of
the Mortgagee will be sufficient on completion of the work to pay
for the same in full (giving in such reasonable detail as the
Mortgagee may require an estimate of the cost of such completion);
(3) Each request shall be accompanied by waivers of liens satisfactory
to the Mortgagee covering that part of the work previously paid
for, if any, and by a title report prepared by a title company or
attorney at law or by other evidence, all to be reasonably
satisfactory to the Mortgagee, that there has not been filed with
respect to the Premises any mechanic's lien or other lien or
instrument for the retention of title in respect of any part of
the work not discharged of record and that there exist no
encumbrances on or affecting the Premises other than encumbrances,
if any, which are set forth in the title policy issued to the
Mortgagee insuring the lien of this Mortgage;
(4) There shall be no Event of Default under this Mortgage; and
(5) The request for any payment after the work has been completed
shall be accompanied by a copy of any certificate or certificates
required by law, if any, to render occupancy of the Premises
legal.
Upon completion of the work and payment in full therefor, or upon
failure on the part of the Mortgagor promptly to commence or diligently to
continue the work, or at any time upon request by the Mortgagor, the Mortgagee
may apply the amount of any such
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proceeds then or thereafter in the hands of the Mortgagee to the payment of the
Indebtedness.
(e) In the event the work to be done is not structural, then the
net insurance proceeds held by the Mortgagee for application thereto shall be
paid to the Mortgagor by the Mortgagee upon completion of the work, subject to
the provisions of the foregoing subparagraphs (b), (c) and (d), except those
which are applicable only if the work to be done is structural.
(f) If within 60 days after the occurrence of any damage or
destruction to the Premises requiring structural work, the Mortgagor shall fail
to commence promptly such repair, restoration and rebuilding, or if thereafter
the Mortgagor fails diligently to continue such repair, restoration and
rebuilding or is delinquent in the payment to contractors, mechanics,
materialmen or others of the costs incurred in connection with such work, or, in
the case of any damage or destruction not requiring structural work, as
determined by the Mortgagee, in order to restore the Premises, if the Mortgagor
shall fail to repair, restore and rebuild promptly the Premises so damaged or
destroyed then, in addition to all other rights herein set forth, and after
giving the Mortgagor 10 days' written notice of the nonfulfillment of one or
more of the foregoing conditions, the Mortgagee, or any lawfully appointed
receiver of the Premises may, at their respective options, unless the Mortgagor
has cured the default, perform or cause to be performed such repair, restoration
and rebuilding, and may take such other steps as they deem advisable to perform
such repair, restoration and rebuilding, and upon 24 hours prior notice to the
extent reasonably necessary for any of the foregoing purposes, and the Mortgagor
hereby waives, for the Mortgagor and all others holding under the Mortgagor, any
claim against the Mortgagee and such receiver arising out of anything done by
the Mortgagee or such receiver pursuant hereto, other than willful misconduct or
gross negligence and the Mortgagee may apply insurance proceeds (without the
need to fulfill any other requirements of this Section 1.4) to reimburse the
Mortgagee, or such receiver, for all amounts expended or incurred by them,
respectively, in connection with the performance of such work, and any excess
costs shall be paid by the Mortgagor to the Mortgagee upon demand.
(g) The Mortgagor shall (1) provide public liability insurance
with respect to the Premises providing for limits of
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liability reasonably acceptable to the Mortgagee for both injury to or death of
a person and for property damage.
(h) All insurance policies required pursuant to this Section 1.4
other than those policies required by subparagraph (g) above shall be endorsed
to name the Mortgagee as an insured thereunder, as its interest may appear, with
loss payable to the Mortgagee, without contribution, under a long-form, non-
contributory mortgagee clause. All insurance policies required pursuant to
subparagraph (g) above shall name Mortgagor as an additional insured. All such
insurance policies and endorsements shall be fully paid for and contain such
provisions and expiration dates and be in such form and issued by such insurance
companies licensed to do business in the State of Connecticut, with a rating of
"A-VI" or better as established by Best's Rating Guide or an equivalent rating
with such other publication of a similar nature as shall be in current use, as
shall be approved by the Mortgagee. Without limiting the foregoing, each policy
shall provide that such policy may not be cancelled or materially changed except
upon 30 days prior written notice of intention of non-renewal, cancellation or
material change to the Mortgagee and that no act or thing done by the Mortgagor
shall invalidate the policy as against the Mortgagee. In the event the
Mortgagor fails to maintain insurance in compliance with this Section 1.4, the
Mortgagee may, but shall not be obligated to, obtain such insurance and pay the
premium therefor and the Mortgagor shall, on demand, reimburse the Mortgagee for
all sums, advances and expenses incurred in connection therewith. Not less than
30 days prior to the expiration date of each policy furnished pursuant to this
Section 1.4, the Mortgagor shall deliver to the Mortgagee copies of all original
renewal policies, marked "premium paid" or accompanied by other evidence of
payment satisfactory to the Mortgagee certified by the insurance company or
authorized agent as being true copies, together with the endorsements thereto
required hereunder.
(i) In the event of foreclosure of this Mortgage or other transfer
of title or assignment of the Mortgaged Property in extinguishment, in whole or
in part, of the Indebtedness, all right, title and interest of the Mortgagor in
and to all policies of insurance required by this Article or otherwise obtained
by the Mortgagor shall inure to the benefit of and pass to the Mortgagee or any
purchaser or transferee of the Mortgaged Property, as the case may be. The
Mortgagor in such event hereby irrevocably appoints the Mortgagee its attorney
in fact, coupled
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with an interest, to endorse any checks, drafts or other instruments
representing any proceeds of such insurance, whether payable by reason of loss
thereunder or otherwise.
Section 1.5. Maintenance of Existence. The Mortgagor shall do or cause
to be done all things necessary to (a) preserve and keep in full force and
effect its existence, franchises, rights and privileges under the laws of the
state of its formation and qualification; and (b) preserve and maintain in full
force and effect its franchises, rights, privileges and good standing under the
laws of each state in which the Mortgagor is transacting business or in which
property owned by the Mortgagor is located, except for any such failure which
would not have a material adverse effect on Mortgagor, and maintain any
required duly authorized agent for service of process in each such state.
Section 1.6. Taxes and Other Charges. Except as provided in Section 4.16
hereof, the Mortgagor shall pay and discharge, not later than the last day on
which the same may be paid without penalty or interest, all taxes of every kind
and nature, sewer rents, charges for water or for setting or repairing meters,
and all other utilities serving the Premises, and assessments, levies, permits,
inspection and license fees and all other charges imposed upon or assessed
against the Mortgaged Property or any part thereof or upon the revenues, rents,
issues, income and profits of the Premises or arising in respect of the
occupancy, use or possession thereof (collectively "Impositions") and the
Mortgagor shall exhibit to the Mortgagee within 10 days after the final date
that items specified in this Section 1.6 can be paid without interest or
penalty, validated receipts showing the payment of such taxes, sewer rents,
water, meter and other utility charges, assessments, levies, fees and other
charges which may be or become a lien on the Mortgaged Property. Should the
Mortgagor default in the payment of any of the foregoing, the Mortgagee may,
with written notice to Mortgagor, but shall not be obligated to, pay the same
or any part thereof and the Mortgagor shall, on demand, reimburse the Mortgagee
for all amounts so paid. The Mortgagor shall not enter into any written or
oral agreement which has the effect of deferring the payment of Impositions
which can be assessed, levied, confirmed, imposed or become a lien on the
Mortgaged Property without the consent of the Mortgagee; provided, however,
that if the Impositions can be paid in installments, Mortgagor shall be
entitled to pay the same in such installments.
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Mortgagor hereby assigns to Mortgagee all rights of Mortgagor now or
hereafter arising in and to any refunds of Impositions, or other charges
relating to the Premises or the debt secured hereby. If upon receipt of any
such refund by Mortgagee, no Event of Default shall have occurred hereunder and
then be continuing, then Mortgagee shall promptly pay over the same to
Mortgagor, if an Event of Default shall have occurred and then be continuing,
Mortgagee may apply said refund in reduction of any amount secured hereby.
Section 1.7. Condemnation Awards. In the event all or any part of the
Premises are taken in eminent domain or condemnation proceedings, or by
alteration in grade of any street or any reacquisitions by any redevelopment or
other governmental agency or for public use or in any other manner, all of the
expense, including appraisers' and attorneys' fees, reasonably incurred therein
by Mortgagee shall be paid by Mortgagor to Mortgagee upon demand, with interest
at the Default Rate as defined in the Note, from the date of such demand until
paid, and shall be secured by this Mortgage. The Mortgagor, immediately upon
obtaining knowledge of the institution of any proceedings for the condemnation
of the Premises or any portion thereof, will notify the Mortgagee of the
pendency of such proceedings. The Mortgagee may participate in such
proceedings, and the Mortgagor from time to time will deliver to the Mortgagee
all instruments reasonably requested by it to permit such participation. All
awards and compensation or other taking, or purchase in lieu thereof (but only
to the extent to pay the Indebtedness), of the Premises or any part thereof
which are awarded for the taking of the portion of the Mortgaged Property which
constitutes real property, are hereby assigned to and shall be paid to the
Mortgagee. The Mortgagor hereby authorizes the Mortgagee to collect and
receive such awards and compensation, to give proper receipts and acquittances
therefor and, in the Mortgagee's sole discretion, to apply the same toward the
payment of the Indebtedness, notwithstanding the fact that the Indebtedness may
not then be due and payable, or to the restoration of the Premises (or to the
applicable portion thereof). The Mortgagor, upon request by the Mortgagee,
shall make, execute and deliver any and all instruments requested for the
purposes of confirming the assignment of the aforesaid awards and compensation
to the Mortgagee, free and clear of any liens, charges or encumbrances of any
kind or nature whatsoever. In the event Mortgagee shall be prohibited from
intervening and participating in any such condemnation proceedings by the court
having jurisdiction over
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such proceedings, Mortgagor shall consult with Mortgagee in connection with such
proceedings, and Mortgagor shall not enter into any agreement with regard to the
Mortgaged Property or any award or payment on account thereof unless Mortgagee
shall have consented thereto in writing, which consent shall not be unreasonably
withheld.
Notwithstanding any taking by condemnation, there shall be no abatement or
reduction in the amounts of payments owed by Mortgagor hereunder or under the
Note in the event of any condemnation affecting the Mortgaged Property, and
Mortgagor shall continue to make all payments or principal and interest
provided for herein and therein. Any awards therefor actually received and
retained by Mortgagee shall be applied by Mortgagee against the principal due
at maturity under the Note. Any reduction in the principal resulting from the
application by Mortgagee of such awards shall be net of all collection costs,
disbursements, expenses, and reasonable counsel fees and shall be deemed to
take effect only on the date of actual receipt of such award by Mortgagee. In
the event of any loss or damage to the Mortgaged Property occasioned by
condemnation, Mortgagor shall promptly commence and diligently pursue to
completion the repair, restoration, and rebuilding of the Mortgaged Property to
as nearly as possible its value, condition, and character immediately prior to
such loss or damage.
Section 1.8. Mortgage Authorized. The Mortgagor hereby warrants and
represents that the execution and delivery of this Mortgage, the Note and the
other Loan Documents has been duly authorized and that there is no provision in
the Mortgagor's charter documents or any other agreement to which Mortgagor is
a party or by which any of its property is bound, requiring further consent for
such action by any other entity or person; the Mortgagor is duly organized,
validly existing and in good standing under the laws of the State of Wisconsin
and duly qualified in each jurisdiction in which it is required to be so
qualified except in those jurisdictions where the failure to be so qualified
would not have a material adverse effect on Mortgagor and has (a) all necessary
and material licenses, authorizations, registrations and approvals and (b) full
power and authority to own its properties and carry on its business as
presently conducted; the Mortgagor has the power, authority and legal right to
carry on the business now conducted by them and to engage in the transactions
contemplated by this Mortgage, the Note and the other Loan Documents; and the
execution and delivery
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by and performance of the Mortgagor's obligations under this Mortgage, the Note
and the other Loan Documents has been duly authorized by all necessary corporate
action by the Mortgagor and will not result in the Mortgagor being in default
under any provision of its charter documents or any other agreement to which
Mortgagor is a party or by which any of its property is bound.
Section 1.9. Costs of Defending and Upholding the Lien. If any action or
proceeding is commenced in which the Mortgagee is made a party, or in which, in
the reasonable opinion of the Mortgagee, it becomes necessary to defend or
uphold the lien of this Mortgage, the Mortgagor shall, on demand, reimburse the
Mortgagee for all expenses (including, without limitation, reasonable
attorneys' fees and appellate attorneys' fees) incurred by the Mortgagee in any
such action or proceeding.
Section 1.10. Additional Advances and Disbursements. Except as provided
in Section 4.16 hereof, the Mortgagor shall pay when due all payments and
charges on all liens, encumbrances, ground and other leases, and security
interests which may be or become superior, equal or inferior to the lien of
this Mortgage, and upon an Event of Default with respect to this obligation,
the Mortgagee shall have the right, but shall not be obligated, to pay, with
notice to the Mortgagor, such payments and charges, and the Mortgagor shall, on
demand, reimburse the Mortgagee for amounts so paid. In addition, upon an
Event of Default with respect to this obligation, the Mortgagee shall have the
right, but shall not be obligated, to cure such default in the name and on
behalf of the Mortgagor. All sums advanced and reasonable expenses incurred at
any time by the Mortgagee pursuant to this Section 1.10 or as otherwise
provided under the terms and provisions of this Mortgage or under applicable
law shall bear interest from the date that such sum is advanced or expense
incurred, to and including the date of reimbursement, computed at the Default
Rate, as defined in the Note.
Section 1.11. Cost of Enforcement. The Mortgagor agrees to bear and pay
all expenses (including reasonable attorneys' fees and appellate attorneys'
fees) of or incidental to the enforcement of any provision hereof, or the
enforcement, compromise or settlement of this Mortgage or the Indebtedness, and
for the curing thereof, or for defending or asserting the rights and claims of
the Mortgagee in respect thereof, by litigation or otherwise. All rights and
remedies of the
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Mortgagee shall be cumulative and may be exercised independently, singly or
concurrently. Notwithstanding anything herein contained to the contrary, to the
extent permitted by law, the Mortgagor: (a) hereby waives trial by jury; (b)
will not (1) at any time insist upon or plead or in any manner whatever claim or
take any benefit or advantage of any stay or extension or moratorium law, any
exemption from execution or sale of the Mortgaged Property, or any part thereof,
wherever enacted, now or at any time hereafter in force, which may affect the
covenants and terms of performance of this Mortgage, (2) claim, take or insist
upon any benefit or advantage of any law now or hereafter in force providing for
the valuation or appraisal of the Mortgaged Property, or any part thereof, prior
to any sale or sales thereof which may be made pursuant to any provision herein,
or pursuant to the decree, judgment or order of any court of competent
jurisdiction, nor (3) after any such sale or sales, claim or exercise any right
under any statute heretofore or hereafter enacted to redeem the property so sold
or any part thereof; (c) hereby expressly waives all benefit or advantage of any
such law or laws; (d) covenants not to hinder, delay or impede the execution of
any power herein granted or delegated to the Mortgagee, but to suffer and permit
the execution of every power as though no such law or laws had been made or
enacted; and (e) waives all right to have the Mortgaged Property marshalled upon
any foreclosure hereof.
Section 1.12. Mortgage Taxes. The Mortgagor shall pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon the Mortgagee by reason of its ownership of the Note or this Mortgage or
any mortgage supplemental hereto, any security instrument with respect to any
fixtures or personal property owned by the Mortgagor at the Premises and any
instrument of further assurance, other than income, franchise and doing
business taxes, and shall pay all stamp taxes and other taxes required to be
paid on the Note or necessary for filing or recording any Loan Documents. In
the event the Mortgagor fails to make such payment within five days after
written notice thereof from the Mortgagee, then the Mortgagee shall have the
right, but shall not be obligated, to pay the amount due, and the Mortgagor
shall, on demand, reimburse the Mortgagee for said amount.
Section 1.13. Intentionally Omitted.
Section 1.14. Intentionally Omitted
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Section 1.15. Transfers, Encumbrances and Liens. Mortgagor recognizes
that any secondary or junior financing placed upon the Mortgaged Property could
(a) divert funds which would otherwise be used to pay the Indebtedness
evidenced by the Note and secured by the Loan Documents; (b) result in
acceleration and foreclosure by any such junior encumbrancer, which could force
Mortgagee to take measures and incur expenses to protect its security; and (c)
impair Mortgagee's right to accept a deed in lieu of foreclosure from
Mortgagor, as a foreclosure by Mortgagee would be necessary to clear the title
to the Mortgaged Property. Mortgagor covenants and agrees that so long as the
Indebtedness secured by this Mortgage is outstanding, there will be no
secondary financing, mortgage, or encumbrance with respect to the Mortgaged
Property; and Mortgagor will not suffer to exist any encumbrance, including
liens of mechanics or materialmen, other than those listed in the policy of
title insurance dated the date hereof insuring the lien of this Mortgage,
whether such mortgage or encumbrance is prior or subordinate to this Mortgage
and the lien hereof. All agreements and obligations to pay commissions or fees
in connection with the leasing of any portion of the Mortgaged Property shall
be subject and subordinate to this Mortgage and shall not be enforceable
against Mortgagee or any purchaser at a foreclosure sale hereunder, or their
respective successors.
Any encumbrance, pledge, transfer or other alienation upon or of the
Mortgaged Property or any change in the present ownership of all or any part of
the Mortgaged Property shall, at the option of the Mortgagee, constitute an
Event of Default hereunder.
Mortgagor agrees that in the event the ownership of the Mortgaged Property
or any part thereof becomes vested in a person other than the Mortgagor,
Mortgagee may, without notice to Mortgagor, deal in any way with such successor
or successors in interest (whether immediate or remote) with reference to this
Mortgage and the Note and other sums hereby secured without in any way vitiating
or discharging Mortgagor's liability hereunder or upon the Note and other sums
hereby secured. No sale of the Mortgaged Property and no forbearance to any
person with respect to this Mortgage and no extension to any person of the time
for payment of the Note and other sums hereby secured given by Mortgagee shall
operate to release, discharge, modify, change, or affect (i) the original
liability of Mortgagor either in whole or
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in part; or (ii) the covenants of Mortgagor under this Section 1.15.
Section 1.16. Intentionally Omitted
Section 1.17. Assignment of Leases. As further security for the payment
of the sums secured hereby, Mortgagor hereby transfers, assigns and sets over
to Mortgagee all leases heretofore and hereafter entered into by Mortgagor
relating to portions or all of the Mortgaged Property, together with all
modifications, supplements, extensions and renewals thereof now existing or
hereafter made, and also together with the rights to sue for, collect and
receive all rents, additional rents, and other sums or payments due in all of
said leases provided to be paid to Mortgagor thereunder, and also together with
the rights of Mortgagor to receive, hold and apply all bonds, deposits, and
security in all of said leases provided to be furnished to the Mortgagor
thereunder, and also together with the rights of Mortgagor to enforce any and
all of the agreements, terms, covenants and conditions provided in all of said
leases and to give notices thereunder; provided, however, that as long as
Mortgagor shall not have defaulted in the performance of any obligation,
covenant or agreement under any collateral instrument further securing payment
of the Indebtedness and, in addition, no event shall have occurred which would
give Mortgagee the right to declare the Indebtedness due and payable, then
Mortgagor shall have the license to collect, but not more than one month in
advance, all rents, additional and percentage rents and other sums payable
under said leases.
Mortgagor shall not otherwise assign or pledge any lease of the Mortgaged
Property, or any part thereof, or the rights to sue for, collect and receive
any rents or other sums payable thereunder and shall enforce all of the
agreements, terms, covenants or conditions to be performed by lessees
thereunder, and shall perform every obligation of Mortgagor thereunder.
Nothing contained in this Mortgage, and/or no exercise by the Mortgagee of
its rights hereunder, shall be construed to obligate Mortgagee to perform any
of the covenants of Mortgagor under any of the leases hereinabove assigned or
shall be deemed to constitute Mortgagee a mortgagee in possession in the
absence of any actual entry into and taking possession of the Mortgaged
Property by Mortgagee.
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Mortgagor shall perform, observe, and comply with all of the terms,
covenants, and conditions of the Assignment of Leases and Rentals of even date
herewith to be recorded in the Farmington Land Records and of any other of the
Loan Documents as if such terms, covenants, and conditions were set forth
herein.
Mortgagor shall furnish Mortgagee at any time, upon reasonable written
demand, with a lease ratification and estoppel agreement as to any lease
affecting the Premises, in form and substance satisfactory to Mortgagee, which
shall be executed by Mortgagor and by the lessee (provided, however, that
Mortgagor shall only be obligated to use its reasonable efforts to obtain
execution by each such lessee and shall not be in default hereunder if the
lessee under any such lease fails to sign such an agreement or does not return
the same in a timely manner so long as all future leases contain a requirement
that the lessee provide such an agreement) stating the terms of the lease, the
tenancy, and the status of rent payments, and, if such be the case, that there
exist no defaults thereunder and that all work required to be performed by the
lessor under the lease has been completed; agreeing that no future
modifications or amendments shall be effected without the written consent of
Mortgagee, and providing that the lessee shall attorn to Mortgagee in the event
Mortgagee shall become the owner of the Premises.
The foregoing rights given the Mortgagee are intended to be complementary
to any rights given the Mortgagee under any separate assignment of leases from
the Mortgagor to the Mortgagee and shall be construed accordingly.
Section 1.18. Indemnity. Mortgagor will indemnify and hold the Mortgagee
harmless against any loss, liability, damage, cost or expense, including,
without limitation, any judgment, attorney's fee, costs of appeal bonds and
printing costs, arising out of or relating to or incurred in connection with
any suit, action or proceeding that might in any way, in the reasonable opinion
of the Mortgagee, affect the priority or effectiveness of the lien of this
Mortgage.
Section 1.19. Environmental Protection.
(a) Definitions. The term "Polluting Substance" shall mean any
hazardous, toxic, or polluting waste or substance including (without limiting
the generality of the foregoing) any of the following: "hazardous waste" (as
defined in the
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regulations adopted under RCRA, defined below); oil or petroleum products;
"chemical liquids or solid, liquid, or gaseous products" (as those terms are
used in the Superlien Statute, defined below); asbestos; polychlorinated
biphenyls; formaldehyde compounds, explosives, and radioactive materials. The
term "Environmental Law" shall mean any statutory, regulatory, or decisional law
pertaining to protection of the environment or to any Polluting Substance,
including (without limiting the generality of the foregoing) the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"); the
Resource Conservation and Recovery Act of 1976 ("RCRA"); and Title 22a
"Environmental Protection" of the Connecticut General Statutes; including
particularly Sections 22a-448 through 22a-457 of the Connecticut General
Statutes (the "Superlien Statute"); as any of them may be amended from time to
time, with the regulations promulgated thereunder. The term "release" as used
herein shall include both the meaning specified in CERCLA and a "spill" as
defined in Section 22a-452c of the Connecticut General Statutes. In the event
any Environmental Law is amended to broaden the meaning of any term defined
thereby, such broader meaning shall apply subsequent to the effective date of
such amendment.
(b) Covenants and Agreements. Mortgagor covenants and agrees that,
except where a breach of the following individually or in the aggregate (I)
would not be reasonably likely to have a material adverse effect on Mortgagor's
ability to perform its obligations pursuant to this Mortgage or (II) would not
be reasonably likely to materially impair the value of the Mortgaged Property:
(i) Mortgagor will not release any Polluting Substance on the Mortgaged Property
or on any properties adjacent to the Mortgaged Property in material
contravention of any applicable Environmental Law; (ii) Mortgagor will not
become involved in operations at the Mortgaged Property involving unlawful use
of Polluting Substances or any other activity that would violate any applicable
Environmental Law or that would be reasonably likely to lead to the imposition
on Mortgagor of liability under any Environmental Law; (iii) Mortgagor, at its
sole cost and expense, will comply in all material respects with the
requirements of all applicable Environmental Laws; (iv) Mortgagor will notify
Mortgagee promptly in the event of the material presence (to the extent not
known by Mortgagee at the time of the execution of the Purchase Agreements) or
release of any Polluting Substance at or affecting the Mortgaged Property in
material contravention of any
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applicable Environmental Law and give to Mortgagee a copy of any notice of
violations of any Environmental Law received by Mortgagor; (v) in the event any
Polluting Substance is found at the Mortgaged Property in material contravention
of any applicable Environmental Law, Mortgagor will ensure compliance with all
applicable Environmental Laws with respect to the removal or remediation of such
Polluting Substance; (vi) Mortgagor will keep the Mortgaged Property free and
clear of any lien imposed pursuant to any applicable Environmental Law; and
(vii) Mortgagor will include in all future leases of any portion of the
Mortgaged Property provisions requiring compliance with all Environmental Laws
and reporting of information regarding such compliance to Mortgagor and
Mortgagee.
(c) Site Assessments. Mortgagor agrees to permit Mortgagee, at its
reasonable election after written notice to Mortgagor, at any time and from time
to time, after the occurrence and during the continuance of an Event of Default
or if Mortgagee has good reason to suspect the presence of a Polluting Substance
on the Mortgaged Property in material contravention of any applicable
Environmental Law, to cause one or more environmental site assessments of the
Mortgaged Property to be undertaken. An environmental site assessment may
include, to the extent reasonably necessary, a detailed visual inspection of the
Mortgaged Property, including, without limitation, all storage areas, storage
tanks, drains, dry wells, and leaching areas, as well as the taking of samples
of soil, surface water, and ground water and such other investigation or
analysis as is reasonably necessary or appropriate to address such Event of
Default or the suspected presence of a Polluting Substance in material
contravention of any applicable Environmental Law.
(d) Mortgagee's Right to Cure. In the event Mortgagor fails to comply
with the requirements of any applicable Environmental Law in material
contravention of any applicable Environmental Law, unless (I) such failure would
not be reasonably likely to have a material adverse effect on Mortgagor's
ability to perform its obligations pursuant to this Mortgage and (II) such
failure would not be reasonably likely to materially impair the value of the
Mortgaged Property, Mortgagee may at its election, but without the obligation so
to do: (i) give such notices, cause such work to be performed at the Mortgaged
Property (or other land included in the same property description with the
Mortgaged Property within three years prior to such failure of compliance), and
take any and all such other
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reasonable actions necessary in order to cure such failure of material
compliance; or (ii) by the payment of any assessment, claim, or charge imposed
by any governmental authority, be thereby subrogated to the rights of such
governmental authority, but no such payment shall be deemed to relieve Mortgagor
from any default hereunder or impair any right or remedy consequent thereon.
Any amounts paid by Mortgagee as a result of Mortgagor's failure to comply
herewith, together with interest thereon at the Default Rate set forth in the
Note, shall be immediately due and payable by Mortgagor to Mortgagee and until
paid shall be added to and become a part of the Entire Indebtedness, having the
benefit of the lien hereby created and of its priority, and the same may be
collected as a part of the Entire Indebtedness in any suit hereon or upon the
Note, to the extent permitted by law, but no such advance shall be deemed to
relieve Mortgagor from any default hereunder or impair any right or remedy
consequent thereon. Mortgagor hereby grants to Mortgagee a license to enter the
Mortgaged Property and remove any Polluting Substance that is in material
contravention of any applicable Environmental Law from the Mortgaged Property.
(e) Indemnity. Mortgagor further covenants and agrees unconditionally
and absolutely to defend, indemnify, and forever hold Mortgagee harmless from
and against all fines, charges, fees, response costs (including cleanup, removal
or mitigation), losses, liabilities, damages, costs and expenses, causes of
actions, suits, claims, demands, and judgments of any nature suffered or
incurred by Mortgagee and arising out of or in connection with any of the
following:
(i) the presence, or any release, of any Polluting Substance at or
affecting the Mortgaged Property;
(ii) the application, or any claim of application, of any Environmental
Law to the Mortgaged Property or the operation thereof, including
any requirement for clean-up of any Polluting Substance or the
assertion of any lien because of any release;
(iii) any failure by Mortgagor to comply with the terms of any order of
the Connecticut Department of Environmental Protection or any
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other federal, state, or municipal governmental authority under
any Environmental Law; and
(iv) any losses as a result of a lien in favor of the Commissioner of
Environmental Protection or any other person having priority over
this Mortgage.
Such expenses shall include (without limiting the generality of the foregoing)
reasonable engineers' and reasonable attorneys' fees and the costs of any
environmental audits or other tests required by Mortgagee in its discretion to
ascertain whether any Polluting Substance in material contravention of any
applicable Environmental Law is present at or affects the Mortgaged Property.
Such losses shall include the assertion of any lien relating to any release at
or affecting the Mortgaged Property or any other land included in the same
property description with the Mortgaged Property at any time within three (3)
years prior to such release.
(f) Survival. For a period of five years beginning on the date of
Closing under the Asset Agreement, as defined in Section 4.7 hereof, this
indemnity shall extend to Mortgagee as holder of the Mortgage, mortgagee in
possession, or as successor in interest to Mortgagor as owner of the Mortgaged
Property by virtue of foreclosure or acceptance of a deed in lieu of foreclosure
and shall survive the repayment of the Indebtedness and the cancellation,
release, or discharge of this Mortgage.
(g) Relation to Purchase Agreements. (i) Notwithstanding any other
provision of this Section 1.19 to the contrary, no provision in this Section
1.19 shall in any way change the respective obligations of Mortgagor and
Mortgagee pursuant to the Purchase Agreements, as defined in Section 4.7 hereof.
(ii) To the degree that any provision of either of the Purchase
Agreements conflicts with any provision of this Section 1.19, the provision of
the Purchase Agreements, as defined in Section 4.7 hereof, will control.
(iii) No provision of this Section 1.19 or any other portion of
this Mortgage shall be construed as requiring Mortgagor to indemnify Mortgagee
from or against any fines, charges, fees, response costs (including cleanup,
removal or
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mitigation), losses, liabilities, damages, costs and expenses, causes of action,
suits, claims, demands or judgments for which Mortgagor is indemnified pursuant
to either of the Purchase Agreements by Sellers and the Shareholders, as those
terms are used and defined in either of the Purchase Agreements as defined in
Section 4.7 hereof.
Section 1.20. Validity of Loan Documents. This Mortgage, the Note and
the other Loan Documents are in all respects legal, valid and binding in
accordance with their respective terms and grant to the Mortgagee a direct,
valid and enforceable lien on and security title in and to the Mortgaged
Property. The Mortgage, the Note and the other Loan Documents have been
validly executed by the Mortgagor and are now binding on the Mortgagor and in
full force and effect and the Mortgagor and the other parties to the foregoing
instruments have faithfully performed all their obligations thereunder as of
the date hereof, and none of said other parties has asserted any claim of
default on the part of the Mortgagor.
Section 1.21. Intentionally Omitted
Section 1.22. Intentionally Omitted.
Section 1.23. Compliance with Requirements. Except with respect to
Environmental Laws (Mortgagor's compliance with which shall be governed under
Section 1.19 hereof), the Mortgagor shall comply promptly with all material
regulations, rules, ordinances, statutes, orders, decrees or other requirements
of all governmental authorities applicable to the Mortgaged Property or any
part thereof and shall furnish the Mortgagee, on demand, independent evidence
of such compliance.
Section 1.24. Compliance With Restrictive Covenants and Easements. The
Mortgagor shall comply with all restrictive covenants affecting the Premises
and shall fully perform each and every obligation of the Mortgagor under any
reciprocal agreement, easement, parking agreement or any other agreement
requiring the performance of the Mortgagor and affecting the Mortgaged
Property, including all agreements affecting the operation, maintenance or
repair of the Mortgaged Property or any easement appurtenant to or right-of-way
adjacent to any portion thereof.
Section 1.25. Priority of the Mortgage. The Mortgagor covenants and
agrees at all times to keep the Premises and all
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materials, equipment and fixtures incorporated therein or to be used in
connection therewith free from any attachment or lis pendens, from any
mechanics' or other liens or notices arising from the furnishing of materials or
labor and from all other liens and encumbrances of any kind, including those
arising from additional or secondary financing (except real estate taxes not yet
due and payable and encumbrances approved by the Mortgagee), whether any such
liens and encumbrances be prior to or subject and subordinate to the Mortgage,
and that at no time will any notice of any contract or mechanics' liens be
recorded. The Mortgagor shall cause the prompt (but in no event later than 30
days after imposition), full and unconditional release of all liens and
encumbrances or pay, from time to time when the same shall become due, all
claims and demands of mechanics, materialmen, laborers and others which, if
unpaid, might result in, or permit the creation of, a lien on the Mortgaged
Property or any part thereof, or on the revenues, rents, issues, income or
profits arising therefrom, and, in general, the Mortgagor shall do, or cause to
be done, at the cost of the Mortgagor and without expense to the Mortgagee,
anything necessary to fully preserve the lien of the Mortgage. In the event the
Mortgagor fails to make payment of such claims and demands and a lien is
attached to the Mortgaged Property, or any part thereof, or on the revenues,
rents, issues, income or profits arising therefrom, the Mortgagee may, but shall
not be obligated to, make payment thereof, and the Mortgagor shall, on demand,
reimburse the Mortgagee for all sums so expended. The Mortgagor shall pay or
cause to be paid prior to the time interest or penalties would accrue thereon
all taxes, charges, betterment or other assessments relating to the Premises or
the materials stored thereon and, upon request of the Mortgagee, shall provide
the Mortgagee with evidence of such payment satisfactory to the Mortgagee.
Prior to the execution thereof by the Mortgagor, all easements affecting the
Premises shall be submitted to the Mortgagee for its approval, which approval
with respect to utility easements shall not be unreasonably withheld,
accompanied by a plan in recordable form showing the location thereof. The
Mortgagee shall approve or disapprove such easements within 30 days of receipt
of such easements and plans and if the Mortgagee fails to act within such
period, then the Mortgagee shall be deemed to have approved such easements.
With respect to utility easements which are approved by the Mortgagee, the
Mortgagee shall agree to subordinate this Mortgage to such easements on terms
and conditions reasonably satisfactory to the Mortgagee, provided the easements:
(a) are to be fixed and located, (b) will not encroach upon or under or
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over Improvements and other easements and (c) do not materially affect the
adequacy of the Mortgagee's security for the payment of the Indebtedness.
Section 1.26. Independence of Premises. Mortgagor shall not by act or
omission permit any building or other improvements on premises not subject to
the lien of this Mortgage to rely on the Premises or any part thereof or any
interest therein to fulfill any municipal or governmental requirement for the
existence of such premises or such building or improvement; and no building or
other improvement on the Premises shall rely on any premises not subject to the
lien of this Mortgage or any interest therein to fulfill any governmental or
municipal requirement. Mortgagor shall not by act or omission impair the
integrity of the Premises as single subdivided zoning lots separate and apart
from all other premises.
Section 1.27. General Representations, Covenants and Warranties.
Mortgagor represents and covenants that (a) Mortgagor is now able to pay its
debts as they mature, the fair market value of its assets exceed its
liabilities, and no bankruptcy or insolvency case or proceeding is pending or
contemplated by or against Mortgagor and (b) Mortgagor is not in default under
the terms of any material instrument evidencing or securing any indebtedness of
Mortgagor and there has occurred no event which would, if uncured or
uncorrected, constitute a default under any such material instrument with the
giving of notice, passage of time, or both.
ARTICLE II
Security Agreement
Section 2.1. Creation of Security Interest. The Mortgagor hereby grants
to the Mortgagee a security interest in the Collateral, including without
limitation any and all property of similar type or kind hereafter located on or
at the Premises in which the Mortgagor has a possessory or title interest, and
any proceeds thereof for the purpose of securing all obligations of the
Mortgagor set forth in this Mortgage.
Section 2.2. Warranties, Representations and Covenants of the Mortgagor.
The Mortgagor hereby warrants, represents and covenants as follows:
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(a) Except for the security interest granted hereby, Mortgagor is, and
as to portions of the Collateral to be acquired after the date hereof will be,
the sole owner of the Collateral, free from any lien, security interest,
encumbrance or adverse claim thereon of any kind whatsoever. The Mortgagor
shall notify the Mortgagee of, and will defend the Collateral against, all
claims and demands of all persons at any time claiming the same or any interest
therein.
(b) Except as otherwise provided herein, the Mortgagor shall not
further encumber or grant a security interest in any of the Collateral or lease
or otherwise treat the same in any manner whereby the ownership or any
beneficial interest in any of the Collateral shall be held by any person or
entity other than Mortgagor without the prior written consent of the Mortgagee.
(c) The Collateral is not used or bought for personal, family or
household purposes.
(d) The Collateral shall be kept on or at the Premises, and the
Mortgagor shall not remove the Collateral from the Premises without the prior
written consent of the Mortgagee, except such portions or items of the
Collateral as are in the process of being cleaned and repaired or are consumed
or worn out in ordinary usage, all of which shall be promptly replaced by the
Mortgagor.
(e) The Mortgagor maintains a place of business in the State of
Connecticut, and the Mortgagor shall immediately notify Mortgagee in writing of
any change in its place of business as set forth in the beginning of this
Mortgage.
(f) This Mortgage constitutes a Security Agreement as that term is
used in the Uniform Commercial Code of the State of Connecticut.
Section 2.3. Mortgage as Financing Statement. Carbon, photographic, or
other reproduction of this Mortgage or any financing statement relating to this
Mortgage shall be sufficient as a financing statement. This Mortgage is
effective and shall be effective as a financing statement filed as a fixture
filing with respect to all goods which are or are to become fixtures included
within the Premises and is to be filed for record in the real estate records of
the Office of the Town Clerk of the town
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where the Premises are situated. The mailing address of Mortgagor and the
address of Mortgagee from which information concerning the security interest may
be obtained are set forth in the section hereof entitled "Notices".
Section 2.4. Uniform Commercial Code: Financing Statements. In addition
to any other rights and remedies availed to Mortgagee hereunder, Mortgagee
shall have all the rights of a secured party under the Connecticut Uniform
Commercial Code. Furthermore, to the extent permitted by law, Mortgagor hereby
authorizes Mortgagee to sign and file financing statements or continuation
statements at any time in respect of any of the Collateral without such
statements being executed by, or on behalf of, Mortgagor, but Mortgagor will,
however, at any time on request of Mortgagee, execute, or cause to be executed,
financing statements in respect of any Collateral. Mortgagor agrees to pay all
filing fees, including fees for filing continuation statements in connection
with such financing statements and to reimburse Mortgagee for all costs and
expenses of any kind incurred in connection therewith.
ARTICLE III
Default and Remedies
Section 3.1. Events of Default. The following shall constitute Events of
Default under this Mortgage:
(a) failure to pay within 5 days of the date when due, any of the
following: (i) any installment of the interest which shall become due and
payable under the Note; or (ii) any other sums to be paid by Mortgagor under the
Note or under any of the Loan Documents; or
(b) there shall be a failure to pay when due any Imposition or
insurance premium when the same becomes due hereunder; or
(c) any insurance coverage required to be maintained by Mortgagor
pursuant to Section 1.4 of this Mortgage is cancelled, lapses, or is terminated
and is not immediately replaced with coverage complying with all the
requirements of this Mortgage so as to prevent any gap in coverage, or there is
any other default related to insurance; or
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(d) default in the due observance or performance of any of the terms,
covenants or conditions contained in the Note (except for failure to make any
payment, in which case Section 3.1(a) shall apply), in this Mortgage, in the
Loan Documents or in any other agreement that the Mortgagor has with the
Mortgagee for more than 15 days after receipt from the Mortgagee of written
notice of such default, provided, however, that if (i) the curing of such
default cannot be accomplished with due diligence within said 15 day period,
(ii) Mortgagor commences to cure such default promptly after receipt of notice
thereof from Mortgagee and thereafter diligently and continuously prosecutes the
cure of such default, and (iii) the extension of the period for effecting a cure
herein provided for will not result in any material impairment of the Mortgaged
Property, or any portion thereof, or Mortgagee's lien thereon, then such 15 day
period shall be extended for such additional period of time as shall be
reasonably deemed necessary for Mortgagor so acting to cure such default but in
no event beyond thirty (30) additional days; provided further, however, that
such notice and grace period set forth in this subsection (d) shall not apply to
any other Event of Default expressly set forth in this Section 3.1 or to any
Event of Default defined as such in the Note, in this Mortgage or in any of the
other collateral documents relating to the loan, or to any other covenant or
condition with respect to which a grace period is expressly provided elsewhere;
or
(e) intentionally omitted; or
(f) the further assignment or encumbrance by the Mortgagor of the
leases or rents of the Premises or any part thereof without prior written
consent of the Mortgagee; or
(g) unless the same are being contested as permitted pursuant to
Section 4.16 hereof, the failure of the Mortgagor to pay or cause to be paid,
before any fine, penalty, interest or cost may be added thereto, all franchise
taxes and charges, and other governmental charges, general and special, ordinary
and extraordinary, unforeseen as well as foreseen, of any kind and nature
whatsoever, including, but not limited to, assessments for public improvements
or benefits which are assessed, levied, confirmed, imposed or become a lien upon
the Mortgaged Property or become payable during the term of the Note or this
Mortgage; or
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(h) except as permitted in Section 1.15 of this Mortgage, the
conveyance, assignment, sale or attempted sale, or other disposition of the
Mortgaged Property or the further mortgage, pledge, financing, refinancing or
other encumbrance by the Mortgagor of the Mortgaged Property or any part
thereof; or
(i) if the Mortgagor consents to the appointment of a receiver,
liquidator or trustee of the Mortgagor or all or a material portion of its
properties; or
(j) if a receiver, liquidator or trustee of the Mortgagor or all or a
material portion of its properties shall be appointed without the consent of the
Mortgagor and the same is not removed within 60 days; or
(k) if a petition in bankruptcy, an insolvency proceeding or a petition
for reorganization shall have been filed against the Mortgagor and same is not
withdrawn, dismissed, cancelled or terminated within 60 days; or
(l) if the Mortgagor is adjudicated bankrupt or insolvent or a petition
for reorganization is granted (without regard for any grace period provided for
herein); or
(m) if there is an attachment or sequestration of any of the material
property of the Mortgagor and same is not promptly discharged or bonded; or
(n) if the Mortgagor files or consents to the filing of any petition in
bankruptcy or commences or consents to the commencement of any proceeding under
the Federal Bankruptcy Act or any other law, now or hereafter in effect,
relating to the reorganization of the Mortgagor or the arrangement or
readjustment of the debts of the Mortgagor; or
(o) if the Mortgagor shall make an assignment for the benefit of its
creditors or shall admit in writing the inability to pay its debts generally as
they become due or shall consent to the appointment of a receiver, trustee or
liquidator of all or material part of its property; or
(p) if the Mortgagor shall cause or institute any proceeding for the
dissolution or termination of the Mortgagor; or
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(q) if the Mortgagor ceases to do business or terminates its business
as presently conducted for any reason whatsoever; or
(r) any lien or claim of lien for labor, materials or, unless the same
are being contested as permitted pursuant to Section 4.16 hereof, taxes (except
for ad valorem taxes not yet due and payable) or otherwise shall be filed
against any of the Mortgaged Property and remain unsatisfied or unbounded for a
period of 30 days after the Mortgagor receives notice of filing thereof.
(s) except as permitted or contemplated by the Purchase Agreements, as
defined in Section 4.16 hereof, Mortgagor is deprived of title, possession, or
control of the Mortgaged Property, or any part thereof, by process of operation
of law or order of any court; or
(t) any non-payment of any material indebtedness of Mortgagor (other
than the Note or other material indebtedness described herein) occurs if the
effect of such non-payment is to accelerate the maturity of such material
indebtedness or any other material indebtedness, the validity of which is not
being contested in good faith by appropriate proceedings.
Failure to exercise any option to accelerate upon the occurrence of an
Event of Default or other circumstance permitting the exercise of such option
shall not constitute a waiver of the default or of the right to exercise such
option at a later time so long as such default or other circumstance continues
to exist, and shall not constitute a waiver of the right to exercise such
option in the event of any other default or circumstance specified herein.
Section 3.2. Remedies. Upon the occurrence of any Event of Default, the
Mortgagee may take such action, without notice or demand, as it deems advisable
to protect and enforce its rights against the Mortgagor and in and to the
Mortgaged Property, including but not limited to, the following actions, each
of which may be pursued concurrently or otherwise, at such time and in such
order as the Mortgagee may determine, in its sole discretion, without impairing
or otherwise affecting the other rights and remedies of the Mortgagee:
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(a) declare the entire unpaid Indebtedness to be immediately due and
payable; or
(b) enter into or upon the Premises, either personally or by its
agents, nominees or attorneys, and dispossess the Mortgagor and its agents and
servants therefrom, and thereupon the Mortgagee may (1) use, operate, manage,
control, insure, maintain, repair, restore and otherwise deal with all and every
part of the Premises; (2) complete any construction on the Premises in such
manner and form as the Mortgagee deems advisable; (3) make alterations,
additions, renewals, replacements and improvements to or on the Premises; (4)
exercise all rights and powers of the Mortgagor with respect to the Mortgaged
Property, whether in the name of the Mortgagor or otherwise, including, without
limitation, the right to make, cancel, enforce or modify leases, obtain and
evict tenants, and demand, sue for, collect and receive all rents from the
Premises and every part thereof; and (5) apply the receipts from the Premises to
the payment of Indebtedness, in such order as the Mortgagee may determine after
deducting therefrom all expenses (including reasonable attorneys' fees) incurred
in connection with the aforesaid operations and all amounts necessary to pay the
taxes, assessments, insurance and other charges in connection with the Mortgaged
Property, as well as just and reasonable compensation for the services of the
Mortgagee, its counsel, agents and employees; or
(c) institute proceedings for the complete foreclosure of this
Mortgage, in which case the Mortgaged Property may be sold for cash or upon
credit in one or more parcels; or
(d) with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Mortgage for the portion of the Indebtedness then due and
payable, subject to the continuing lien of this Mortgage for the balance of the
Indebtedness not then due; or
(e) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein or in the
Note; or
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(f) to the fullest extent permitted by law, recover judgment on the
Note either before, during or after any proceedings for the enforcement of this
Mortgage; or
(g) at the option of Mortgagee and irrespective of whether or not
Mortgagee shall actually elect to declare the Indebtedness due and payable,
Mortgagee shall be entitled, at its option, to the appointment of a receiver of
the Mortgaged Property or the rents and profits of the Mortgaged Property, and
such receiver shall be appointed with or without notice and without regard to
the adequacy of any security held for the payment of the Indebtedness and other
sums secured hereby or the solvency of any person or persons liable for the
payment of such amounts. Such receiver may also be granted such extended
powers, duties, and authority as would be necessary or useful in the management
and operation of the Mortgaged Property, including without limitation the power
to enter into, modify, terminate, and enforce leases; pay Impositions and other
operating expenses; employ property managers; make payments of such portions of
the Indebtedness and in such order as Mortgagee may elect; and expend reasonable
sums in repair and maintenance of the Mortgaged Property.
(h) exercise any or all of the remedies available to a secured party
under the Connecticut Uniform Commercial Code, including, but not limited to:
(1) either personally or by means of a court appointed receiver, to take
possession of all or any of the Collateral and exclude therefrom the Mortgagor
and all others claiming under the Mortgagor, and thereafter to hold, store, use,
operate, manage, maintain and control, make repairs, replacements, alterations,
additions and improvements to and exercise all rights and powers of the
Mortgagor in respect to the Collateral or any part thereof. If the Mortgagee
demands or attempts to take possession of the Collateral in the exercise of any
rights under any of the instruments which secure the Note, the Mortgagor
promises and agrees promptly to turn over and deliver complete possession
thereof to the Mortgagee; (2) without notice to or demand upon the Mortgagor, to
make such payments and do such acts as the Mortgagee may deem necessary to
protect its security interest in the Collateral, including, without limitation,
paying, purchasing, contesting or compromising any encumbrance, charge or lien
which is prior to or superior to the security interest granted hereunder, and in
exercising any such powers or authority to pay all expenses incurred in
connection therewith; (3) to require the Mortgagor to assemble the
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Collateral or any portion thereof, at a place designated by the Mortgagee and
reasonably convenient to both parties, and promptly to deliver such Collateral
to the Mortgagee, or an agent or representative designated by it. The
Mortgagee, and its agents and representatives shall have the right to enter upon
any or all of the Mortgagor's premises and property to exercise the Mortgagee's
rights hereunder; (4) to sell, lease or otherwise dispose of the Collateral at
public or private sale or auction sale, with or without having the Collateral at
the place of sale, and upon such terms and in such manner as the Mortgagee may
determine. The Mortgagee may be a purchaser at any such sale, and unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Mortgagee shall give the
Mortgagor at least 5 days prior written notice of the time and place of any
public sale of the Collateral or other intended disposition thereof. Such
notice may be mailed to the Mortgagor at the address hereinafter set forth for
notices; (5) to sell the Mortgaged Property including the Collateral at one
sale, in connection with any foreclosure or any other sale all of which shall be
deemed to be commercially reasonable. Notices given in connection with
foreclosure shall constitute reasonable notice hereunder. The taking of
possession of the Collateral shall not prevent concurrent or later proceedings
for the foreclosure and sale of other portions of the Mortgaged Property as
provided elsewhere herein.
(i) pursue such other remedies as the Mortgagee may have under
applicable law.
Mortgagee shall not be compelled to release, or be prevented from
foreclosing or enforcing, this Mortgage upon all or any part of the Mortgaged
Property unless the Indebtedness shall be paid in full as aforesaid, and shall
not be required to accept any part or parts of the said Mortgaged Property, as
distinguished from the whole thereof, as payment of or upon the Indebtedness to
the extent of the value of such part or parts, and shall not be compelled to
accept or allow any apportionment of the said debt to or among any separate
parts of the Mortgaged Property. In the case of a foreclosure sale, the
Mortgaged Property (including all real and personal property), at Mortgagee's
election, may be sold in one parcel.
No recovery of any judgment by the Mortgagee and no levy of an execution
under any judgment upon the Mortgaged Property or
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upon any other property of the Mortgagor shall affect in any manner or to any
extent the lien of this Mortgage upon the Mortgaged Property or any part
thereof, or any liens, rights, powers or remedies of the Mortgagee hereunder,
but such liens, rights, powers and remedies of the Mortgagee shall continue
unimpaired as before.
Section 3.3. Intentionally Omitted
Section 3.4. Interest After Default. Except with respect to Permitted
Set-Offs as defined in Section 4.7 hereof, if any payment due hereunder or
under the Note is not paid when due, either at stated or accelerated maturity
or pursuant to any of the terms hereof, then and in such event, the Mortgagor
shall pay interest thereon from and after the date on which such payment first
becomes due at the Default Rate as set forth in Section 1.10 hereof and such
interest shall be due and payable, on demand, at such rate until the entire
amount due is paid to the Mortgagee, whether or not any action shall have been
taken or proceeding commenced to recover the same or to foreclose this
Mortgage. Nothing in this Section 3.4 or in any other provision of this
Mortgage shall constitute an extension of the time of payment of the
Indebtedness.
Section 3.5. Mortgagor's Actions After Default. After the happening of
any Event of Default and immediately upon the commencement of any action, suit
or other legal proceedings by the Mortgagee to obtain judgment for the
Indebtedness or any part thereof, or of any other nature in and of the
enforcement of the Note or of this Mortgage, the Mortgagor will (a) waive the
issuance and service of process and enter its voluntary appearance in such
action, suit or proceeding, and (b) if required by the Mortgagee, consent to
the appointment of a receiver or receivers of the Mortgaged Property and of all
the earnings, revenues, rents, issues, profits and income thereof.
Section 3.6. Control by Mortgagee After Default. Notwithstanding the
appointment of any receiver, liquidator or trustee of the Mortgagor, or of any
of its property, or of the Mortgaged Property or any part thereof, the
Mortgagee shall be entitled to retain possession and control of all property
now and hereafter covered by this Mortgage.
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ARTICLE IV
Miscellaneous
Section 4.1. Mortgage Extension. The lien hereof shall remain in full
force and effect and no consent or any subsequent encumbrancer shall be
required in the event of any postponement or extension of the time of payment
of the Indebtedness, or of any part thereof, or any amendment or modification
of the terms of this Mortgage, the Note, or any collateral security instrument,
or any additional notes taken by Mortgagee.
Section 4.2. Notices. All notices to any party hereto shall be given by
personal delivery or delivered by registered or certified mail, return receipt
requested, or by nationally recognized overnight carrier, with postage or
carrier charges prepaid and addressed to each party at the address herein set
forth or such other address of which any party may give the other notice in
writing in the manner provided in this Section 4.2 and such delivery shall be
deemed given upon receipt or refusal to accept, or upon return to sender due to
impossibility of delivery. Notwithstanding the address for the Mortgagor
herein, notice or demand delivered to the address of one or more of the
persons, corporations or other entities which shall at the time hold the record
title to the premises secured by this Mortgage, shall constitute notice or
demand delivered to the Mortgagor as may be required by any provision of this
Mortgage. For purposes of this Mortgage, the addresses of the Mortgagor and
the Mortgagee are as follows:
Mortgagor: _____________________________
_____________________________
_____________________________
Attention: _________________
Mortgagee: _____________________________
_____________________________
_____________________________
Attention: _________________
Section 4.3. Binding Obligations. The provisions and covenants of this
Mortgage shall run with the land, shall be binding upon the Mortgagor and shall
inure to the benefit of the Mortgagee, subsequent holders of this Mortgage and
their respective successors and assigns. For the purpose of this Mortgage, the
term "Mortgagor" shall mean the Mortgagor named
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herein, any subsequent owner of the Mortgaged Property, and their respective
heirs, executors, legal representatives, successors and assigns.
Section 4.4. Captions. The captions of the Sections of this Mortgage are
for the purpose of convenience only and are not intended to be a part of this
Mortgage and shall not be deemed to modify, explain, enlarge or restrict any of
the provisions hereof.
Section 4.5. Further Assurances. The Mortgagor shall do, execute,
acknowledge and deliver to the Mortgagee, at the sole cost and expense of the
Mortgagor, all and every such further acts, deeds, conveyances, mortgages,
assignments, estoppel certificates, notices of assignment, surveys,
supplementary mortgages, financing statements, other chattel instruments,
transfers and assurances as the Mortgagee may reasonably require from time to
time in order to better assure, convey, secure, assign, transfer and confirm
unto the Mortgagee, the rights now or hereafter intended to be granted to the
Mortgagee under this Mortgage, any other instrument executed in connection with
this Mortgage or any other instrument under which the Mortgagor may be or may
hereafter become bound to convey, mortgage or assign to the Mortgagee for
carrying out the intention or facilitating the performance of the terms of this
Mortgage. The Mortgagor hereby irrevocably appoints the Mortgagee its
attorney-in-fact, coupled with an interest, to execute, acknowledge and deliver
for and in the name of the Mortgagor any and all of the instruments mentioned
in this Section 4.5.
Section 4.6. Severability. Any provision of this Mortgage which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
Section 4.7. The Mortgagor's Obligations Survive. Except with respect to
setoffs to which Mortgagor shall be entitled with respect to amounts owed to
Mortgagor pursuant to indemnification provisions contained in (I) that certain
Purchase and Sale Agreement dated May ___, 1998 between Mortgagor and Mortgagee
relating to the Mortgaged Property and (II) that certain Asset Purchase
Agreement (the "Asset Agreement") dated May ___, 1998 between Mortgagor, Apex
Acquisition Corporation, Apex Machine
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Tool Company, Inc., Mortgagee and Michael Biondi (collectively the "Permitted
Set-Offs") (the Agreements set forth in (I) and (II) above, collectively the
"Purchase Agreements"), all sums payable by the Mortgagor hereunder shall be
paid without notice, demand, counterclaim, setoff, deduction or defense (except
as expressly provided herein) and without abatement, suspension, deferment,
diminution or reduction, and the obligations and liabilities of the Mortgagor
hereunder shall in no way be released, discharged, or otherwise affected (except
as expressly provided herein) by reason of: (a) any damage to or destruction of
or any condemnation or similar taking of the Mortgaged Property or any part
thereof; (b) any restriction or prevention of or interference with any use of
the Mortgaged Property or any part thereof; (c) any title defect or encumbrance
or any eviction from the Premises or the improvements thereon or any part
thereof by title paramount or otherwise; (d) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to the Mortgagee, or any action taken with respect to this
Mortgage by any trustee or receiver of the Mortgagee, or by any court, in any
such proceeding; (e) any claim which the Mortgagor has or might have against the
Mortgagee; (f) any default or failure on the part of the Mortgagee to perform or
comply with any of the terms hereof or of any other agreement with the
Mortgagor; or (g) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not the Mortgagor shall have notice or knowledge of
any of the foregoing. Except as expressly provided herein, the Mortgagor waives
all rights now or hereafter conferred by statute or otherwise to any abatement,
suspension, deferment, diminution or reduction of any sum secured hereby and
payable by the Mortgagor.
Section 4.8. Additional Security. If the Mortgagee at any time holds
additional security for any of the obligations secured hereby, it may enforce
the sale thereof or otherwise realize upon the same, at its option, either
before or concurrently with or after a foreclosure or sale hereunder without
being deemed to have made an election thereby or of having accepted the
security provided hereby or the proceeds hereof or such additional security or
the proceeds thereof in full settlement of the Note.
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Section 4.9. General Conditions.
(a) All covenants hereof shall be construed as affording to the
Mortgagee rights additional to and not exclusive of the rights conferred under
law.
(b) This Mortgage cannot be altered, amended, modified or discharged
orally and no executory agreement shall be effective to modify or discharge it
in whole or in part, unless it is in writing and signed by the party against
whom enforcement of the modification, alteration, amendment or discharge is
sought. Any amendment hereafter made by Mortgagor and Mortgagee relating to
this Mortgage shall be superior to the rights of the holder of any intervening
lien or encumbrance.
(c) With respect to Mortgagor's obligations hereunder, time and
punctuality shall be of the essence with respect to this instrument. No delay
or failure of Mortgagee to enforce any of the provisions herein contained shall
waive or affect any of Mortgagee's rights hereunder.
(d) No remedy herein conferred upon or reserved to the Mortgagee is
intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
Any failure by Mortgagee to insist upon the strict performance by Mortgagor of
any of the terms and provisions hereof shall not be deemed to be a waiver of any
of the terms and provisions hereof, and Mortgagee, notwithstanding any such
failure, shall have the right thereafter to insist upon the strict performance
by Mortgagor of any and all of the terms and provisions hereof to be performed
by Mortgagor. Neither Mortgagor nor any other person now or hereafter obligated
for the payment of the whole or any part of the Indebtedness shall be relieved
of such obligation by reason of the failure of Mortgagee to comply with any
request of Mortgagor or of any other person so obligated to take action to
foreclose this Mortgage or otherwise enforce any of the provisions of this
Mortgage or of any obligation secured by this Mortgage, or by reason of the
release, regardless of consideration of the whole or any part of the security
held for the Indebtedness. Acceptance of any payment after the occurrence of an
Event of Default shall not be deemed to waive or cure such Event of Default; and
every power and remedy given by this Mortgage to the Mortgagee may be exercised
from time to time as
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often as may be deemed expedient by the Mortgagee. Nothing in this Mortgage or
in the Note shall affect the obligation of the Mortgagor to pay the Indebtedness
in the manner and at the time and place therein respectively expressed.
(e) No waiver by the Mortgagee will be effective unless it is in
writing and then only to the extent specifically stated. Without limiting the
generality of the foregoing, any payment made by the Mortgagee for insurance
premiums, taxes, assessments, water rates, sewer rentals or any other charges
affecting the Mortgaged Property, shall not constitute a waiver of the
Mortgagor's default in making such payments and shall not obligate the Mortgagee
to make any further payments.
(f) The Mortgagee shall have the right to appear in and defend any
action or proceeding, in the name and on behalf of the Mortgagor which the
Mortgagee, in its reasonable discretion, feels may adversely affect the lien
created hereby on the Mortgaged Property.
(g) In the event of the passage after the date of this Mortgage of any
law of any governmental authority having jurisdiction, deducting from the value
of land for the purpose of taxation, affecting any lien thereon or changing in
any way the laws of taxation of mortgages or debts secured by mortgages for
federal, state or local purposes, or the manner of the collection of any such
taxes, so as to adversely affect this Mortgage, the Mortgagor shall promptly pay
to the Mortgagee, on demand, all taxes, costs and charges for which the
Mortgagee is or may be liable as a result thereof, provided said payment shall
not be prohibited by law or render the Note usurious, in which event the
Mortgagee may declare the Indebtedness to be immediately due and payable, and
provided further that the Mortgagor shall have no obligation to pay any
franchise, income or other tax upon the interest on the Note, or upon the
Mortgagee, unless such tax is, in whole or in part, in lieu of or in
substitution for property taxes upon the Mortgaged Property.
(h) The Mortgagor acknowledges that it has received a true copy of this
Mortgage.
(i) Whenever used herein, the singular number shall include the plural;
the plural, the singular, and the use of any gender shall include all genders,
as the context may require.
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Section 4.10. Legal Construction. The Note, this Mortgage and the other
Loan Documents shall be governed, construed and enforced in accordance with the
laws of the State of Connecticut. Nothing in this Mortgage, the Note or in any
other agreement between the Mortgagor and the Mortgagee shall require the
Mortgagor to pay, or the Mortgagee to accept, interest in an amount which would
subject the Mortgagee to any penalty under applicable law. In the event that
the payment of any interest due hereunder or under the Note or any such other
agreement would subject the Mortgagee to any penalty under applicable law, then
ipso facto the obligations of the Mortgagor to make such payment shall be
reduced to the highest rate authorized under applicable law.
Section 4.11. Merger. So long as any indebtedness secured by this
Mortgage shall remain unpaid, fee title to and any other estate in the Mortgaged
Property shall not merge, but shall be kept separate and distinct,
notwithstanding the union of such estates in any person or entity.
Section 4.12. Rights of Third Parties. All conditions of the obligations
of the Mortgagee hereunder are imposed solely and exclusively for the benefit
of the Mortgagee, its successors and assigns, and no other person shall have
standing to require satisfaction of such conditions in accordance with their
terms, and no other person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any and all of which may be freely waived in
whole or in part by the Mortgagee at any time if, in its sole discretion, it
deems it desirable to do so.
Section 4.13. No Agency. The Mortgagee is not the agent or
representative of the Mortgagor, and the Mortgagor is not the agent or
representative of the Mortgagee, and nothing in this Agreement shall be
construed to make the Mortgagee liable to anyone for goods delivered or
services performed upon the Premises or for debts or claims accruing against
the Mortgagor. Nothing herein shall be construed to create a relationship ex
contractu or ex delicto between the Mortgagee and any person supplying labor or
materials to the Premises.
Section 4.14. No Partnership or Joint Venture. Nothing herein nor the
acts of the parties hereto shall be construed to create a partnership or joint
venture between the Mortgagor and the Mortgagee. The relationship of the
Mortgagor and the Mortgagee is "debtor" and "creditor".
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Section 4.15. Intentionally Omitted.
Section 4.16. Permitted Contests. So long as a default or an Event of
Default is not existing under this Mortgage, the Note or the other Loan
Documents (any circumstance which would be a default hereunder except for the
contest thereof by Mortgager as permitted pursuant to this Section 4.16 shall
not be a default hereunder so long as such contest is maintained by Mortgagor
as permitted hereby), the Mortgagor may contest by appropriate legal
proceedings, diligently conducted in good faith, the validity or applicability
of any law, the requirements of any governmental authority or the amount of
Impositions due, provided (a) the Mortgagor gives the Mortgagee 30 days prior
written notice of its intent to contest hereunder, (b) such contest will not
expose the Mortgagee to any civil or criminal liability for failure to comply
with law or the requirements of governmental authorities, (c) such contest will
not result, regardless of the outcome of such contest, in a forfeiture of title
to all or any portion of the Mortgaged Property, or divestiture of the lien or
interest in favor of the Mortgagee in all or any portion of the Mortgaged
Property, and (d) the Mortgagor furnishes the Mortgagee security satisfactory
to the Mortgagee against loss, injury or costs resulting from such contest,
including losses, injuries and costs resulting from delays in compliance with
law or requirements of Governmental Authorities or in paying Impositions.
Section 4.17. Successors and Assigns. Whenever in this Mortgage one of
the parties hereto is named or referred to, unless otherwise specified, the
legal representatives, successors, successors-in-title and assigns, to the
extent permitted hereunder, of such parties shall be included, and all
covenants and agreements contained in this Mortgage by or on behalf of the
Mortgagor or by or on behalf of the Mortgagee shall bind and inure to the
benefit of their respective legal representatives, successors,
successors-in-title and assigns, whether so expressed or not.
Section 4.18. WAIVER OF NOTICE, HEARING AND BOND BEFORE PREJUDGMENT
REMEDY. MORTGAGOR ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS MORTGAGE IS
A PART IS A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION AND WAIVES
ANY RIGHT TO (1) NOTICE AND PRIOR HEARING ON THE RIGHT OF MORTGAGEE, OR ITS
SUCCESSORS OR ASSIGNS, TO OBTAIN A PREJUDGMENT REMEDY UNDER CHAPTER 903a OF THE
CONNECTICUT GENERAL STATUTES, REV. 1958, AS AMENDED, OR AS THE
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SAME MAY BE AMENDED; (2) NOTICE AND PRIOR HEARING OR OTHER PROCESS ALLOWED UNDER
ANY STATE OR FEDERAL CONSTITUTION, STATUTE OR OTHER LAW, NOW OR HEREAFTER
AFFECTING PREJUDGMENT REMEDIES AND (3) ANY REQUIREMENT THAT MORTGAGEE POST A
BOND IN ORDER TO OBTAIN ANY PREJUDGMENT REMEDY.
Section 4.19. OTHER WAIVERS. MORTGAGOR FURTHER WAIVES DILIGENCE, DEMAND,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST,
AND NOTICE OF ANY RENEWALS OR EXTENSIONS OF THE NOTE OR ANY OTHER LOAN
DOCUMENT; ALL RIGHTS TO THE BENEFITS OF ANY MORATORIUM, APPRAISEMENT, EXEMPTION
AND HOMESTEAD NOW PROVIDED OR WHICH MAY HEREAFTER BE PROVIDED BY ANY FEDERAL OR
STATE STATUTE, INCLUDING BUT NOT LIMITED TO EXEMPTIONS PROVIDED BY OR ALLOWED
UNDER THE BANKRUPTCY REFORM ACT OF 1978, AS THE SAME MAY BE AMENDED, BOTH AS TO
ITSELF PERSONALLY AND AS TO ALL OF ITS PROPERTY, WHETHER REAL OR PERSONAL,
AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS EVIDENCED BY THE
NOTE, THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS AND ANY AND ALL
EXTENSIONS, RENEWALS AND MODIFICATIONS THEREOF; AND THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR IN
TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THE NOTE,
THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS.
Section 4.20. WAIVERS BARGAINED FOR AND KNOWINGLY AND VOLUNTARILY GIVEN.
MORTGAGOR ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS ASSIGNMENT
AND IN ALL OF THE OTHER LOAN DOCUMENTS HAVE BEEN SPECIFICALLY REQUESTED BY
MORTGAGEE AND HAVE BEEN GRANTED BY MORTGAGOR TO INDUCE MORTGAGEE TO PROVIDE
CREDIT TO MORTGAGOR UNDER THE TERMS OF THE NOTE AND THAT SUCH WAIVERS HAVE BEEN
KNOWINGLY AND VOLUNTARILY GIVEN ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS
OF SUCH WAIVERS WITH ITS ATTORNEY.
Section 4.21. CONSENT TO JURISDICTION. MORTGAGOR AND MORTGAGEE HEREBY
AGREE THAT ANY CLAIMS OR DISPUTES WITH RESPECT TO PERMITTED SET-OFFS SHALL BE
RESOLVED PURSUANT TO THE ARBITRATION PROVISIONS OF THE ASSET AGREEMENT, AS
DEFINED IN SECTION 4.7 HEREOF. WITH RESPECT TO ANY CLAIMS OR DISPUTES BETWEEN
MORTGAGOR AND MORTGAGEE PERTAINING DIRECTLY OR INDIRECTLY TO THIS MORTGAGE, THE
NOTE OR TO ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING HEREFROM OR
THEREFROM WHICH ARE NOT OF A NATURE REQUIRED TO BE SUBMITTED TO ARBITRATION
UNDER THE ASSET AGREEMENT, MORTGAGOR AND MORTGAGEE HEREBY AGREE THAT ANY STATE
COURT OR LOCAL COURT OF THE STATE OF CONNECTICUT AND THE UNITED
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STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY SUCH CLAIMS OR DISPUTES. IN SUCH EVENT,
MORTGAGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
SUCH ACTION OR PROCEEDING COMMENCED IN SUCH COURTS, HEREBY WAIVING ANY
OBJECTIONS IT MAY HAVE AS TO VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDINGS
BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM AND HEREBY
WAIVING PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN, AND AGREEING THAT SERVICE OF SUCH SUMMONS AND COMPLAINT,
OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED
TO MORTGAGOR AT 1806 NEW BRITAIN AVENUE, FARMINGTON, CONNECTICUT 06032. IN
ADDITION TO THE FOREGOING, MORTGAGOR IRREVOCABLY DESIGNATES AND APPOINTS [INSERT
NAME OF A CONNECTICUT RESIDENT OR ENTITY] AS ITS AGENT TO RECEIVE ON ITS BEHALF
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT IN THE STATE OF
CONNECTICUT AND DIRECTS SUCH AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF.
NOTHING HEREIN CONTAINED SHALL AFFECT THE RIGHT TO SECURE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW. THE EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS
SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED
IN SUCH FORUM, OR THE TAKING OF ANY ACTION UNDER THE NOTE, THIS MORTGAGE OR
UNDER ANY OF THE OTHER LOAN DOCUMENTS TO ENFORCE SAME, IN ANY APPROPRIATE
JURISDICTION.
THE CONDITION OF THIS DEED IS SUCH THAT, WHEREAS, Mortgagor is justly
indebted to Mortgagee in the aggregate principal amount of _______________
DOLLARS ($___________) and has executed and delivered to Mortgagee the Note for
such amount, payable to the order of Mortgagee, for value received, with
interest and in the manner as provided in the Note, a copy of which is attached
hereto as Schedule B and made a part hereof;
NOW THEREFORE, if the Note and any extensions, renewals or modifications
thereof shall be well and fully paid according to their tenor, and if all
covenants, conditions, agreements and provisions contained in the Note, any
extensions, renewals or modifications thereof, and this Mortgage are fully kept
and performed, then this Mortgage shall become null and void; otherwise to
remain in full force and effect.
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage Deed, Assignment
of Leases and Security Agreement to be duly executed this ______ day of
____________, 1998.
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Signed, Sealed and Delivered
In the Presence of: EDAC TECHNOLOGIES CORPORATION
_______________________________ By: _______________________________
Name: Name:
Title:
Hereunto Duly Authorized
_______________________________
Name:
STATE OF CONNECTICUT :
: SS. ____________, 1998
COUNTY OF HARTFORD ::
Personally appeared ____________________, ______________ of EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation, signer and sealer of the
foregoing instrument and acknowledged the same to be his/her free act and deed
as such Officer and the free act and deed of that corporation, before me.
_____________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires
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SCHEDULE A
Description of Premises
<PAGE> 96
SCHEDULE B
Note
<PAGE> 97
EXHIBIT D
ASSIGNMENT OF LEASES AND RENTALS
This ASSIGNMENT OF LEASES AND RENTALS (hereinafter referred to as the
"Assignment") is made this ________ day of _________________, 1998, by EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation with a place of business at
1806 New Britain Avenue, Farmington, Connecticut 06032 (hereinafter referred to
as "Borrower") to GERALD S. BIONDI, an individual residing at
_______________________________, and JAMES G. BIONDI, an individual residing at
______________________________________ (collectively, the "Lender").
WHEREAS, Borrower is the owner of certain real property and improvements
thereon located in the Town of Farmington, County of Hartford, and State of
Connecticut, more particularly described in Exhibit A attached hereto (which
real property and improvements are hereinafter referred to as the "Premises");
and
WHEREAS Lender is the holder of a certain Mortgage Deed, Assignment of
Leases and Security Agreement (hereinafter referred to as the "Mortgage") of
even date herewith, executed and delivered by Borrower and intended to be
recorded in the land records of the Town of Farmington, Connecticut, which
Mortgage secures the debt evidenced by a certain Promissory Note of even date
herewith made by Borrower to Lender in the principal sum of $__________________
(hereinafter referred to as the "Note"); and
WHEREAS Lender has required that Borrower execute and deliver this
Assignment, as further security for the Note and the obligations secured by the
Mortgage.
NOW, THEREFORE, in consideration of the foregoing and the sum of One
Dollar ($1.00) and other valuable considerations paid to Borrower by Lender,
receipt and sufficiency of which are hereby acknowledged, Borrower agrees as
follows:
1. Assignment. Borrower hereby transfers, assigns, and sets over unto
Lender all present leases of space in the Premises as identified in Exhibit B
attached hereto and, whether or not so identified, any and all leases,
subleases, rentals or occupancy agreements, oral or written, and all of the
right, title and
<PAGE> 98
interest of Borrower in and to any and all guaranties made in connection with
such leases, subleases, rentals or occupancy agreements, and whether made in
contravention of this assignment or not, for the use and occupancy of any part
or all of the Premises, whether such leases are now in existence or may exist at
any time or times in the future during the term of this Assignment, and any
renewals or extensions thereof, whether or not recorded (all of which present
and future leases, subleases, rentals, occupancy agreements, and guaranties,
whether or not identified in Exhibit B, are made subject to this Assignment and
are hereinafter referred to by and included within the terms "Lease" or
"Leases", together with all of the right, title, and interest of Borrower in and
to all rents, income, issues, proceeds, and profits from the Leases and from the
Premises intending hereby to assign to Lender all of the interest of Borrower
in the leases, and all rents, income, issues, proceeds, and profits arising
therefrom and from the Premises, including any security deposits held pursuant
to the terms of the Leases, cancellation fees or charges, all sums of money
payable by a tenant under any Lease on account of a termination or default by
the tenant, sums payable on account of leases in any bankruptcy or insolvency
proceedings involving the tenants thereunder, and all sums whatsoever to be paid
by any tenant to Borrower (all items of payment by a tenant referred to in this
paragraph of whatever nature, collectively, "Tenant Payments")
2. Obligations Secured. This Assignment is given as security for (a)
payment of the principal indebtedness evidenced by the Note, with interest
thereon; (b) payment of all other sums, with interest thereon, payable under
the provisions of the Note, the Mortgage or this Assignment (collectively, the
"Loan Documents"); and (c) the performance and observance by Borrower of all of
the covenants, representations, and agreements contained in the Note, the Loan
Documents, and any and all Leases.
3. Representations by Borrower. Borrower represents that, as to each of
the existing Leases (a) Borrower has good right and authority to assign such
Lease to Lender and the execution of this assignment by the Borrower has been
duly authorized by all requisite partnership action; and (b) Borrower has
neither done, nor omitted to do, any act which might prevent or limit Lender
from exercising its rights under this assignment.
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<PAGE> 99
4. Borrower's Covenants.
(a) Borrower shall not, without Lender's prior written consent in each
instance, which consent shall not be unreasonably withheld (i) accept any
payment of rent in advance for more than each current month, or (ii) enter into,
materially modify, terminate or accept the surrender of any Lease, or (iii)
waive or release the tenant under any Lease from the performance or observance
of any material obligation or condition of such Lease, or (iv) exercise any
option arising on any casualty or condemnation available to Landlord under any
Lease, unless required under such Lease; or (v) give any consent sought by any
tenant under any Lease. Lender agrees that its consent to any proposed leases
shall not be unreasonably withheld.
(b) Borrower shall not, unless in each instance Lender's written
consent be first obtained, which consent shall not be unreasonably withheld (i)
assign or pledge, or contract (expressly or by implication) to assign or pledge,
any Lease, or the right to sue for, collect and receive any rents, additional
rents or other sums in any of said Leases provided to be paid to Borrower
thereunder, or the right to receive, hold and apply any bonds and security in
any of said Leases provided to be furnished to the landlord thereunder, or the
right to enforce any of the agreements, terms, covenants or conditions of said
Leases or to give notice thereunder; (ii) subordinate any of said Leases to any
mortgage (other than the Mortgage), deed of trust, or other encumbrance or
permit, consent or agree to such subordination, or (iii) convey or transfer or
suffer or permit a conveyance or transfer of the premises demised thereby or of
any interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, any tenants under any of the
Leases.
(c) Borrower shall, at its own cost and expense, unless and until
Lender takes possession and control of the Premises; (i) promptly and fully
perform each and every material covenant, condition, promise, and obligation on
the part of the landlord to be performed under and pursuant to the terms of each
Lease, and shall not suffer or permit there to exist any default in such
performance on the part of such landlord or permit any event to occur which
would give the tenant under any such Lease the right to terminate the same or
claim any deduction or offset against rent, (ii) appear in and defend any action
growing out
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of, or in any manner connected with, any such Leases or the obligations or
liabilities of Borrower as landlord or of the tenant or guarantor thereunder;
(iii) enforce, short of termination unless Lender otherwise consents, the
performance and observance of each and every material covenant and condition of
the Leases to be performed or observed by the tenants thereunder; and (iv) at
the reasonable request of Lender exercise any option available to the Borrower
as landlord under said Leases arising on any casualty or condemnation.
(d) Borrower shall furnish to Lender, within five (5) days after the
receipt thereof, or the mailing or service thereof by Borrower, as the case may
be, a copy of each notice of default which Borrower shall give to or receive
from any tenant of the Premises or of any part or parts thereof based upon the
occurrence, or alleged occurrence, of any default or defaults in the performance
of any covenant, condition, promise or obligation provided for in any Lease.
(e) Borrower shall, upon reasonable request from Lender, furnish Lender
within five (5) business days of such request with true and complete copies of
all Leases then in effect.
5. Future Leases.
(a) Borrower shall furnish to Lender a true and complete copy of each
Lease, or renewal or extension of Lease, hereafter made by Borrower with respect
to space in the Premises, within five (5) business days after delivery of each
such Lease, or renewal or extension of Lease, by the parties thereto.
(b) Borrower will from time to time, upon reasonable demand of Lender,
confirm in writing the assignment to Lender of any or all Leases hereafter made
affecting the Premises or any part or parts thereof, and such written
confirmation shall be in such form as Lender shall reasonably require and as
necessary to make the same recordable, and shall contain the representations
required pursuant to Section 3 of this Assignment.
(c) All agreements and obligations to pay commissions or fees in
connection with the leasing of any portion of the Premises shall be subject and
subordinate to the Mortgage and this Assignment and shall not be enforceable
against Lender or
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any purchaser at a foreclosure sale under the Mortgage, or their respective
successors.
6. Collection of Rents. Notwithstanding the present assignment effected
hereby and only so long as there is no default (other than those which may have
arisen due to a Permitted Set-Off, as defined in the Mortgage) by Borrower
which is continuing beyond applicable grace and cure periods in any payment or
obligation secured hereby, Borrower may receive, collect, and enjoy the rents
(but not in advance except for each current month), income, issues proceeds,
and profits payable to Borrower in the ordinary course from the Premises or
from the Leases, or both, or either, but as a trust fund for payment of all
amounts due under the Note and the Loan Documents, including, but not limited
to principal and interest, taxes, assessments, insurance premiums, maintenance,
operating and utility charges relating to the Premises before using the same
for any other purpose. Following any default hereunder which continues beyond
any applicable grace and cure periods, Borrower shall (i) deliver all security
deposits received by tenants under the Leases to Lender, which security
deposits Lender shall hold under the terms of the Leases, (ii) not interfere
with Lender's collection of the rents due under the Leases, and (iii) apply all
rents received by Borrower to the debt secured hereby.
7. Events of Default. As used herein, the term "Event of Default" shall
include the following:
(a) any default in the performance of any obligation required to be
performed or observed by Borrower hereunder or any breach or violation of any
covenant under this Assignment, which default, breach, or violation continues
for more than fifteen (15) days after written notice thereof from Lender to
Borrower; or
(b) any Event of Default as defined in the Mortgage.
8. Remedies. (a) If an Event of Default occurs, Lender may, at its option,
with written notice thereof to Borrower, and without regard to the adequacy of
security for the indebtedness secured hereby, with or without bringing any
action or proceeding, either in person or by an agent or by a receiver to be
appointed by a court, enter upon, take possession of, manage, repair and
operate the Premises or any part thereof, and
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otherwise exercise ail rights of the landlord under the Leases; make, cancel,
enforce or modify Leases, obtain and evict tenants, fix or modify rents, and do
any acts which Lender deems proper to protect the security hereof, and either
with or without taking possession of said property, in its own name sue for or
otherwise collect and receive all rents, income, issues, proceeds, and profits,
including those past due and unpaid, and apply the same, less costs and expenses
of operation and collection (including without limitation attorneys' fees), upon
any indebtedness secured hereby or by the mortgage, in such order or priority as
Lender may elect. Lender may exercise its rights under this Section 8 as often
as any Event of Default may occur. Immediately upon Lender's request after the
occurrence of an Event of Default, Borrower shall turn over to Lender all
security deposits required under any of the Leases, which shall be held and
applied by Lender in accordance with the provisions of the Leases governing such
security deposits.
(b) Any default by Borrower under this Assignment or any breach or
violation of any representation or covenant under this Assignment which shall
continue for more than fifteen (15) days after notice thereof from Lender to
Borrower shall at the option of Lender constitute an Event of Default under the
Mortgage, as if the provisions of this assignment were fully set forth in the
Mortgage, entitling Lender to all rights and remedies contained in the Mortgage;
provided, however, that if (i) the curing of such default cannot be accomplished
with due diligence within said fifteen (15) day period, and (ii) Borrower
commences to cure such default promptly after receipt of notice thereof from
Lender and thereafter diligently and continuously prosecutes the cure of such
default, and (iii) the extension of the period for effecting a cure will not
result in any material impairment of the Premises or any portion thereof, the
value thereof or Lender's lien thereon, then such period of fifteen (15) days
shall be extended for such period of time as is reasonably necessary for
Borrower so acting to cure such default but in no event for more than an
additional thirty (30) days; provided further, however, such extended cure
period shall not be applicable to any default which may be cured by the payment
of money.
9. Payment of Rent to Lender. A written demand on any tenant by Lender
(with written copy to Borrower detailing the Event of Default) for payment of
rent to Lender shall be
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sufficient warrant to said tenant to pay rent, income, issues, proceeds, and
profit to Lender without necessity for consent by Borrower or any obligation of
said tenant to inquire as to the evidence of a default by Borrower,
notwithstanding any claim by the Borrower to the contrary, and Borrower hereby
irrevocably authorizes, directs and requires all tenants of the Premises to
honor this Assignment and comply with any such demand by Lender, until further
written notice by Lender authorizing the tenant to resume rent payments to
Borrower. Borrower shall have no claim against any tenant for any amounts paid
to Lender hereunder. Borrower shall not interfere in any way with Lender's
collection of the rents pursuant to this Assignment. This Section 9 shall not
however, relieve Lender of any liability it may have in connection with any
improper notice delivered by Lender to any tenant of Borrower.
10. Lender not Liable. Nothing contained herein or in the Mortgage shall
be construed, expressly or by implication, to obligate Lender, prior to the
time when Lender acquires title to the Premises, to perform any of the
covenants of Borrower as landlord under any of the Leases hereinabove assigned
or to pay any sum of money or damages therein provided to be paid by Borrower,
each and all of which covenants and payments Borrower agrees to perform and
pay.
Lender shall not be liable for any loss sustained by Borrower resulting
from Lender's failure to let the Premises after an Event of Default or from any
other act or omission of Lender in managing the Premises after an Event of
Default unless such loss is caused by the gross negligence, willful misconduct
or bad faith of Lender. Borrower hereby agrees to indemnify and save Lender
harmless against and from any liability or expense incurred by Lender hereunder
or under any of the Leases, provided such liability or expense is not the result
of Lender's gross negligence, willful misconduct, bad faith, breach of this
Agreement or Lender's own action prior to the date hereof acting as landlord
under the lease with Goldstar, Inc., and Borrower agrees to reimburse Lender for
any such expenses including attorney's fees, on demand, with interest at the
Default Rate, as defined in the Note.
11. Right to Protect Security. If Borrower fails to make any payment or
to do any act as herein provided beyond any applicable grace or cure period,
then the Lender, but without
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obligation so to do and without notice to or demand on Borrower, and without
releasing Borrower from any obligation hereof, may make or do the same in such
manner and to such extent as the Lender may deem necessary to protect the
security hereof, including specifically, without limiting its general powers,
the right to appear in and defend any action or proceeding purporting to affect
the security hereof or the rights or powers of the Lender, and also the right to
perform and discharge each and every obligations, covenant and agreement of the
Landlord in the Leases contained; and in exercising any such powers to pay
necessary costs and expenses, employ counsel and incur and pay reasonable
attorney's fees. Borrower shall pay immediately upon demand all sums expended
by the Lender under the authority hereof, together with interest thereon at the
Default Rate, as defined in the Note, and the same shall be added to the said
indebtedness and shall be secured hereby and by the Mortgage.
12. No Waiver. No waiver by Lender of any breach by Borrower of any
covenant or condition contained herein, nor any failure by Lender to exercise
any right or remedy in respect of any breach hereunder, shall constitute a
waiver or relinquishment for the future of any such covenant or condition or of
any subsequent breach of any such covenant or condition, or bar any right or
remedy of Lender in respect of any such subsequent breach. If Lender shall
from time to time suffer or permit Borrower to sue for, collect or receive any
rent, additional rent or other sums in said Leases provided to be paid to the
Borrower thereunder, or to receive, hold or apply any bonds or security
thereunder, or to enforce any of the agreements, terms, covenants or conditions
thereunder or to give notices thereunder, neither such sufferance nor
permission shall constitute a waiver or relinquishment by Lender of its rights
hereunder, which rights are hereby assigned to Lender, with respect to any
subsequent rent, additional rent or any other sums payable to Borrower under
said Leases or with respect to any subsequent receipt, holding or application
of bonds or security or any subsequent enforcement of such agreements, terms,
covenants or conditions or any subsequent notice.
Any action of Lender hereunder shall not constitute a waiver of or be
deemed to cure any default by Borrower hereunder or under the Note or Mortgage,
and shall not affect or prejudice any other rights or remedies of Lender, which
other rights or remedies may be exercised by Lender prior to, concurrently with
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<PAGE> 105
or subsequent to action hereunder; and any action by Lender under the Note or
the Mortgage or any other instrument, or the release of any party liable
thereunder, or any extension or indulgence with respect thereto, shall not
affect or prejudice Lender's rights hereunder.
13. Assignment by Lender; Foreclosure. Lender may assign Lender's interest
in the Leases hereby assigned to any subsequent holder of the Mortgage or to any
party who acquires title to the Premises in foreclosure. After a foreclosure of
the Mortgage, neither Lender nor any assignee of the landlord's interest in said
Leases shall be liable to account to Borrower for any rents or income thereafter
collected.
14. Termination. This Assignment shall continue in full force and effect
until full payment of all amounts secured hereby, as evidenced by the recording
of a full release of the Mortgage.
15. Notification of Assignment. Lender shall be entitled to notify any
tenant of the existence of this Assignment at any time, even in the absence of
any default by Borrower.
16. Notices. All notices to any party hereto shall be given by personal
delivery or delivered by registered or certified mail, return receipt
requested, or by nationally recognized overnight carrier, with postage or
carrier charges prepaid and addressed to each party at the address herein set
forth or such other address of which any party may give the other notice in
writing in the manner provided in this section and such delivery shall be
deemed given upon receipt or refusal to accept, or upon return to sender due to
impossibility of delivery. Notwithstanding the address for the Borrower herein,
notice or demand delivered to the address of one or more of the persons,
corporations or other entitles which shall at the time hold the record title to
the premises secured by the Mortgage, shall constitute notice or demand
delivered to the Borrower as may be required by any provision of this
Assignment. For purposes of this Assignment, the addresses of the Borrower and
the Lender are as follows:
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<PAGE> 106
Borrower: _________________________________
_________________________________
_________________________________
_________________________________
Lender: _________________________________
_________________________________
_________________________________
_________________________________
17. Miscellaneous. The provisions hereof shall be construed in accordance
with the laws of the State of Connecticut. This Assignment shall bind
Borrower, its successors and assigns, and inure to the benefit of Lender, its
heirs, executors, administrators, successors and assigns. The covenants of
Borrower herein shall run with the land. The word "Borrower" as used herein
shall mean not only the original Borrower named in the first paragraph of this
instrument, but also all future owners of the Premises, and the word "Lender"
as used herein shall mean not only the original Lender named in the first
paragraph of this instrument, but also all future holders of this Assignment.
The words "Borrower" and "Lender", together with any pronoun or pronouns in
connection therewith (and the possessive form of any such pronoun or pronouns),
shall include the singular, plural, masculine, feminine and neuter, as the
context may require whenever used, the singular number shall include the
plural, the plural the singular, and the use of any gender shall include all
genders. This Assignment may not be changed orally, but only by an agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
18. BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS ASSIGNMENT IS
A PART IS A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION AND WAIVES
ANY RIGHT TO (1) NOTICE AND PRIOR HEARING ON THE RIGHT OF LENDER, OR ITS
SUCCESSORS OR ASSIGNS, TO OBTAIN A PREJUDGMENT REMEDY UNDER CHAPTER 903a OF THE
CONNECTICUT GENERAL STATUTES, REV. 1958, AS AMENDED, OR AS THE SAME MAY BE
AMENDED; (2) NOTICE AND PRIOR HEARING OR OTHER PROCESS ALLOWED UNDER ANY STATE
OR FEDERAL CONSTITUTION, STATUTE OR OTHER LAW, NOW OR HEREAFTER AFFECTING
PREJUDGMENT REMEDIES AND (3) ANY REQUIREMENT THAT LENDER POST A BOND IN ORDER
TO OBTAIN ANY PREJUDGMENT REMEDY.
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<PAGE> 107
19. BORROWER FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THE NOTE OR ANY OTHER LOAN DOCUMENT; ALL RIGHTS TO THE
BENEFITS OF ANY MORATORIUM, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW PROVIDED
OR WHICH MAY HEREAFTER BE PROVIDED BY ANY FEDERAL OR STATE STATUTE, INCLUDING
BUT NOT LIMITED TO EXEMPTIONS PROVIDED BY OR ALLOWED UNDER THE BANKRUPTCY
REFORM ACT OF 1978, AS THE SAME MAY BE AMENDED, BOTH AS TO ITSELF PERSONALLY
AND AS TO ALL OF ITS PROPERTY, WHETHER REAL OR PERSONAL, AGAINST THE
ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS EVIDENCED BY THE NOTE, THIS
ASSIGNMENT OR ANY OF THE OTHER LOAN DOCUMENTS AND ANY AND ALL EXTENSIONS,
RENEWALS AND MODIFICATIONS THEREOF; AND THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT, AT
LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THE NOTE, THIS
ASSIGNMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
20. BORROWER ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS
ASSIGNMENT AND IN ALL OF THE OTHER LOAN DOCUMENTS HAVE BEEN SPECIFICALLY
REQUESTED BY LENDER AND HAVE BEEN GRANTED BY BORROWER TO INDUCE LENDER TO
PROVIDE CREDIT TO BORROWER UNDER THE TERMS OF THIS ASSIGNMENT AND THAT SUCH
WAIVERS HAVE BEEN KNOWINGLY AND VOLUNTARILY GIVEN ONLY AFTER CONSIDERATION OF
THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS ATTORNEY.
IN WITNESS WHEREOF, Borrower has caused this Assignment to be executed as
of the day and year first written above.
Signed, Sealed and Delivered
In the Presence of: EDAC TECHNOLOGIES CORPORATION
_________________________________ By: _________________________________
Name: Name:
Title:
_________________________________ Hereunto Duly Authorized
Name:
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<PAGE> 108
STATE OF CONNECTICUT :
ss ______________, 1998
COUNTY OF HARTFORD :
Personally appeared ___________________, ________________ of EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation, signer and sealer of the
foregoing instrument and acknowledged the same to be his/her free act and deed
as such Officer and the free act and deed of that corporation, before me.
_____________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires
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<PAGE> 109
EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF LEASE
KNOW ALL MEN BY THESE PRESENTS:
THAT GERALD S. BIONDI and JAMES G. BIONDI (collectively, the "Assignors")
hereby transfer, assign and set over unto EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation ("Assignee") all of Assignor's right, title, interest and
obligation in, to and under that certain Lease and Option to Purchase dated May
22, 1991 between Assignors, as Lessor, and Lithographics, Inc.
("Lithographics"), as Tenant, amended by (a) First Amendment to Lease and Option
to Purchase dated August 29, 1994, (b) Second Amendment to Lease dated March 17,
1995 and (c) Second Amendment to Lease and Option to Purchase dated March ___,
1996 (such Lease and Option to Purchaser, as so amended, the "Lease"). The
Lease and all amendments and modifications thereto are attached hereto and
incorporated herein by reference as Exhibit A.
TO HAVE AND TO HOLD the Lease, together with any and all security deposits,
prepaid rents, rights and appurtenances thereto in anywise belonging to
Assignors unto Assignee, its successors and assigns FOREVER, and Assignors do
hereby bind themselves and successors and assigns to WARRANT AND FOREVER DEFEND
all and singular the Lease unto Assignee, its successors, and assigns, against
every person whomsoever lawfully claiming or to claim the same or any part
thereof by, through or under Assignors, but not otherwise.
Assignors certify that Lithographics has not paid rent more than one month
in advance and that Assignors are not in default under the Lease. Assignors
indemnify and hold Assignee harmless from and against any loss, cost, damage or
expense arising from claims made by Lithographics under the Lease hereby
assigned based upon events occurring prior to the Effective Date (hereinafter
defined) or for any inaccuracies contained herein.
Assignee, by its acceptance hereof, hereby (i) accepts said assignment;
(ii) assumes and agrees to keep, perform, fulfill, or cause to be performed and
fulfilled, all the terms, covenants, conditions, duties and obligations of
landlord contained in the Lease arising on and after the Effective Date
(hereinafter
<PAGE> 110
defined) and (iii) agrees to indemnify and hold Assignors harmless from and
against any loss, cost, damage or expenses arising from claims made by
Lithographics or any successor or assign under the Lease hereby assigned based
upon events occurring on or after the Effective Date (hereinafter defined)
(including specifically, without limitation, the obligations of the landlord
under the Lease with respect to security deposits delivered to Assignee on the
date hereof, but not otherwise).
Notwithstanding the date of execution of this Assignment and Assumption of
Lease, it is the intention of Assignors and Assignee that this Assignment and
Assumption of Lease be effective as of __________ A.M., Farmington, Connecticut
time on _____________, 1998 (the "Effective Date").
This Assignment and Assumption of Lease may be executed in one or more
counterparts, each of which together shall be deemed to be one and the same
instrument.
IN WITNESS WHEREOF, Assignors and Assignee have caused this Assignment and
Assumption of Lease to be duly executed as of this ______ day of
_______________, 1998.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: ASSIGNORS:
_________________________________ _________________________________
Name: Gerald S. Biondi
_________________________________
Name:
_________________________________ _________________________________
Name: James G. Biondi
_________________________________
Name:
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<PAGE> 111
ASSIGNEE:
EDAC TECHNOLOGIES CORPORATION
_________________________________ By: _________________________________
Name: Name:
Title:
Hereunto Duly Authorized
_________________________________
Name:
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, GERALD S. BIONDI, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed, before me.
_____________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires: ______________
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, JAMES G. BIONDI, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed, before me.
_____________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires: ______________
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<PAGE> 112
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, EDAC TECHNOLOGIES CORPORATION , a Wisconsin
corporation, signer and sealer of the foregoing instrument and acknowledged the
same to be his free act and deed, as such officer, and the free act and deed of
that corporation, before me.
_____________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires: ______________
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<PAGE> 113
EXHIBIT F
TENANT NOTIFICATION LETTER
____________, _____
Lithographics, Inc.
55 Spring Lane
Farmington, Connecticut 06032
Re: Sale of 55 Spring Lane, Farmington, Connecticut
Dear Tenant:
Please be advised that:
1. EDAC TECHNOLOGIES CORPORATION ("Purchaser") has purchased the captioned
property (the "Property") from GERALD S. BIONDI and JAMES G. BIONDI
("Sellers").
[2. In connection with such purchase, Sellers have transferred your
security deposit in the amount of $___________ (the "Security Deposit") to
Purchaser. Purchaser specifically acknowledges the receipt of and sole
responsibillity for the return of the security deposit.] IF APPLICABLE.
[3. All rental and other payments that become due subsequent to the date
hereof should be payable to Purchaser and should be delivered to the following
address unless you are otherwise notified by Purchaser in writing:
_________________________________
_________________________________
_________________________________
SELLERS:
_____________________________
Gerald S. Biondi
<PAGE> 114
______________________________
James G. Biondi
PURCHASER:
EDAC TECHNOLOGIES CORPORATION
By: __________________________
Name:
Title:
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<PAGE> 115
EXHIBIT G
PERMITTED ENCUMBRANCES
55 Spring Lane, Farmington, Connecticut
1. Any and all provisions of any ordinance, municipal regulation or public or
private law.
2. Real estate taxes to the Town of Farmington (subject, however, to proration
as provided in Section 3.6.1 of the Agreement.
3. Such state of facts as an accurate survey may reveal.
4. Forty foot building line and ten foot drainage right-of-way as shown on map
or plan entitled "MAP OF LAND TO BE CONVEYED TO THE NEW ENGLAND AIRCRAFT
PRODUCTS COMPANY SPRING LANE - FARMINGTON, CONN. Scale 1" = 50' - June
1980 Certified Substantially Correct Edward F. Reuber, W. F. Grunewald,
Surveyors Hodge Surveying Associates, P.C."
5. Easements and rights-of-way as shown on map or plan entitled "Map of
FARMINGTON INDUSTRIAL PARK & LAND of WEST HARTFORD VILLAGE, INC., Et. Al.
Farmington & Plainville Connecticut Scale 1"=200' - September, 1962
Certified Substantially Correct Edward F. Reuber W.F. Grunewald Jr.
Surveyors Office of Merton Hodge & Assoc. - Eng'rs & Surveyors Revised May,
1965 Revised June, 1966 Revised July, 1966" recorded in Farmington Land
Records.
6. Easement from West Hartford Village, Inc. to Hartford Electric Light
Company dated November 12, 1962, recorded November 14, 1962 in Farmington
Land Records in Volume 161 at Page 246.
7. Easement from F.I.P. Corporation, et al to Hartford Electric Light Company
dated November 20, 1963, recorded November 22, 1963 in Farmington Land
Records in Volume 166 at Page 280.
8. The following drainage and utility easements relating to Farmington
Industrial Park insofar as the same may specifically affect the
above-described premises:
<PAGE> 116
(a) Grant of an Easement from James E. Thomas to The American
Telephone & Telegraph Co. dated August 31, 1904 and recorded in the
Farmington Land Records in Volume 86 at Page 37, and Right-of-Way from
James E. Thomas to American Telephone and Telegraph Company dated
September 5, 1904 and recorded in the Farmington Land Records in
Volume 73 at Page 568.
(b) Right-of-Way set forth in Warranty Deed from Burton A. Harris to
G. Lewis Wells dated June 28, 1948 and recorded in the Farmington Land
Records in Volume 102 at Page 208.
(c) Grant of easement from Oscar J. Nelson and Gunhild M. Nelson to
The Connecticut Power Company dated March 27, 1950 and recorded in the
Farmington Land Records in Volume 104 at Page 415.
(d) Grant of an easement from The Connecticut Spring Corporation to
the Town of Farmington dated January 26, 1960 and recorded in the
Farmington Land Records in Volume 147 at Page 144, of the right to
discharge storm water from Wells Drive.
(e) Grant of an easement from The Connecticut Spring Corporation to
The Hartford Electric Light Company dated December 30, 1960 and
recorded in the Farmington Land Records in Volume 152 at Page 151.
(f) Grant of an easement from Irving Fisher and Stanley D. Fisher to
the Hartford Electric Light Company dated November 12, 1962 and
recorded in the Farmington Land Records in Volume 161 at Page 245.
(g) Grant of an easement from Stanley D. Fisher and Bertram Youmans to
The Hartford Electric Light Company dated November 12, 1962 and
recorded in the Farmington Land Records in Volume 161 at Page 247.
(h) Drainage easement set forth in Warranty Deed from Stanley D.
Fisher and Bertram Youmans to the Town of Farmington dated October 30,
1962 and recorded in the Farmington Land Records in Volume 161 at Page
323.
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<PAGE> 117
(i) Drainage easement set forth in Warranty Deed from Stanley D.
Fisher and Irving Fisher to the Town of Farmington dated October 30,
1962 and recorded in the Farmington Land Records in Volume 161 at Page
325.
(j) Grant of an easement from West Hartford Village, Inc. to The
Connecticut Light & Power Company dated October 14, 1963, recorded
October 23, 1963 in Farmington Land Records in Volume 166 at Page 34.
(k) Grant of an easement from F.I.P. Corporation and Milton Nahum,
Trustee to The Hartford Electric Light Company dated May 19, 1967 and
recorded in the Farmington Land Records in Volume 183 at Page 562.
9. Notice of Lease by and between James G. Biondi and Gerald S. Biondi as
Landlords, and Lithographics, Inc., as Tenant, dated March 17, 1995 and
recorded in Volume 496 at Page 952 of the Farmington Land Records.
10. Assignment of Lease from Lithographics, Inc. as Borrower and James G.
Biondi and Gerald S. Biondi as Lessors to Bristol Savings Bank dated March
10, 1995 and recorded in Volume 496 at Page 957 of the Farmington Land
Records.
11. Lessor's Agreement by and between James G. Biondi and Gerald Biondi as
Lessors, and Bristol Savings Bank (Bank), Small Business Association (SBA)
and Lithographics, Inc. (Borrower) dated March 17, 1995 and recorded in
Volume 504 at Page 124 of the Farmington Land Records.
12. Any Lease entered into by Sellers as provided in Section 9.12 of the
Agreement.
13. Any other caveats, easements, covenants and/or nonmonetary encumbrances
of record prior to the date of this Agreement provided the same do not
render title to the Property unmarketable. No matter shall be construed
as an encumbrance or defect in title so long as such matter is not
construed as such under the Standards of Title of the Connecticut Bar
Association whenever the standards shall be applicable.
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<PAGE> 1
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") made this 30th day of June, 1998
by EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation having its principal
place of business at 1806 New Britain Avenue, Farmington, Connecticut
("Guarantor") to GERALD S. BIONDI of Canton Connecticut, JAMES G. BIONDI of
Burlington, Connecticut and MICHAEL J. BIONDI of Harwinton, Connecticut
(collectively, the "Lenders").
W I T N E S E T H :
WHEREAS, pursuant to the terms of a certain Purchase Agreement dated
May 13, 1998 between Guarantor and Lenders (the "Real Estate Contract"), Lenders
agreed to sell and Guarantor agreed to purchase certain real property known as
17 Spring Lane and 21 Spring Lane, Farmington, Connecticut (collectively, the
"Real Property"); and
WHEREAS, pursuant to Section 9.1 of the Real Estate Contract and a
certain Assignment dated the date hereof, Guarantor has assigned to Apex
Acquisition Corporation, a Connecticut corporation having its principal office
at 1806 New Britain Avenue, Farmington, Connecticut 06032 ("Apex"), the right to
acquire title to the Real Property under the Real Estate Contract; and
WHEREAS, pursuant to the Real Estate Contract, Lenders have conveyed
the Real Property to Apex and assigned the Landlord's interest in and to a
certain lease to Apex pursuant to that certain Assignment and Assumption of
Lease dated the date hereof granted by Lenders to Apex (the "Lease Assumption
Agreement"); and
WHEREAS, as provided in the Real Estate Contract, Apex paid the
purchase price for the Real Property by delivery of a $________ Promissory Note
dated the date hereof made by Apex to the order of the Lenders (the "Note"),
which Note is secured by (i) a Mortgage Deed, Assignment of Leases and Security
Agreement dated the date hereof granted by Apex to Lenders (the "Mortgage") and
(ii) an Assignment of Leases and Rentals dated the date hereof granted by Apex
to the Lenders (the "Assignment"); and
WHEREAS, as provided in Section 9.1 of the Real Estate Contract,
Lenders required that Guarantor enter into this Guaranty as a condition
precedent to Lender's conveyance of the Real Property to Apex and Lender's
acceptance of the Note,
<PAGE> 2
Mortgage, Assignment of Leases and Lease Assumption from Apex; and
WHEREAS, as the holder of all of the issued and outstanding shares of
stock of Apex, Guarantor shall receive substantial benefit if Lenders make
credit available to Apex as provided in the Note; and
WHEREAS, Guarantor desires that Lenders convey the Real Property to
Apex and that Lender accept the Note, Mortgage, Assignment of Leases and Lease
Assumption from Apex.
NOW THEREFORE, for good and valuable consideration received by
Guarantor, the receipt and sufficiency of which is hereby acknowledged, and for
the purpose of inducing Lenders to convey the Real Property to Apex and to
accept the Note, the Mortgage, the Assignment of Leases and the Lease Assumption
Agreement from Apex, Guarantor absolutely, unconditionally and irrevocably
guarantees to Lenders the due and punctual payment, performance and discharge
(whether upon acceleration or otherwise in accordance with the terms thereof) of
all of Apex's obligations under the Note, the Mortgage, the Assignment of Leases
and the Lease Assumption Agreement (collectively, the "Guaranteed Documents"),
including all costs and expenses of Lenders arising under the Guaranteed
Documents, together with any and all expenses of, for and incidental to
collection including reasonable attorneys' fees and appraiser's fees whether or
not litigation is commenced (collectively, the "Guaranteed Obligations").
Guarantor shall have no right of subrogation, reimbursement or
indemnity whatsoever and no right of recourse to or with respect to any asset or
property of Apex or to any collateral for the Guaranteed Obligations. Nothing
shall discharge or satisfy the liability of Guarantor hereunder except the full
performance and payment of the Guaranteed Obligations. If Apex, Guarantor or any
other guarantor of the Guaranteed Obligations should at any time become
insolvent or make a general assignment for the benefit of creditors, or if a
petition in bankruptcy or any insolvency or reorganization proceeding shall be
filed or commenced by, against, or in respect of Apex, Guarantor, or any such
other guarantor, and which in the case of a filing against Apex, Guarantor or
any such other guarantor, is not dismissed within sixty (60) days, any and all
of the obligations of Guarantor shall forthwith become due and payable without
notice.
Guarantor consents and agrees that, without notice to Guarantor and
without affecting or impairing the obligations of Guarantor hereunder, Lenders
may renew or extend the obligations
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<PAGE> 3
of Apex under the Guaranteed Documents or otherwise, any number of times, may
compromise or settle, extend the duration or the time for payment, discharge or
performance of, or may refuse to enforce or may release all or any party to any
and all of the Guaranteed Obligations, or waive or fail to act with respect to
any requirement of or relating to the Guaranteed Obligations, or may grant other
indulgences to Apex in respect thereof, or may amend or modify in any manner any
document or agreement relating to the Guaranteed Obligations (other than this
Guaranty) or may release, surrender, exchange, modify, or impair any security at
any time held or available to Lenders, or may extend the duration or time for
performance, discharge or payment of any obligation of Apex and may fail to
set-off and may release, in whole or in part, any balance of any and all
deposits and other property securing the Guaranteed Obligations or on which
Lenders at any time may have a lien, or may refuse to enforce their rights, or
may make any compromise or settlement or agreement therefor, in respect of any
and all of such deposits and property, or with any party to the Guaranteed
Obligations, or with any other person, firm or corporation whatsoever, or may
release or substitute any one or more of the endorsers or guarantors of the
Guaranteed Obligations whether parties to this instrument or not, or may
exchange, enforce, waive or release any security for any guaranty of the
Guaranteed Obligations.
Guarantor consents and agrees that Lenders shall be under no obligation
to marshal any asset in favor of Guarantor or against or in payment of any or
all of the Guaranteed Obligations. Guarantor further agrees that to the extent
Apex makes a payment or payments to Lenders which payment or payments thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party under
any bankruptcy act, state or federal law, common law or equitable cause, then to
the extent of such payment or repayment, the obligation or part thereof intended
to be satisfied shall be revived and continue in full force and effect as if
said payment had not been made.
Guarantor agrees that the liability of Guarantor on this Guaranty shall
be irrevocable and shall be immediate and not contingent upon the exercise or
enforcement by Lenders of whatever remedies they may have against Apex or
others, or the enforcement of any lien or realization upon any security Lenders
may at any time possess. Any attempted revocation shall be ineffective except if
Lenders shall have granted written consent thereto. Lenders shall be under no
obligation to grant such consent. Any such consent which Lenders might grant
with respect to Guarantor will not release any other guarantor of the
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<PAGE> 4
Guaranteed Obligations from his or her obligations under his or her guaranty.
Guarantor represents and warrants to Lenders as an inducement to
Lenders to convey the Real Property to Apex and to accept the Guaranteed
Documents from Apex that: (i) this Guaranty constitutes a legal, valid and
binding obligation of Guarantor enforceable in accordance with its terms, (ii)
the execution and delivery of this Guaranty and compliance with the terms hereof
will not conflict with, or result in a breach of, the terms, conditions or
provisions of any agreement or instrument to which Guarantor is a party or by
which Guarantor may be bound, or constitute a default thereunder, or render
Guarantor insolvent, or result in the creation of a lien, charge or encumbrance
upon any property or assets of Guarantor; (iii) as of the date of this Guaranty,
the fair saleable value of Guarantor's assets exceed its liabilities; (iv)
Guarantor is meeting current liabilities as they mature; (v) there are not now
pending any material court or administrative proceedings or undischarged
judgments against Guarantor, and no federal or state liens have been filed or
threatened against Guarantor, nor is Guarantor in default or claimed default
under any agreement for borrowed money; and (vi) no petition in bankruptcy has
been filed by or against Guarantor.
This Guaranty is a primary and original obligation of Guarantor and is
an absolute, unconditional, continuing and irrevocable guaranty of payment and
shall remain in full force and effect regardless of future changes in
conditions, including change of law or any invalidity or irregularity with
respect to the issuance of any obligations of Apex to Lenders or with respect to
the execution and delivery of any agreement between Apex and Lenders.
Lenders shall have the right to seek recourse against Guarantor to the
full extent provided for herein and in any other document or instrument
evidencing obligations of Guarantor to Lenders, and against Apex, to the full
extent provided for in the Guaranteed Documents. No election to proceed in one
form of action or proceeding, or against any party, or on any obligation, shall
constitute a waiver of Lenders' right to proceed in any other form of action or
proceeding or against other parties unless Lenders have expressly waived such
right in writing. No action or proceeding by Lenders against Apex, under any
document or instrument evidencing or securing indebtedness of Apex to Lenders
shall serve to diminish the liability of Guarantor except to the extent Lenders
realized payment by such action or proceeding. Guarantor is fully aware of the
financial condition of Apex. Guarantor delivers this Guaranty based solely upon
its
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<PAGE> 5
own independent investigation and in no part upon any representation or
statement of Lenders with respect thereto. Guarantor is in a position to and
hereby assumes full responsibility for obtaining any additional information
concerning the financial condition of Apex as Guarantor may deem material to its
obligations hereunder and Guarantor is not relying upon, nor expecting Lenders
to furnish to it any information concerning the financial condition of Apex.
Guarantor agrees that it will promptly execute and deliver to Lenders
or their designee written reaffirmation of Guarantor's obligations hereunder if
so requested by Lenders from time to time. Guarantor's absolute obligation to
make such reaffirmations shall not be construed to infer an absence of liability
on behalf of Guarantor in any instance in which Guarantor is not asked to
reaffirm (or fails to reaffirm) its obligations, notwithstanding any
modification of Apex's obligations to Lenders.
Guarantor agrees that, in the event Lenders deem it necessary to employ
counsel to enforce any of the obligations of Guarantor hereunder, Guarantor
shall pay the reasonable attorneys' fees so incurred whether suit be brought or
not, including without limitation attorneys' fees on appeal or in any bankruptcy
proceeding, together with all other reasonable costs and expenses connected
therewith.
This Guaranty, all acts and transactions hereunder and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
according to the laws of the State of Connecticut. Guarantor and Lender agree
that any claims or disputes with respect to any set-off rights exercised by Apex
or Guarantor due to any alleged unpaid indemnification obligation of Lenders
under the Purchase Agreements, as defined in the Real Estate Contract, shall be
resolved pursuant to the arbitration provisions of the Asset Agreement, as
defined in the Real Estate Contract. With respect to any claims or disputes
between Guarantor and Lenders pertaining directly or indirectly to this
Guaranty, or to any of the Guaranteed Documents or to any matter arising
herefrom or therefrom which are not of a nature required to be submitted to
arbitration under the Asset Agreement, Guarantor and Lenders hereby agree that
any state court or local court of the State of Connecticut and the United States
District Court for the District of Connecticut shall have exclusive jurisdiction
to hear and determine any such claims or disputes. In such event, Guarantor
expressly submits and consents in advance to such jurisdiction in any such
action or proceeding commenced in such courts, hereby waiving any objections it
may have as to venue of any such suit, action or proceedings brought
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<PAGE> 6
in such court or that such court is an inconvenient forum and hereby waiving
personal service of the summons and complaint, or other process or papers issued
therein, and agreeing that service of such summons and complaint, or other
process or papers may be made by registered or certified mail addressed to
Guarantor at the address of Guarantor set forth above. In addition to the
foregoing, Guarantor irrevocably designates and appoints __________________ as
its agent to receive on its behalf service of all process in any such
proceedings in any such court in the State of Connecticut and directs such agent
to accept such service on its behalf. The exclusive choice of forum set forth in
this Paragraph shall not be deemed to preclude the enforcement of any judgment
obtained in such forum, or the taking of any action under this Guaranty or under
any of the other Guaranteed Documents, to enforce same, in any appropriate
jurisdiction.
No failure, omission or delay on the part of Lenders in exercising any
rights hereunder or in taking any action to collect or enforce payment or
performance of the Guaranteed Obligations or in enforcing observance or
performance of any agreement, covenant, term or condition to be performed or
observed under the Guaranteed Documents or any other instrument evidencing or
securing any of the Guaranteed Obligations, either against Apex, or any other
person or entity liable therefor, shall operate as a waiver of any such right or
in any manner prejudice the rights of Lenders against Guarantor.
In case any one or more of the provisions contained in this Guaranty
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof, and this Guaranty shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
Notwithstanding the foregoing, it is the intention of Guarantor and Lenders that
if any provision of this Guaranty is capable of two (2) constructions, one of
which would render the provision void and the other of which would render the
provision valid, then such provision shall be construed in accordance with the
construction which renders such provision valid.
This Guaranty shall remain fully enforceable irrespective of any
defenses or counterclaims that Apex may assert on or with respect to the
Guaranteed Obligations (other than actual payment or Permitted Set-offs, as
defined in Section 4.7 of the Mortgage).
GUARANTOR ACKNOWLEDGES THAT THIS GUARANTY AND THE TRANSACTIONS
CONTEMPLATED BY THE GUARANTEED DOCUMENTS ARE COMMERCIAL TRANSACTIONS AND NOT
CONSUMER TRANSACTIONS, AND
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<PAGE> 7
GUARANTOR WAIVES ANY RIGHT TO (1) NOTICE AND HEARING ON THE RIGHT OF LENDERS TO
OBTAIN A PREJUDGMENT REMEDY UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES, REV. 1958, AS AMENDED, OR AS THE SAME MAY BE AMENDED; (2) NOTICE AND
PRIOR HEARING OR OTHER PROCESS ALLOWED UNDER ANY STATE OR FEDERAL CONSTITUTION,
STATUTE OR OTHER LAW, NOW OR HEREAFTER AFFECTING PREJUDGMENT REMEDIES; AND (3)
ANY REQUIREMENT THAT LENDERS POST A BOND OR OTHER SECURITY IN ORDER TO OBTAIN
ANY PREJUDGMENT REMEDY.
IN ADDITION, GUARANTOR DOES HEREBY WAIVE: NOTICE OF ACCEPTANCE HEREOF;
NOTICE OF THE AMOUNT OF THE GUARANTEED OBLIGATIONS FROM TIME TO TIME; NOTICE OF
ANY CHANGE OF APEX'S FINANCIAL CONDITION OR ANY OTHER FACT WHICH MIGHT INCREASE
GUARANTOR'S RISK; DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, DEMAND OR PROTEST
AND NOTICE THEREOF AS TO ANY INSTRUMENT; NOTICE OF DEFAULT; AND ALL OTHER
NOTICES AND DEMANDS TO WHICH GUARANTOR MIGHT OTHERWISE BE ENTITLED INCLUDING,
BUT NOT LIMITED TO, NOTICE OF ANY RENEWALS OR EXTENSIONS OF THE NOTE OR ANY OF
THE OTHER GUARANTEED DOCUMENTS. GUARANTOR FURTHER WAIVES ALL RIGHTS BY STATUTE
OR OTHERWISE TO REQUIRE LENDERS TO INSTITUTE SUIT AGAINST APEX, OR TO EXHAUST
THEIR RIGHTS AND REMEDIES AGAINST APEX, GUARANTOR BEING BOUND TO THE PAYMENT OF
EACH AND ALL OF THE GUARANTEED OBLIGATIONS, WHETHER NOW EXISTING OR HEREAFTER
ACCRUING, AS FULLY AS IF SUCH OBLIGATIONS WERE DIRECTLY OWING TO LENDER BY
GUARANTOR. GUARANTOR FURTHER WAIVES ANY DEFENSE ARISING BY REASON OF ANY
DISABILITY OR OTHER DEFENSE OF APEX OR BY REASON OF THE CESSATION FROM ANY CAUSE
WHATSOEVER OF THE LIABILITY OF APEX AND ANY DEFENSE THAT OTHER INDEMNITY,
GUARANTY OR SECURITY WAS TO BE OBTAINED.
GUARANTOR FURTHER WAIVES ALL RIGHTS TO THE BENEFITS OF ANY MORATORIUM,
APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW PROVIDED OR WHICH MAY HEREAFTER BE
PROVIDED BY ANY FEDERAL OR STATE STATUTE, INCLUDING BUT NOT LIMITED TO
EXEMPTIONS PROVIDED BY OR ALLOWED UNDER THE BANKRUPTCY REFORM ACT OF 1978, AS
THE SAME MAY BE AMENDED, BOTH AS TO ITSELF PERSONALLY AND AS TO ALL OF ITS
PROPERTY, WHETHER REAL OR PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION OF
ITS OBLIGATIONS HEREUNDER; ALL RIGHTS UNDER ANY STATUTE OF LIMITATIONS; AND THE
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER
IN CONTRACT OR IN TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY
RELATED TO THIS GUARANTY OR ANY OF THE OTHER GUARANTEED DOCUMENTS.
GUARANTOR ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS
GUARANTY HAVE BEEN SPECIFICALLY REQUESTED BY LENDERS AND HAVE BEEN GRANTED BY
GUARANTOR TO INDUCE LENDERS CONVEY THE REAL PROPERTY TO APEX AND TO ACCEPT THE
GUARANTEED DOCUMENTS FROM APEX AND THAT SUCH WAIVERS HAVE BEEN KNOWINGLY AND
VOLUNTARILY GIVEN
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<PAGE> 8
ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS ATTORNEY.
All notices to Guarantor or Lenders shall be given by personal delivery
or delivered by registered or certified mail, return receipt required, or by
nationally recognized overnight carrier, with postage or carrier charges prepaid
and addressed to such party at the address herein set forth or such other
address of which any party may give the other notice in writing in the manner
provided in this Paragraph and such delivery shall be deemed given (i) when
delivered if delivered personally; (ii) on the third (3rd) day following its
being postmarked if delivered by mail as provided above; or (iii) on the first
(1st) day following its being placed in the possession of such delivery service.
For purposes of this Guaranty, the addresses of Guarantor and Lender are as
follows:
Guarantor: EDAC Technologies Corporation
1806 New Britain Avenue
Farmington, Connecticut 06032
Attention: President
Lenders: Gerald S. Biondi
4 Overlook Drive
Canton, Connecticut 06019
and
James G. Biondi
4 Laurel Crest Drive
Burlington, Connecticut 06013
and
Michael J. Biondi
130 Terryville Road
Harwinton, Connecticut 06791
This Guaranty contains the entire understanding and agreement with
respect to its subject matter, and all prior negotiations, discussions,
commitments, representations, agreements and understandings between Lenders and
Guarantor with respect thereto are merged herein. None of the terms, covenants,
conditions, warranties or representations contained in this Guaranty may be
renewed, replaced, amended, extended, substituted, revised, waived,
consolidated, modified or terminated except by an agreement in writing signed by
the party against whom enforcement is sought. The provisions of this Guaranty
shall extend and be applicable to all renewals,
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<PAGE> 9
replacements, amendments, extensions, substitutions, revisions, waivers,
consolidations, modifications and terminations of the Guaranteed Documents; and
all references herein to any of the Guaranteed Documents shall be deemed to
include any such renewals, replacements, amendments, extensions, substitutions,
revisions, consolidations, waivers, modifications or terminations thereof.
Notwithstanding the foregoing, any reference, whether express or
implied, to any renewal, replacement, amendment, extension, substitution,
revision, waiver, consolidation, modification or termination of any of the
Guaranteed Documents is not intended to constitute a consent to any such
renewal, replacement, amendment, extension, substitution, revision, waiver,
consolidation, modification or termination of any of the Guaranteed Documents,
but as a reference only to those instances where Lenders may give written
consent to any such renewal, replacement, amendment, extension, substitution,
revision, waiver, consolidation, modification or termination of any of the
Guaranteed Documents.
This Guaranty shall (i) be binding on Guarantor and its successors and
assigns and (ii) inure to the benefit of Lender, any other person or entity who
may now or hereafter hold any interest in the Note and the other Guaranteed
Documents and their respective successors and assigns. Notwithstanding the
foregoing, Guarantor may not assign or otherwise transfer this Guaranty or any
of its rights or obligations hereunder without the express written consent of
Lenders, in each instance, which consent may be withheld in Lenders' sole and
absolute discretion.
References in this Guaranty to "herein," "hereof" and "hereunder" shall
be deemed to refer to this Guaranty and shall not be limited to the particular
text or paragraph in which such words appear. References in this Guaranty to
attorneys' fees and expenses shall be deemed to include all costs for
administrative, paralegal and other support staff.
The use of any gender herein shall include all genders and the singular
number shall include the plural and vice versa as the context may require.
As used herein, the term "including," when following any general
statement, will not be construed to limit such statement to the specific items
or matters as provided immediately following the term "including" (whether or
not non-limiting language such as "without limitation" or "but not limited to"
or words of similar import are also used), but rather will be deemed
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<PAGE> 10
to refer to all items or matters that could reasonably fall within the broader
scope of the general statement.
IN WITNESS WHEREOF, Guarantor caused this Guaranty to be duly executed
as of the day and year first above written.
Signed, Sealed and Delivered
in the Presence of: EDAC TECHNOLOGIES CORPORATION
By:
_________________________ ____________________________
Name: Name:
Title:
Hereunto Duly Authorized
_________________________
Name:
STATE OF CONNECTICUT :
: SS. , June ___, 1998
COUNTY OF HARTFORD :
Personally appeared _________________, __________________, of EDAC
TECHNOLOGIES CORPORATION, signer and sealer of the foregoing instrument, and
acknowledged the same to be his/her free act and deed as such Officer and the
free act and deed of that corporation, before me.
__________________________________
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires:
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<PAGE> 1
EXHIBIT 99.4
PROMISSORY NOTE
$2,710,687.02 June 30, 1998
Hartford, Connecticut
FOR VALUE RECEIVED, on or before January 1, 2000, APEX ACQUISITION CORPORATION,
a Connecticut corporation, having an office at 1806 New Britain Avenue,
Farmington, Connecticut 06032 ("Borrower"), hereby promises to pay to the order
of GERALD S. BIONDI, an individual residing at 4 Overlook Drive, Canton,
Connecticut 06019, JAMES G. BIONDI, an individual residing at 4 Laurel Crest
Drive, Burlington, Connecticut 06013 and MICHAEL J. BIONDI, an individual
residing at 130 Terryville Road, Harwinton, Connecticut 06791 (collectively,
"Payee") or any subsequent holder hereof (the holder hereof, whether Payee or a
subsequent holder, is hereinafter referred to as "Lender") at the office of
Payee at 4 Laurel Crest Drive, Burlington, Connecticut 06013 or at such other
place as the Lender may designate from time to time in writing, the principal
sum of TWO MILLION SEVEN HUNDRED TEN THOUSAND SIX HUNDRED EIGHTY-SEVEN AND
02/100 DOLLARS ($2,710,687.02), together with (i) interest from the date hereof
on the unpaid principal balance until paid at the rate of ten and twelve
hundredths percent (10.12%) per annum; (ii) all amounts which may become due
under this Note, the Mortgage (as hereinafter defined), or under any other
document securing the indebtedness evidenced by this Note (collectively the
"Loan Documents"); (iii) any costs and expenses, including reasonable
attorney's and appraiser's fees incurred in the collection of this Note, or in
the foreclosure of the Mortgage, or in protecting or sustaining the lien of the
Mortgage, or in any litigation or controversy arising from or connected with
this Note or any of the other Loan Documents; and (iv) all taxes or duties
assessed upon said sum against the Lender, upon the debt evidenced hereby, upon
the Mortgage or any of the other Loan Documents and upon the property
encumbered by the Mortgage and the other Loan Documents (the "Mortgaged
Property"). All amounts owing under this Note and interest thereon shall be
payable in legal tender of the United States of America.
Interest shall be calculated by using a 360-day year, but shall be due for
the actual number of days elapsed during the period for which interest is being
paid.
<PAGE> 2
Interest only shall be paid monthly in arrears commencing on August 1,
1998 and on the first day of each month thereafter until January 1, 2000 when
the entire principal balance and any unpaid interest shall become due and
payable.
Notwithstanding any provision contained in this Note or in the Loan
Documents to the contrary, interest shall accrue on the outstanding principal
balance of this Note from the expiration of any applicable grace periods of any
default or from the date of the right to accelerate payment of principal and
interest hereunder (so long as such default or right continues) and after
judgment and until collection, regardless of whether or not there has been an
acceleration of the payment of principal and interest as set forth herein, at
the rate that is two percent (2%) above the then applicable interest rate of
this Note (the "Default Rate"). The monthly installments due hereunder shall
be increased by the amount of such increase in interest.
Each monthly installment when paid shall be applied first to the payment
of any taxes, late charges, and amounts otherwise due under this Note and the
Loan Documents, then to interest on the unpaid principal of this Note and the
balance to principal due hereunder.
Borrower shall have the right at any time and from time to time to prepay
in whole or in part, without penalty, the principal amount of this Note in
multiples of Ten Thousand Dollars ($10,000); provided, however, that (a) any
prepayment shall be applied first to the payment of any taxes, late charges and
amounts otherwise due under this Note and the Loan Documents, second to accrued
and unpaid interest hereunder up to the date of such prepayment and third to
the principal hereunder, (b) any such prepayment shall not postpone any
subsequent payments of interest, and (c) the acceptance of any such prepayment
when there is a default continuing hereunder or under any of the Loan Documents
shall not constitute a waiver, release or accord and satisfaction thereof or of
any rights with respect thereto by Lender.
Except with respect to set-offs to which Borrower shall be entitled with
respect to amounts owed to Borrower pursuant to the indemnification provisions
contained in (I) that certain Purchase Agreement dated May 13, 1998 between
Payee and Edac Technologies
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<PAGE> 3
Corporation ("Edac") relating to 17 and 21 Spring Lane, Farmington,
Connecticut, the purchaser's interest under which was assigned to Borrower
under that certain Assignment and Assumption Agreement dated June 30, 1998 (the
Purchase Agreement as so assigned, the "17-21 Spring Lane Agreement"), and (ii)
that certain Asset Purchase Agreement dated May 13, 1998 between Edac, Apex
Acquisition Corporation, a Wisconsin Corporation ("Apex Wisconsin"), Apex
Machine Tool Company, Inc. and Payee, Apex Wisconsin's interest under which was
assigned to Borrower under that certain Assignment and Assumption Agreement
dated June 15, 1998 (the Asset Purchase Agreement as so assigned the "Asset
Agreement") all payments due hereunder shall be due without set-off or
counterclaim by Borrower of any kind.
If default shall be made in any payment when the same becomes due under
this Note and such default continues for more than five (5) days; or if
Borrower defaults in the payment of taxes or any municipal assessment prior to
the date that the same become delinquent, any insurance premiums, or any lien
or charge upon the Mortgaged Property, or upon the happening of a default as
provided for in the Mortgage or any other Loan Document which shall continue
beyond the applicable grace period therefor; or if a petition shall be filed by
or against Borrower under the Federal Bankruptcy Act or the Bankruptcy Code of
1978 or acts amendatory thereof or supplemental thereto or under any statute
either of the United States or any state thereof in connection with insolvency
or reorganization or for the appointment of a receiver or trustee of all or a
material portion of Borrower's property and any such petition filed against
Borrower is not withdrawn, dismissed, discharged, or removed, as the case may
be, within sixty (60) days after such petition is filed; or if an assignment of
any material property of Borrower be made for the benefit of creditors; or if
Borrower shall abandon all or any part of the Mortgaged Property or Borrower
shall declare in writing Borrower's inability to pay its debts as they come
due; or if the United States of America, the State of Connecticut, or any
agency or subdivision of either, shall impose a tax (other than income tax),
levy, or assessment on or concerning this Note, the Mortgage or the Mortgaged
Property, or on the debt thereby evidenced or secured, which Borrower cannot
lawfully or does not pay when due; or if Borrower shall assign, encumber or
transfer any portion or all of its right, title or interest in or to the
Mortgaged Property or any material portion thereof; (all of the foregoing
events being herein called "Events of Default" and each
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<PAGE> 4
individually being herein called an "Event of Default"), then, and in any such
event, Lender may at its option declare the entire unpaid balance of this Note,
together with interest accrued hereon, to be immediately due and payable and
Lender may proceed to exercise any rights or remedies that it may have under
this Note, the Mortgage, or any of the other Loan Documents, or such other
rights and remedies which Lender may have at law, equity or otherwise.
In the event this Note is turned over to an attorney at law for collection
after default, in addition to the other obligations hereunder, Lender shall be
entitled to collect all reasonable costs of collection, including, but not
limited to, reasonable attorneys' fees incurred in connection with protection
of or realization of collateral or in connection with any of the Lender's
collection efforts, whether or not suit on this Note or any foreclosure
proceeding is filed, and all such costs and expenses shall be payable on demand
and shall also be secured by the Mortgage and the other Loan Documents.
No failure on the part of Lender to exercise any right or remedy
hereunder, whether before or after the happening of a default shall constitute
a waiver thereof, and no waiver of any past default shall constitute waiver of
any future default or of any other default. No failure to accelerate the debt
evidenced hereby by reason of default hereunder, or acceptance of a past due
installment, or indulgence granted from time to time shall be construed to be a
waiver of the right to insist upon prompt payment thereafter or to impose late
charges retroactively or prospectively, or shall be deemed to be a novation of
this Note or as a reinstatement of the debt evidenced hereby or as a waiver of
such right or acceleration or any other right, or be construed so as to
preclude the exercise of any right which Lender may have, whether by the laws
of the State of Connecticut by agreement or otherwise; and Borrower hereby
expressly waives the benefit of any statute or rule of law or equity which
would produce a result contrary to or in conflict with the foregoing.
This Note has been executed and delivered in accordance with and is
secured by a Mortgage Deed, Assignment of Leases and Security Agreement of even
date herewith between Borrower and Lender (the "Mortgage") on the Mortgaged
Property, which Mortgage is incorporated herein by reference, which sets forth
further terms and conditions upon which the entire unpaid principal
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<PAGE> 5
hereof and all interest hereon may become due and payable prior to the stated
maturity hereof, and generally as to further rights of Lender and duties of
Borrower with respect hereto. This Note has also been executed and delivered
in accordance with the terms of the 17-21 Spring Lane Agreement and the Asset
Agreement (together the "Purchase Agreements"). The Purchase Agreements, which
are incorporated herein by reference, set forth certain additional rights and
obligations of the parties, including but not limited to set-off rights of
Borrower against this Note in favor of Borrower with respect to indemnification
obligations of the Payee under the Purchase Agreement and provisions for
arbitration of disputes relating to such indemnification obligations.
Borrower and Lender hereby agree that any claims or disputes with respect
to any set-off rights exercised by Borrower due to any alleged unpaid
indemnification obligation of the Payee under the Purchase Agreements shall be
resolved pursuant to the arbitration provisions of the Asset Agreement. With
respect to any claims or disputes between Borrower and Lender pertaining
directly or indirectly to this Note, or to any of the other Loan Documents or
to any matter arising herefrom or therefrom which are not of a nature required
to be submitted to arbitration under the Asset Agreement, Borrower and Lender
hereby agree that any state court or local court of the State of Connecticut
and the United States District Court for the District of Connecticut shall have
exclusive jurisdiction to hear and determine any such claims or disputes. In
such event, Borrower expressly submits and consents in advance to such
jurisdiction in any such action or proceeding commenced in such courts, hereby
waiving any objections it may have as to venue of any such suit, action or
proceedings brought in such court or that such court is an inconvenient forum
and hereby waiving personal service of the summons and complaint, or other
process or papers issued therein, and agreeing that service of such summons and
complaint, or other process or papers may be made by registered or certified
mail addressed to Borrower at 1806 New Britain Avenue, Farmington, Connecticut
06032. In addition to the foregoing, Borrower irrevocably designates and
appoints CT Corporation System, One Commercial Plaza, Hartford, Connecticut
06103 as its agent to receive on its behalf service of all process in any such
proceedings in any such court in the State of Connecticut and directs such
agent to accept such service on its behalf. Nothing herein contained shall
affect the right to secure process in any
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<PAGE> 6
other manner permitted by law. The exclusive choice of forum set forth in this
paragraph shall not be deemed to preclude the enforcement of any judgment
obtained in such forum, or the taking of any action under this Note or under
any of the other Loan Documents to enforce same, in any appropriate
jurisdiction.
BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS
A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION AND WAIVES ANY RIGHT TO
(1) NOTICE AND PRIOR HEARING ON THE RIGHT OF LENDER, OR ITS SUCCESSORS OR
ASSIGNS, TO OBTAIN A PREJUDGMENT REMEDY UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, REV. 1958, AS AMENDED, OR AS THE SAME MAY BE AMENDED; (2)
NOTICE AND PRIOR HEARING OR OTHER PROCESS ALLOWED UNDER ANY STATE OR FEDERAL
CONSTITUTION, STATUTE OR OTHER LAW, NOW OR HEREAFTER AFFECTING PREJUDGMENT
REMEDIES AND (3) ANY REQUIREMENT THAT LENDER POST A BOND IN ORDER TO OBTAIN ANY
PREJUDGMENT REMEDY.
BORROWER FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE
OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS OR
EXTENSIONS OF THIS NOTE OR ANY OTHER LOAN DOCUMENT; ALL RIGHTS TO THE BENEFITS
OF ANY MORATORIUM, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW PROVIDED OR WHICH
MAY HEREAFTER BE PROVIDED BY ANY FEDERAL OR STATE STATUTE, INCLUDING BUT NOT
LIMITED TO EXEMPTIONS PROVIDED BY OR ALLOWED UNDER THE BANKRUPTCY REFORM ACT OF
1978, AS THE SAME MAY BE AMENDED, BOTH AS TO ITSELF PERSONALLY AND AS TO ALL OF
ITS PROPERTY, WHETHER REAL OR PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION
OF THE OBLIGATIONS EVIDENCED BY THIS NOTE, THE MORTGAGE OR ANY OF THE OTHER
LOAN DOCUMENTS AND ANY AND ALL EXTENSIONS, RENEWALS AND MODIFICATIONS THEREOF;
AND THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT, AT LAW OR IN EQUITY, ARISING OUT
OF OR IN ANY WAY RELATED TO THIS NOTE, THE MORTGAGE OR ANY OF THE OTHER LOAN
DOCUMENTS.
BORROWER ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS NOTE
AND IN ALL OF THE OTHER LOAN DOCUMENTS HAVE BEEN SPECIFICALLY REQUESTED BY
LENDER AND HAVE BEEN GRANTED BY BORROWER TO INDUCE LENDER TO PROVIDE CREDIT TO
BORROWER UNDER THE TERMS OF THIS NOTE AND THAT SUCH WAIVERS HAVE BEEN KNOWINGLY
AND VOLUNTARILY GIVEN ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF SUCH
WAIVERS WITH ITS ATTORNEY.
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<PAGE> 7
Any delay on the part of Lender in exercising any right hereunder shall
not operate as a waiver of any such right, and any waiver granted for one
occasion shall not operate as a waiver in the event of any subsequent default.
This Note shall be governed by and construed in accordance with the laws
of the State of Connecticut. This Note shall bind the successors and assigns
of the Borrower and shall inure to the benefit of the Lender and its heirs,
administrators, executors, successors and assigns. This Note shall not be
changed or terminated orally, but only by an agreement in writing signed by
the party against whom enforcement of any change or termination is sought.
APEX ACQUISITION CORPORATION
By:
-------------------------------
Name:
Title:
Hereunto Duly Authorized
This Note is secured by a Mortgage Deed, Assignment of Leases and Security
Agreement dated the date hereof covering certain real and personal property
known and numbered as 17 Spring Lane and 21 Spring Lane, Farmington,
Connecticut and by an Assignment of Leases and Rents with respect to the
above-described properties and by other instruments now or hereafter executed
by Borrower in favor of Lender, which in any manner constitute additional
security for this Note, whether or not on file, of record or otherwise.
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<PAGE> 1
EXHIBIT 99.5
PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of this _____ day of May 1998,
by and between EDAC TECHNOLOGIES CORPORATION ("Buyer"), and Gerald S. Biondi
and James G. Biondi (collectively "Sellers").
RECITALS
WHEREAS, Sellers are the owners of the real estate at 55 Spring Lane,
Farmington, Connecticut (the "Property"); and
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase
from Sellers, the Property upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and covenants contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Right of First Refusal Relating to the Property. Sellers state, and
Buyer acknowledges that Sellers have so stated, that pursuant to that certain
Lease and Option to Purchase dated May 22, 1991 between Sellers, as Lessor, and
Lithographics, Inc. ("Lithographics"), as Tenant, amended by (a) First
Amendment to Lease and Option to Purchase dated August 29, 1994, (b) Second
Amendment to Lease dated March 17, 1995 and (c) Second Amendment to Lease and
Option to Purchase dated March __, 1996 (such Lease and Option to Purchase, as
so amended, the "Lithographics Lease"), Lithographics has a right of first
refusal with respect to the sale of the Property under the same terms and
conditions as apply to the sale of the Property under this Agreement. Pursuant
to the Lithographics Lease, Lithographics must exercise its right of first
refusal within thirty (30) days after receipt of notice from Sellers that they
have received a bona fide offer for the Property which they are willing to
accept (such notice must include the terms of such sale). Promptly following
execution of this Agreement, Sellers will deliver to Lithographics a Notice of
Intent to Sell in the form of the Notice attached hereto as Exhibit A and seek
to have
<PAGE> 2
Lithographics either confirm its exercise of its right of first refusal or
waive such right with respect to the sale of the Property hereunder as soon as
possible. Sellers and Buyer agree that (i) if Lithographics fails to exercise
its right of first refusal as provided in the Lithographics Lease or if
Lithographics shall waive its right of first refusal with respect to the sale
of the Property hereunder, then this Agreement shall continue in full force and
effect and (ii) if Lithographics exercises its right of first refusal as
provided in the Lithographics Lease, then all rights and liabilities of the
parties hereto by reason of this Agreement (except those obligations and
liabilities specifically set forth herein to survive termination) shall be
deemed at an end.
2. Conveyance. On the Closing Date, as hereinafter defined, Sellers shall
execute a Limited Warranty Deed with covenants against Sellers' acts conveying
the Property to Buyer subject to (i) the Lithographics Lease but without any
right of first refusal or any other tenant purchase rights relating to the
conveyance pursuant to this Agreement and (ii) the other Permitted Encumbrances
as defined in Section 6.1 hereof.
3. Closing.
3.1 Date of Closing.
(a) The closing ("Closing") of the purchase and sale of the
Property shall occur at 10:00 a.m. on the sixtieth (60th) day following
Sellers' delivery of the Determination to Buyer as provided in Section 8.2
hereof ("Closing Date") time being of the essence, in the offices of Murtha,
Cullina, Richter and Pinney LLP, CityPlace I, 185 Asylum Street, Hartford,
Connecticut 06103 or at such other time or place or on such other date as shall
be mutually agreed upon in writing by the parties. All transactions
contemplated herein shall be effective as of 12:01 a.m. on the Closing Date.
If the Closing Date as provided above shall not be a Business Day, then the
Closing Date shall be the next succeeding Business Day. For purposes of this
Agreement, the term "Business Day" shall mean any day other than a Saturday,
Sunday or any other day on which banks in Hartford, Connecticut are closed.
(b) Notwithstanding anything contained herein to the contrary, if
Sellers do not deliver the Determination to
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<PAGE> 3
Buyer as provided in Section 8.2 hereof within 48 months after the Closing
Date under the Asset Agreement, Sellers and Buyer shall each have the right to
terminate this Agreement by written notice to the other party. If either party
terminates this Agreement in accordance with this Section 3.1(b), all rights
and liabilities of the parties hereto by reason of this Agreement (except those
obligations and liabilities specifically set forth herein to survive
termination) shall be deemed at an end.
3.2 Purchase Price.
3.2.1. The Purchase Price for the Property shall be $1,135,600
(the "Purchase Price") and shall be payable at the Closing of transfer of
title to the Property by certified bank or cashier's check or federal wire
transfer, subject to closing adjustments as hereinafter set forth.
Notwithstanding the foregoing, if the Closing Date is within 17 months from the
date hereof, Buyer shall have the option of paying the Purchase Price by
delivering to Sellers a Note (the "Note") in form and substance identical to
that attached hereto as Exhibit B and incorporated herein by reference with all
blanks filled in with the appropriate information, which Note shall be secured
by (i) a Mortgage on the Property (the "Mortgage") in form and substance
identical to that mortgage attached hereto as Exhibit C and incorporated herein
by reference with all blanks filled in with the appropriate information and
(ii) an Assignment of Leases ("Assignment of Leases") encumbering all leases
existing with respect to the Property on the Closing Date or thereafter, which
shall be in form and substance identical to that attached hereto as Exhibit D
and incorporated herein by reference.
3.2.2. Sellers shall be responsible for any state or local real
estate conveyance taxes assessed by any applicable government or municipality.
3.3. Closing Deliveries by Buyer. At the Closing, Buyer shall deliver
to Sellers the following items, each executed, witnessed and acknowledged as
appropriate:
3.3.1. Certified copies of resolutions of Buyer's Board of
Directors authorizing and approving the execution of this Agreement and all
other documents required to be delivered to Buyer hereunder and the performance
by Buyer of the transactions contemplated hereby and thereby.
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<PAGE> 4
3.3.2. A closing certificate executed by Buyer stating that all
representations and warranties made by Buyer are true and correct in all
material respects as of the Closing Date and that Buyer has performed and
complied in all material respects with all of its covenants and obligations
required under this Agreement as of the Closing Date.
3.3.3. Unless the Buyer elects to pay the Purchase Price by
delivery of the Note as provided in Section 3.2.1 hereof, a bank or certified
check or wire transfer of funds to an account designated by Sellers in an amount
equal to the Purchase Price, plus adjustments, if any, which are payable by
Buyer to Sellers pursuant to Section 3.6 hereof.
3.3.4. If Buyer elects to pay the Purchase Price by delivery of
the Note as provided in Section 3.2.1 hereof, the Note, the Mortgage and the
Assignment of Leases together with a Lender's title insurance policy issued by a
title insurance company licensed to do business in Connecticut chosen by Buyer
and reasonably acceptable to Sellers (the "Title Company") insuring the Mortgage
as a first priority Mortgage on the Property subject only to those matters to
which Buyer's title from Sellers is subject, such title insurance policy shall
be in the full amount of the Purchase Price.
3.3.5. An assignment and assumption of lease and security deposit
in the form of the Assignment and Assumption of Lease attached hereto as Exhibit
E with all blanks filled in with the appropriate information (the "Lithographics
Assignment of Lease") pursuant to which (I) Sellers assign to Buyer all of
Sellers' right, title, interest and obligation in, to and under the
Lithographics Lease, (II) Buyer assumes the obligations of Sellers under the
Lithographics Lease from and after the Closing Date; (III) Sellers indemnify
Buyer from any loss, cost, expense or liability incurred by Buyer by reason of
any landlord defaults under the Lithographics Lease existing prior to the
Closing Date and (IV) Buyer indemnifies Sellers from any loss, cost, expense or
liability incurred by Sellers by reason of any landlord defaults under the
Lithographics Lease arising from and after the Closing Date; and a tenant
notification letter in the form of the letter attached hereto as Exhibit F with
all blanks filled in with the appropriate information (the "Tenant Notification
Letter") notifying Lithographics of the sale of the Property to
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<PAGE> 5
Buyer. Notwithstanding the foregoing, in the event the Lithographics Lease
shall be terminated prior to the Closing, (i) if no new lease is entered into by
Sellers pursuant to Section 9.12 hereof then no Lithographics Assignment of
Lease or Tenant Notification Letter shall be required to be delivered at the
Closing and (ii) if a new lease is entered into by Sellers pursuant to Section
9.12 hereof, then Buyer and Sellers shall enter into an assignment and
assumption of lease and a tenant notification letter with respect to such new
lease in the same form as the Lithographics Assignment of Lease and the Tenant
Notification Letter.
3.4. Closing Deliveries by Sellers. At the Closing, Sellers shall
deliver, or cause to be delivered, the following items, each executed, witnessed
and acknowledged as appropriate, to Buyer:
3.4.1. The Limited Warranty Deed required by Section 2.
3.4.2. The Lithographics Assignment of Lease and the Tenant
Notification Letter, subject to the provisions of Section 3.3.5 hereof.
3.4.3. All such documents as are necessary to terminate and
release encumbrances which effect the Property being conveyed other than
Permitted Encumbrances.
3.4.4. A closing certificate executed by Sellers stating that the
representations and warranties made by Sellers in Section 4.2 hereof are true
and correct in all material respects as of the Closing Date; and that Sellers
have performed and complied in all material respects with all of their covenants
and obligations required under this Agreement as of the Closing Date.
3.4.5. Such affidavits and certificates as may be reasonably and
customarily required by the Title Company to delete title exceptions relating to
(i) parties in possession other than tenants under the Lithographics Lease or
other lease entered into pursuant to Section 9.12 hereof and (ii) possible
mechanics liens with respect to work done at the request of the Sellers.
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<PAGE> 6
3.4.6. A Non-Foreign Status Certification.
3.4.7. State and local transfer tax forms detailing the transfer
tax due, if any, together with checks, in appropriate amounts, payable to the
Connecticut Department of Revenue Services and the Town of Farmington in payment
of required conveyance taxes.
3.4.8. A Form 1099-S.
3.4.9. Any form required pursuant to Section 8.1 hereof.
3.5. Mutual Deliveries. At the Closing Buyer and Sellers shall deliver
a Closing Statement showing the disbursement of the net closing proceeds, payoff
amounts sufficient to release encumbrances on the Property being conveyed other
than Permitted Encumbrances, the real estate conveyance taxes and such other
disbursements and adjustments as are usual and customary including, without
limitation, proration of rent and security deposits.
3.6. Prorations.
3.6.1. Real Property Taxes. Sellers and Buyer acknowledge that
Lithographics is responsible for the payment of real estate taxes effecting the
Property during the term of the Lithographics Lease; therefore, there shall be
no adjustment between Sellers and Buyer with respect to real estate taxes
payable during the continuance of the Lithographics Lease. If the Lithographics
Lease has expired or been terminated prior to the Closing, real estate taxes
which relate to periods after such termination or expiration shall be adjusted
as of the day immediately preceding the Closing Date in accordance with the
custom of the Hartford County Bar Association.
3.6.2. Assessments. Sellers and Buyer acknowledge that
Lithographics is responsible for the payment of assessments on the Property
which are due during the term of the Lithographics Lease; therefore, there shall
be no adjustment between Sellers and Buyer with respect to any assessments for
benefit with respect to the Property which were payable during the continuance
of the Lithographics Lease. If the Lithographics Lease has expired or been
terminated prior to the Closing,
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<PAGE> 7
assessments which relate to the periods after such termination or expiration
shall be adjusted as of the day immediately preceding the Closing Date in
accordance with the custom of the Hartford County Bar Association.
3.6.3. Utilities. Sellers and Buyer acknowledge that Lithographics
is responsible for the payment of all utilities supplied to the Property during
the term of the Lithographics Lease; therefore, there shall be no adjustment of
utilities between Sellers and Buyer with respect to such charges incurred during
the continuance of the Lithographics Lease. If the Lithographics Lease is
terminated or expires prior to the Closing Date, Sellers shall endeavor to
obtain meter readings on the day immediately preceding the Closing Date with
respect to utilities supplied to the Property after the termination or
expiration of the Lithographics Lease, and if such readings are obtained, then
Sellers shall pay the bills therefor for the period to, but not including, the
Closing Date. If Sellers are unable to obtain meter readings as of the day
immediately preceding the Closing Date, such utilities shall be prorated at the
Closing Date based upon the most recent utility bills, and reprorated between
Sellers and Buyer upon issuance of the actual bills therefor.
3.6.4. Rent. Rents with respect to the Property shall be adjusted
in the following manner:
3.6.4.1 Rents received by Sellers for the calendar month
in which the Closing shall occur shall be adjusted at the Closing as of
the day preceding the Closing Date.
3.6.4.2 Rents received by Buyer or Sellers after the
Closing for the calendar month in which the Closing shall occur shall be
adjusted as of the day preceding the Closing Date, and Buyer or Sellers,
as the case may be, shall remit or cause to be remitted to the other its
pro rata share of such rents promptly after receipt thereof;
3.6.4.3 Except as provided in Section 3.6.4.2 above, with
respect to the adjustment of rents received by Buyer after the date of
Closing for the calendar month in which the Closing shall occur, no
adjustment shall
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<PAGE> 8
be made for delinquent rent owing to Sellers on the date of Closing,
unless such payments are in excess of amounts necessary to bring a
tenant current for rent owed after the Closing. Sellers shall retain
title to all such delinquent rents, if any.
3.6.5. Association Assessments. Any property owners association
assessment due on the Property which are not paid directly by Lithographics or
any other tenant under a lease entered into pursuant to Section 9.12 hereof
shall be prorated on the Closing Date, through the day immediately preceding the
Closing Date.
3.6.6. Contractual Obligations, Sellers shall perform all
obligations under all service contracts of Sellers affecting or involving the
Property to be assumed by Buyer, as evidenced in writing by Buyer prior to the
Closing Date and Buyer shall perform all obligations under all such contracts
following the Closing Date. If any payments under such contracts are not paid
through the day preceding the Closing Date, or are prepaid before the Closing
Date for periods from and after the Closing Date, such amounts shall be prorated
through the day preceding the Closing Date and credited or debited against the
Purchase Price, as appropriate.
4. Representations and Warranties of Sellers.
4.1. General. In order to induce Buyer to enter into this
Agreement, Sellers, jointly and severally make the following representations and
warranties. Except for intentional breaches of the representations and
warranties for which claims may be made at any time until the claim is barred by
the applicable period of limitations under federal and state laws relating
thereto, the representations and warranties in Section 4.2 hereof shall survive
for a period of twenty-four (24) months from the Closing hereunder and the
representations and warranties in Sections 4.3 and 4.4 shall survive for a
period of twenty-four (24) months from the Closing under the Asset Agreement.
Sellers shall indemnify Buyer for breach of such representations and warranties
as provided in Section 7 hereof. In no event shall the aggregate indemnity
payments required to be made by Sellers for all claims hereunder exceed Five
Million Dollars ($5,000,000) minus (i) any amounts paid by Apex Machine Tool
Company, Inc. ("Apex") or any of the Sellers and/or Michael Biondi pursuant to
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<PAGE> 9
indemnifications under the Asset Purchase Agreement ("Asset Agreement") dated
the date hereof between Apex Acquisition Corp., Buyer, Apex, Sellers and
Michael Biondi and (ii) any amounts paid by Sellers and/or Michael Biondi
pursuant to indemnifications under the Purchase and Sale Agreement dated the
date hereof between Buyer, Sellers and Michael Biondi relating to 17 Spring
Lane and 21 Spring Lane, Farmington, Connecticut (the "Other Real Estate Sale
Agreement").
4.2. Enforceability; Conflicting Obligations. This Agreement and all
other agreements of Sellers contemplated hereby are or, upon the execution and
delivery thereof, will be the valid and binding obligations of Sellers
enforceable against Sellers in accordance with their terms. Except for
Lithographics' right of first refusal under the Lithographics Lease, which is
triggered by the execution of this Agreement as provided in Section 1 above (but
only until such time as Lithographics either fails to exercise or waives such
first refusal rights), the execution and delivery of this Agreement does not,
and the consummation of the sale and purchase of the Property contemplated
hereby will not, conflict with or violate any provisions of, or result in the
acceleration of, any obligations under any mortgage, lien, lease, order,
arbitration award, judgment, or decree, or any other agreement or other
instrument to which Sellers are subject or to which they are a party or violate
any restriction or limitation of any kind to which they are bound, including any
law, rule, regulation or guideline. Except as described herein, there are no
approvals or consents of third parties necessary for the sale of the Property,
or the transfer of the benefit and enjoyment thereof to Buyer under this
Agreement.
4.3. Litigation. Except as otherwise disclosed in the Asset Agreement,
there is no litigation, proceeding or governmental investigation pending or, to
the knowledge of Sellers, threatened against Sellers relating to the
transactions contemplated by this Agreement or to the Property. Except as
otherwise disclosed in the Asset Agreement, there is no outstanding order,
decree or stipulation issued by any federal, state or local authority to which
Sellers are a party which adversely affects or may adversely affect the Property
or Buyer's enjoyment thereof following the Closing.
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<PAGE> 10
4.4. Sellers' Representations and Warranties. Sellers represent and
warrant to Buyer that (i) Sellers have not received any written notice of any
assessments for public improvements against the Property or any written notice
or order by any governmental, regulatory or administrative authority, any
insurance company which has issued a policy with respect to any of such
properties or any board of fire underwriters or other body exercising similar
functions that: (a) relates to violations of building, safety or fire ordinances
or regulations; (b) claims any defect or deficiency with respect to any of the
Property; or (e) requests the performance of any repairs, alternations or other
work to or in any of the Property or in the streets bounding the same; and (ii)
Sellers have not received any written notice of any condemnation, expropriation,
eminent domain or similar proceeding affecting all or any portion of the
aforesaid Property.
5. Representations and Warranties of Buyer.
5.1. General. In order to induce Sellers to enter into this Agreement,
Buyer makes the following representations and warranties, each of which shall
survive the Closing and shall be deemed to be independently material and relied
upon by Sellers, regardless of any investigation made by, or information known
to, Sellers. Buyer shall indemnify Sellers for breach of such representations
and warranties as provided in Section 7 hereof.
5.2. Organization. Buyer is a corporation duty organized, validly
existing, and in good standing under the laws of the State of Wisconsin. Buyer
possesses all necessary franchises, powers, permits, and authorizations
(collectively, "Governmental Authorizations") to own all of its properties and
assets, and to carry on its business as now being conducted and as of the
Closing Date shall possess all Governmental Authorizations to own the Property
and to carry out its business therein.
5.3. Enforceability, Conflicting Obligations. This Agreement, and all
other agreements of Buyer contemplated hereby are, or upon the execution and
delivery thereof will be, the valid and binding obligations of Buyer enforceable
against it in accordance with their terms. The execution and delivery of this
Agreement does not, and the consummation of the sale and purchase
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<PAGE> 11
of the Property contemplated hereby will not, conflict with or violate any
provisions of the Articles of Incorporation or Bylaws of Buyer, nor any
provisions of, or result in the acceleration of, any material obligations under
any mortgage, lien, lease, law, rule, regulation, guideline, order, arbitration
award, judgment or decree, or any other instrument to which Buyer is subject or
to which it is a party or violate any restriction or limitation of any to which
it is bound, including any law, rule, regulation or guideline.
5.4. Authorization. Buyer has all necessary power and authority to
enter into and perform the actions contemplated by this Agreement in accordance
with the terms and conditions hereof. The execution and delivery of this
Agreement, and the performance by Buyer of its obligations contained in this
Agreement, have been duly approved by Buyer's Board of Directors.
5.5. Litigation. There is no litigation, proceeding or governmental
investigation pending or threatened against Buyer relating to the transactions
contemplated by this Agreement. There is no outstanding order, decree or
stipulation issued by any federal state or local authority to which Buyer is a
party which adversely affects or may adversely affect the purchase of the
Property by Buyer or the performance of Buyer's obligations under the documents
to be delivered by Buyer as required hereby, including but not limited to the
Note, the Mortgage, the Assignment of Leases, or the Lithographics Assignment of
Lease or such other assignment of lease as relates to a lease, if any, entered
into pursuant to Section 9.12 hereof.
6.1 Title.
(i) Title to the Property at Closing shall be fee simple title, free and
clear of all liens, encumbrances, easements or other matters effecting title
except those items set forth on Exhibit G attached hereto (the "Permitted
Encumbrances").
(ii) If at the Closing, Sellers are unable to convey title to the
Property free and clear of all encumbrances except the Permitted Encumbrances,
then Sellers shall have the right, by written notice to Buyer, to extend the
date of Closing for thirty (30) days to effect a cure of the offending title
condition(s). If Sellers do not so elect to postpone the Closing as provided
in
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this Section 6.1(ii) so as to have additional time to cure a title defect or
if at the end of such extension period title to the Property is not free and
clear of all encumbrances except the Permitted Encumbrances, then Buyer shall
have the option: (a) of accepting such title as Seller can convey without an
abatement in the Purchase Price or (b) of terminating this Agreement by written
notice to Sellers. If Buyer shall exercise its right to terminate this
Agreement pursuant to this Section 6.1(ii), all obligations and liabilities of
the parties hereto by reason of this Agreement (except those obligations and
liabilities specifically set forth herein to survive termination) shall be
deemed at an end.
6.2 Investigations and Contingencies.
(i) For purposes of this Agreement, the term "Contingency Period" shall
mean the period commencing on the date of this Agreement and ending at 5:00
p.m., Hartford, Connecticut time, on the thirtieth (30th) day following the date
hereof (or if such thirtieth (30th) day following the date hereof is not a
Business Day then on the next succeeding Business Day.
(ii) At any time during the Contingency Period, subject to the terms of
this Section 6.2(ii), Buyer shall have the right, personally or through its
engineers, surveyors, architects or such other parties as Buyer shall designate,
to enter the Property to survey the Property and to inspect the physical
components of the Property (the "Investigations"). Such Investigations shall be
made at Buyer's sole cost and expense. In conducting such Investigations, Buyer
covenants and agrees: (i) to provide Sellers with at least twenty-four (24)
hours notice (telephonic or otherwise) of the date or dates on which Buyer
desires to conduct an Investigation; (ii) to repair all damages to the Property
resulting from any such Investigations; and (iii) to indemnify and hold harmless
Sellers from any and all damages and/or injuries to third persons caused by such
Investigations, which indemnity shall survive the termination of this Agreement
and the Closing. Buyer agrees that it shall take no action in derogation of the
rights of the tenants at the Property. Sellers shall have the right to have a
representative accompany Buyer or Buyer's representatives during any such
Investigation if Sellers so desire. Before Buyer or any of Buyer's
representatives, agents or contractors shall be allowed access to the Property,
Buyer shall provide Sellers with a copy
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of a policy of public liability and property damage insurance with respect to
the Property, or a certificate of insurance with respect thereto, in which: (A)
the limits shall not be less than $1,000,000 single limit and (B) Sellers shall
be named as additional insureds. Such insurance shall be issued by insurers of
recognized responsibility, licensed to do business in the State of Connecticut
and otherwise in commercially reasonable form and substance. Buyer shall not
cause any physically invasive investigations of the Premises to be conducted
without the written consent of Sellers, which consent shall not be unreasonably
withheld, delayed or conditioned.
(iii) Buyer agrees that all reports and other information generated by
Buyer and Buyer's agents and consultants shall be kept confidential and shall
not be disclosed to any other persons, other than Buyer's attorneys, advisors
and prospective lenders who shall agree to keep such information confidential.
Notwithstanding the foregoing, Buyer may disclose such information if required
by law or pursuant to a court order or subpoena, provided that Buyer shall first
notify Seller of any such required disclosure.
(iv) If during the Contingency Period, Buyer discovers that (a) any of
the buildings or other improvements located on the Property or the current use
of the Property are in violation of any applicable zoning regulations; (b) that
any of the Permitted Encumbrances are located on the Property in such a manner
that they interfere, or the exercise of the rights of the holders of such
Permitted Encumbrances would cause interference, with the use of any of the
buildings located on the Property; (c) that any of the buildings located on the
Property are located in a flood plain, flood plain hazard area or designated
wetlands area; (d) that any of the buildings or other improvements located on
the Property encroach over the boundary lines or set-back lines of the Property;
(e) that there are any structural or mechanical defects or conditions in the
buildings on the Property which reasonably could have a materially adverse
effect on the value of the Property or reasonably could impair the health and
safety of future occupants of the Property; (f) the Property does not have
access to a publicly dedicated street; or (g) public utilities required to
operate the mechanical facilities of the Property are not available to the
Property, then in such event, Buyer shall have the right to terminate this
Agreement by giving Sellers written notice thereof (the "Buyer's Notice") on or
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before 5:00 p.m. Hartford, Connecticut time, on the last day of the Contingency
Period. The Buyer's Notice shall set forth the reason for such termination.
Buyer's failure to deliver the Buyer's Notice on or before 5:00 p.m. Hartford,
Connecticut time, on the last day of the Contingency Period shall be deemed a
waiver of Buyer's right to terminate this Agreement pursuant to this Section
6.2.
(v) If Buyer elects to terminate this Agreement pursuant to this Section
6.2, all rights and liabilities of the parties hereto by reason of this
Agreement (except those obligations and liabilities specifically set forth
herein to survive termination) shall be deemed at an end.
(vi) If Buyer terminates this Agreement as provided in this Section
6.2, or if Sellers terminate this Agreement due to a default by Buyer hereunder,
Buyer shall provide Sellers with the product of the Investigations (including
written reports and the like) without cost to Sellers. The provisions of this
Section 6.2(vi) shall survive termination of this Agreement.
6.3. Title Review. (i) For purposes of this Agreement, the term "Title
Review Period" shall mean the period commencing on the date of this Agreement
and ending at 5:00 p.m. Hartford, Connecticut time on the fifth (5th) Business
Day following the date hereof. If during the Title Review Period, Buyer is
dissatisfied with Sellers' title to the Property, then Buyer shall have the
right to terminate this Agreement by giving Sellers written notice thereof (the
"Title Notice") on or before 5:00 p.m. Hartford, Connecticut time, on the last
day of the Title Review Period. The Title Notice shall set forth the reason for
such termination. Buyer's failure to deliver the Title Notice on or before 5:00
p.m. Hartford, Connecticut time on the last day of the Title Review Period shall
be deemed a waiver of Buyer's right to terminate this Agreement pursuant to this
Section 6.3.
(ii) If Buyer elects to terminate this Agreement pursuant to this
Section 6.3, all rights and liabilities of the parties hereto by reason of this
Agreement (except those obligations and liabilities specifically set forth
herein to survive termination) shall be deemed at an end.
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7. Procedure for Claims and Indemnification.
7.1. Buyer and Sellers acknowledge that claims with respect to any
indemnification obligations shall be made in accordance with, and governed by,
the applicable terms and conditions set forth in Article X and XI of the Asset
Agreement, as the case may be, subject however, to any modifications thereto
resulting from specific provisions herein, with the same force and effect as if
such terms and conditions were set forth herein with such changes therein as are
necessary to reflect the inclusion of such terms and conditions herein dealing
with the subject matter of this Agreement as opposed to that of the Asset
Agreement.
8. Environmental Covenants of Sellers and Buyer.
8.1. Connecticut Transfer Act. As an express condition to Buyer's
obligation to close, Sellers shall be responsible for full compliance with the
provisions of Section 22a-134 et seq. of the Connecticut General Statutes (the
"Transfer Act"), including without limitation (i) the determination as to the
applicability of the Transfer Act to the transfer of the Property contemplated
by this Agreement, (ii) the signing and filing of any appropriate Transfer Act
form with the Connecticut Department of Environmental Protection ("DEP"), (iii)
the payment of any Transfer Act form filing fee, (iv) the performance of any
remediation or other activities required to comply with any Transfer Act form
filed with the DEP in accordance with any applicable DEP regulations or required
by the DEP in connection with any such Transfer Act form filing, and (v) the
payment of all costs, liabilities and expenses directly or indirectly related to
the foregoing subparagraphs (i) through (iv), inclusive.
8.2. Remediation of Contaminated Soil Area.
(a) Based on the Environmental Reports, Sellers and Buyer agree that
certain "yellow-stained" soil contamination in the form of elevated levels of
chromium, cadmium and arsenic is present on the Property in the area identified
in the Environmental Reports (the "Contaminated Soil Area"). Sellers and Buyer
further agree that the Contaminated Soil Area (whether ultimately determined
through the provisions of the remediation required hereunder to be more or less
extensive than that
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supposed in the Environmental Reports) shall be remediated by Sellers at
Sellers' sole cost and expense, and that such remediation shall include, if
required, any necessary post-remediation groundwater monitoring. Sellers shall
conduct such remediation prior to Closing by filing an Environmental Conditions
Assessment Form with the DEP pursuant to Section 22a-133x of the Connecticut
General Statutes.
(b) In the course of performing any investigation or remediation
activities, including any post-remediation or other groundwater monitoring
activities, Sellers shall have the right to (i) appeal by appropriate and
diligent actions any determination by a regulatory agency concerning the
appropriate requirements for remediation, and (ii) seek application of any
alternative or site specific remediation standards or any variances approved by
a regulatory agency that Sellers deem necessary or desirable, provided that the
application of such alternative or site specific remediation standards or of
such variance shall be consistent with the use of the Property for commercial or
industrial purposes.
(c) Sellers' pre-Closing investigation and remediation
responsibilities pursuant to this Section 8 shall be deemed complete and fully
satisfied upon delivery by Sellers to Buyer of either (i) a written
determination from the DEP stating that, except for any post-remediation or
other groundwater monitoring activities deemed necessary by the DEP, no further
remediation is required at the Property as of the date of the DEP letter, or
(ii) a written determination or verification, as appropriate, by a Licensed
Environmental Professional ("LEP") stating that, except for any post-remediation
or other groundwater monitoring activities deemed necessary by the LEP, no
further remediation is required at the Property as of the date of the LEP
determination or verification. Upon delivery by Sellers to Buyer of a DEP or
LEP determination (the "Determination") pursuant to subparagraphs (i) or (ii)
above, the sixty (60) day period referenced in Section 3.1 of this Agreement
shall commence, and Sellers shall be responsible for filing an appropriate form
pursuant to the Transfer Act at the Closing. Sellers' responsibilities pursuant
to any Transfer Act form filed by Sellers shall continue until the fifth
anniversary of the date of the Closing under the Other Real Estate Sale
Agreement (such date the "Environmental Termination Date"), after which
Environmental Termination Date Sellers shall have no further
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responsibility whatsoever for investigation or remediation of the Property. If
Sellers do not deliver the Determination within forty-eight (48) months after
the Closing Date under the Asset Agreement, either Buyer or Sellers may
terminate this Agreement. Upon any such termination, all rights and liabilities
of the parties hereto by reason of this Agreement (except those obligations and
liabilities specifically set forth herein to survive termination) shall be
deemed at an end.
(d) In the course of performing their obligations under this Section
8, Sellers shall keep Buyer fully apprised of both the schedule for, and scope
of, any investigation and remediation activities contemplated by this Section 8,
and shall take all reasonable steps to ensure that the investigation and
remediation activities do not unreasonably interfere with the use of the
Property by Buyer or Buyer's tenants. Sellers shall provide all data and
information with respect to investigation and remediation activities, including
copies of draft data, information or reports, to Buyer, and provide Buyer with
full opportunity to make reasonable comments and recommendations to Sellers
regarding such materials, which comments and recommendations shall be considered
in good faith by Sellers but shall not be binding on Sellers. Sellers shall
provide Buyer with a minimum of forty-eight (48) hours prior notice of any
meetings between Sellers and representatives of regulatory agencies such that
Buyer and/or its representatives has the opportunity to attend such meetings for
the sole purpose of observing such meetings.
8.3. Comprehensive Environmental Response, Compensation, and Liability
Information System. As indicated in the Environmental Reports, a number of
properties in the Farmington Industrial Park, including the Property, are listed
on the United States Environmental Protection Agency's ("EPA") Comprehensive
Environmental Response, Compensation, and Liability Information System
("CERCLIS"). Until the Environmental Termination Date, Sellers shall be
responsible for all costs and liabilities associated with any Environmental
Claim or other Losses directly or indirectly relating to or arising out of the
fact that the Property is included on CERCLIS, including but not limited to any
Comprehensive Environmental Response, Compensation and Liability Act action or
claim (a "CERCLA Claim"), asserted by any governmental agency or third party
against Sellers or Buyer on or before the Environmental Termination Date;
provided,
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however, that Sellers shall not be responsible for any portion of any
Environmental Claim, or Losses related to any Environmental Claim, to the
extent that the same relates to or was caused by activities of the Buyer or
Apex Acquisition Corp., or any tenants of Buyer or Apex Acquisition Corp., on
the Property or on surrounding properties after the Closing Date.
8.4. Known Environmental Issues. Until the Environmental Termination
Date, Sellers, jointly and severally, shall be responsible for any Environmental
Claim, or Losses related to such Environmental Claim, which directly or
indirectly arise out of, result from, or relate to, any of the contamination or
non-compliance with Environmental Laws identified in the Environmental Reports;
provided, however, that Sellers shall not be responsible for any portion of any
Environmental Claim, or Losses related to any Environmental Claim, to the extent
that the same relates to or was caused by activities of the Buyer or Apex
Acquisition Corp., or any tenants of Buyer or Apex Acquisition Corp., after the
Closing Date.
8.5. Pre-Closing Environmental Issues. Sellers shall be fully
responsible for the performance of any remediation or other activities required
under Environmental Laws in connection with any spill or release of any
Hazardous Substances which occurs on, at or under, or which migrates onto the
Property between the date of this Agreement and the Closing Date.
8.6. Covenant Not To Sue; Comfort Letter. Until the Environmental
Termination Date, Sellers shall cooperate with and assist Buyer, at Buyer's
cost, in the event that Buyer elects to seek, under relevant provisions of
Environmental Law, a "covenant not to sue" from the DEP, a "comfort letter" from
the EPA, or other similar forms of government assistance for which Buyer may be
eligible as the result of Buyer's consummation of the transaction contemplated
by this Agreement.
8.7. Termination of Seller's Obligations. Notwithstanding any other
provision of this Agreement to the contrary, the obligations of Sellers pursuant
to this Section 8 shall terminate as of the Environmental Termination Date, and
Sellers shall have no further obligations whatsoever with respect to the
Property.
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8.8. Buyer's Environmental Responsibility Post-Closing. Buyer covenants
that on and after the Closing Date, it will be solely responsible for full
compliance with, and will be solely responsible for any failure of its tenants
to comply with all applicable Environmental Laws and will be solely responsible
for maintaining full compliance with all material Environmental Permits required
for the ongoing operation of the Property for Buyer's businesses. Buyer shall be
fully responsible for the performance of any remediation or other activities
required under Environmental Law in connection with any spill or other release
of any Hazardous Substances which occurs on, at or under the Property, or which
migrates from surrounding properties, resulting from Buyer's ownership or
operation of the Property, or the operations or activities of Buyer's tenants,
after the Closing.
8.9. Buyer's Cooperation With Sellers. (i) Buyer shall use commercially
reasonable efforts not to interfere with or increase the cost of the performance
of Sellers' obligations under this Section 8, and shall cooperate, at Sellers'
cost, with any appeal by Sellers of any determination by a regulatory agency
regarding the appropriate standards for any remediation, and any application by
Sellers for any alternative or site specific remediation standards, or any
variances, consistent with industrial or commercial use sought by Sellers from
the DEP and/or the EPA; provided, however, that Buyer shall not be required to
take any action or refrain from taking any action which it reasonably believes,
after consultation with counsel, would constitute a violation of law by Buyer or
a violation of law for which Buyer is reasonably likely to have responsibility.
(ii) Buyer acknowledges that Sellers intend to complete their
obligations under this Section 8 in a way which minimizes any necessary
investigation or remediation costs but that is in full compliance with all
applicable Environmental Laws. In the event that Buyer interferes with Sellers'
efforts to complete their obligations under this Section 8, including but not
limited to completion of either pre-Closing or post-Closing investigation or
remediation activities, or if Buyer modifies its operations or activities in a
way that materially increases the cost of performing Sellers' obligations, and
such action constitutes a breach by Buyer of Section 8.9, Buyer shall reimburse
Sellers for any additional costs Sellers would not have
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otherwise incurred in performing their obligations under this Section 8.
8.10. Buyer's Acknowledgement of Form of DEP or LEP Determination.
Buyer explicitly acknowledges that it is aware that the Determination obtained
by Sellers in accordance with the terms of this Section 8, and particularly
Section 8.2 (c)(i) or (ii) of this Agreement, is likely to contain language
indicating that investigation and/or remediation of the Property may be required
at any point in the future, and Buyer agrees that as long as such Determination
substantially indicates that, except for any required post-remediation or other
groundwater monitoring activities, no further remediation of the Property is
required as of the date of the Determination, any such language in such
Determination shall not render such Determination ineffective in carrying out
the purposes of this Section 8 and commencing the sixty (60) day period
referenced in Section 3.1 of this Agreement.
8.11. Access. Buyer shall grant Sellers and their agents reasonable
access to the Property along materially the same terms as Sellers provided Buyer
access to Sellers' Property under the License for Access dated March 4, 1998 to
perform any necessary investigation and/or remediation activities required by
this Section 8. Buyer also shall grant Sellers and their agents reasonable
access to the Property as necessary for Sellers to pursue any actions against
third parties, including but not limited to Howmet Corporation and insurance
carriers, relating to any environmental liabilities incurred by Sellers.
8.12. Communications and Coordination With Agencies. In recognition of
the desirability of coordinating communications with environmental agencies,
unless otherwise required by applicable law, Buyer shall allow Sellers to serve
as the sole liaison with any regulatory agencies involved in any of the matters
which are the responsibility of Sellers pursuant to this Section 8; provided,
however, that Buyer may attend any meetings between Sellers and representatives
of regulatory agencies for the sole purpose of observing such meetings. In the
event that Buyer communicates with any agency in a manner that interferes with
Sellers' efforts to complete their obligations pursuant to this Section 8 in the
most cost effective manner possible, and such communication constitutes a breach
by Buyer of Section 8.9 hereof, including but not limited to the completion of
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investigation and remediation activities in a way that minimizes the costs of
such activities, Buyer shall reimburse Sellers for any additional costs Sellers
would not have otherwise incurred in performing their obligations pursuant to
this Section 8. Notwithstanding anything in this Agreement to the contrary, if
(a) any CERCLA Claim is made directly against Buyer or Apex Acquisition Corp.,
and Sellers do not agree, by assuming control of the defense of such CERCLA
Claim after receipt of the notice required pursuant to the Asset Agreement, that
all Losses incurred in connection with such CERCLA Claim are fully covered by
Sellers' indemnification obligations to the Article X Indemnitees of the Asset
Agreement; (b) a CERCLA Claim is made against Sellers and such CERCLA Claim, on
its face, raises issues concerning the allocation of potential environmental
related liabilities between the periods before and after the Closing hereunder
or, in defending such a CERCLA Claim, Sellers posit defenses which raise such
allocation issues; and/or (c) a criminal investigation or complaint concerning
environmental matters is made which involves Apex Acquisition Corp. and/or the
Buyer, Apex Acquisition Corp., Buyer and its representatives shall be free to
take whatever actions they deem appropriate to protect their interests,
including but not limited to, having discussions with any regulatory agency, and
any such actions by Buyer, Apex Acquisition Corp. or its representatives will
not in any way affect the rights of Buyer or Apex Acquisition Corp. to
indemnification from Sellers pursuant to the Asset Agreement.
8.13. Definitions. Capitalized terms used in this Section 8 but not
otherwise defined in this Agreement shall have the meanings ascribed to them in
the Asset Agreement.
8.14. Buyer Acknowledgement. Buyer acknowledges that the nature of any
investigation or remediation activities to be performed by Sellers pursuant to
this Agreement (the "Remediation Process") is that the Remediation Process is
likely to involve substantial discussions with representatives of regulatory
agencies concerning the nature and scope of activities required pursuant to
applicable law and regulations, and potentially discretionary decisions by
representatives of such regulatory agencies and/or an LEP. Buyer further
acknowledges and agrees that notwithstanding the "compliance with applicable
law" provisions of Section 8.9 and Section 8.12 hereof, Buyer shall not utilize
the nature of the Remediation Process as a reason for involving itself in, or
interfering with, the activities of the
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Sellers, except in the manner contemplated in Section 8.2(d) hereof in complying
with their obligations pursuant to this Agreement.
9. MISCELLANEOUS.
9.1. Benefit and Assignment. This Agreement shall be binding upon and,
except as otherwise provided herein, inure to the benefit of, the parties
hereto, their heirs, successors, assignees, wholly owned subsidiaries, and
beneficiaries in interest. Neither Buyer nor Sellers may assign any of its
rights under this Agreement without the prior written consent of the other,
which consent may be withheld in such party's sole discretion; provided,
however, Buyer shall have the right to designate a wholly-owned subsidiary to
take title to the Property at the Closing so long as Buyer guarantees to
Sellers, pursuant to a written guarantee in form and substance satisfactory to
Sellers, the full and prompt performance of all of such designee's obligations
under the conveyance documents to be executed and delivered as provided in this
Agreement. In the event of the appointment of such designee to take title to
the Property at Closing, such designee's name shall be substituted for the name
"EDAC TECHNOLOGIES CORPORATION" in the transaction documents which are attached
as Exhibits hereto. No assignment approved of by either party shall relieve the
other party of its obligations under this Agreement.
9.2. Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
9.3. Expenses. Except as otherwise herein provided, all expenses
incurred in connection with this Agreement or the transactions herein provided
for shall be paid by either Sellers or by Buyer, whichever incurs the same.
9.4. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
9.5. Headings. All section headings in this Agreement are inserted for
convenience only and shall not modify or affect
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the construction or interpretation of any provision of this Agreement.
9.6. Exhibits. All of the Exhibits referred to herein are intended to
be and are hereby specifically incorporated herein by reference.
9.7. Amendment, Modification and Waiver. This Agreement may not be
modified, amended or supplemented except by mutual written agreement of all the
parties hereto. Either party may waive in writing any term or condition
contained herein and intended to be for its benefit; provided, however, that no
waiver shall be deemed or construed as a future or continuing waiver of any term
or condition. Each amendment, modification, supplement or waiver shall be in
writing and signed by the party to be charged.
9.8. Notices. Any notices to be given hereunder shall be deemed given
and sufficient if in writing and delivered by hand or reputable overnight
courier, mailed by registered or certified mail or telecopies, in the case of
Sellers, to:
Apex Machine Tool Company, Inc.
c/o James G. Biondi
4 Laurel Crest Drive
Burlington, Connecticut 06013
Facsimile No.: 860-673-5020
With a copy to:
Murtha, Cullina, Richter and Pinney LLP
CityPlace I
185 Asylum Street
Hartford, Connecticut 06103-3469
Attn: Richard S. Smith, Jr., Esquire
Facsimile No.: 860-240-6150
And, in the case of Buyer, to:
Edac Technologies Corporation
1806 New Britain Avenue
Farmington, Connecticut 06032
Attn: Edward J. McNerney, President
Facsimile No.: 860-674-2718
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With a copy to:
Reinhart, Boerner, Van Deuren
Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, Wisconsin 53202
Attn: Daniel J. Brink, Esquire
Facsimile No. 414-298-8097
or to such other address as Sellers or Buyer may designate by notice in writing
to the other. Notices shall be deemed given upon receipt.
9.9. Damage or Condemnation Prior to Closing.
9.9.1. Destruction. If, prior to Closing, any or all of the
Property is rendered untenable or is destroyed by a casualty, subject to Buyer's
right to terminate this Agreement as specifically set forth herein, Buyer shall
close the transaction contemplated by this Agreement on the date set forth and
pursuant to all other terms and conditions of this Agreement without any
reduction in the Purchase Price. If any such damage or destruction occurs, and
Sellers shall not have completed the repair of such damage prior to the Closing,
Sellers shall pay to Purchaser an amount equal to the insurance proceeds payable
to and actually received by Seller from such insurer of the Property relating to
such damage plus the amount of any deductible on the casualty insurance policy
maintained by Sellers on the Property minus the costs actually incurred by
Sellers in repairing such damage. The payment of the proceeds will be made at
the Closing if Sellers have received such proceeds by that date. If not,
Sellers agree to deliver such proceeds to Purchaser promptly after receipt of
such proceeds or to assign such proceeds to Purchaser. In connection with the
foregoing, Sellers hereby represent that they are maintaining or causing to be
maintained and will continue to maintain or caused to be maintained through the
Closing Date, casualty insurance on the Improvements as provided in Exhibit H
hereof.
9.9.2. Condemnation. If, prior to Closing, all or any portion of
the Property is taken or threatened to be taken under power of eminent domain,
subject to Buyer's right to terminate this Agreement as specifically set forth
herein, Buyer
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shall close the transaction contemplated by this Agreement (with such reduction
in the Property as shall have been caused by such eminent domain proceeding)
without any reduction in the Purchase Price, and at the Closing, Sellers shall
pay (if the same have already been collected) or assign to Buyer any cumulative
condemnation awards (less the costs of Sellers in collecting the same). Any
portion of such condemnation awards in excess of the Purchase Price shall be
retained by and paid to Sellers.
9.10. Mutual Contingency. Buyer's and Sellers' obligations to close
the purchase and sale of the Property are contingent on the closing of the
transactions contemplated by the Asset Agreement and the Other Real Estate Sale
Agreement; provided, however, that if the failure to close the Asset Agreement
and the Other Real Estate Sale Agreement is due (i) to the default of Buyer,
Buyer will be obligated to close this transaction and (ii) to the default of
Apex or Sellers, Sellers shall be obligated to close this transaction.
9.11. Default. If either Buyer or Sellers default under this
Agreement, the non-defaulting party shall have all remedies available at law and
in equity.
9.12. Sellers' Right to Lease Property.
(a) In the event that prior to the Closing, Lithographics or any
other tenant at the Property pursuant to a lease entered into pursuant to the
terms of this Section 9.12 shall default in the payment of their rent under
their lease, Sellers shall provide notice of such default to Buyer and Buyer
shall have a period of fifteen (15) days from receipt of such notice to elect to
pay to Sellers on a monthly basis (on the first day of each month) from the time
of such default until the time of Closing, an amount equal to the monthly rental
which Sellers would have received from such tenant during such period had their
been no default (the first payment to be due on the first day of the month
following such notice from Sellers but to include a pro rata payment for the
period from such default by such tenant to the day preceding the date such
payment is made and the first fully monthly payment by Buyer). Such election
must be made by delivering to Sellers, within the aforesaid fifteen (15) day
period, written notice of Buyer's agreement to make such payments to Sellers and
any such payments due and outstanding at the Closing shall be paid in cash by
Buyer to
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Sellers at the Closing. If (i) Buyer shall not provide written notice to
Sellers within the aforesaid fifteen (15) day period of its election to make
such monthly payments to Seller, (ii) Buyer shall make a timely election to make
such monthly payments but shall thereafter become delinquent in such payments
for more than five (5) days or (iii) Buyer shall notify Seller that Buyer does
not wish to make such monthly payments, then, in any such event, Sellers shall
have the right to lease the Property to other parties at such rentals and upon
such other terms and conditions as Sellers in their reasonable discretion may
deem advisable, including but not limited to a lease term of up to five (5)
years from commencement of such lease. Any such lease entered into by Sellers
pursuant to this Section 9.12 shall be deemed a Permitted Encumbrance hereunder
and Buyer shall be obligated to take title to the Property at the Closing
subject to the terms and conditions of any such lease.
(b) Sellers agree that they shall not take any action to extend the
Lithographics Lease for any period beyond the date which is forty-eight (48)
months after the Closing Date under the Asset Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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9.13 Attorney's Fees. In the event of any litigation arising out of
this Agreement, the prevailing party shall be entitled to reasonable attorney's
fees and costs.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
BUYER:
EDAC TECHNOLOGIES CORPORATION
By:
-----------------------------
Name:
Title:
Hereunto Duly Authorized
SELLERS:
--------------------------------
Gerald S. Biondi
--------------------------------
James G. Biondi
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EXHIBIT C
MORTGAGE DEED, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
THIS MORTGAGE DEED, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT, made this
______ day of _____________, 1998, by and between EDAC TECHNOLOGIES
CORPORATION, a Wisconsin corporation having an office at 1806 New Britain
Avenue, Farmington, Connecticut (the "Mortgagor"), and GERALD S. BIONDI of
_____________, Connecticut and JAMES G. BIONDI of ____________, Connecticut
having a mailing address of ________________________, Connecticut _____
(collectively the "Mortgagee").
WITNESSETH
That for good and valuable consideration and to secure the payment of an
indebtedness in the sum of _____________________________________________________
_________________________________________ DOLLARS ($_____________) lawful money
of the United States to be paid according to a certain Promissory Note of even
date herewith and by this reference made a part hereof, as said note may be
hereinafter amended, modified or extended (the "Note") and all other
obligations and liabilities due or to become due the Mortgagee hereunder, under
the Note or other Loan Documents as herein defined, all amounts, sums and
expenses paid hereunder by the Mortgagee according to the terms hereof and all
other obligations and liabilities of the Mortgagor under this Mortgage and the
Note, together with all interest on the said indebtedness, obligations,
liabilities, amounts, sums and expenses (all of the aforesaid, collectively,
the "Indebtedness"), the Mortgagor hereby mortgages, gives, grants, bargains,
sells, warrants, conveys, aliens, remises, releases, assigns, sets over and
confirms to the Mortgagee, its successors and assigns forever:
All those certain lots, pieces or parcels of land more particularly
described in Schedule A annexed hereto and by this reference made a part
hereof;
TOGETHER with the buildings and improvements now or hereafter located on
said land and all right, title and interest, if any, of the Mortgagor in and to
the streets and roads, opened or proposed, abutting said land to the center
lines thereof, and strips and gores within or adjoining said land, the air space
and right to use said air space above said land, all rights of ingress and
egress on or within said land, all easements now or hereafter affecting said
land, royalties and all rights
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appertaining to the use and enjoyment of said land, including, without
limitation, air, lateral support, alley, drainage, mineral, water, oil and gas
rights (said land, together with said building and improvements, the property
and other rights, privileges and interests encumbered or conveyed hereby,
collectively, the "Premises");
TOGETHER with all fixtures, including, without limitation, all gas and
electric fixtures, radiators, heaters, boilers, elevators and motors, bathtubs,
sinks, toilets, basins, pipes, faucets and other air-conditioning, plumbing,
and heating fixtures, refrigerating plant, carpeting, and appurtenances in
which the Mortgagor now or hereafter has a possessory or title interest, and
all building material, supplies and equipment now or hereafter delivered to the
Premises and intended to be installed therein; all other fixtures of whatever
kind and nature at present contained in or hereafter affixed to any building
standing on the Premises in which the Mortgagor has a possessory or title
interest; and all renewals or replacements thereof or articles in substitution
thereof; and all proceeds and profits thereof, all of which shall be deemed to
be fixtures and an accession to the freehold and a part of the realty as
between the parties hereto, and all persons claiming by, through or under them,
and shall be deemed to be a portion of the security for the Indebtedness. If
the lien of the Mortgage on any fixtures be subject to a lease agreement,
conditional sales agreement or chattel mortgage covering such property, then,
in the event of any default hereunder, all the right, title and interest of the
Mortgagor in and to any and all deposits made thereon or therefor are hereby
assigned to the Mortgagee, together with the benefit of any payments now or
hereafter made thereon (the items set forth in this paragraph and in the next
eight immediately succeeding paragraphs being sometimes hereinafter
collectively referred to as the "Collateral," and the Collateral and the
Premises being hereinafter collectively referred to as the "Mortgaged
Property"). Notwithstanding anything to the contrary herein, Collateral does
not include any items which are not related to fixtures and specifically
excludes machinery and equipment;
TOGETHER with all interests, estates or other claims, both in law and in
equity, which the Mortgagor now has or may hereafter acquire in the Premises;
TOGETHER with all rights and easements, expressed or implied to use and
maintain for the benefit of the Mortgaged Property all drains, basins, sewers,
pipes, conduits, wires, and other facilities that furnish utility or other
services to the same;
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TOGETHER with all sales agreements, and other agreements affecting the
sale of the Mortgage Property now or hereinafter entered into and the deposits
under purchase or sales or issuing from the Mortgaged Property;
TOGETHER with the right, in the name and on behalf of Mortgagor, to appear
in and defend any action or proceeding brought with respect to the lien created
hereby on the Mortgaged Property and to commence any action or proceedings to
protect the interest of the Mortgagee therein;
TOGETHER with all leases, lettings, tenancies and licenses of the Premises
or any part thereof now or hereafter entered into and all right, title and
interest of the Mortgagor thereunder, including, without limitation, rights,
incomes, profits, revenues, royalties, bonuses, accounts, contract rights and
general intangibles under any and all of such leases, lettings, tenancies or
licenses, and the right to receive and collect the same payable thereunder;
TOGETHER with all unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor with respect to
the Mortgaged Property and all judgments, awards of damages and settlements
hereafter made as a result of or in lieu of any taking of the Premises or any
part thereof or any interest therein under the power of eminent domain, or for
any damage (whether caused by such taking or otherwise) to the Premises or the
improvements thereon or any part thereof or interest therein, including any
award for change of grade of streets;
TOGETHER with all proceeds of the conversion, voluntary or involuntary, of
the Mortgaged Property or any part thereof into cash or liquidated claims,
including, without limitation, proceeds of hazard and title insurance, subject
to the terms and conditions of this Mortgage; and
TOGETHER with all right, title and interest of the Mortgagor in and to all
options, extensions, improvements, betterments, renewals, substitutions and
replacements of, and all additions and appurtenances to, the Mortgaged
Property, hereafter acquired by, or released to, the Mortgagor, or constructed,
assembled or placed by the Mortgagor on the Mortgaged Property, and all
conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or conversion, as the
case may be, and in each such case, without any further mortgage, conveyance,
assignment or other act by the Mortgagor, shall become subject to the lien of
this Mortgage as fully and completely, and with the same effect, as though now
owned by the Mortgagor and specifically described herein;
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TO HAVE AND TO HOLD the Mortgaged Property, with all the privileges and
appurtenances to the same belonging, unto the Mortgagee and its successors and
assigns to their use and behoof forever.
AND the Mortgagor covenants and agrees with the Mortgagee as follows:
ARTICLE I
Representations and Covenants of the Mortgagor
Section 1.1. Payment of the Indebtedness. Except with respect to
Permitted Set-Offs as defined in Section 4.7 hereof, the Mortgagor will
punctually pay the Indebtedness in immediately available funds as provided
herein, in the Note or in any other loan documents (the "Loan Documents")
delivered to the Mortgagee in connection with the loan (the "Loan") evidenced
by the Note, all in the coin and currency of the United States of America which
is legal tender for the payment of public and private debts.
Section 1.2. Title to the Mortgaged Property. The Mortgagor warrants
that: (a) the Mortgagor has fee simple title to the premises described in
Schedule A and good indefeasible title to the balance of the Mortgaged
Property, free and clear of liens and encumbrances, except those exceptions to
title set forth in the policy of title insurance insuring the lien of this
Mortgage; (b) it has full power and lawful authority to encumber the Mortgaged
Property in the manner and form herein set forth; (c) it owns or will own all
the Collateral now or hereafter affixed to and/or used in connection with, the
Premises, including any substitutions or replacements thereof, free and clear
of liens and claims; (d) this Mortgage is and will remain a valid and
enforceable first lien on the Mortgaged Property; (e) it will preserve such
title and will forever WARRANT AND DEFEND the same to the Mortgagee and will
forever WARRANT AND DEFEND the validity and priority of the lien hereof against
the claims of all persons and parties whomsoever; and (f) that this covenant
shall not be extinguished by any foreclosure hereof but shall run with the
Premises.
Section 1.3. Maintenance of the Mortgaged Property. The Mortgagor shall
maintain the Mortgaged Property in good repair, shall comply with the
requirements of any governmental authority claiming jurisdiction over the
Mortgaged Property within 30 days after an order containing such requirement
has been issued by any such authority and promptly shall repair, restore,
replace or rebuild any part of the Mortgaged Property which may be damaged or
destroyed by any casualty whatsoever or may be affected by any
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condemnation proceeding, and Mortgagor shall complete and pay for, within
reasonable time, any structure that at any time is in the process of
construction on the Premises. If at any time the then existing use or
occupancy of any part of the Premises shall, pursuant to any zoning or other
law, ordinance or regulation, be permitted only so long as such use or
occupancy shall continue, the Mortgagor shall promptly advise the Mortgagee
thereof and shall not cause or permit such use or occupancy to be discontinued
without the prior written consent of the Mortgagee, which consent shall not be
unreasonably withheld. The Mortgagor shall not, without the prior written
consent of the Mortgagee, which consent shall not be unreasonably withheld,
threaten, commit, permit or suffer to occur any waste, material alteration,
demolition or removal of the Mortgaged Property or any part thereof; provided,
however, that fixtures included within the Collateral may be removed from the
Premises if the Mortgagor concurrently therewith replaces same with similar
items of equal or greater value, free of any lien, charge or claim of superior
title and by such removal and replacement Mortgagor shall be deemed to have
subjected such property to the lien of this Mortgage, and; provided further,
however, that fixtures included within the Collateral which are no longer
necessary for the operation of the Mortgaged Property need not be so replaced
by Mortgagor . Mortgagor shall immediately notify Mortgagee of any such
replacement and shall further execute such mortgage, security agreement or
other documents as Mortgagee may require with respect thereto.
Section 1.4. Insurance; Restoration. The Mortgagor shall keep the
buildings and improvements now or hereafter located within the Premises insured
against damage by fire and the other hazards covered by a standard fire, broad
form extended coverage and vandalism and malicious mischief insurance policy
for the full insurable value thereof (which, unless the Mortgagee shall
otherwise agree in writing, shall mean the full repair and replacement value
thereof without reduction for depreciation or co-insurance). In addition, the
Mortgagee may require the Mortgagor to carry such other insurance, in such
amounts as may from time to time be reasonably required by institutional
lenders, against insurable risks which at the time are commonly insured against
in the case of premises similarly situated, due regard being given to the site
and the type of building, construction, location, utilities and occupancy or
any replacements or substitutions therefor, including, without limitation, war
risk, nuclear explosion, demolition and contingent liability from the operation
of "nonconforming" improvements on the Premises and earthquake. The Mortgagor
shall additionally keep the buildings and improvements now or hereafter located
in or on the Premises insured against loss by flood if the Premises are located
in an area identified by the Secretary of Housing and Urban Development
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as an area having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968 (and any
successor act thereto) in an amount at least equal to the outstanding
Indebtedness or the maximum limit of coverage available with respect to the
buildings under said Act, whichever is less, which policy or policies shall
have endorsed thereon a long-form, non-contributory mortgagee clause in the
name of the Mortgagee, so and in such manner and form that the Mortgagee shall
at all times have and hold the said policy or policies as collateral and
further security for the payment of the Indebtedness until the full payment of
the Indebtedness. The proceeds of insurance paid on account of any damage or
destruction to the Premises or any part thereof shall be paid over to the
Mortgagee to be applied as hereinafter provided.
(a) The Mortgagee shall have the option in its sole discretion to apply
any insurance proceeds it may receive pursuant to this Section 1.4 to the
payment of the Indebtedness or to allow all or a portion of such proceeds to be
used for the restoration of the Premises. If any insurance proceeds are
used for the restoration of the Premises, then such use shall be governed as
hereinafter provided in subparagraphs (b), (c), (d), (e) and (f).
(b) In the event of damage or destruction to the Premises, the Mortgagor
shall give prompt written notice thereof to the Mortgagee and shall, to the
extent permitted by law, promptly commence and diligently continue to repair,
restore and rebuild the Premises so damaged or destroyed (the "work") to
restore the Premises in full compliance with all legal requirements and so that
the Premises shall be at least equal in value and general utility as they were
prior to the damage or destruction.
(c) The Mortgagor shall perform the work diligently and in good faith.
(d) All insurance proceeds recovered by the Mortgagee on account of
damage or destruction to the Premises which the Mortgagee elects to be used for
the restoration of the Premises, less the cost, if any, of such recovery and of
paying out such proceeds (including attorneys' fees), shall, upon the written
request of the Mortgagor, be applied by the Mortgagee to the payment of the
cost of the work referred to in subparagraph (b) above and shall be paid out
from time to time to the Mortgagor or, upon the happening of an Event of
Default, at the Mortgagee's option, directly to the contractor, subcontractors,
materialmen, laborers, engineers, architects and other persons rendering
services or materials for the work, as said work progresses except as otherwise
hereinafter provided, but subject
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to the following conditions, any of which the Mortgagee may waive:
(1) If the work to be done is structural, an architect chosen
by Mortgagor and reasonably satisfactory to Mortgagee (the
"Architect") shall be in charge of the work;
(2) Each request for payment shall be made on seven days
prior notice to the Mortgagee and shall be accompanied by a
certificate of the Architect if one is required under subparagraph
(d)(1) above, otherwise by the President or Chief Financial
Officer of the Mortgagor, stating that (i) all of the work
completed has been done in compliance with the plans
and specifications approved by the Architect, if applicable, and
in accordance with all provisions of law; (ii) the sum requested
is justly required to reimburse the Mortgagor for payments by the
Mortgagor to, or is justly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or
other persons rendering services or materials for the work
(giving a brief description of such services and materials), and
that when added to all sums, if any, previously paid out by the
Mortgagee does not exceed the value of the work done to the date
of such certificate; and (iii) the amount of such proceeds
remaining in the hands of the Mortgagee will be sufficient on
completion of the work to pay for the same in full (giving in
such reasonable detail as the Mortgagee may require an estimate
of the cost of such completion);
(3) Each request shall be accompanied by waivers of liens
satisfactory to the Mortgagee covering that part of the work
previously paid for, if any, and by a title report prepared by a
title company or attorney at law or by other evidence, all to be
reasonably satisfactory to the Mortgagee, that there has not been
filed with respect to the Premises any mechanic's lien or other
lien or instrument for the retention of title in respect of any
part of the work not discharged of record and that there exist no
encumbrances on or affecting the Premises other than encumbrances,
if any, which are set forth in the title policy issued to the
Mortgagee insuring the lien of this Mortgage;
(4) There shall be no Event of Default under this Mortgage;
and
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(5) The request for any payment after the work has been completed
shall be accompanied by a copy of any certificate or certificates
required by law, if any, to render occupancy of the Premises legal.
Upon completion of the work and payment in full therefor, or upon failure
on the part of the Mortgagor promptly to commence or diligently to continue the
work, or at any time upon request by the Mortgagor, the Mortgagee may apply the
amount of any such proceeds then or thereafter in the hands of the Mortgagee to
the payment of the Indebtedness.
(e) In the event the work to be done is not structural, then the net
insurance proceeds held by the Mortgagee for application thereto shall be paid
to the Mortgagor by the Mortgagee upon completion of the work, subject to the
provisions of the foregoing subparagraphs (b), (c) and (d), except those which
are applicable only if the work to be done is structural.
(f) If within 60 days after the occurrence of any damage or
destruction to the Premises requiring structural work, the Mortgagor shall
fail to commence promptly such repair, restoration and rebuilding, or if
thereafter the Mortgagor fails diligently to continue such repair, restoration
and rebuilding or is delinquent in the payment to contractors, mechanics,
materialmen or others of the costs incurred in connection with such work, or,
in the case of any damage or destruction not requiring structural work, as
determined by the Mortgagee, in order to restore the Premises, if the Mortgagor
shall fail to repair, restore and rebuild promptly the Premises so damaged or
destroyed then, in addition to all other rights herein set forth, and after
giving the Mortgagor 10 days' written notice of the nonfulfillment of one or
more of the foregoing conditions, the Mortgagee, or any lawfully appointed
receiver of the Premises may, at their respective options, unless the Mortgagor
has cured the default, perform or cause to be performed such repair,
restoration and rebuilding, and may take such other steps as they deem
advisable to perform such repair, restoration and rebuilding, and upon 24 hours
prior notice to the extent reasonably necessary for any of the foregoing
purposes, and the Mortgagor hereby waives, for the Mortgagor and all others
holding under the Mortgagor, any claim against the Mortgagee and such receiver
arising out of anything done by the Mortgagee or such receiver pursuant hereto,
other than willful misconduct or gross negligence and the Mortgagee may apply
insurance proceeds (without the need to fulfill any other requirements of this
Section 1.4) to reimburse the Mortgagee, or such receiver, for all amounts
expended or incurred by them, respectively, in connection with the performance
of such work, and any excess
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costs shall be paid by the Mortgagor to the Mortgagee upon demand.
(g) The Mortgagor shall (1) provide public liability insurance with
respect to the Premises providing for limits of
liability reasonably acceptable to the Mortgagee for both injury to or death of
a person and for property damage.
(h) All insurance policies required pursuant to this Section 1.4 other
than those policies required by subparagraph (g) above shall be endorsed to
name the Mortgagee as an insured thereunder, as its interest may appear, with
loss payable to the Mortgagee, without contribution, under a long-form, non-
contributory mortgagee clause. All insurance policies required pursuant to
subparagraph (g) above shall name Mortgagor as an additional insured. All such
insurance policies and endorsements shall be fully paid for and contain such
provisions and expiration dates and be in such form and issued by such
insurance companies licensed to do business in the State of Connecticut, with a
rating of "A-VI" or better as established by Best's Rating Guide or an
equivalent rating with such other publication of a similar nature as shall be
in current use, as shall be approved by the Mortgagee. Without limiting the
foregoing, each policy shall provide that such policy may not be cancelled or
materially changed except upon 30 days prior written notice of intention of
non-renewal, cancellation or material change to the Mortgagee and that no act
or thing done by the Mortgagor shall invalidate the policy as against the
Mortgagee. In the event the Mortgagor fails to maintain insurance in
compliance with this Section 1.4, the Mortgagee may, but shall not be obligated
to, obtain such insurance and pay the premium therefor and the Mortgagor shall,
on demand, reimburse the Mortgagee for all sums, advances and expenses incurred
in connection therewith. Not less than 30 days prior to the expiration date of
each policy furnished pursuant to this Section 1.4, the Mortgagor shall deliver
to the Mortgagee copies of all original renewal policies, marked "premium paid"
or accompanied by other evidence of payment satisfactory to the Mortgagee
certified by the insurance company or authorized agent as being true copies,
together with the endorsements thereto required hereunder.
(i) In the event of foreclosure of this Mortgage or other transfer of
title or assignment of the Mortgaged Property in extinguishment, in whole or in
part, of the Indebtedness, all right, title and interest of the Mortgagor in
and to all policies of insurance required by this Article or otherwise obtained
by the Mortgagor shall inure to the benefit of and pass to the Mortgagee or any
purchaser or transferee of the Mortgaged Property, as the case may be. The
Mortgagor in such event hereby irrevocably appoints the Mortgagee its attorney
in fact, coupled
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with an interest, to endorse any checks, drafts or other instruments
representing any proceeds of such insurance, whether payable by reason of loss
thereunder or otherwise.
Section 1.5. Maintenance of Existence. The Mortgagor shall do or cause
to be done all things necessary to (a) preserve and keep in full force and
effect its existence, franchises, rights and privileges under the laws of the
state of its formation and qualification; and (b) preserve and maintain in full
force and effect its franchises, rights, privileges and good standing under the
laws of each state in which the Mortgagor is transacting business or in which
property owned by the Mortgagor is located, except for any such failure which
would not have a material adverse effect on Mortgagor, and maintain any
required duly authorized agent for service of process in each such state.
Section 1.6. Taxes and Other Charges. Except as provided in Section 4.16
hereof, the Mortgagor shall pay and discharge, not later than the last day on
which the same may be paid without penalty or interest, all taxes of every kind
and nature, sewer rents, charges for water or for setting or repairing meters,
and all other utilities serving the Premises, and assessments, levies, permits,
inspection and license fees and all other charges imposed upon or assessed
against the Mortgaged Property or any part thereof or upon the revenues, rents,
issues, income and profits of the Premises or arising in respect of the
occupancy, use or possession thereof (collectively "Impositions") and the
Mortgagor shall exhibit to the Mortgagee within 10 days after the final date
that items specified in this Section 1.6 can be paid without interest or
penalty, validated receipts showing the payment of such taxes, sewer rents,
water, meter and other utility charges, assessments, levies, fees and other
charges which may be or become a lien on the Mortgaged Property. Should the
Mortgagor default in the payment of any of the foregoing, the Mortgagee may,
with written notice to Mortgagor, but shall not be obligated to, pay the same
or any part thereof and the Mortgagor shall, on demand, reimburse the Mortgagee
for all amounts so paid. The Mortgagor shall not enter into any written or
oral agreement which has the effect of deferring the payment of Impositions
which can be assessed, levied, confirmed, imposed or become a lien on the
Mortgaged Property without the consent of the Mortgagee; provided, however,
that if the Impositions can be paid in installments, Mortgagor shall be
entitled to pay the same in such installments.
Mortgagor hereby assigns to Mortgagee all rights of Mortgagor now or
hereafter arising in and to any refunds of Impositions, or other charges
relating to the Premises or the debt secured hereby. If upon receipt of any
such refund by Mortgagee, no Event of Default shall have occurred hereunder and
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then be continuing, then Mortgagee shall promptly pay over the same to
Mortgagor, if an Event of Default shall have occurred and then be continuing,
Mortgagee may apply said refund in reduction of any amount secured hereby.
Section 1.7. Condemnation Awards. In the event all or any part of the
Premises are taken in eminent domain or condemnation proceedings, or by
alteration in grade of any street or any reacquisitions by any redevelopment or
other governmental agency or for public use or in any other manner, all of the
expense, including appraisers' and attorneys' fees, reasonably incurred therein
by Mortgagee shall be paid by Mortgagor to Mortgagee upon demand, with interest
at the Default Rate as defined in the Note, from the date of such demand until
paid, and shall be secured by this Mortgage. The Mortgagor, immediately upon
obtaining knowledge of the institution of any proceedings for the condemnation
of the Premises or any portion thereof, will notify the Mortgagee of the
pendency of such proceedings. The Mortgagee may participate in such
proceedings, and the Mortgagor from time to time will deliver to the Mortgagee
all instruments reasonably requested by it to permit such participation. All
awards and compensation or other taking, or purchase in lieu thereof (but only
to the extent to pay the Indebtedness), of the Premises or any part thereof
which are awarded for the taking of the portion of the Mortgaged Property which
constitutes real property, are hereby assigned to and shall be paid to the
Mortgagee. The Mortgagor hereby authorizes the Mortgagee to collect and
receive such awards and compensation, to give proper receipts and acquittances
therefor and, in the Mortgagee's sole discretion, to apply the same toward the
payment of the Indebtedness, notwithstanding the fact that the Indebtedness may
not then be due and payable, or to the restoration of the Premises (or to the
applicable portion thereof). The Mortgagor, upon request by the Mortgagee,
shall make, execute and deliver any and all instruments requested for the
purposes of confirming the assignment of the aforesaid awards and compensation
to the Mortgagee, free and clear of any liens, charges or encumbrances of any
kind or nature whatsoever. In the event Mortgagee shall be prohibited from
intervening and participating in any such condemnation proceedings by the court
having jurisdiction over such proceedings, Mortgagor shall consult with
Mortgagee in connection with such proceedings, and Mortgagor shall not enter
into any agreement with regard to the Mortgaged Property or any award or
payment on account thereof unless Mortgagee shall have consented thereto in
writing, which consent shall not be unreasonably withheld.
Notwithstanding any taking by condemnation, there shall be no abatement or
reduction in the amounts of payments owed by Mortgagor hereunder or under the
Note in the event of any
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condemnation affecting the Mortgaged Property, and Mortgagor shall continue to
make all payments or principal and interest provided for herein and therein.
Any awards therefor actually received and retained by Mortgagee shall be applied
by Mortgagee against the principal due at maturity under the Note. Any reduction
in the principal resulting from the application by Mortgagee of such awards
shall be net of all collection costs, disbursements, expenses, and reasonable
counsel fees and shall be deemed to take effect only on the date of actual
receipt of such award by Mortgagee. In the event of any loss or damage to the
Mortgaged Property occasioned by condemnation, Mortgagor shall promptly commence
and diligently pursue to completion the repair, restoration, and rebuilding of
the Mortgaged Property to as nearly as possible its value, condition, and
character immediately prior to such loss or damage.
Section 1.8. Mortgage Authorized. The Mortgagor hereby warrants and
represents that the execution and delivery of this Mortgage, the Note and the
other Loan Documents has been duly authorized and that there is no provision in
the Mortgagor's charter documents or any other agreement to which Mortgagor is
a party or by which any of its property is bound, requiring further consent for
such action by any other entity or person; the Mortgagor is duly organized,
validly existing and in good standing under the laws of the State of Wisconsin
and duly qualified in each jurisdiction in which it is required to be so
qualified except in those jurisdictions where the failure to be so qualified
would not have a material adverse effect on Mortgagor and has (a) all necessary
and material licenses, authorizations, registrations and approvals and (b) full
power and authority to own its properties and carry on its business as
presently conducted; the Mortgagor has the power, authority and legal right to
carry on the business now conducted by them and to engage in the transactions
contemplated by this Mortgage, the Note and the other Loan Documents; and the
execution and delivery by and performance of the Mortgagor's obligations under
this Mortgage, the Note and the other Loan Documents has been duly authorized
by all necessary corporate action by the Mortgagor and will not result in the
Mortgagor being in default under any provision of its charter documents or any
other agreement to which Mortgagor is a party or by which any of its property
is bound.
Section 1.9. Costs of Defending and Upholding the Lien. If any action or
proceeding is commenced in which the Mortgagee is made a party, or in which, in
the reasonable opinion of the Mortgagee, it becomes necessary to defend or
uphold the lien of this Mortgage, the Mortgagor shall, on demand, reimburse the
Mortgagee for all expenses (including, without limitation,
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reasonable attorneys' fees and appellate attorneys' fees) incurred by the
Mortgagee in any such action or proceeding.
Section 1.10. Additional Advances and Disbursements. Except as provided
in Section 4.16 hereof, the Mortgagor shall pay when due all payments and
charges on all liens, encumbrances, ground and other leases, and security
interests which may be or become superior, equal or inferior to the lien of
this Mortgage, and upon an Event of Default with respect to this obligation,
the Mortgagee shall have the right, but shall not be obligated, to pay, with
notice to the Mortgagor, such payments and charges, and the Mortgagor shall, on
demand, reimburse the Mortgagee for amounts so paid. In addition, upon an
Event of Default with respect to this obligation, the Mortgagee shall have the
right, but shall not be obligated, to cure such default in the name and on
behalf of the Mortgagor. All sums advanced and reasonable expenses incurred at
any time by the Mortgagee pursuant to this Section 1.10 or as otherwise
provided under the terms and provisions of this Mortgage or under applicable
law shall bear interest from the date that such sum is advanced or expense
incurred, to and including the date of reimbursement, computed at the Default
Rate, as defined in the Note.
Section 1.11. Cost of Enforcement. The Mortgagor agrees to bear and pay
all expenses (including reasonable attorneys' fees and appellate attorneys'
fees) of or incidental to the enforcement of any provision hereof, or the
enforcement, compromise or settlement of this Mortgage or the Indebtedness, and
for the curing thereof, or for defending or asserting the rights and claims of
the Mortgagee in respect thereof, by litigation or otherwise. All rights and
remedies of the Mortgagee shall be cumulative and may be exercised
independently, singly or concurrently. Notwithstanding anything herein
contained to the contrary, to the extent permitted by law, the Mortgagor: (a)
hereby waives trial by jury; (b) will not (1) at any time insist upon or plead
or in any manner whatever claim or take any benefit or advantage of any stay or
extension or moratorium law, any exemption from execution or sale of the
Mortgaged Property, or any part thereof, wherever enacted, now or at any time
hereafter in force, which may affect the covenants and terms of performance of
this Mortgage, (2) claim, take or insist upon any benefit or advantage of any
law now or hereafter in force providing for the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior to any sale or sales thereof
which may be made pursuant to any provision herein, or pursuant to the decree,
judgment or order of any court of competent jurisdiction, nor (3) after any
such sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted to redeem the property so sold or any part thereof; (c)
hereby expressly waives all benefit or advantage of
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any such law or laws; (d) covenants not to hinder, delay or impede the
execution of any power herein granted or delegated to the Mortgagee, but to
suffer and permit the execution of every power as though no such law or laws
had been made or enacted; and (e) waives all right to have the Mortgaged
Property marshalled upon any foreclosure hereof.
Section 1.12. Mortgage Taxes. The Mortgagor shall pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon the Mortgagee by reason of its ownership of the Note or this Mortgage or
any mortgage supplemental hereto, any security instrument with respect to any
fixtures or personal property owned by the Mortgagor at the Premises and any
instrument of further assurance, other than income, franchise and doing
business taxes, and shall pay all stamp taxes and other taxes required to be
paid on the Note or necessary for filing or recording any Loan Documents. In
the event the Mortgagor fails to make such payment within five days after
written notice thereof from the Mortgagee, then the Mortgagee shall have the
right, but shall not be obligated, to pay the amount due, and the Mortgagor
shall, on demand, reimburse the Mortgagee for said amount.
Section 1.13. Intentionally Omitted.
Section 1.14. Intentionally Omitted
Section 1.15. Transfers, Encumbrances and Liens. Mortgagor recognizes
that any secondary or junior financing placed upon the Mortgaged Property could
(a) divert funds which would otherwise be used to pay the Indebtedness
evidenced by the Note and secured by the Loan Documents; (b) result in
acceleration and foreclosure by any such junior encumbrancer, which could force
Mortgagee to take measures and incur expenses to protect its security; and (c)
impair Mortgagee's right to accept a deed in lieu of foreclosure from
Mortgagor, as a foreclosure by Mortgagee would be necessary to clear the title
to the Mortgaged Property. Mortgagor covenants and agrees that so long as the
Indebtedness secured by this Mortgage is outstanding, there will be no
secondary financing, mortgage, or encumbrance with respect to the Mortgaged
Property; and Mortgagor will not suffer to exist any encumbrance, including
liens of mechanics or materialmen, other than those listed in the policy of
title insurance dated the date hereof insuring the lien of this Mortgage,
whether such mortgage or encumbrance is prior or subordinate to this Mortgage
and the lien hereof. All agreements and obligations to pay commissions or fees
in connection with the leasing of any portion of the Mortgaged Property shall
be subject and subordinate to this Mortgage and shall not be enforceable
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against Mortgagee or any purchaser at a foreclosure sale hereunder, or their
respective successors.
Any encumbrance, pledge, transfer or other alienation upon or of the
Mortgaged Property or any change in the present ownership of all or any part of
the Mortgaged Property shall, at the option of the Mortgagee, constitute an
Event of Default hereunder.
Mortgagor agrees that in the event the ownership of the Mortgaged Property
or any part thereof becomes vested in a person other than the Mortgagor,
Mortgagee may, without notice to Mortgagor, deal in any way with such successor
or successors in interest (whether immediate or remote) with reference to this
Mortgage and the Note and other sums hereby secured without in any way
vitiating or discharging Mortgagor's liability hereunder or upon the Note and
other sums hereby secured. No sale of the Mortgaged Property and no
forbearance to any person with respect to this Mortgage and no extension to any
person of the time for payment of the Note and other sums hereby secured given
by Mortgagee shall operate to release, discharge, modify, change, or affect (i)
the original liability of Mortgagor either in whole or in part; or (ii) the
covenants of Mortgagor under this Section 1.15.
Section 1.16. Intentionally Omitted
Section 1.17. Assignment of Leases. As further security for the payment
of the sums secured hereby, Mortgagor hereby transfers, assigns and sets over
to Mortgagee all leases heretofore and hereafter entered into by Mortgagor
relating to portions or all of the Mortgaged Property, together with all
modifications, supplements, extensions and renewals thereof now existing or
hereafter made, and also together with the rights to sue for, collect and
receive all rents, additional rents, and other sums or payments due in all of
said leases provided to be paid to Mortgagor thereunder, and also together with
the rights of Mortgagor to receive, hold and apply all bonds, deposits, and
security in all of said leases provided to be furnished to the Mortgagor
thereunder, and also together with the rights of Mortgagor to enforce any and
all of the agreements, terms, covenants and conditions provided in all of said
leases and to give notices thereunder; provided, however, that as long as
Mortgagor shall not have defaulted in the performance of any obligation,
covenant or agreement under any collateral instrument further securing payment
of the Indebtedness and, in addition, no event shall have occurred which would
give Mortgagee the right to declare the Indebtedness due and payable, then
Mortgagor shall have the license to collect, but not more than one month in
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advance, all rents, additional and percentage rents and other sums payable
under said leases.
Mortgagor shall not otherwise assign or pledge any lease of the Mortgaged
Property, or any part thereof, or the rights to sue for, collect and receive
any rents or other sums payable thereunder and shall enforce all of the
agreements, terms, covenants or conditions to be performed by lessees
thereunder, and shall perform every obligation of Mortgagor thereunder.
Nothing contained in this Mortgage, and/or no exercise by the Mortgagee of
its rights hereunder, shall be construed to obligate Mortgagee to perform any
of the covenants of Mortgagor under any of the leases hereinabove assigned or
shall be deemed to constitute Mortgagee a mortgagee in possession in the
absence of any actual entry into and taking possession of the Mortgaged
Property by Mortgagee.
Mortgagor shall perform, observe, and comply with all of the terms,
covenants, and conditions of the Assignment of Leases and Rentals of even date
herewith to be recorded in the Farmington Land Records and of any other of the
Loan Documents as if such terms, covenants, and conditions were set forth
herein.
Mortgagor shall furnish Mortgagee at any time, upon reasonable written
demand, with a lease ratification and estoppel agreement as to any lease
affecting the Premises, in form and substance satisfactory to Mortgagee, which
shall be executed by Mortgagor and by the lessee (provided, however, that
Mortgagor shall only be obligated to use its reasonable efforts to obtain
execution by each such lessee and shall not be in default hereunder if the
lessee under any such lease fails to sign such an agreement or does not return
the same in a timely manner so long as all future leases contain a requirement
that the lessee provide such an agreement) stating the terms of the lease, the
tenancy, and the status of rent payments, and, if such be the case, that there
exist no defaults thereunder and that all work required to be performed by the
lessor under the lease has been completed; agreeing that no future
modifications or amendments shall be effected without the written consent of
Mortgagee, and providing that the lessee shall attorn to Mortgagee in the event
Mortgagee shall become the owner of the Premises.
The foregoing rights given the Mortgagee are intended to be complementary
to any rights given the Mortgagee under any separate assignment of leases from
the Mortgagor to the Mortgagee and shall be construed accordingly.
Section 1.18. Indemnity. Mortgagor will indemnify and hold the Mortgagee
harmless against any loss, liability, damage,
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cost or expense, including, without limitation, any judgment, attorney's
fee, costs of appeal bonds and printing costs, arising out of or relating to or
incurred in connection with any suit, action or proceeding that might in any
way, in the reasonable opinion of the Mortgagee, affect the priority or
effectiveness of the lien of this Mortgage.
Section 1.19. Environmental Protection.
(a) Definitions. The term "Polluting Substance" shall mean any
hazardous, toxic, or polluting waste or substance including (without limiting
the generality of the foregoing) any of the following: "hazardous waste" (as
defined in the regulations adopted under RCRA, defined below); oil or
petroleum products; "chemical liquids or solid, liquid, or gaseous products"
(as those terms are used in the Superlien Statute, defined below); asbestos;
polychlorinated biphenyls; formaldehyde compounds, explosives, and radioactive
materials. The term "Environmental Law" shall mean any statutory, regulatory,
or decisional law pertaining to protection of the environment or to any
Polluting Substance, including (without limiting the generality of the
foregoing) the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 ("CERCLA"); the Resource Conservation and Recovery Act of
1976 ("RCRA"); and Title 22a "Environmental Protection" of the Connecticut
General Statutes; including particularly Sections 22a-448 through 22a-457 of
the Connecticut General Statutes (the "Superlien Statute"); as any of them may
be amended from time to time, with the regulations promulgated thereunder. The
term "release" as used herein shall include both the meaning specified in
CERCLA and a "spill" as defined in Section 22a-452c of the Connecticut General
Statutes. In the event any Environmental Law is amended to broaden the meaning
of any term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment.
(b) Covenants and Agreements. Mortgagor covenants and agrees that,
except where a breach of the following individually or in the aggregate (I)
would not be reasonably likely to have a material adverse effect on Mortgagor's
ability to perform its obligations pursuant to this Mortgage or (II) would not
be reasonably likely to materially impair the value of the Mortgaged Property:
(i) Mortgagor will not release any Polluting Substance on the Mortgaged
Property or on any properties adjacent to the Mortgaged Property in material
contravention of any applicable Environmental Law; (ii) Mortgagor will not
become involved in operations at the Mortgaged Property involving unlawful use
of Polluting Substances or any other activity that would violate any applicable
Environmental Law or that would be reasonably likely to lead to the imposition
on
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Mortgagor of liability under any Environmental Law; (iii) Mortgagor, at its
sole cost and expense, will comply in all material respects with the
requirements of all applicable Environmental Laws; (iv) Mortgagor will notify
Mortgagee promptly in the event of the material presence (to the extent not
known by Mortgagee at the time of the execution of the Purchase Agreements) or
release of any Polluting Substance at or affecting the Mortgaged Property in
material contravention of any applicable Environmental Law and give to
Mortgagee a copy of any notice of violations of any Environmental Law received
by Mortgagor; (v) in the event any Polluting Substance is found at the
Mortgaged Property in material contravention of any applicable Environmental
Law, Mortgagor will ensure compliance with all applicable Environmental Laws
with respect to the removal or remediation of such Polluting Substance; (vi)
Mortgagor will keep the Mortgaged Property free and clear of any lien imposed
pursuant to any applicable Environmental Law; and (vii) Mortgagor will include
in all future leases of any portion of the Mortgaged Property provisions
requiring compliance with all Environmental Laws and reporting of information
regarding such compliance to Mortgagor and Mortgagee.
(c) Site Assessments. Mortgagor agrees to permit Mortgagee, at its
reasonable election after written notice to Mortgagor, at any time and from
time to time, after the occurrence and during the continuance of an Event of
Default or if Mortgagee has good reason to suspect the presence of a Polluting
Substance on the Mortgaged Property in material contravention of any applicable
Environmental Law, to cause one or more environmental site assessments of the
Mortgaged Property to be undertaken. An environmental site assessment may
include, to the extent reasonably necessary, a detailed visual inspection of
the Mortgaged Property, including, without limitation, all storage areas,
storage tanks, drains, dry wells, and leaching areas, as well as the taking of
samples of soil, surface water, and ground water and such other investigation
or analysis as is reasonably necessary or appropriate to address such Event of
Default or the suspected presence of a Polluting Substance in material
contravention of any applicable Environmental Law.
(d) Mortgagee's Right to Cure. In the event Mortgagor fails to comply
with the requirements of any applicable Environmental Law in material
contravention of any applicable Environmental Law, unless (I) such failure
would not be reasonably likely to have a material adverse effect on Mortgagor's
ability to perform its obligations pursuant to this Mortgage and (II) such
failure would not be reasonably likely to materially impair the value of the
Mortgaged Property, Mortgagee may at its election, but without the obligation
so to do: (i) give such notices, cause such work to be performed at the
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Mortgaged Property (or other land included in the same property description
with the Mortgaged Property within three years prior to such failure of
compliance), and take any and all such other reasonable actions necessary in
order to cure such failure of material compliance; or (ii) by the payment of
any assessment, claim, or charge imposed by any governmental authority, be
thereby subrogated to the rights of such governmental authority, but no such
payment shall be deemed to relieve Mortgagor from any default hereunder or
impair any right or remedy consequent thereon. Any amounts paid by Mortgagee
as a result of Mortgagor's failure to comply herewith, together with interest
thereon at the Default Rate set forth in the Note, shall be immediately due and
payable by Mortgagor to Mortgagee and until paid shall be added to and become a
part of the Entire Indebtedness, having the benefit of the lien hereby created
and of its priority, and the same may be collected as a part of the Entire
Indebtedness in any suit hereon or upon the Note, to the extent permitted by
law, but no such advance shall be deemed to relieve Mortgagor from any default
hereunder or impair any right or remedy consequent thereon. Mortgagor hereby
grants to Mortgagee a license to enter the Mortgaged Property and remove any
Polluting Substance that is in material contravention of any applicable
Environmental Law from the Mortgaged Property.
(e) Indemnity. Mortgagor further covenants and agrees unconditionally
and absolutely to defend, indemnify, and forever hold Mortgagee harmless from
and against all fines, charges, fees, response costs (including cleanup,
removal or mitigation), losses, liabilities, damages, costs and expenses,
causes of actions, suits, claims, demands, and judgments of any nature suffered
or incurred by Mortgagee and arising out of or in connection with any of the
following:
(i) the presence, or any release, of any Polluting Substance at or
affecting the Mortgaged Property;
(ii) the application, or any claim of application, of any Environmental
Law to the Mortgaged Property or the operation thereof, including
any requirement for clean-up of any Polluting Substance or the
assertion of any lien because of any release;
(iii) any failure by Mortgagor to comply with the terms of any order of
the Connecticut Department of Environmental Protection or any
other federal, state, or municipal governmental authority under any
Environmental Law; and
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(iv) any losses as a result of a lien in favor of the Commissioner of
Environmental Protection or any other person having priority over
this Mortgage.
Such expenses shall include (without limiting the generality of the foregoing)
reasonable engineers' and reasonable attorneys' fees and the costs of any
environmental audits or other tests required by Mortgagee in its discretion to
ascertain whether any Polluting Substance in material contravention of any
applicable Environmental Law is present at or affects the Mortgaged Property.
Such losses shall include the assertion of any lien relating to any release at
or affecting the Mortgaged Property or any other land included in the same
property description with the Mortgaged Property at any time within three (3)
years prior to such release.
(f) Survival. For a period of five years beginning on the date of
Closing under the Asset Agreement, as defined in Section 4.7 hereof, this
indemnity shall extend to Mortgagee as holder of the Mortgage, mortgagee in
possession, or as successor in interest to Mortgagor as owner of the Mortgaged
Property by virtue of foreclosure or acceptance of a deed in lieu of
foreclosure and shall survive the repayment of the Indebtedness and the
cancellation, release, or discharge of this Mortgage.
(g) Relation to Purchase Agreements. (i) Notwithstanding any other
provision of this Section 1.19 to the contrary, no provision in this Section
1.19 shall in any way change the respective obligations of Mortgagor and
Mortgagee pursuant to the Purchase Agreements, as defined in Section 4.7
hereof.
(ii) To the degree that any provision of either of the Purchase
Agreements conflicts with any provision of this Section 1.19, the provision of
the Purchase Agreements, as defined in Section 4.7 hereof, will control.
(iii) No provision of this Section 1.19 or any other portion of this
Mortgage shall be construed as requiring Mortgagor to indemnify Mortgagee from
or against any fines, charges, fees, response costs (including cleanup, removal
or mitigation), losses, liabilities, damages, costs and expenses, causes of
action, suits, claims, demands or judgments for which Mortgagor is indemnified
pursuant to either of the Purchase Agreements by Sellers and the Shareholders,
as those terms are used and defined in either of the Purchase Agreements as
defined in Section 4.7 hereof.
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Section 1.20. Validity of Loan Documents. This Mortgage, the Note and
the other Loan Documents are in all respects legal, valid and binding in
accordance with their respective terms and grant to the Mortgagee a direct,
valid and enforceable lien on and security title in and to the Mortgaged
Property. The Mortgage, the Note and the other Loan Documents have been
validly executed by the Mortgagor and are now binding on the Mortgagor and in
full force and effect and the Mortgagor and the other parties to the foregoing
instruments have faithfully performed all their obligations thereunder as of
the date hereof, and none of said other parties has asserted any claim of
default on the part of the Mortgagor.
Section 1.21. Intentionally Omitted
Section 1.22. Intentionally Omitted.
Section 1.23. Compliance with Requirements. Except with respect to
Environmental Laws (Mortgagor's compliance with which shall be governed under
Section 1.19 hereof), the Mortgagor shall comply promptly with all material
regulations, rules, ordinances, statutes, orders, decrees or other requirements
of all governmental authorities applicable to the Mortgaged Property or any
part thereof and shall furnish the Mortgagee, on demand, independent evidence
of such compliance.
Section 1.24. Compliance With Restrictive Covenants and Easements. The
Mortgagor shall comply with all restrictive covenants affecting the Premises
and shall fully perform each and every obligation of the Mortgagor under any
reciprocal agreement, easement, parking agreement or any other agreement
requiring the performance of the Mortgagor and affecting the Mortgaged
Property, including all agreements affecting the operation, maintenance or
repair of the Mortgaged Property or any easement appurtenant to or right-of-way
adjacent to any portion thereof.
Section 1.25. Priority of the Mortgage. The Mortgagor covenants and
agrees at all times to keep the Premises and all materials, equipment
and fixtures incorporated therein or to be used in connection therewith free
from any attachment or lis pendens, from any mechanics' or other liens or
notices arising from the furnishing of materials or labor and from all other
liens and encumbrances of any kind, including those arising from additional or
secondary financing (except real estate taxes not yet due and payable and
encumbrances approved by the Mortgagee), whether any such liens and
encumbrances be prior to or subject and subordinate to the Mortgage, and that
at no time will any notice of any contract or mechanics' liens be recorded.
The Mortgagor shall cause the prompt (but in no event later than 30 days after
imposition), full and unconditional release of all
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liens and encumbrances or pay, from time to time when the same shall
become due, all claims and demands of mechanics, materialmen, laborers and
others which, if unpaid, might result in, or permit the creation of, a lien on
the Mortgaged Property or any part thereof, or on the revenues, rents, issues,
income or profits arising therefrom, and, in general, the Mortgagor shall do,
or cause to be done, at the cost of the Mortgagor and without expense to the
Mortgagee, anything necessary to fully preserve the lien of the Mortgage. In
the event the Mortgagor fails to make payment of such claims and demands and a
lien is attached to the Mortgaged Property, or any part thereof, or on the
revenues, rents, issues, income or profits arising therefrom, the Mortgagee
may, but shall not be obligated to, make payment thereof, and the Mortgagor
shall, on demand, reimburse the Mortgagee for all sums so expended. The
Mortgagor shall pay or cause to be paid prior to the time interest or penalties
would accrue thereon all taxes, charges, betterment or other assessments
relating to the Premises or the materials stored thereon and, upon request of
the Mortgagee, shall provide the Mortgagee with evidence of such payment
satisfactory to the Mortgagee. Prior to the execution thereof by the
Mortgagor, all easements affecting the Premises shall be submitted to the
Mortgagee for its approval, which approval with respect to utility easements
shall not be unreasonably withheld, accompanied by a plan in recordable form
showing the location thereof. The Mortgagee shall approve or disapprove such
easements within 30 days of receipt of such easements and plans and if the
Mortgagee fails to act within such period, then the Mortgagee shall be deemed
to have approved such easements. With respect to utility easements which are
approved by the Mortgagee, the Mortgagee shall agree to subordinate this
Mortgage to such easements on terms and conditions reasonably satisfactory to
the Mortgagee, provided the easements: (a) are to be fixed and located, (b)
will not encroach upon or under or over Improvements and other easements and
(c) do not materially affect the adequacy of the Mortgagee's security for the
payment of the Indebtedness.
Section 1.26. Independence of Premises. Mortgagor shall not by act or
omission permit any building or other improvements on premises not subject to
the lien of this Mortgage to rely on the Premises or any part thereof or any
interest therein to fulfill any municipal or governmental requirement for the
existence of such premises or such building or improvement; and no building or
other improvement on the Premises shall rely on any premises not subject to the
lien of this Mortgage or any interest therein to fulfill any governmental or
municipal requirement. Mortgagor shall not by act or omission impair the
integrity of the Premises as single subdivided zoning lots separate and apart
from all other premises.
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Section 1.27. General Representations, Covenants and Warranties.
Mortgagor represents and covenants that (a) Mortgagor is now able to pay its
debts as they mature, the fair market value of its assets exceed its
liabilities, and no bankruptcy or insolvency case or proceeding is pending or
contemplated by or against Mortgagor and (b) Mortgagor is not in default under
the terms of any material instrument evidencing or securing any indebtedness of
Mortgagor and there has occurred no event which would, if uncured or
uncorrected, constitute a default under any such material instrument with the
giving of notice, passage of time, or both.
ARTICLE II
Security Agreement
Section 2.1. Creation of Security Interest. The Mortgagor hereby grants
to the Mortgagee a security interest in the Collateral, including without
limitation any and all property of similar type or kind hereafter located on or
at the Premises in which the Mortgagor has a possessory or title interest, and
any proceeds thereof for the purpose of securing all obligations of the
Mortgagor set forth in this Mortgage.
Section 2.2. Warranties, Representations and Covenants of the Mortgagor.
The Mortgagor hereby warrants, represents and covenants as follows:
(a) Except for the security interest granted hereby, Mortgagor is, and as
to portions of the Collateral to be acquired after the date hereof will be, the
sole owner of the Collateral, free from any lien, security interest,
encumbrance or adverse claim thereon of any kind whatsoever. The Mortgagor
shall notify the Mortgagee of, and will defend the Collateral against, all
claims and demands of all persons at any time claiming the same or any interest
therein.
(b) Except as otherwise provided herein, the Mortgagor shall not further
encumber or grant a security interest in any of the Collateral or lease or
otherwise treat the same in any manner whereby the ownership or any beneficial
interest in any of the Collateral shall be held by any person or entity other
than Mortgagor without the prior written consent of the Mortgagee.
(c) The Collateral is not used or bought for personal, family or
household purposes.
(d) The Collateral shall be kept on or at the Premises, and the Mortgagor
shall not remove the Collateral from
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the Premises without the prior written consent of the Mortgagee, except such
portions or items of the Collateral as are in the process of being cleaned and
repaired or are consumed or worn out in ordinary usage, all of which shall be
promptly replaced by the Mortgagor.
(e) The Mortgagor maintains a place of business in the State of
Connecticut, and the Mortgagor shall immediately notify Mortgagee in writing of
any change in its place of business as set forth in the beginning of this
Mortgage.
(f) This Mortgage constitutes a Security Agreement as that term is
used in the Uniform Commercial Code of the State of Connecticut.
Section 2.3. Mortgage as Financing Statement. Carbon, photographic, or
other reproduction of this Mortgage or any financing statement relating to this
Mortgage shall be sufficient as a financing statement. This Mortgage is
effective and shall be effective as a financing statement filed as a fixture
filing with respect to all goods which are or are to become fixtures included
within the Premises and is to be filed for record in the real estate records of
the Office of the Town Clerk of the town where the Premises are
situated. The mailing address of Mortgagor and the address of Mortgagee from
which information concerning the security interest may be obtained are set
forth in the section hereof entitled "Notices".
Section 2.4. Uniform Commercial Code: Financing Statements. In addition
to any other rights and remedies availed to Mortgagee hereunder, Mortgagee
shall have all the rights of a secured party under the Connecticut Uniform
Commercial Code. Furthermore, to the extent permitted by law, Mortgagor hereby
authorizes Mortgagee to sign and file financing statements or continuation
statements at any time in respect of any of the Collateral without such
statements being executed by, or on behalf of, Mortgagor, but Mortgagor will,
however, at any time on request of Mortgagee, execute, or cause to be executed,
financing statements in respect of any Collateral. Mortgagor agrees to pay all
filing fees, including fees for filing continuation statements in connection
with such financing statements and to reimburse Mortgagee for all costs and
expenses of any kind incurred in connection therewith.
ARTICLE III
Default and Remedies
Section 3.1. Events of Default. The following shall constitute Events of
Default under this Mortgage:
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(a) failure to pay within 5 days of the date when due, any of the
following: (i) any installment of the interest which shall become due and
payable under the Note; or (ii) any other sums to be paid by Mortgagor under
the Note or under any of the Loan Documents; or
(b) there shall be a failure to pay when due any Imposition or insurance
premium when the same becomes due hereunder; or
(c) any insurance coverage required to be maintained by Mortgagor pursuant
to Section 1.4 of this Mortgage is cancelled, lapses, or is terminated and is
not immediately replaced with coverage complying with all the requirements of
this Mortgage so as to prevent any gap in coverage, or there is any other
default related to insurance; or
(d) default in the due observance or performance of any of the terms,
covenants or conditions contained in the Note (except for failure to make any
payment, in which case Section 3.1(a) shall apply), in this Mortgage, in the
Loan Documents or in any other agreement that the Mortgagor has with the
Mortgagee for more than 15 days after receipt from the Mortgagee of written
notice of such default, provided, however, that if (i) the curing of such
default cannot be accomplished with due diligence within said 15 day period,
(ii) Mortgagor commences to cure such default promptly after receipt of notice
thereof from Mortgagee and thereafter diligently and continuously prosecutes
the cure of such default, and (iii) the extension of the period for effecting a
cure herein provided for will not result in any material impairment of the
Mortgaged Property, or any portion thereof, or Mortgagee's lien thereon, then
such 15 day period shall be extended for such additional period of time as
shall be reasonably deemed necessary for Mortgagor so acting to cure such
default but in no event beyond thirty (30) additional days; provided further,
however, that such notice and grace period set forth in this subsection (d)
shall not apply to any other Event of Default expressly set forth in this
Section 3.1 or to any Event of Default defined as such in the Note, in this
Mortgage or in any of the other collateral documents relating to the loan, or
to any other covenant or condition with respect to which a grace period is
expressly provided elsewhere; or
(e) intentionally omitted; or
(f) the further assignment or encumbrance by the Mortgagor of the leases
or rents of the Premises or any part thereof without prior written consent of
the Mortgagee; or
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(g) unless the same are being contested as permitted pursuant to Section
4.16 hereof, the failure of the Mortgagor to pay or cause to be paid, before
any fine, penalty, interest or cost may be added thereto, all franchise taxes
and charges, and other governmental charges, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, of any kind and nature
whatsoever, including, but not limited to, assessments for public improvements
or benefits which are assessed, levied, confirmed, imposed or become a lien
upon the Mortgaged Property or become payable during the term of the Note or
this Mortgage; or
(h) except as permitted in Section 1.15 of this Mortgage, the conveyance,
assignment, sale or attempted sale, or other disposition of the Mortgaged
Property or the further mortgage, pledge, financing, refinancing or other
encumbrance by the Mortgagor of the Mortgaged Property or any part thereof; or
(i) if the Mortgagor consents to the appointment of a receiver, liquidator
or trustee of the Mortgagor or all or a material portion of its properties; or
(j) if a receiver, liquidator or trustee of the Mortgagor or all or a
material portion of its properties shall be appointed without the consent of
the Mortgagor and the same is not removed within 60 days; or
(k) if a petition in bankruptcy, an insolvency proceeding or a petition
for reorganization shall have been filed against the Mortgagor and same is not
withdrawn, dismissed, cancelled or terminated within 60 days; or
(l) if the Mortgagor is adjudicated bankrupt or insolvent or a petition
for reorganization is granted (without regard for any grace period provided for
herein); or
(m) if there is an attachment or sequestration of any of the material
property of the Mortgagor and same is not promptly discharged or bonded; or
(n) if the Mortgagor files or consents to the filing of any petition in
bankruptcy or commences or consents to the commencement of any proceeding under
the Federal Bankruptcy Act or any other law, now or hereafter in effect,
relating to the reorganization of the Mortgagor or the arrangement or
readjustment of the debts of the Mortgagor; or
(o) if the Mortgagor shall make an assignment for the benefit of its
creditors or shall admit in writing the inability
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to pay its debts generally as they become due or shall consent to the
appointment of a receiver, trustee or liquidator of all or material part of its
property; or
(p) if the Mortgagor shall cause or institute any proceeding for the
dissolution or termination of the Mortgagor; or
(q) if the Mortgagor ceases to do business or terminates its business
as presently conducted for any reason whatsoever; or
(r) any lien or claim of lien for labor, materials or, unless the
same are being contested as permitted pursuant to Section 4.16 hereof,
taxes (except for ad valorem taxes not yet due and payable) or otherwise shall
be filed against any of the Mortgaged Property and remain unsatisfied or
unbounded for a period of 30 days after the Mortgagor receives notice of filing
thereof.
(s) except as permitted or contemplated by the Purchase Agreements, as
defined in Section 4.16 hereof, Mortgagor is deprived of title, possession, or
control of the Mortgaged Property, or any part thereof, by process of operation
of law or order of any court; or
(t) any non-payment of any material indebtedness of Mortgagor (other
than the Note or other material indebtedness described herein) occurs if the
effect of such non-payment is to accelerate the maturity of such material
indebtedness or any other material indebtedness, the validity of which is not
being contested in good faith by appropriate proceedings.
Failure to exercise any option to accelerate upon the occurrence of an
Event of Default or other circumstance permitting the exercise of such option
shall not constitute a waiver of the default or of the right to exercise such
option at a later time so long as such default or other circumstance continues
to exist, and shall not constitute a waiver of the right to exercise such
option in the event of any other default or circumstance specified herein.
Section 3.2. Remedies. Upon the occurrence of any Event of Default, the
Mortgagee may take such action, without notice or demand, as it deems advisable
to protect and enforce its rights against the Mortgagor and in and to the
Mortgaged Property, including but not limited to, the following actions, each
of which may be pursued concurrently or otherwise, at such time and in such
order as the Mortgagee may determine, in its sole
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discretion, without impairing or otherwise affecting the other rights and
remedies of the Mortgagee:
(a) declare the entire unpaid Indebtedness to be immediately due and
payable; or
(b) enter into or upon the Premises, either personally or by its agents,
nominees or attorneys, and dispossess the Mortgagor and its agents and servants
therefrom, and thereupon the Mortgagee may (1) use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and every part of
the Premises; (2) complete any construction on the Premises in such manner and
form as the Mortgagee deems advisable; (3) make alterations, additions,
renewals, replacements and improvements to or on the Premises; (4) exercise all
rights and powers of the Mortgagor with respect to the Mortgaged Property,
whether in the name of the Mortgagor or otherwise, including, without
limitation, the right to make, cancel, enforce or modify leases, obtain and
evict tenants, and demand, sue for, collect and receive all rents from the
Premises and every part thereof; and (5) apply the receipts from the Premises
to the payment of Indebtedness, in such order as the Mortgagee may determine
after deducting therefrom all expenses (including reasonable attorneys' fees)
incurred in connection with the aforesaid operations and all amounts necessary
to pay the taxes, assessments, insurance and other charges in connection with
the Mortgaged Property, as well as just and reasonable compensation for the
services of the Mortgagee, its counsel, agents and employees; or
(c) institute proceedings for the complete foreclosure of this Mortgage,
in which case the Mortgaged Property may be sold for cash or upon credit in one
or more parcels; or
(d) with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Mortgage for the portion of the Indebtedness then due and
payable, subject to the continuing lien of this Mortgage for the balance of the
Indebtedness not then due; or
(e) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein or in the
Note; or
(f) to the fullest extent permitted by law, recover judgment on the Note
either before, during or after any proceedings for the enforcement of this
Mortgage; or
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(g) at the option of Mortgagee and irrespective of whether or not
Mortgagee shall actually elect to declare the Indebtedness due and payable,
Mortgagee shall be entitled, at its option, to the appointment of a receiver of
the Mortgaged Property or the rents and profits of the Mortgaged Property, and
such receiver shall be appointed with or without notice and without regard to
the adequacy of any security held for the payment of the Indebtedness and other
sums secured hereby or the solvency of any person or persons liable for the
payment of such amounts. Such receiver may also be granted such extended
powers, duties, and authority as would be necessary or useful in the management
and operation of the Mortgaged Property, including without limitation the power
to enter into, modify, terminate, and enforce leases; pay Impositions and other
operating expenses; employ property managers; make payments of such portions of
the Indebtedness and in such order as Mortgagee may elect; and expend
reasonable sums in repair and maintenance of the Mortgaged Property.
(h) exercise any or all of the remedies available to a secured party under
the Connecticut Uniform Commercial Code, including, but not limited to: (1)
either personally or by means of a court appointed receiver, to take possession
of all or any of the Collateral and exclude therefrom the Mortgagor and all
others claiming under the Mortgagor, and thereafter to hold, store, use,
operate, manage, maintain and control, make repairs, replacements, alterations,
additions and improvements to and exercise all rights and powers of the
Mortgagor in respect to the Collateral or any part thereof. If the Mortgagee
demands or attempts to take possession of the Collateral in the exercise of any
rights under any of the instruments which secure the Note, the Mortgagor
promises and agrees promptly to turn over and deliver complete possession
thereof to the Mortgagee; (2) without notice to or demand upon the Mortgagor,
to make such payments and do such acts as the Mortgagee may deem necessary to
protect its security interest in the Collateral, including, without limitation,
paying, purchasing, contesting or compromising any encumbrance, charge or lien
which is prior to or superior to the security interest granted hereunder, and
in exercising any such powers or authority to pay all expenses incurred in
connection therewith; (3) to require the Mortgagor to assemble the Collateral
or any portion thereof, at a place designated by the Mortgagee and
reasonably convenient to both parties, and promptly to deliver such Collateral
to the Mortgagee, or an agent or representative designated by it. The
Mortgagee, and its agents and representatives shall have the right to enter
upon any or all of the Mortgagor's premises and property to exercise the
Mortgagee's rights hereunder; (4) to sell, lease or otherwise dispose of the
Collateral at public or private sale or auction sale, with or without having
the Collateral at the place of sale,
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and upon such terms and in such manner as the Mortgagee may determine.
The Mortgagee may be a purchaser at any such sale, and unless the Collateral is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, the Mortgagee shall give the Mortgagor
at least 5 days prior written notice of the time and place of any public sale
of the Collateral or other intended disposition thereof. Such notice may be
mailed to the Mortgagor at the address hereinafter set forth for notices; (5)
to sell the Mortgaged Property including the Collateral at one sale, in
connection with any foreclosure or any other sale all of which shall be deemed
to be commercially reasonable. Notices given in connection with foreclosure
shall constitute reasonable notice hereunder. The taking of possession of the
Collateral shall not prevent concurrent or later proceedings for the
foreclosure and sale of other portions of the Mortgaged Property as provided
elsewhere herein.
(i) pursue such other remedies as the Mortgagee may have under
applicable law.
Mortgagee shall not be compelled to release, or be prevented from
foreclosing or enforcing, this Mortgage upon all or any part of the Mortgaged
Property unless the Indebtedness shall be paid in full as aforesaid, and shall
not be required to accept any part or parts of the said Mortgaged Property, as
distinguished from the whole thereof, as payment of or upon the Indebtedness to
the extent of the value of such part or parts, and shall not be compelled to
accept or allow any apportionment of the said debt to or among any separate
parts of the Mortgaged Property. In the case of a foreclosure sale, the
Mortgaged Property (including all real and personal property), at Mortgagee's
election, may be sold in one parcel.
No recovery of any judgment by the Mortgagee and no levy of an execution
under any judgment upon the Mortgaged Property or upon any other property
of the Mortgagor shall affect in any manner or to any extent the lien of this
Mortgage upon the Mortgaged Property or any part thereof, or any liens, rights,
powers or remedies of the Mortgagee hereunder, but such liens, rights, powers
and remedies of the Mortgagee shall continue unimpaired as before.
Section 3.3. Intentionally Omitted
Section 3.4. Interest After Default. Except with respect to Permitted
Set-Offs as defined in Section 4.7 hereof, if any payment due hereunder or
under the Note is not paid when due, either at stated or accelerated maturity
or pursuant to any of the terms hereof, then and in such event, the Mortgagor
shall pay
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interest thereon from and after the date on which such payment first
becomes due at the Default Rate as set forth in Section 1.10 hereof and such
interest shall be due and payable, on demand, at such rate until the entire
amount due is paid to the Mortgagee, whether or not any action shall have been
taken or proceeding commenced to recover the same or to foreclose this
Mortgage. Nothing in this Section 3.4 or in any other provision of this
Mortgage shall constitute an extension of the time of payment of the
Indebtedness.
Section 3.5. Mortgagor's Actions After Default. After the happening of
any Event of Default and immediately upon the commencement of any action, suit
or other legal proceedings by the Mortgagee to obtain judgment for the
Indebtedness or any part thereof, or of any other nature in and of the
enforcement of the Note or of this Mortgage, the Mortgagor will (a) waive the
issuance and service of process and enter its voluntary appearance in such
action, suit or proceeding, and (b) if required by the Mortgagee, consent to
the appointment of a receiver or receivers of the Mortgaged Property and of all
the earnings, revenues, rents, issues, profits and income thereof.
Section 3.6. Control by Mortgagee After Default. Notwithstanding the
appointment of any receiver, liquidator or trustee of the Mortgagor, or of any
of its property, or of the Mortgaged Property or any part thereof, the
Mortgagee shall be entitled to retain possession and control of all property
now and hereafter covered by this Mortgage.
ARTICLE IV
Miscellaneous
Section 4.1. Mortgage Extension. The lien hereof shall remain in full
force and effect and no consent or any subsequent encumbrancer shall be
required in the event of any postponement or extension of the time of payment
of the Indebtedness, or of any part thereof, or any amendment or modification
of the terms of this Mortgage, the Note, or any collateral security instrument,
or any additional notes taken by Mortgagee.
Section 4.2. Notices. All notices to any party hereto shall be given by
personal delivery or delivered by registered or certified mail, return receipt
requested, or by nationally recognized overnight carrier, with postage or
carrier charges prepaid and addressed to each party at the address herein set
forth or such other address of which any party may give the other notice in
writing in the manner provided in this Section 4.2 and such delivery shall be
deemed given upon receipt or refusal to accept, or upon return to sender due to
impossibility of
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delivery. Notwithstanding the address for the Mortgagor herein, notice or
demand delivered to the address of one or more of the persons, corporations or
other entities which shall at the time hold the record title to the premises
secured by this Mortgage, shall constitute notice or demand delivered to the
Mortgagor as may be required by any provision of this Mortgage. For purposes
of this Mortgage, the addresses of the Mortgagor and the Mortgagee are as
follows:
Mortgagor: _____________________________
_____________________________
_____________________________
Attention: _________________
Mortgagee: _____________________________
_____________________________
_____________________________
Attention: _________________
Section 4.3. Binding Obligations. The provisions and covenants of this
Mortgage shall run with the land, shall be binding upon the Mortgagor and shall
inure to the benefit of the Mortgagee, subsequent holders of this Mortgage and
their respective successors and assigns. For the purpose of this Mortgage, the
term "Mortgagor" shall mean the Mortgagor named herein, any subsequent owner of
the Mortgaged Property, and their respective heirs, executors, legal
representatives, successors and assigns.
Section 4.4. Captions. The captions of the Sections of this Mortgage are
for the purpose of convenience only and are not intended to be a part of this
Mortgage and shall not be deemed to modify, explain, enlarge or restrict any of
the provisions hereof.
Section 4.5. Further Assurances. The Mortgagor shall do, execute,
acknowledge and deliver to the Mortgagee, at the sole cost and expense of the
Mortgagor, all and every such further acts, deeds, conveyances, mortgages,
assignments, estoppel certificates, notices of assignment, surveys,
supplementary mortgages, financing statements, other chattel instruments,
transfers and assurances as the Mortgagee may reasonably require from time to
time in order to better assure, convey, secure, assign, transfer and confirm
unto the Mortgagee, the rights now or hereafter intended to be granted to the
Mortgagee under this Mortgage, any other instrument executed in connection with
this Mortgage or any other instrument under which the Mortgagor may be or may
hereafter become bound to convey, mortgage or assign to the Mortgagee for
carrying out the intention or facilitating the performance of the terms of this
Mortgage. The Mortgagor hereby
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irrevocably appoints the Mortgagee its attorney-in-fact, coupled with an
interest, to execute, acknowledge and deliver for and in the name of the
Mortgagor any and all of the instruments mentioned in this Section 4.5.
Section 4.6. Severability. Any provision of this Mortgage which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
Section 4.7. The Mortgagor's Obligations Survive. Except with respect to
setoffs to which Mortgagor shall be entitled with respect to amounts owed to
Mortgagor pursuant to indemnification provisions contained in (I) that certain
Purchase and Sale Agreement dated May ___, 1998 between Mortgagor and Mortgagee
relating to the Mortgaged Property and (II) that certain Asset Purchase
Agreement (the "Asset Agreement") dated May ___, 1998 between Mortgagor, Apex
Acquisition Corporation, Apex Machine Tool Company, Inc., Mortgagee and
Michael Biondi (collectively the "Permitted Set-Offs") (the Agreements set
forth in (I) and (II) above, collectively the "Purchase Agreements"), all sums
payable by the Mortgagor hereunder shall be paid without notice, demand,
counterclaim, setoff, deduction or defense (except as expressly provided
herein) and without abatement, suspension, deferment, diminution or reduction,
and the obligations and liabilities of the Mortgagor hereunder shall in no way
be released, discharged, or otherwise affected (except as expressly provided
herein) by reason of: (a) any damage to or destruction of or any condemnation
or similar taking of the Mortgaged Property or any part thereof; (b) any
restriction or prevention of or interference with any use of the Mortgaged
Property or any part thereof; (c) any title defect or encumbrance or any
eviction from the Premises or the improvements thereon or any part thereof by
title paramount or otherwise; (d) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to the Mortgagee, or any action taken with respect to this Mortgage by
any trustee or receiver of the Mortgagee, or by any court, in any such
proceeding; (e) any claim which the Mortgagor has or might have against the
Mortgagee; (f) any default or failure on the part of the Mortgagee to perform
or comply with any of the terms hereof or of any other agreement with the
Mortgagor; or (g) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not the Mortgagor shall have notice or
knowledge of any of the foregoing. Except as expressly provided herein, the
Mortgagor waives all rights now or hereafter conferred by statute or otherwise
to any abatement, suspension,
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deferment, diminution or reduction of any sum secured hereby and payable by
the Mortgagor.
Section 4.8. Additional Security. If the Mortgagee at any time holds
additional security for any of the obligations secured hereby, it may enforce
the sale thereof or otherwise realize upon the same, at its option, either
before or concurrently with or after a foreclosure or sale hereunder without
being deemed to have made an election thereby or of having accepted the
security provided hereby or the proceeds hereof or such additional security or
the proceeds thereof in full settlement of the Note.
Section 4.9. General Conditions.
(a) All covenants hereof shall be construed as affording to the
Mortgagee rights additional to and not exclusive of the rights conferred under
law.
(b) This Mortgage cannot be altered, amended, modified or discharged
orally and no executory agreement shall be effective to modify or discharge it
in whole or in part, unless it is in writing and signed by the party against
whom enforcement of the modification, alteration, amendment or discharge is
sought. Any amendment hereafter made by Mortgagor and Mortgagee relating to
this Mortgage shall be superior to the rights of the holder of any intervening
lien or encumbrance.
(c) With respect to Mortgagor's obligations hereunder, time and
punctuality shall be of the essence with respect to this instrument. No delay
or failure of Mortgagee to enforce any of the provisions herein contained shall
waive or affect any of Mortgagee's rights hereunder.
(d) No remedy herein conferred upon or reserved to the Mortgagee is
intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
Any failure by Mortgagee to insist upon the strict performance by Mortgagor of
any of the terms and provisions hereof shall not be deemed to be a waiver of
any of the terms and provisions hereof, and Mortgagee, notwithstanding any such
failure, shall have the right thereafter to insist upon the strict performance
by Mortgagor of any and all of the terms and provisions hereof to be performed
by Mortgagor. Neither Mortgagor nor any other person now or hereafter
obligated for the payment of the whole or any part of the Indebtedness shall be
relieved of such obligation by reason of the failure of Mortgagee to comply
with any request of Mortgagor or of any other person so obligated to take
action to
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foreclose this Mortgage or otherwise enforce any of the provisions of
this Mortgage or of any obligation secured by this Mortgage, or by reason of
the release, regardless of consideration of the whole or any part of the
security held for the Indebtedness. Acceptance of any payment after the
occurrence of an Event of Default shall not be deemed to waive or cure such
Event of Default; and every power and remedy given by this Mortgage to the
Mortgagee may be exercised from time to time as often as may be deemed
expedient by the Mortgagee. Nothing in this Mortgage or in the Note shall
affect the obligation of the Mortgagor to pay the Indebtedness in the manner
and at the time and place therein respectively expressed.
(e) No waiver by the Mortgagee will be effective unless it is in writing
and then only to the extent specifically stated. Without limiting the
generality of the foregoing, any payment made by the Mortgagee for insurance
premiums, taxes, assessments, water rates, sewer rentals or any other charges
affecting the Mortgaged Property, shall not constitute a waiver of the
Mortgagor's default in making such payments and shall not obligate the
Mortgagee to make any further payments.
(f) The Mortgagee shall have the right to appear in and defend any action
or proceeding, in the name and on behalf of the Mortgagor which the Mortgagee,
in its reasonable discretion, feels may adversely affect the lien created
hereby on the Mortgaged Property.
(g) In the event of the passage after the date of this Mortgage of any law
of any governmental authority having jurisdiction, deducting from the value of
land for the purpose of taxation, affecting any lien thereon or changing in any
way the laws of taxation of mortgages or debts secured by mortgages for
federal, state or local purposes, or the manner of the collection of any such
taxes, so as to adversely affect this Mortgage, the Mortgagor shall promptly
pay to the Mortgagee, on demand, all taxes, costs and charges for which the
Mortgagee is or may be liable as a result thereof, provided said payment shall
not be prohibited by law or render the Note usurious, in which event the
Mortgagee may declare the Indebtedness to be immediately due and payable, and
provided further that the Mortgagor shall have no obligation to pay any
franchise, income or other tax upon the interest on the Note, or upon the
Mortgagee, unless such tax is, in whole or in part, in lieu of or in
substitution for property taxes upon the Mortgaged Property.
(h) The Mortgagor acknowledges that it has received a true copy of this
Mortgage.
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(i) Whenever used herein, the singular number shall include the plural;
the plural, the singular, and the use of any gender shall include all genders,
as the context may require.
Section 4.10. Legal Construction. The Note, this Mortgage and the other
Loan Documents shall be governed, construed and enforced in accordance with the
laws of the State of Connecticut. Nothing in this Mortgage, the Note or in any
other agreement between the Mortgagor and the Mortgagee shall require the
Mortgagor to pay, or the Mortgagee to accept, interest in an amount which would
subject the Mortgagee to any penalty under applicable law. In the event that
the payment of any interest due hereunder or under the Note or any such other
agreement would subject the Mortgagee to any penalty under applicable law, then
ipso facto the obligations of the Mortgagor to make such payment shall be
reduced to the highest rate authorized under applicable law.
Section 4.11. Merger. So long as any indebtedness secured by this
Mortgage shall remain unpaid, fee title to and any other estate in the
Mortgaged Property shall not merge, but shall be kept separate and distinct,
notwithstanding the union of such estates in any person or entity.
Section 4.12. Rights of Third Parties. All conditions of the obligations
of the Mortgagee hereunder are imposed solely and exclusively for the benefit
of the Mortgagee, its successors and assigns, and no other person shall have
standing to require satisfaction of such conditions in accordance with their
terms, and no other person shall, under any circumstances, be deemed to be a
beneficiary of such conditions, any and all of which may be freely waived in
whole or in part by the Mortgagee at any time if, in its sole discretion, it
deems it desirable to do so.
Section 4.13. No Agency. The Mortgagee is not the agent or
representative of the Mortgagor, and the Mortgagor is not the agent or
representative of the Mortgagee, and nothing in this Agreement shall be
construed to make the Mortgagee liable to anyone for goods delivered or
services performed upon the Premises or for debts or claims accruing against
the Mortgagor. Nothing herein shall be construed to create a relationship ex
contractu or ex delicto between the Mortgagee and any person supplying labor or
materials to the Premises.
Section 4.14. No Partnership or Joint Venture. Nothing herein nor the
acts of the parties hereto shall be construed to create a partnership or joint
venture between the Mortgagor and the Mortgagee. The relationship of the
Mortgagor and the Mortgagee is "debtor" and "creditor".
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Section 4.15. Intentionally Omitted.
Section 4.16. Permitted Contests. So long as a default or an Event of
Default is not existing under this Mortgage, the Note or the other Loan
Documents (any circumstance which would be a default hereunder except for the
contest thereof by Mortgager as permitted pursuant to this Section 4.16 shall
not be a default hereunder so long as such contest is maintained by Mortgagor
as permitted hereby), the Mortgagor may contest by appropriate legal
proceedings, diligently conducted in good faith, the validity or applicability
of any law, the requirements of any governmental authority or the amount of
Impositions due, provided (a) the Mortgagor gives the Mortgagee 30 days prior
written notice of its intent to contest hereunder, (b) such contest will not
expose the Mortgagee to any civil or criminal liability for failure to comply
with law or the requirements of governmental authorities, (c) such contest will
not result, regardless of the outcome of such contest, in a forfeiture of title
to all or any portion of the Mortgaged Property, or divestiture of the lien or
interest in favor of the Mortgagee in all or any portion of the Mortgaged
Property, and (d) the Mortgagor furnishes the Mortgagee security satisfactory
to the Mortgagee against loss, injury or costs resulting from such contest,
including losses, injuries and costs resulting from delays in compliance with
law or requirements of Governmental Authorities or in paying Impositions.
Section 4.17. Successors and Assigns. Whenever in this Mortgage one of
the parties hereto is named or referred to, unless otherwise specified, the
legal representatives, successors, successors-in-title and assigns, to the
extent permitted hereunder, of such parties shall be included, and all
covenants and agreements contained in this Mortgage by or on behalf of the
Mortgagor or by or on behalf of the Mortgagee shall bind and inure to the
benefit of their respective legal representatives, successors,
successors-in-title and assigns, whether so expressed or not.
Section 4.18. WAIVER OF NOTICE, HEARING AND BOND BEFORE PREJUDGMENT
REMEDY. MORTGAGOR ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS MORTGAGE IS
A PART IS A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION AND WAIVES
ANY RIGHT TO (1) NOTICE AND PRIOR HEARING ON THE RIGHT OF MORTGAGEE, OR ITS
SUCCESSORS OR ASSIGNS, TO OBTAIN A PREJUDGMENT REMEDY UNDER CHAPTER 903a OF THE
CONNECTICUT GENERAL STATUTES, REV. 1958, AS AMENDED, OR AS THE SAME MAY BE
AMENDED; (2) NOTICE AND PRIOR HEARING OR OTHER PROCESS ALLOWED UNDER ANY STATE
OR FEDERAL CONSTITUTION, STATUTE OR OTHER LAW, NOW OR HEREAFTER AFFECTING
PREJUDGMENT REMEDIES AND (3) ANY REQUIREMENT THAT MORTGAGEE POST A BOND IN
ORDER TO OBTAIN ANY PREJUDGMENT REMEDY.
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Section 4.19. OTHER WAIVERS. MORTGAGOR FURTHER WAIVES DILIGENCE, DEMAND,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST,
AND NOTICE OF ANY RENEWALS OR EXTENSIONS OF THE NOTE OR ANY OTHER LOAN
DOCUMENT; ALL RIGHTS TO THE BENEFITS OF ANY MORATORIUM, APPRAISEMENT, EXEMPTION
AND HOMESTEAD NOW PROVIDED OR WHICH MAY HEREAFTER BE PROVIDED BY ANY FEDERAL OR
STATE STATUTE, INCLUDING BUT NOT LIMITED TO EXEMPTIONS PROVIDED BY OR ALLOWED
UNDER THE BANKRUPTCY REFORM ACT OF 1978, AS THE SAME MAY BE AMENDED, BOTH AS TO
ITSELF PERSONALLY AND AS TO ALL OF ITS PROPERTY, WHETHER REAL OR PERSONAL,
AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS EVIDENCED BY THE
NOTE, THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS AND ANY AND ALL
EXTENSIONS, RENEWALS AND MODIFICATIONS THEREOF; AND THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR IN
TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THE NOTE,
THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS.
Section 4.20. WAIVERS BARGAINED FOR AND KNOWINGLY AND VOLUNTARILY GIVEN.
MORTGAGOR ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS ASSIGNMENT
AND IN ALL OF THE OTHER LOAN DOCUMENTS HAVE BEEN SPECIFICALLY REQUESTED BY
MORTGAGEE AND HAVE BEEN GRANTED BY MORTGAGOR TO INDUCE MORTGAGEE TO PROVIDE
CREDIT TO MORTGAGOR UNDER THE TERMS OF THE NOTE AND THAT SUCH WAIVERS HAVE BEEN
KNOWINGLY AND VOLUNTARILY GIVEN ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS
OF SUCH WAIVERS WITH ITS ATTORNEY.
Section 4.21. CONSENT TO JURISDICTION. MORTGAGOR AND MORTGAGEE HEREBY
AGREE THAT ANY CLAIMS OR DISPUTES WITH RESPECT TO PERMITTED SET-OFFS SHALL BE
RESOLVED PURSUANT TO THE ARBITRATION PROVISIONS OF THE ASSET AGREEMENT, AS
DEFINED IN SECTION 4.7 HEREOF. WITH RESPECT TO ANY CLAIMS OR DISPUTES BETWEEN
MORTGAGOR AND MORTGAGEE PERTAINING DIRECTLY OR INDIRECTLY TO THIS MORTGAGE, THE
NOTE OR TO ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING HEREFROM OR
THEREFROM WHICH ARE NOT OF A NATURE REQUIRED TO BE SUBMITTED TO ARBITRATION
UNDER THE ASSET AGREEMENT, MORTGAGOR AND MORTGAGEE HEREBY AGREE THAT ANY STATE
COURT OR LOCAL COURT OF THE STATE OF CONNECTICUT AND THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF CONNECTICUT SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY SUCH CLAIMS OR DISPUTES. IN SUCH EVENT, MORTGAGOR EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY SUCH ACTION OR
PROCEEDING COMMENCED IN SUCH COURTS, HEREBY WAIVING ANY OBJECTIONS IT MAY HAVE
AS TO VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDINGS BROUGHT IN SUCH COURT OR
THAT SUCH COURT IS AN INCONVENIENT FORUM AND HEREBY WAIVING PERSONAL SERVICE OF
THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND
AGREEING THAT SERVICE OF SUCH SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
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<PAGE> 66
ADDRESSED TO MORTGAGOR AT 1806 NEW BRITAIN AVENUE, FARMINGTON, CONNECTICUT
06032. IN ADDITION TO THE FOREGOING, MORTGAGOR IRREVOCABLY DESIGNATES AND
APPOINTS [INSERT NAME OF A CONNECTICUT RESIDENT OR ENTITY] AS ITS AGENT TO
RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY
SUCH COURT IN THE STATE OF CONNECTICUT AND DIRECTS SUCH AGENT TO ACCEPT SUCH
SERVICE ON ITS BEHALF. NOTHING HEREIN CONTAINED SHALL AFFECT THE RIGHT TO
SECURE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. THE EXCLUSIVE CHOICE OF
FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT
OF ANY JUDGMENT OBTAINED IN SUCH FORUM, OR THE TAKING OF ANY ACTION UNDER THE
NOTE, THIS MORTGAGE OR UNDER ANY OF THE OTHER LOAN DOCUMENTS TO ENFORCE SAME,
IN ANY APPROPRIATE JURISDICTION.
THE CONDITION OF THIS DEED IS SUCH THAT, WHEREAS, Mortgagor is justly
indebted to Mortgagee in the aggregate principal amount of _______________
DOLLARS ($___________) and has executed and delivered to Mortgagee the Note for
such amount, payable to the order of Mortgagee, for value received, with
interest and in the manner as provided in the Note, a copy of which is attached
hereto as Schedule B and made a part hereof;
NOW THEREFORE, if the Note and any extensions, renewals or modifications
thereof shall be well and fully paid according to their tenor, and if all
covenants, conditions, agreements and provisions contained in the Note, any
extensions, renewals or modifications thereof, and this Mortgage are fully kept
and performed, then this Mortgage shall become null and void; otherwise to
remain in full force and effect.
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage Deed,
Assignment of Leases and Security Agreement to be duly executed this ______ day
of ____________, 1998.
Signed, Sealed and Delivered
In the Presence of: EDAC TECHNOLOGIES CORPORATION
By:
- ---------------------------- --------------------------------
Name: Name:
Title:
Hereunto Duly Authorized
- ----------------------------
Name:
STATE OF CONNECTICUT :
: SS. ____________, 1998
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<PAGE> 67
COUNTY OF HARTFORD ::
Personally appeared ____________________, ______________ of EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation, signer and sealer of the
foregoing instrument and acknowledged the same to be his/her free act and deed
as such Officer and the free act and deed of that corporation, before me.
---------------------------------------
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires
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<PAGE> 68
SCHEDULE A
Description of Premises
<PAGE> 69
SCHEDULE B
Note
<PAGE> 70
EXHIBIT D
ASSIGNMENT OF LEASES AND RENTALS
This ASSIGNMENT OF LEASES AND RENTALS (hereinafter referred to as the
"Assignment") is made this ________ day of _________________, 1998, by EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation with a place of business at
1806 New Britain Avenue, Farmington, Connecticut 06032 (hereinafter referred to
as "Borrower") to GERALD S. BIONDI, an individual residing at
_______________________________, and JAMES G. BIONDI, an individual residing at
______________________________________ (collectively, the "Lender").
WHEREAS, Borrower is the owner of certain real property and improvements
thereon located in the Town of Farmington, County of Hartford, and State of
Connecticut, more particularly described in Exhibit A attached hereto (which
real property and improvements are hereinafter referred to as the "Premises");
and
WHEREAS Lender is the holder of a certain Mortgage Deed, Assignment of
Leases and Security Agreement (hereinafter referred to as the "Mortgage") of
even date herewith, executed and delivered by Borrower and intended to be
recorded in the land records of the Town of Farmington, Connecticut, which
Mortgage secures the debt evidenced by a certain Promissory Note of even date
herewith made by Borrower to Lender in the principal sum of $__________________
(hereinafter referred to as the "Note"); and
WHEREAS Lender has required that Borrower execute and deliver this
Assignment, as further security for the Note and the obligations secured by the
Mortgage.
NOW, THEREFORE, in consideration of the foregoing and the sum of One
Dollar ($1.00) and other valuable considerations paid to Borrower by Lender,
receipt and sufficiency of which are hereby acknowledged, Borrower agrees as
follows:
1. Assignment. Borrower hereby transfers, assigns, and sets over unto
Lender all present leases of space in the Premises as identified in Exhibit B
attached hereto and, whether or not so identified, any and all leases,
subleases, rentals or occupancy agreements, oral or written, and all of the
right, title and interest of Borrower in and to any and all guaranties
made in connection with such leases, subleases, rentals or occupancy
agreements, and whether made in contravention of this assignment or not, for
the use and occupancy of any part or all of the Premises, whether such leases
are now in existence or may exist
<PAGE> 71
at any time or times in the future during the term of this Assignment, and
any renewals or extensions thereof, whether or not recorded (all of which
present and future leases, subleases, rentals, occupancy agreements, and
guaranties, whether or not identified in Exhibit B, are made subject to this
Assignment and are hereinafter referred to by and included within the terms
"Lease" or "Leases", together with all of the right, title, and interest of
Borrower in and to all rents, income, issues, proceeds, and profits from the
Leases and from the Premises intending hereby to assign to Lender all of the
interest of Borrower in the leases, and all rents, income, issues, proceeds,
and profits arising therefrom and from the Premises, including any security
deposits held pursuant to the terms of the Leases, cancellation fees or
charges, all sums of money payable by a tenant under any Lease on account of a
termination or default by the tenant, sums payable on account of leases in any
bankruptcy or insolvency proceedings involving the tenants thereunder, and all
sums whatsoever to be paid by any tenant to Borrower (all items of payment by a
tenant referred to in this paragraph of whatever nature, collectively, "Tenant
Payments")
2. Obligations Secured. This Assignment is given as security for (a)
payment of the principal indebtedness evidenced by the Note, with interest
thereon; (b) payment of all other sums, with interest thereon, payable under
the provisions of the Note, the Mortgage or this Assignment (collectively, the
"Loan Documents"); and (c) the performance and observance by Borrower of all of
the covenants, representations, and agreements contained in the Note, the Loan
Documents, and any and all Leases.
3. Representations by Borrower. Borrower represents that, as to each of
the existing Leases (a) Borrower has good right and authority to assign such
Lease to Lender and the execution of this assignment by the Borrower has been
duly authorized by all requisite partnership action; and (b) Borrower has
neither done, nor omitted to do, any act which might prevent or limit Lender
from exercising its rights under this assignment.
4. Borrower's Covenants.
(a) Borrower shall not, without Lender's prior written consent in each
instance, which consent shall not be unreasonably withheld (i) accept any
payment of rent in advance for more than each current month, or (ii) enter
into, materially modify, terminate or accept the surrender of any Lease, or
(iii) waive or release the tenant under any Lease from the performance or
observance of any material obligation or condition of such Lease, or (iv)
exercise any option arising on any casualty or
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<PAGE> 72
condemnation available to Landlord under any Lease, unless required under
such Lease; or (v) give any consent sought by any tenant under any Lease.
Lender agrees that its consent to any proposed leases shall not be unreasonably
withheld.
(b) Borrower shall not, unless in each instance Lender's written consent
be first obtained, which consent shall not be unreasonably withheld (i) assign
or pledge, or contract (expressly or by implication) to assign or pledge, any
Lease, or the right to sue for, collect and receive any rents, additional rents
or other sums in any of said Leases provided to be paid to Borrower thereunder,
or the right to receive, hold and apply any bonds and security in any of said
Leases provided to be furnished to the landlord thereunder, or the right to
enforce any of the agreements, terms, covenants or conditions of said Leases or
to give notice thereunder; (ii) subordinate any of said Leases to any mortgage
(other than the Mortgage), deed of trust, or other encumbrance or permit,
consent or agree to such subordination, or (iii) convey or transfer or suffer
or permit a conveyance or transfer of the premises demised thereby or of any
interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, any tenants under any of the
Leases.
(c) Borrower shall, at its own cost and expense, unless and until Lender
takes possession and control of the Premises; (i) promptly and fully perform
each and every material covenant, condition, promise, and obligation on the
part of the landlord to be performed under and pursuant to the terms of each
Lease, and shall not suffer or permit there to exist any default in such
performance on the part of such landlord or permit any event to occur which
would give the tenant under any such Lease the right to terminate the same or
claim any deduction or offset against rent, (ii) appear in and defend any
action growing out of, or in any manner connected with, any such Leases or
the obligations or liabilities of Borrower as landlord or of the tenant or
guarantor thereunder; (iii) enforce, short of termination unless Lender
otherwise consents, the performance and observance of each and every material
covenant and condition of the Leases to be performed or observed by the tenants
thereunder; and (iv) at the reasonable request of Lender exercise any option
available to the Borrower as landlord under said Leases arising on any casualty
or condemnation.
(d) Borrower shall furnish to Lender, within five (5) days after the
receipt thereof, or the mailing or service thereof by Borrower, as the case may
be, a copy of each notice of default which Borrower shall give to or receive
from any tenant of the Premises or of any part or parts thereof based upon the
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<PAGE> 73
occurrence, or alleged occurrence, of any default or defaults in the
performance of any covenant, condition, promise or obligation provided for in
any Lease.
(e) Borrower shall, upon reasonable request from Lender, furnish Lender
within five (5) business days of such request with true and complete copies of
all Leases then in effect.
5. Future Leases.
(a) Borrower shall furnish to Lender a true and complete copy of each
Lease, or renewal or extension of Lease, hereafter made by Borrower with
respect to space in the Premises, within five (5) business days after delivery
of each such Lease, or renewal or extension of Lease, by the parties thereto.
(b) Borrower will from time to time, upon reasonable demand of Lender,
confirm in writing the assignment to Lender of any or all Leases hereafter made
affecting the Premises or any part or parts thereof, and such written
confirmation shall be in such form as Lender shall reasonably require and as
necessary to make the same recordable, and shall contain the representations
required pursuant to Section 3 of this Assignment.
(c) All agreements and obligations to pay commissions or fees in
connection with the leasing of any portion of the Premises shall be subject and
subordinate to the Mortgage and this Assignment and shall not be enforceable
against Lender or any purchaser at a foreclosure sale under the Mortgage, or
their respective successors.
6. Collection of Rents. Notwithstanding the present assignment effected
hereby and only so long as there is no default (other than those which may have
arisen due to a Permitted Set-Off, as defined in the Mortgage) by Borrower
which is continuing beyond applicable grace and cure periods in any payment or
obligation secured hereby, Borrower may receive, collect, and enjoy the rents
(but not in advance except for each current month), income, issues proceeds,
and profits payable to Borrower in the ordinary course from the Premises or
from the Leases, or both, or either, but as a trust fund for payment of all
amounts due under the Note and the Loan Documents, including, but not limited
to principal and interest, taxes, assessments, insurance premiums, maintenance,
operating and utility charges relating to the Premises before using the same
for any other purpose. Following any default hereunder which continues beyond
any applicable grace and cure periods, Borrower shall (i) deliver all security
deposits received by tenants under the Leases to
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<PAGE> 74
Lender, which security deposits Lender shall hold under the terms of the
Leases, (ii) not interfere with Lender's collection of the rents due under the
Leases, and (iii) apply all rents received by Borrower to the debt secured
hereby.
7. Events of Default. As used herein, the term "Event of Default" shall
include the following:
(a) any default in the performance of any obligation required to be
performed or observed by Borrower hereunder or any breach or violation of any
covenant under this Assignment, which default, breach, or violation continues
for more than fifteen (15) days after written notice thereof from Lender to
Borrower; or
(b) any Event of Default as defined in the Mortgage.
8. Remedies. (a) If an Event of Default occurs, Lender may, at its option,
with written notice thereof to Borrower, and without regard to the adequacy of
security for the indebtedness secured hereby, with or without bringing any
action or proceeding, either in person or by an agent or by a receiver to be
appointed by a court, enter upon, take possession of, manage, repair and
operate the Premises or any part thereof, and otherwise exercise ail rights
of the landlord under the Leases; make, cancel, enforce or modify Leases,
obtain and evict tenants, fix or modify rents, and do any acts which Lender
deems proper to protect the security hereof, and either with or without taking
possession of said property, in its own name sue for or otherwise collect and
receive all rents, income, issues, proceeds, and profits, including those past
due and unpaid, and apply the same, less costs and expenses of operation and
collection (including without limitation attorneys' fees), upon any
indebtedness secured hereby or by the mortgage, in such order or priority as
Lender may elect. Lender may exercise its rights under this Section 8 as often
as any Event of Default may occur. Immediately upon Lender's request after the
occurrence of an Event of Default, Borrower shall turn over to Lender all
security deposits required under any of the Leases, which shall be held and
applied by Lender in accordance with the provisions of the Leases governing
such security deposits.
(b) Any default by Borrower under this Assignment or any breach or
violation of any representation or covenant under this Assignment which shall
continue for more than fifteen (15) days after notice thereof from Lender to
Borrower shall at the option of Lender constitute an Event of Default under the
Mortgage, as if the provisions of this assignment were fully set forth in the
Mortgage, entitling Lender to all rights and
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<PAGE> 75
remedies contained in the Mortgage; provided, however, that if (i) the
curing of such default cannot be accomplished with due diligence within said
fifteen (15) day period, and (ii) Borrower commences to cure such default
promptly after receipt of notice thereof from Lender and thereafter diligently
and continuously prosecutes the cure of such default, and (iii) the extension
of the period for effecting a cure will not result in any material impairment
of the Premises or any portion thereof, the value thereof or Lender's lien
thereon, then such period of fifteen (15) days shall be extended for such
period of time as is reasonably necessary for Borrower so acting to cure such
default but in no event for more than an additional thirty (30) days; provided
further, however, such extended cure period shall not be applicable to any
default which may be cured by the payment of money.
9. Payment of Rent to Lender. A written demand on any tenant by Lender
(with written copy to Borrower detailing the Event of Default) for payment of
rent to Lender shall be sufficient warrant to said tenant to pay rent, income,
issues, proceeds, and profit to Lender without necessity for consent by
Borrower or any obligation of said tenant to inquire as to the evidence of a
default by Borrower, notwithstanding any claim by the Borrower to the contrary,
and Borrower hereby irrevocably authorizes, directs and requires all tenants of
the Premises to honor this Assignment and comply with any such demand by
Lender, until further written notice by Lender authorizing the tenant to resume
rent payments to Borrower. Borrower shall have no claim against any tenant for
any amounts paid to Lender hereunder. Borrower shall not interfere in any way
with Lender's collection of the rents pursuant to this Assignment. This
Section 9 shall not however, relieve Lender of any liability it may have in
connection with any improper notice delivered by Lender to any tenant of
Borrower.
10. Lender not Liable. Nothing contained herein or in the Mortgage shall
be construed, expressly or by implication, to obligate Lender, prior to the
time when Lender acquires title to the Premises, to perform any of the
covenants of Borrower as landlord under any of the Leases hereinabove assigned
or to pay any sum of money or damages therein provided to be paid by Borrower,
each and all of which covenants and payments Borrower agrees to perform and
pay.
Lender shall not be liable for any loss sustained by Borrower resulting
from Lender's failure to let the Premises after an Event of Default or from any
other act or omission of Lender in managing the Premises after an Event of
Default unless such loss is caused by the gross negligence, willful misconduct
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<PAGE> 76
or bad faith of Lender. Borrower hereby agrees to indemnify and save Lender
harmless against and from any liability or expense incurred by Lender hereunder
or under any of the Leases, provided such liability or expense is not the
result of Lender's gross negligence, willful misconduct, bad faith, breach of
this Agreement or Lender's own action prior to the date hereof acting as
landlord under the lease with Goldstar, Inc., and Borrower agrees to reimburse
Lender for any such expenses including attorney's fees, on demand, with
interest at the Default Rate, as defined in the Note.
11. Right to Protect Security. If Borrower fails to make any payment or
to do any act as herein provided beyond any applicable grace or cure period,
then the Lender, but without obligation so to do and without notice to or
demand on Borrower, and without releasing Borrower from any obligation hereof,
may make or do the same in such manner and to such extent as the Lender may
deem necessary to protect the security hereof, including specifically, without
limiting its general powers, the right to appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of
the Lender, and also the right to perform and discharge each and every
obligations, covenant and agreement of the Landlord in the Leases contained;
and in exercising any such powers to pay necessary costs and expenses, employ
counsel and incur and pay reasonable attorney's fees. Borrower shall pay
immediately upon demand all sums expended by the Lender under the authority
hereof, together with interest thereon at the Default Rate, as defined in the
Note, and the same shall be added to the said indebtedness and shall be secured
hereby and by the Mortgage.
12. No Waiver. No waiver by Lender of any breach by Borrower of any
covenant or condition contained herein, nor any failure by Lender to exercise
any right or remedy in respect of any breach hereunder, shall constitute a
waiver or relinquishment for the future of any such covenant or condition or of
any subsequent breach of any such covenant or condition, or bar any right or
remedy of Lender in respect of any such subsequent breach. If Lender shall
from time to time suffer or permit Borrower to sue for, collect or receive any
rent, additional rent or other sums in said Leases provided to be paid to the
Borrower thereunder, or to receive, hold or apply any bonds or security
thereunder, or to enforce any of the agreements, terms, covenants or conditions
thereunder or to give notices thereunder, neither such sufferance nor
permission shall constitute a waiver or relinquishment by Lender of its rights
hereunder, which rights are hereby assigned to Lender, with respect to any
subsequent rent, additional rent or any other sums payable to Borrower under
said Leases or with respect to any subsequent receipt, holding or
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<PAGE> 77
application of bonds or security or any subsequent enforcement of such
agreements, terms, covenants or conditions or any subsequent notice.
Any action of Lender hereunder shall not constitute a waiver of or be
deemed to cure any default by Borrower hereunder or under the Note or Mortgage,
and shall not affect or prejudice any other rights or remedies of Lender, which
other rights or remedies may be exercised by Lender prior to, concurrently with
or subsequent to action hereunder; and any action by Lender under the Note or
the Mortgage or any other instrument, or the release of any party liable
thereunder, or any extension or indulgence with respect thereto, shall not
affect or prejudice Lender's rights hereunder.
13. Assignment by Lender; Foreclosure. Lender may assign Lender's
interest in the Leases hereby assigned to any subsequent holder of the Mortgage
or to any party who acquires title to the Premises in foreclosure. After a
foreclosure of the Mortgage, neither Lender nor any assignee of the landlord's
interest in said Leases shall be liable to account to Borrower for any rents or
income thereafter collected.
14. Termination. This Assignment shall continue in full force and effect
until full payment of all amounts secured hereby, as evidenced by the recording
of a full release of the Mortgage.
15. Notification of Assignment. Lender shall be entitled to notify any
tenant of the existence of this Assignment at any time, even in the absence of
any default by Borrower.
16. Notices. All notices to any party hereto shall be given by personal
delivery or delivered by registered or certified mail, return receipt
requested, or by nationally recognized overnight carrier, with postage or
carrier charges prepaid and addressed to each party at the address herein set
forth or such other address of which any party may give the other notice in
writing in the manner provided in this section and such delivery shall be
deemed given upon receipt or refusal to accept, or upon return to sender due to
impossibility of delivery. Notwithstanding the address for the Borrower herein,
notice or demand delivered to the address of one or more of the persons,
corporations or other entitles which shall at the time hold the record title to
the premises secured by the Mortgage, shall constitute notice or demand
delivered to the Borrower as may be required by any provision of this
Assignment. For purposes of this Assignment, the addresses of the Borrower and
the Lender are as follows:
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<PAGE> 78
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<PAGE> 79
Borrower: _________________________________
_________________________________
_________________________________
_________________________________
Lender: _________________________________
_________________________________
_________________________________
_________________________________
17. Miscellaneous. The provisions hereof shall be construed in accordance
with the laws of the State of Connecticut. This Assignment shall bind
Borrower, its successors and assigns, and inure to the benefit of Lender, its
heirs, executors, administrators, successors and assigns. The covenants of
Borrower herein shall run with the land. The word "Borrower" as used herein
shall mean not only the original Borrower named in the first paragraph of this
instrument, but also all future owners of the Premises, and the word "Lender"
as used herein shall mean not only the original Lender named in the first
paragraph of this instrument, but also all future holders of this Assignment.
The words "Borrower" and "Lender", together with any pronoun or pronouns in
connection therewith (and the possessive form of any such pronoun or pronouns),
shall include the singular, plural, masculine, feminine and neuter, as the
context may require whenever used, the singular number shall include the
plural, the plural the singular, and the use of any gender shall include all
genders. This Assignment may not be changed orally, but only by an agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
18. BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS ASSIGNMENT IS
A PART IS A COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION AND WAIVES
ANY RIGHT TO (1) NOTICE AND PRIOR HEARING ON THE RIGHT OF LENDER, OR ITS
SUCCESSORS OR ASSIGNS, TO OBTAIN A PREJUDGMENT REMEDY UNDER CHAPTER 903a OF THE
CONNECTICUT GENERAL STATUTES, REV. 1958, AS AMENDED, OR AS THE SAME MAY BE
AMENDED; (2) NOTICE AND PRIOR HEARING OR OTHER PROCESS ALLOWED UNDER ANY STATE
OR FEDERAL CONSTITUTION, STATUTE OR OTHER LAW, NOW OR HEREAFTER AFFECTING
PREJUDGMENT REMEDIES AND (3) ANY REQUIREMENT THAT LENDER POST A BOND IN ORDER
TO OBTAIN ANY PREJUDGMENT REMEDY.
19. BORROWER FURTHER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THE NOTE OR ANY OTHER LOAN DOCUMENT; ALL RIGHTS TO THE
BENEFITS OF ANY MORATORIUM, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW PROVIDED
OR WHICH MAY
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<PAGE> 80
HEREAFTER BE PROVIDED BY ANY FEDERAL OR STATE STATUTE, INCLUDING BUT NOT
LIMITED TO EXEMPTIONS PROVIDED BY OR ALLOWED UNDER THE BANKRUPTCY REFORM ACT OF
1978, AS THE SAME MAY BE AMENDED, BOTH AS TO ITSELF PERSONALLY AND AS TO ALL OF
ITS PROPERTY, WHETHER REAL OR PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION
OF THE OBLIGATIONS EVIDENCED BY THE NOTE, THIS ASSIGNMENT OR ANY OF THE OTHER
LOAN DOCUMENTS AND ANY AND ALL EXTENSIONS, RENEWALS AND MODIFICATIONS THEREOF;
AND THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR IN TORT, AT LAW OR IN EQUITY, ARISING OUT
OF OR IN ANY WAY RELATED TO THE NOTE, THIS ASSIGNMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.
20. BORROWER ACKNOWLEDGES AND AGREES THAT THE WAIVERS CONTAINED IN THIS
ASSIGNMENT AND IN ALL OF THE OTHER LOAN DOCUMENTS HAVE BEEN SPECIFICALLY
REQUESTED BY LENDER AND HAVE BEEN GRANTED BY BORROWER TO INDUCE LENDER TO
PROVIDE CREDIT TO BORROWER UNDER THE TERMS OF THIS ASSIGNMENT AND THAT SUCH
WAIVERS HAVE BEEN KNOWINGLY AND VOLUNTARILY GIVEN ONLY AFTER CONSIDERATION OF
THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS ATTORNEY.
IN WITNESS WHEREOF, Borrower has caused this Assignment to be executed as
of the day and year first written above.
Signed, Sealed and Delivered
In the Presence of: EDAC TECHNOLOGIES CORPORATION
By:
- -------------------------------- ---------------------------------
Name: Name:
Title:
Hereunto Duly Authorized
- --------------------------------
Name:
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<PAGE> 81
STATE OF CONNECTICUT :
ss ______________, 1998
COUNTY OF HARTFORD :
Personally appeared ___________________, ________________ of EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation, signer and sealer of the
foregoing instrument and acknowledged the same to be his/her free act and deed
as such Officer and the free act and deed of that corporation, before me.
-----------------------------------------
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires
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<PAGE> 82
EXHIBIT E
ASSIGNMENT AND ASSUMPTION OF LEASE
KNOW ALL MEN BY THESE PRESENTS:
THAT GERALD S. BIONDI and JAMES G. BIONDI (collectively, the "Assignors")
hereby transfer, assign and set over unto EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation ("Assignee") all of Assignor's right, title, interest and
obligation in, to and under that certain Lease and Option to Purchase dated May
22, 1991 between Assignors, as Lessor, and Lithographics, Inc.
("Lithographics"), as Tenant, amended by (a) First Amendment to Lease and
Option to Purchase dated August 29, 1994, (b) Second Amendment to Lease dated
March 17, 1995 and (c) Second Amendment to Lease and Option to Purchase dated
March ___, 1996 (such Lease and Option to Purchaser, as so amended, the
"Lease"). The Lease and all amendments and modifications thereto are attached
hereto and incorporated herein by reference as Exhibit A.
TO HAVE AND TO HOLD the Lease, together with any and all security
deposits, prepaid rents, rights and appurtenances thereto in anywise belonging
to Assignors unto Assignee, its successors and assigns FOREVER, and Assignors
do hereby bind themselves and successors and assigns to WARRANT AND FOREVER
DEFEND all and singular the Lease unto Assignee, its successors, and assigns,
against every person whomsoever lawfully claiming or to claim the same or any
part thereof by, through or under Assignors, but not otherwise.
Assignors certify that Lithographics has not paid rent more than one month
in advance and that Assignors are not in default under the Lease. Assignors
indemnify and hold Assignee harmless from and against any loss, cost, damage or
expense arising from claims made by Lithographics under the Lease hereby
assigned based upon events occurring prior to the Effective Date (hereinafter
defined) or for any inaccuracies contained herein.
Assignee, by its acceptance hereof, hereby (i) accepts said assignment;
(ii) assumes and agrees to keep, perform, fulfill, or cause to be performed and
fulfilled, all the terms, covenants, conditions, duties and obligations of
landlord contained in the Lease arising on and after the Effective Date
(hereinafter defined) and (iii) agrees to indemnify and hold Assignors
harmless from and against any loss, cost, damage or expenses arising from
claims made by Lithographics or any successor or assign under the Lease hereby
assigned based upon events occurring on or after the Effective Date
(hereinafter defined)
<PAGE> 83
(including specifically, without limitation, the obligations of the landlord
under the Lease with respect to security deposits delivered to Assignee on the
date hereof, but not otherwise).
Notwithstanding the date of execution of this Assignment and Assumption of
Lease, it is the intention of Assignors and Assignee that this Assignment and
Assumption of Lease be effective as of __________ A.M., Farmington, Connecticut
time on _____________, 1998 (the "Effective Date").
This Assignment and Assumption of Lease may be executed in one or more
counterparts, each of which together shall be deemed to be one and the same
instrument.
IN WITNESS WHEREOF, Assignors and Assignee have caused this Assignment and
Assumption of Lease to be duly executed as of this ______ day of
_______________, 1998.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: ASSIGNORS:
- ---------------------------- ------------------------------------
Name: Gerald S. Biondi
- ----------------------------
Name:
- ---------------------------- ------------------------------------
Name: James G. Biondi
- ----------------------------
Name:
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<PAGE> 84
ASSIGNEE:
EDAC TECHNOLOGIES CORPORATION
By:
- ------------------------- ---------------------------------
Name: Name:
Title:
Hereunto Duly Authorized
- -------------------------
Name:
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, GERALD S. BIONDI, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed, before me.
--------------------------------------
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires:
----------------
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
COUNTY OF HARTFORD )
Personally appeared, JAMES G. BIONDI, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed, before me.
--------------------------------------
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires:
----------------
STATE OF CONNECTICUT )
) SS. ____________ ___________, 1998
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<PAGE> 85
COUNTY OF HARTFORD )
Personally appeared, EDAC TECHNOLOGIES CORPORATION , a Wisconsin
corporation, signer and sealer of the foregoing instrument and acknowledged the
same to be his free act and deed, as such officer, and the free act and deed of
that corporation, before me.
-----------------------------------------
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires:
-------------------
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<PAGE> 86
EXHIBIT F
TENANT NOTIFICATION LETTER
____________, _____
Lithographics, Inc.
55 Spring Lane
Farmington, Connecticut 06032
Re: Sale of 55 Spring Lane, Farmington, Connecticut
Dear Tenant:
Please be advised that:
1. EDAC TECHNOLOGIES CORPORATION ("Purchaser") has purchased the captioned
property (the "Property") from GERALD S. BIONDI and JAMES G. BIONDI
("Sellers").
[2. In connection with such purchase, Sellers have transferred your
security deposit in the amount of $___________ (the "Security Deposit") to
Purchaser. Purchaser specifically acknowledges the receipt of and sole
responsibillity for the return of the security deposit.] IF APPLICABLE.
[3. All rental and other payments that become due subsequent to the date
hereof should be payable to Purchaser and should be delivered to the following
address unless you are otherwise notified by Purchaser in writing:
_________________________________
_________________________________
_________________________________
SELLERS:
---------------------------------
Gerald S. Biondi
---------------------------------
James G. Biondi
<PAGE> 87
PURCHASER:
EDAC TECHNOLOGIES CORPORATION
By:
------------------------------
Name:
Title:
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<PAGE> 88
EXHIBIT G
PERMITTED ENCUMBRANCES
55 Spring Lane, Farmington, Connecticut
1. Any and all provisions of any ordinance, municipal regulation or public
or private law.
2. Real estate taxes to the Town of Farmington (subject, however, to
proration as provided in Section 3.6.1 of the Agreement.
3. Such state of facts as an accurate survey may reveal.
4. Forty foot building line and ten foot drainage right-of-way as shown on
map or plan entitled "MAP OF LAND TO BE CONVEYED TO THE NEW ENGLAND
AIRCRAFT PRODUCTS COMPANY SPRING LANE - FARMINGTON, CONN. Scale 1" = 50'
- June 1980 Certified Substantially Correct Edward F. Reuber, W. F.
Grunewald, Surveyors Hodge Surveying Associates, P.C."
5. Easements and rights-of-way as shown on map or plan entitled "Map of
FARMINGTON INDUSTRIAL PARK & LAND of WEST HARTFORD VILLAGE, INC., Et. Al.
Farmington & Plainville Connecticut Scale 1"=200' - September, 1962
Certified Substantially Correct Edward F. Reuber W.F. Grunewald Jr.
Surveyors Office of Merton Hodge & Assoc. - Eng'rs & Surveyors Revised
May, 1965 Revised June, 1966 Revised July, 1966" recorded in Farmington
Land Records.
6. Easement from West Hartford Village, Inc. to Hartford Electric Light
Company dated November 12, 1962, recorded November 14, 1962 in Farmington
Land Records in Volume 161 at Page 246.
7. Easement from F.I.P. Corporation, et al to Hartford Electric Light
Company dated November 20, 1963, recorded November 22, 1963 in Farmington
Land Records in Volume 166 at Page 280.
8. The following drainage and utility easements relating to Farmington
Industrial Park insofar as the same may specifically affect the
above-described premises:
(a) Grant of an Easement from James E. Thomas to The American
Telephone & Telegraph Co. dated August 31, 1904 and recorded in the
Farmington Land Records in Volume 86 at Page 37, and Right-of-Way
from James E.
<PAGE> 89
Thomas to American Telephone and Telegraph Company dated September
5, 1904 and recorded in the Farmington Land Records in Volume 73 at
Page 568.
(b) Right-of-Way set forth in Warranty Deed from Burton A. Harris
to G. Lewis Wells dated June 28, 1948 and recorded in the
Farmington Land Records in Volume 102 at Page 208.
(c) Grant of easement from Oscar J. Nelson and Gunhild M. Nelson to
The Connecticut Power Company dated March 27, 1950 and recorded in
the Farmington Land Records in Volume 104 at Page 415.
(d) Grant of an easement from The Connecticut Spring Corporation to
the Town of Farmington dated January 26, 1960 and recorded in the
Farmington Land Records in Volume 147 at Page 144, of the right to
discharge storm water from Wells Drive.
(e) Grant of an easement from The Connecticut Spring Corporation to
The Hartford Electric Light Company dated December 30, 1960 and
recorded in the Farmington Land Records in Volume 152 at Page 151.
(f) Grant of an easement from Irving Fisher and Stanley D. Fisher
to the Hartford Electric Light Company dated November 12, 1962 and
recorded in the Farmington Land Records in Volume 161 at Page 245.
(g) Grant of an easement from Stanley D. Fisher and Bertram Youmans
to The Hartford Electric Light Company dated November 12, 1962 and
recorded in the Farmington Land Records in Volume 161 at Page 247.
(h) Drainage easement set forth in Warranty Deed from Stanley D.
Fisher and Bertram Youmans to the Town of Farmington dated October
30, 1962 and recorded in the Farmington Land Records in Volume 161
at Page 323.
(i) Drainage easement set forth in Warranty Deed from Stanley D.
Fisher and Irving Fisher to the Town of Farmington dated October
30, 1962 and recorded in the Farmington Land Records in Volume 161
at Page 325.
(j) Grant of an easement from West Hartford Village, Inc. to The
Connecticut Light & Power Company dated October 14, 1963, recorded
October 23, 1963 in Farmington Land Records in Volume 166 at Page
34.
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<PAGE> 90
(k) Grant of an easement from F.I.P. Corporation and Milton Nahum,
Trustee to The Hartford Electric Light Company dated May 19, 1967
and recorded in the Farmington Land Records in Volume 183 at Page
562.
9. Notice of Lease by and between James G. Biondi and Gerald S. Biondi as
Landlords, and Lithographics, Inc., as Tenant, dated March 17, 1995 and
recorded in Volume 496 at Page 952 of the Farmington Land Records.
10. Assignment of Lease from Lithographics, Inc. as Borrower and James G.
Biondi and Gerald S. Biondi as Lessors to Bristol Savings Bank dated March
10, 1995 and recorded in Volume 496 at Page 957 of the Farmington Land
Records.
11. Lessor's Agreement by and between James G. Biondi and Gerald Biondi as
Lessors, and Bristol Savings Bank (Bank), Small Business Association (SBA)
and Lithographics, Inc. (Borrower) dated March 17, 1995 and recorded in
Volume 504 at Page 124 of the Farmington Land Records.
12. Any Lease entered into by Sellers as provided in Section 9.12 of the
Agreement.
13. Any other caveats, easements, covenants and/or nonmonetary encumbrances
of record prior to the date of this Agreement provided the same do not
render title to the Property unmarketable. No matter shall be construed
as an encumbrance or defect in title so long as such matter is not
construed as such under the Standards of Title of the Connecticut Bar
Association whenever the standards shall be applicable.
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<PAGE> 1
ELEVENTH AMENDMENT TO LOANS AND SECURITY AGREEMENT,
MODIFICATION OF NOTES AND REAFFIRMATION OF GUARANTIES
This ELEVENTH AMENDMENT TO LOANS AND SECURITY AGREEMENT AND REAFFIRMATION
OF GUARANTIES, dated as of June 30, 1998 (this "AMENDMENT") is by and among
FLEET NATIONAL BANK F/K/A FLEET NATIONAL BANK OF CONNECTICUT F/K/A SHAWMUT BANK
CONNECTICUT, N.A., a national banking association with a place of business at
777 Main Street, Hartford, Connecticut 06115 ("LENDER"), EDAC TECHNOLOGIES
CORPORATION, a Wisconsin corporation with a principal place of business at 1806
New Britain Avenue, Farmington, Connecticut 06032 ("BORROWER") and GROS-ITE
INDUSTRIES, INC., a Connecticut corporation with a mailing address c/o Borrower
at 1806 New Britain Avenue, Farmington, Connecticut 06032 ("GUARANTOR").
On October 3, 1985, Lender and Borrower entered into a certain Revolving
Loan and Security Agreement which has been amended and restated in its entirety
by a certain Fifth Amended and Restated Revolving Loan, Term Loan, Equipment
Loan and Security Agreement dated February 28, 1995, as amended by a certain
Sixth Amendment to Revolving Loan, Term Loan, Equipment Loan and Security
Agreement dated July 31, 1995, as further amended by a certain Seventh
Amendment to Revolving Loan, Term Loan, Equipment Loan and Security Agreement
and Reaffirmation of Guaranties dated as of January 26, 1996, as further
amended by a certain Eighth Amendment to Revolving Loan, Term Loan, Equipment
Loan and Security Agreement and Reaffirmation of Guaranties dated as of April
10, 1996, as further amended by a certain Ninth Amendment to Revolving Loan,
Term Loan, Equipment Loan, Security Agreement, Modification of Notes and
Reaffirmation of Guaranties dated May 27, 1997 between Borrower and Lender and
as further amended by a certain Tenth Amendment to Revolving Loan, Term Loan,
Equipment Loan and Security Agreement and Reaffirmation of Guaranties dated May
22, 1998 (as amended and in effect from time to time, the "LOAN AGREEMENT").
Capitalized terms used herein and not defined herein shall have the meanings
given to them in the Loan Agreement.
Pursuant to the Loan Agreement, the Lender has made: (i) a $9,000,000.00
revolving loan (the "REVOLVING LOAN") as evidenced by a certain Amended and
Restated Revolving Promissory Note dated as of March 27, 1997 (the "REVOLVING
NOTE"), (ii) a $541,153.34 term loan (the "CONSOLIDATED EQUIPMENT LOAN") as
evidenced by a certain Amended and Restated Promissory Note dated March 27,
1997 (the "CONSOLIDATED EQUIPMENT NOTE"), (iii) a $4,000,000.00 term loan (the
"TERM LOAN") as evidenced by a certain Term Promissory Note dated March 22,
1993 (the "TERM NOTE"), (iv) a $1,000,000.00 construction to permanent loan
(the "CONSTRUCTION LOAN") as evidenced by a certain Construction to Permanent
Loan Promissory Note dated July 31, 1995 (the "CONSTRUCTION NOTE"), (v) a
$3,000,000.00 equipment loan (the "THIRD EQUIPMENT LOAN") as evidenced by a
certain Equipment Promissory Note III dated as of March 27, 1997 (the "THIRD
EQUIPMENT NOTE") and (vi) a $3,000,000 equipment loan (the "FOURTH EQUIPMENT
LOAN") as evidenced by a certain Equipment Promissory Note IV dated as of May
22, 1998 (the "FOURTH EQUIPMENT NOTE").
<PAGE> 2
Borrower has requested that Lender amend the Loan Agreement and the Loan
Documents in order to, among other things, (i) extend the termination date and
increase the maximum principal amount of the Revolving Loan, (ii) amend the
Borrowing Base, (iii) modify the interest rates of the Revolving Loan, the
Consolidated Equipment Loan, the Third Equipment Loan, the Fourth Equipment
Loan and the Construction Loan (collectively, the "LOANS"), (iv) make a new
$14,000,000 term loan to the Borrower, and (v) make other amendments as set
forth herein. Lender has advised Borrower that Lender is prepared to make the
loan and amendments requested on the condition that Borrower join with Lender
in this Amendment upon the terms and conditions set forth herein.
In consideration of this Amendment and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Lender, Borrower and Guarantor hereby agree as follows.
I. Acknowledgments, Affirmations and Representations and Warranties.
A. The Borrower and Guarantor acknowledge and affirm that:
1. All of the statements contained herein are true and correct and
that they understand that the Lender is relying on the truth and completeness of
such statements to enter into this Amendment.
2. As of June 30, 1998 and without regard to the financial
accommodations contemplated herein, the Borrower is legally and validly
indebted to the Lender in the principal amount of $4,425,116.84 with respect to
the Revolving Loan, $414,873.34 with respect to the Consolidated Equipment
Loan, $2,850,000 with respect to the Third Equipment Loan, $1,245,085.00 with
respect to the Fourth Equipment Loan, $3,072,053.69 with respect to the Term
Loan and $833,333.20 with respect to the Construction Loan, plus interest and
fees accrued and accruing thereon and costs and expenses of collection,
including without limitation, attorneys' fees, and there is no defense, offset
or counterclaim with respect to any of the foregoing or independent claim or
action against the Lender.
3. The Guarantor is legally and validly indebted to the Lender by
virtue of the Guaranty and there is no defense, offset or counterclaim with
respect thereto or claim or independent against the Lender.
B. The Borrower and the Guarantor represent and warrant to the Lender
that:
1. The resolutions previously adopted by the Board of Directors of the
Borrower and the Guarantor and provided to the Lender have not in any way been
rescinded or modified and have been in full force and effect since their
adoption to and including the date hereof and are now in full force and effect,
except to the extent that they have been modified or supplemented to authorize
this Amendment and the documents and transactions described herein.
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<PAGE> 3
2. The Borrower and the Guarantor have the corporate power and
authority to enter into, and have taken all necessary corporate action to
authorize, this Amendment and the transactions contemplated hereby.
3. All representations, warranties and covenants contained in, and
schedules and exhibits attached to, the Loan Documents are true and correct on
and as of the date hereof, are incorporated herein by reference and are hereby
remade.
4. The Borrower and the Guarantor are not currently in default under
any of the Loan Documents, and no condition exists which would constitute an
event of default under any of the Loan Documents but for the giving of notice
or passage of time, or both.
5. The consummation of the transactions contemplated hereby is not
prevented or limited by, nor does it conflict with or result in a breach of
terms, conditions or provisions of the Borrower's or Guarantor's respective
Certificates of Incorporation or Bylaws or any evidence of indebtedness,
agreement or instrument of whatever nature to which the Borrower or any of the
Guarantor is a party or by which any of them is bound, does not constitute a
default under any of the foregoing and does not violate any federal, state or
local law, regulation or order or any order of any court or agency which is
binding upon the Borrower or the Guarantor.
II. Amendments to Loan Documents.
A. Amendments to the Loan Agreement.
1. Amendment to Section 1. Sections 1.22, 1.30 and 1.33 are hereby
deleted and replaced with the following:
1.22 "COST OF FUNDS LOANS" or "COST OF FUNDS LOAN" means any
Revolving Loan, Equipment Loan, Equipment Loan IV, Second
Term Loan, or Acquisition Term Loan or any portion thereof
which bears interest with reference to the Cost of Funds.
1.30 "LIBOR LOANS" or "LIBOR LOAN" means the Revolving Loan,
Equipment Loan, Equipment Loan IV, the Second Term Loan
or Acquisition Term Loan or any portion thereof which
bears interest with reference to LIBOR.
1.33 "PRIME RATE LOAN" or "PRIME RATE LOANS" means the
Revolving Loan, Equipment Loan, Equipment Loan IV, Second
Term Loan or Acquisition Term Loan or any portion thereof
which bears interest with reference to the Prime Rate.
a. The following are hereby inserted after Section 1.38 of
the Loan Agreement:
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<PAGE> 4
1.39 "ACQUISITION TERM LOAN" means that term as defined in
Section 2.21 hereof.
1.40 "ACQUISITION TERM NOTE" means that term as defined in
Section 2.21.
2. Amendment to Section 2.1 of the Loan Agreement. The Loan
Agreement is hereby amended by deleting Section 2.1 in its entirety and
substituting the following in lieu thereof:
2.1 Revolving Loan. The Lender may loan to the Borrower, at its
discretion, and the Borrower may borrow from the Lender, from
time to time (each an "ADVANCE" and collectively, the "REVOLVING
LOAN"), up to that amount (hereinafter referred to as the
"BORROWING BASE") which is the lesser of:
a. The sum of:
(1) EIGHTY PERCENT (80%) of the Borrower's Eligible
Receivables;
(2) SIXTY PERCENT (60%) of the Borrower's Eligible
Inventory, but in any event not to exceed SEVEN MILLION
DOLLARS ($7,000,000.00);
which sum shall be reduced by the aggregate amount committed
under any letter or letters of credit issued by the Lender on
behalf of the Borrower; OR
b. THIRTEEN MILLION DOLLARS ($13,000,000.00), reduced by the
aggregate amount committed under any letter or letters of
credit issued by the Lender on behalf of the Borrower.
Nothing herein shall be construed to require the Lender to
lend up to the Borrowing Base, and nothing shall prohibit the
Lender from lending in excess of the Borrowing Base, all
loans to be at the discretion of the Lender.
The Revolving Loan shall be evidenced by the Amended and
Restated Revolving Promissory Note annexed hereto and made a
part hereof as EXHIBIT "B".
3. Amendment to Section 2.9 of the Loan Agreement. The Loan
Agreement is hereby amended by deleting the first sentence of Section 2.9 in
its entirety and substituting the following in lieu thereof:
The Revolving Loan shall terminate on June 30, 2001.
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<PAGE> 5
4. Amendment to Section 2.13 of the Loan Agreement. Section 2.13
of the Loan Agreement is hereby deleted and replaced with the following:
2.13 Non-Default Interest. The Borrower shall pay interest to
Lender monthly in arrears on the first day of each month
commencing on the outstanding and unpaid principal balance
of the Revolving Loan, Second Term Loan, Equipment Loan,
Equipment Loan IV and Acquisition Term Loan (collectively,
the "LOANS") at a rate per annum equal to, at Borrower's
election pursuant to Sections 2.14 and 2.17 below, (i) the
Prime Rate, (ii) LIBOR plus one hundred fifty (150) basis
points, or (iii) the Cost of Funds plus one hundred fifty
(150) basis points. If the Borrower achieves an Operating
Leverage Ratio (as defined in Section 10 of Exhibit A
hereto) of less than or equal to 2.0 to 1.0 for the
quarter period tested, the Lender, in its sole and
absolute discretion, may lower the interest rate on the
portion of the Loans which bear interest with respect to
the LIBOR Rate by twenty-five (25) basis points for the
quarter following the quarter in which the Operating
Leverage Ratio was tested.
5. The following is hereby inserted after Section 2.20 of the Loan
Agreement:
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<PAGE> 6
Section 2.21 Acquisition Term Loan. Subject to the terms and
conditions of this Agreement, Lender shall make a term loan
to the Borrower in an original principal amount of Fourteen
Million Dollars ($14,000,000.00) (the "ACQUISITION TERM
LOAN"). The Acquisition Term Loan shall be evidenced by, and
repaid in accordance with a single promissory note of
Borrower in the form attached hereto as Exhibit G duly
completed, executed and delivered to Lender, in the principal
amount of $14,000,000.00 (such promissory note is referred to
herein as the "ACQUISITION TERM NOTE") payable to Lender and
maturing on June 30, 2005. Borrower shall make monthly
payments of accrued interest commencing on August 1, 1998 and
on the first Business Day of each month thereafter until the
Acquisition Term Loan is repaid in full. Borrower shall make
mandatory scheduled principal payments under the Acquisition
Term Note monthly in the amount of (a) $83,333.33 per month,
commencing July 1, 1999 and continuing on the first day of
each succeeding month thereafter through and including June
1, 2002, (b) $250,000 commencing on July 1, 2002 and
continuing on the first day of each succeeding month
thereafter through and including June 1, 2003 and (c)
$333,333.33 per month commencing on July 1, 2003 and
continuing on the first day of each succeeding month
thereafter through and including June 1, 2005 except that if
not sooner paid, the principal amount, together with all
accrued but unpaid interest thereon, shall be due and payable
on June 30, 2005. Additionally, if at any time after June
30, 1999 the Borrower's Debt Service Ratio (as defined in
Section 10 of Exhibit A) exceeds 1.3 to 1.0 based on
Borrower's June 30 and December 31 financial statements, the
Borrower shall pay Lender an amount equal to fifty (50%)
percent of the amount of earnings which when deducted from
the Debt Service Ratio calculation would provide for a Debt
Service Ratio of 1.3 to 1.0. Such excess amount will be used
to first pay down the principal balance of the Acquisition
Term Loan in the inverse order of maturity and then to pay
down the principal balance of the Second Term Loan, Term
Loan, Equipment Loan or Equipment Loan IV ("OTHER TERM DEBT")
as determined by Lender in its sole discretion. Furthermore,
in the event of a public offering of capital stock or other
equity of Borrower, including without limitation a secondary
offering thereof, a minimum of $11,000,000 of the proceeds of
such offering, after allowance for ordinary and customary
underwriting expenses, shall be used to first pay down the
principal balance of the Acquisition Term Loan in the inverse
order of maturity and then to pay down Other Term Debt of
Borrower to Lender as determined by Lender in its sole
discretion.
Section 2.22 Success Fee. The Borrower shall pay Lender a
"success fee" of $120,000.00 as follows: (i) in full upon
the closing of a secondary stock offering which occurs on or
before December 31, 1999; (ii) $60,000 on or before December
31, 1999 and $60,000 on the earlier of (a) June 30, 2000 or
(b) the closing of a secondary stock offering; or (iii) in
full if the Loans are refinanced either in whole or in part
with borrowed money.
--6-
<PAGE> 7
6. Section 5.1(i) of the Loan Agreement is hereby deleted and
replaced with the following:
(i) Default in the payment of any sum due under any
indebtedness for borrowed money owed by the Borrower or any
Guarantor, including without limitation, indebtedness owed to
Gerald Biondi or James Biondi (the "BIONDI DEBT"), which
results in such indebtedness being due prior to its stated
maturity, provided, however, if (x) the Borrower disputes a
claim of default under the Biondi Debt due to its right of
offset contained in a certain Asset Purchase Agreement by and
among Apex Acquisition Corp., Apex Machine Tool Company,
Inc., Gerald S. Biondi, James G. Biondi and Michael Biondi,
and (y) Borrower establishes adequate reserves for the Biondi
Debt in an amount reasonably satisfactory to Lender, such
default shall not constitute a default hereunder unless and
until such dispute is resolved adversely to Borrower.
7. Amendment to Exhibit A of the Loan Agreement. Exhibit A of
the Loan Agreement is hereby amended by:
a. Deleting Section 10 of Exhibit "A" to the Loan
Agreement in its entirety and substituting the
following in lieu thereof:
Debt Service Ratio. The Borrower shall maintain as of
the end of each calendar quarter, for the year to date
period, a ratio of [(earnings before interest, taxes,
depreciation and amortization) minus (Unfunded Capital
Expenditures (pro rated based upon the percentage of
the calendar year elapsed at the time of the covenant
testing)) to [(Current Maturities of Long-Term Debt
paid or scheduled to be paid during the period to be
tested) plus (interest) plus (taxes) plus (dividends)]
of not less than (a) 1.4 to 1.0 as of September 30,
1998 and at all times through and including September
30, 1999, and (b) 1.2 to 1.0 as of December 31, 1999
and at all times thereafter. "CURRENT MATURITIES OF
LONG TERM DEBT" shall mean all indebtedness of Borrower
(excluding the Revolving Loan) which, in accordance
with GAAP may be properly classified as long term debt,
the portion of which is due within one (1) year from
the date of determination thereof. "UNFUNDED CAPITAL
EXPENDITURES" means all Capital Expenditures which are
not funded with the proceeds of the Equipment Loan IV,
the Acquisition Term Loan, or the Biondi Debt.
"CAPITAL EXPENDITURES" shall mean amounts paid by the
Borrower in connection with the purchase by the
Borrower of Capital Assets that would be required to be
capitalized and shown on the balance sheet of the
Borrower in accordance with GAAP. "CAPITAL ASSETS"
shall mean fixed assets, both tangible (such as land,
buildings, fixtures,
-7-
<PAGE> 8
machinery and equipment) and intangible (such as
patents, copyrights, trademarks, franchises and good
will); provided that Capital Assets shall not include
any item customarily charged directly to expense or
depreciated over a useful life of twelve (12) months or
less in accordance with GAAP.
b. Deleting Section 13 of Exhibit "A" to the Loan
Agreement in its entirety and substituting the
following in lieu thereof:
Operating Leverage Ratio. The Borrower shall maintain
on a rolling four quarter basis a ratio of [Funded
Senior Debt] to [earnings before interest, taxes,
depreciation and amortization] of not greater than (a)
5.6 to 1.0 as of September 30, 1998, (b) 4.9 to 1.0 as
of December 31, 1998 and at all times through September
30, 1999, (c) 3.0 to 1.0 as of December 31, 1999 and at
all times through September 30, 2000 and (d) 2.5 to 1.0
as of December 31, 2000 and at all times thereafter.
"FUNDED SENIOR DEBT" shall mean all outstanding
indebtedness of Borrower to Lender and to James Biondi
and Gerald Biondi.
8. EXHIBIT B of the Loan Agreement is hereby deleted and
replaced with B attached hereto.
9. EXHIBIT G attached hereto is hereby attached to the Loan
Agreement as EXHIBIT G.
B. Amendments to Revolving Note. The Revolving Note is hereby amended
and restated as set forth in EXHIBIT B attached hereto.
III. Reaffirmation of Guaranty.
To induce the Lender to enter into this Amendment, the Guarantor hereby
(a) consents to this Amendment and (b) affirms and ratifies the Guaranty and
confirms that (i) the Guarantor does irrevocably and unconditionally guarantee
to the Lender the payment and performance from the Borrower of the Obligations
(as defined in the Guaranty) from the Borrower to the Lender, upon the terms
and conditions set forth in the Guaranty, (ii) the term Obligations includes,
without limitation, this Amendment (the "MODIFICATION"), the Term Loan, the
Construction Loan, the Consolidated Equipment Loan, the Third Equipment Loan,
the Fourth Equipment Loan, the increase in the Revolving Loan and the
Acquisition Term Loan, and (iii) the Guaranty remains in full force and effect.
IV. Miscellaneous.
A. Ratifications, Etc. Except as otherwise expressly set forth herein,
all terms and conditions of the Loan Agreement, the Guaranty and the Loan
Documents are ratified and shall
-8-
<PAGE> 9
remain in full force and effect. Nothing herein shall be construed to be a
waiver of any requirements of the Loan Agreement and the Loan Documents except
as expressly set forth herein.
B. Conditions Precedent. The effectiveness of this Amendment shall be
subject to the Lender's prior receipt of each of the following in form and
substance satisfactory to Lender and its counsel:
1. This Amendment, duly executed and delivered by the Borrower
and Guarantor and the Amended and Restated Revolving
Promissory Note and Acquisition Term Note, both duly executed
and delivered by the Borrower;
2. The execution by Apex Machine Tool Company, Inc. f/k/a Apex
Acquisition Corporation of a Guaranty of the obligations of
Borrower to Lender (the "APEX GUARANTY"), a security agreement
securing all obligations of Apex under the Apex Guaranty and a
UCC-1 Financing Statement in favor of Lender providing a first
priority perfected security interest in all personal property
of Apex to Lender, except for the security interest of the
State of Connecticut as previously disclosed to Lender.
3. The execution and delivery of an open-end mortgage in favor
of Lender on 1790, 1794 and 1806 New Britain Avenue,
Farmington, Connecticut securing the Acquisition Term Loan.
4. Copies of all corporate action taken by the Borrower,
Guarantor and Apex, including resolutions of their Board of
Directors, authorizing the execution, delivery, and
performance of the Loan Documents to which each is a party and
each other document to be delivered pursuant to this
Amendment, certified as of the date of this Amendment by the
Secretary of the Borrower, Guarantor and Apex;
5. A certificate or certificates, dated as of the date of this
Amendment, of the Secretary of the Borrower, Guarantor and
Apex certifying the names and true signatures of the officers
of the Borrower, Guarantor and Apex authorized to sign the
Loan Documents to which the Borrower, Guarantor and Apex are a
party and the other documents to be delivered by the Borrower,
Guarantor and Apex under this Amendment;
6. Opinions of counsel for Borrower, Guarantor and Apex in form
and substance satisfactory to Lender.
7. All fees and expenses, including legal fees and related
disbursements incurred by Lender in connection with the
structuring, negotiation, preparation and closing of this
Amendment and the transactions related hereto;
-9-
<PAGE> 10
8. Execution and recording of a modification to the mortgage
securing the Construction Loan and the issuance of an
endorsement to the title policy insuring the original mortgage
modified by such modification;
9. Execution and recording of a certain Ninth Modification of
Open-End Mortgage of even date herewith and the issuance of
an endorsement to the title policy insuring the original
mortgage modified by said Modification of Open-End Mortgage
Deed; and
10. Payment of a $30,000 commitment fee to Lender.
C. Counterparts. This Amendment may be executed in any number of
counterparts, which together shall constitute one instrument.
D. Governing Law. This Amendment shall be construed and interpreted in
accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
an instrument under seal.
LENDER:
FLEET NATIONAL BANK f/k/a FLEET NATIONAL
BANK OF CONNECTICUT f/k/a SHAWMUT BANK
CONNECTICUT, N.A.
By: /s/ Edgar Ezerins
-------------------------------------
Edgar Ezerins
Its Vice President
Duly Authorized
BORROWER:
EDAC TECHNOLOGIES CORPORATION
By: /s/ Ronald G. Popolizio
-------------------------------------
Ronald G. Popolizio
Its Vice President
Duly Authorized
GUARANTOR:
GROS-ITE INDUSTRIES, INC.
By: /s/ Ronald G. Popolizio
-------------------------------------
-10-
<PAGE> 11
Its Secretary
APEX MACHINE TOOL COMPANY, INC. f/k/a
APEX ACQUISITION CORPORATION
By: /s/ Ronald G. Popolizio
-----------------------------------
Its Vice President
-11-
<PAGE> 1
SECOND AMENDED AND RESTATED
REVOLVING PROMISSORY NOTE
$13,000,000.00 Hartford, Connecticut
June 30, 1998
ON DEMAND FOR VALUE RECEIVED, the undersigned, EDAC TECHNOLOGIES
CORPORATION, a Wisconsin corporation with a place of business at 1790 New
Britain Avenue, Farmington, Connecticut 06032 (hereinafter "BORROWER") promises
to pay to the order of FLEET NATIONAL BANK, f/k/a Fleet National Bank of
Connecticut, N.A. f/k/a Shawmut Bank of Connecticut f/k/a Connecticut National
Bank, a national banking association ("LENDER"), having a mailing address of
777 Main Street, Hartford, Connecticut, 06115 or at such other place as Lender
may from time to time designate in writing, the principal sum of THIRTEEN
MILLION ($13,000,000.00) DOLLARS (the "PRINCIPAL AMOUNT") or, if less, the
aggregate unpaid principal amount of all Advances made pursuant to that certain
Fifth Amended and Restated Revolving Loan, Term Loan, Equipment Loan and
Security Agreement dated February 28, 1995, as amended by a certain Sixth
Amendment to Revolving Loan, Term Loan, Equipment Loan and Security Agreement
dated July 31, 1995, as further amended by a certain Seventh Amendment to
Revolving Loan, Term Loan, Equipment Loan and Security Agreement and
Reaffirmation of Guaranties dated as of January 26, 1996, as further amended by
a certain Eighth Amendment to Revolving Loan, Term Loan, Equipment Loan and
Security Agreement and Reaffirmation of Guaranties dated as of April 10, 1996,
as further amended by a certain Ninth Amendment to Revolving Loan, Term Loan,
Equipment Loan, Security Agreement, Modification of Notes and Reaffirmation of
Guaranties dated March 27, 1997 between Borrower and Lender, as further amended
by a certain Tenth Amendment to Revolving Loan, Term Loan, Equipment Loan and
Security Agreement and Reaffirmation of Guaranties dated May 22, 1998 and as
further amended by a certain Eleventh Amendment to Revolving Loan, Term Loan,
Equipment Loan, Security Agreement dated of even date herewith
(as amended and in effect from time to time, the "LOAN AGREEMENT"), together
with (i) interest at the rate and in the manner provided in the Loan Agreement;
(ii) all amounts which may become due under the Loan Agreement or any of the
other Loan Documents; (iii) any costs and expenses, including reasonable
attorneys' and appraiser's fees incurred in the collection of this Note or the
enforcement of the Loan Agreement or any of the other Loan Documents,
foreclosure thereunder or in any litigation or controversy arising from or
connected with this Note, or the Loan Agreement or any of the other Loan
Documents; and (iv) all taxes or duties assessed upon said sum against Lender
or upon the debt evidenced hereby. All amounts owing under this Note and
interest thereon shall be payable in legal tender of the United States of
America. Capitalized terms used herein and not otherwise defined shall have
the meanings given to them in the Loan Agreement.
Interest on the Principal Amount shall be computed on the basis of a
360-day year for actual days elapsed and shall be payable at the rate and in
the manner as provided in the Loan Agreement until all of said Principal Amount
has been fully paid, whether before or after the maturity hereof, by
acceleration or otherwise, and whether or not any judgment is obtained hereon.
If not sooner paid,
<PAGE> 2
the Principal Amount, together with all accrued but unpaid interest thereon,
shall be due and payable on June 30, 2001 or such earlier date as provided in
the Loan Agreement (including by reason of an acceleration upon the occurrence
of an Event of Default) (the "MATURITY DATE").
In the event that Lender has not received, within fifteen (15) days of its
due date, any payment of principal or interest due hereunder (excluding any
Principal Amount or interest due upon the Maturity Date), or payment with
respect to any other payment due under this Note, Borrower shall be subject to
a late charge equal to five (5%) percent of any such payment.
Upon the occurrence of default by Borrower in the performance of any of
Borrower's obligations hereunder, or an Event of Default as defined in the Loan
Agreement or in any other Loan Documents, Lender may, at its option, accelerate
Borrower's obligations hereunder and declare the entire unpaid Principal
Amount, together with accrued interest and all other amounts then due which are
evidenced by this Note, to be immediately due and payable, without the
necessity for demand or additional notice. In addition, upon the occurrence of
such default or Event of Default or after the Maturity Date, the interest rate
of this Note shall increase without notice, as provided in the Loan Agreement.
Failure to exercise these options shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default.
Borrower may prepay the Note only in accordance with the terms of the Loan
Agreement.
Notwithstanding any provisions of this Note, it is the understanding and
agreement of Borrower and Lender that the maximum rate of interest to be paid
by Borrower to Lender shall not exceed the highest of the maximum rate of
interest permissible to be charged by Lender under applicable laws. Any amount
paid in excess of such rate shall be deemed to be a payment in reduction of
principal except to the extent that such amount is in excess of the then
outstanding Principal Amount, in which event such excess shall be returned to
the Borrower.
This Note shall be governed by and construed in accordance with the laws
of the State of Connecticut. This Note shall bind the successors and assigns
of Borrower, and shall inure to the benefit of Lender and its successors and
assigns. This Note may not be changed or terminated orally, but only by an
agreement in writing signed by the party against whom enforcement of any such
change or termination is sought.
Whenever in this Note words of any gender appear, they shall be deemed to
apply equally to any other gender. Whenever used in this Note, the plural
shall include the singular and the singular shall include the plural, as the
context shall require. In the event that Borrower consists of more than one
person or entity, the obligations hereunder shall be joint and several.
This Note amends, restates, and supersedes in its entirety a certain
Amended and Restated Revolving Promissory Note dated March 27, 1997 in the
original principal amount of $9,000,000.00 from the Borrower to the Lender (as
amended and in effect from time to time, the "ORIGINAL NOTE") and the Original
Note shall have no further force and effect except to the extent necessary to
preserve
2
<PAGE> 3
and maintain the Lender's previously filed and fully protected security
interest in the personal property of the Borrower. Nothing contained herein
shall constitute a novation of the Original Note.
TO INDUCE LENDER TO ENTER INTO THE COMMERCIAL LOAN TRANSACTION EVIDENCED
BY THIS NOTE, THE LOAN AGREEMENT, AND ANY OTHER LOAN DOCUMENTS EVIDENCING OR
SECURING THE SAME, BORROWER AGREES THAT THIS IS A COMMERCIAL TRANSACTION AND
NOT A CONSUMER TRANSACTION, AND WAIVES ANY RIGHT TO NOTICE AND A HEARING AND
AUTHORIZES LENDER'S ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT
COURT ORDER, PROVIDED THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER AND
WAIVES ANY CLAIM IN TORT, CONTRACT OR OTHERWISE AGAINST LENDER'S ATTORNEY WHICH
MAY ARISE OUT OF SUCH ISSUANCE OF A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT
ORDER. BORROWER FURTHER WAIVES ANY RIGHT IT MAY HAVE TO REQUEST THAT LENDER
POST A BOND IN CONNECTION WITH ANY SUCH PREJUDGMENT REMEDY. BORROWER
ACKNOWLEDGES AND STIPULATES THAT SUCH WAIVER AND AUTHORIZATION GRANTED ABOVE
ARE MADE KNOWINGLY AND FREELY AND AFTER FULL CONSULTATION WITH COUNSEL.
SPECIFICALLY, BORROWER RECOGNIZES AND UNDERSTANDS THAT THE EXERCISE OF LENDER'S
RIGHTS DESCRIBED ABOVE MAY RESULT IN THE ATTACHMENT OF OR LEVY AGAINST
BORROWER'S PROPERTY, AND SUCH WRIT FOR A PREJUDGMENT REMEDY WILL NOT HAVE THE
PRIOR WRITTEN APPROVAL OR SCRUTINY OF A COURT OF LAW OR OTHER JUDICIAL OFFICER
NOR WILL BORROWER HAVE THE RIGHT TO ANY NOTICE OR PRIOR HEARING WHERE BORROWER
MIGHT CONTEST SUCH A PROCEDURE. THE INTENT OF BORROWER IS TO GRANT TO LENDER
FOR GOOD AND VALUABLE CONSIDERATION THE RIGHT TO OBTAIN SUCH A PREJUDGMENT
REMEDY AND TO EXPRESS ITS BELIEF THAT ANY SUCH PREJUDGMENT REMEDY OBTAINED IS
VALID AND CONSTITUTIONAL. FURTHER, TO THE EXTENT ALLOWED UNDER APPLICABLE LAW,
BORROWER HEREBY WAIVES DEMAND, PRESENTMENT FOR PAYMENT, PROTEST, NOTICE OF
PROTEST, NOTICE OF DISHONOR, DILIGENCE IN COLLECTION, NOTICE OF NONPAYMENT OF
THIS NOTE AND ANY AND ALL NOTICES OF A LIKE NATURE.
3
<PAGE> 4
Lender may at any time pledge all or any portion of its rights under this
note and any other loan documents evidencing, securing or relating thereto to
any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement
thereof shall release Lender from its obligations under any of the loan
documents.
BORROWER:
EDAC TECHNOLOGIES CORPORATION
By: /s/ Ronald G. Popolizio
-----------------------------
Ronald G. Popolizio
Its Vice President
(Duly Authorized)
4
<PAGE> 1
TERM PROMISSORY NOTE
$14,000,000.00 Hartford, Connecticut
June 30, 1998
FOR VALUE RECEIVED, the undersigned, EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation ("BORROWER"), with its chief executive office at 1790 New
Britain Avenue, Farmington, Connecticut 06032, promises to pay to the order of
FLEET NATIONAL BANK f/k/a FLEET NATIONAL BANK OF CONNECTICUT f/k/a SHAWMUT BANK
CONNECTICUT, N.A. f/k/a CONNECTICUT NATIONAL BANK, a national banking
association ("LENDER"), at its place of business at 777 Main Street, Hartford,
Connecticut or at such other place as Lender may from time to time designate in
writing, the principal sum of Fourteen Million and 00/100 Dollars
($14,000,000.00) (the "PRINCIPAL AMOUNT"), pursuant to that certain Fifth
Amended and Restated Revolving Loan, Term Loan, Equipment Loan and Security
Agreement dated February 28, 1995, as amended by a certain Sixth Amendment to
Revolving Loan, Term Loan, Equipment Loan and Security Agreement dated July 31,
1995, as further amended by a certain Seventh Amendment to Revolving Loan, Term
Loan, Equipment Loan and Security Agreement and Reaffirmation of Guaranties
dated as of January 26, 1996, as further amended by a certain Eighth Amendment
to Revolving Loan, Term Loan, Equipment Loan and Security Agreement and
Reaffirmation of Guaranties dated as of April 10, 1996, and as further amended
by a certain Ninth Amendment to Revolving Loan, Term Loan, Equipment Loan,
Security Agreement, Modification of Notes and Reaffirmation of Guaranties
dated as of March 27, 1997, as further amended by a Tenth Amendment to
Revolving Loan, Term Loan, Equipment Loan and Security Agreement and
Reaffirmation of Guaranties dated as of May 22, 1998 and as further amended by
a certain Eleventh Amendment to Loans and Security Agreement, Modification of
Notes and Reaffirmation of Guaranties of even date herewith between Borrower
and Lender (as amended and in effect from time to time, the "LOAN AGREEMENT"),
together with (i) interest at the rate and in the manner provided in the Loan
Agreement; (ii) all amounts which may become due under the Loan Agreement or
any of the other Loan Documents; (iii) any costs and expenses, including
reasonable attorneys' and appraiser's fees incurred in the collection of this
Note or the enforcement of the Loan Agreement or any of the other Loan
Documents, foreclosure thereunder or in any litigation or controversy arising
from or connected with this Note, or the Loan Agreement or any of the other
Loan Documents; and (iv) all taxes or duties assessed upon said sum against
Lender or upon the debt evidenced hereby. All amounts owing under this Note
and interest thereon shall be payable in legal tender of the United States of
America. Capitalized terms used herein and not otherwise defined shall have
the meanings given to them in the Loan Agreement.
Borrower shall make mandatory scheduled principal payments monthly in the
amount of (a) $83,333.33 per month, commencing July 1, 1999 and continuing on
the first day of each succeeding month thereafter through and including June 1,
2002, (b) $250,000 per month commencing on July 1, 2002 and continuing on the
first day of each succeeding month thereafter through and including
<PAGE> 2
June 1, 2003 and (c) $333,333.33 per month commencing on July 1, 2003 and
continuing on the first day of each succeeding month thereafter through and
including June 1, 2005 except that if not sooner paid, the principal amount,
together with all accrued but unpaid interest thereon, shall be due and payable
on June 30, 2005 (the "MATURITY DATE").
Interest on the Principal Amount shall be computed on the basis of a
360-day year for actual days elapsed and shall be payable at the rate and in
the manner as provided in the Loan Agreement until all of said Principal Amount
has been fully paid, whether before or after the Maturity Date, by acceleration
or otherwise, and whether or not any judgment is obtained hereon.
In the event that Lender has not received, within fifteen (15) days of its
due date, any installment of the Principal Amount and interest (upon the
Maturity Date or otherwise), or payment with respect to any other payment due
under this Note, Borrower shall be subject to a late charge equal to five
percent (5%) of such amount due. The minimum late charge shall be $15.00.
Upon the occurrence of default by Borrower in the performance of any of
Borrower's obligations hereunder, or an Event of Default as defined in the Loan
Agreement or in any other Loan Documents, Lender may, at its option, accelerate
Borrower's obligations hereunder and declare the entire unpaid Principal
Amount, together with accrued interest and all other amounts then due which are
evidenced by this Note, to be immediately due and payable, without the
necessity for demand or additional notice. In addition, upon the occurrence of
such default or Event of Default or after the Maturity Date, the interest rate
of this Note shall increase without notice, as provided in the Loan Agreement.
Failure to exercise these options shall not constitute a waiver of the right to
exercise the same in the event of any subsequent default.
Borrower may prepay the Note only as permitted under the Loan Agreement
and subject to the payment of such prepayment premiums or penalties contained
therein.
Notwithstanding any provisions of this Note, it is the understanding and
agreement of Borrower and Lender that the maximum rate of interest to be paid
by Borrower to Lender shall not exceed the highest of the maximum rate of
interest permissible to be charged by Lender under applicable laws. Any amount
paid in excess of such rate shall be deemed to be a payment in reduction of
principal except to the extent that such amount is in excess of the then
outstanding Principal Amount, in which event such excess shall be returned to
the Borrower.
This Note shall be governed by and construed in accordance with the laws
of the State of Connecticut. This Note shall bind the successors and assigns
of Borrower, and shall inure to the benefit of Lender and its successors and
assigns. This Note may not be changed or terminated orally, but only by an
agreement in writing signed by the party against whom enforcement of any such
change or termination is sought.
Whenever in this Note words of any gender appear, they shall be deemed to
apply equally to any other gender. Whenever used in this Note, the plural
shall include the singular and the singular
-2-
<PAGE> 3
shall include the plural, as the context shall require. In the event that
Borrower consists of more than one person or entity, the obligations hereunder
shall be joint and several.
TO INDUCE LENDER TO ENTER INTO THE COMMERCIAL LOAN TRANSACTION EVIDENCED
BY THIS NOTE, THE LOAN AGREEMENT, AND ANY OTHER LOAN DOCUMENTS EVIDENCING OR
SECURING THE SAME, BORROWER AGREES THAT THIS IS A COMMERCIAL TRANSACTION AND
NOT A CONSUMER TRANSACTION, AND WAIVES ANY RIGHT TO NOTICE AND A HEARING AND
AUTHORIZES LENDER'S ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT
COURT ORDER, PROVIDED THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER AND
WAIVES ANY CLAIM IN TORT, CONTRACT OR OTHERWISE AGAINST LENDER'S ATTORNEY WHICH
MAY ARISE OUT OF SUCH ISSUANCE OF A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT
ORDER. BORROWER ACKNOWLEDGES AND STIPULATES THAT SUCH WAIVER AND AUTHORIZATION
GRANTED ABOVE ARE MADE KNOWINGLY AND FREELY AND AFTER FULL CONSULTATION WITH
COUNSEL. SPECIFICALLY, BORROWER RECOGNIZES AND UNDERSTANDS THAT THE EXERCISE
OF LENDER'S RIGHTS DESCRIBED ABOVE MAY RESULT IN THE ATTACHMENT OF OR LEVY
AGAINST BORROWER'S PROPERTY, AND SUCH WRIT FOR A PREJUDGMENT REMEDY WILL NOT
HAVE THE PRIOR WRITTEN APPROVAL OR SCRUTINY OF A COURT OF LAW OR OTHER JUDICIAL
OFFICER NOR WILL BORROWER HAVE THE RIGHT TO ANY NOTICE OR PRIOR HEARING WHERE
BORROWER MIGHT CONTEST SUCH A PROCEDURE. THE INTENT OF BORROWER IS TO GRANT TO
LENDER FOR GOOD AND VALUABLE CONSIDERATION THE RIGHT TO OBTAIN SUCH A
PREJUDGMENT REMEDY AND TO EXPRESS ITS BELIEF THAT ANY SUCH PREJUDGMENT REMEDY
OBTAINED IS VALID AND CONSTITUTIONAL. FURTHER, TO THE EXTENT ALLOWED UNDER
APPLICABLE LAW, BORROWER HEREBY WAIVES DEMAND, PRESENTMENT FOR PAYMENT,
PROTEST, NOTICE OF PROTEST, NOTICE OF DISHONOR, DILIGENCE IN COLLECTION, NOTICE
OF NONPAYMENT OF THIS NOTE AND ANY AND ALL NOTICES OF A LIKE NATURE.
Lender may at any time pledge all or any portion of its rights under this
note and any other loan documents evidencing, securing or relating thereto to
any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement
thereof shall release Lender from its obligations under any of the loan
documents.
BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY. THIS
-3-
<PAGE> 4
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BANK TO ACCEPT THIS NOTE AND MAKE
THE LOAN EVIDENCED BY THE NOTE.
BORROWER:
EDAC TECHNOLOGIES CORPORATION
By: /s/ Ronald G. Popolizio
-------------------------------------
Ronald G. Popolizio
Its Vice President
(Duly Authorized)
-4-
<PAGE> 1
FOURTH MODIFICATION OF CONSTRUCTION TO
PERMANENT LOAN PROMISSORY NOTE AND
OPEN-END CONSTRUCTION TO PERMANENT MORTGAGE DEED
THIS FOURTH MODIFICATION OF CONSTRUCTION TO PERMANENT LOAN PROMISSORY NOTE
AND OPEN-END CONSTRUCTION TO PERMANENT MORTGAGE DEED (the "AGREEMENT"), entered
into as of the 30th day of June, 1998, by and between EDAC TECHNOLOGIES
CORPORATION, a Wisconsin corporation having a place of business at 1790 New
Britain Avenue, Farmington, Connecticut 06032 (the "BORROWER"), and FLEET
NATIONAL BANK f/k/a FLEET NATIONAL BANK OF CONNECTICUT f/k/a SHAWMUT BANK
CONNECTICUT, N.A. a national banking association, having an office at 777 Main
Street, Hartford, Connecticut 06115 (the "LENDER").
W I T N E S S E T H:
1. On October 3, 1985, the Lender and the Borrower entered into a certain
Revolving Loan and Security Agreement which has been (a) amended and restated
in its entirety by a certain Fifth Amended and Restated Revolving Loan, Term
Loan, Equipment Loan and Security Agreement dated February 28, 1995, (b)
amended by a certain Sixth Amendment to Revolving Loan, Term Loan, Equipment
Loan and Security Agreement dated July 31, 1995, (c) amended by a certain
Seventh Amendment to Revolving Loan, Term Loan, Equipment Loan and Security
Agreement and Reaffirmation of Guaranties dated as of January 26, 1996, (d)
amended by a certain Eighth Amendment to Revolving Loan, Term Loan, Equipment
Loan and Security Agreement dated as of April 10, 1996, (e) amended by a
certain Ninth Amendment to Revolving Loan, Term Loan, Equipment Loan, Security
Agreement, Modification of Notes and Reaffirmation of Guaranties dated May 27,
1997 between Borrower and Lender, (f) as further amended by a certain Tenth
Amendment to Revolving Loan, Term Loan, Equipment Loan and Security Agreement
and Reaffirmation of Guaranties dated May 22, 1998, and (g) as further amended
by a certain Eleventh Amendment to Loan and Security Agreement and Modification
of Notes and Reaffirmation of Guaranties (as amended and in effect from time to
time, collectively, the "LOAN AGREEMENT"). Capitalized terms used herein and
not defined herein shall have the meanings given to them in the Loan Agreement.
2. Pursuant to the Loan Agreement, the Borrower executed a certain
Construction to Permanent Loan Promissory Note dated July 31, 1995 in the
original principal amount of up to $1,000,000 in favor of the Lender, which was
amended pursuant to (i) a certain Modification of Construction to Permanent
Loan Promissory Note and Open-End Construction to Permanent Mortgage Deed
recorded in Volume 513 at Page 462 of the Farmington Land Records (the
"MODIFICATION"), (ii) a certain Second Modification of Construction to
Permanent Loan, Promissory Note and Open End Construction to Permanent Mortgage
dated as of April 10, 1996 and recorded in Volume 514 at Page 716 of the
Farmington Land Records (the "SECOND MODIFICATION") and (iii) a certain Third
Modification of Construction to Permanent Loan Promissory Note and Open-End
Construction to Permanent Mortgage Deed dated as of March 27, 1997 and recorded
in Volume 535 at Page 344 of the Farmington Land Records (the "THIRD
MODIFICATION") (collectively, as modified,
<PAGE> 2
the "NOTE"). The Note is secured by, among other things, an Open-End
Construction to Permanent Mortgage Deed from the Borrower in favor of Lender
dated August 3, 1995 and recorded in Volume 502 at Page 1024 of the Farmington
Land Records, which was modified pursuant to the Modification, the Second
Modification and Third Modification (as modified, the "MORTGAGE"), encumbering
certain real property located in the Town of Farmington as more particularly
described in Schedule A to the Mortgage. The Loan Agreement, Note, Mortgage and
related documents are collectively referred to as the "LOAN DOCUMENTS".
3. The Borrower has requested that the Lender extend certain other loans
from the Lender to the Borrower and to modify the interest rates set forth in
the Note.
4. As a condition to the extension, the Lender requires the Borrower to
enter into this Agreement.
5. In consideration of the foregoing, and for One ($1.00) Dollar and other
valuable consideration received to its satisfaction, the Borrower agrees to
modify the terms and conditions of the Note and Mortgage as more specifically
set forth in this Agreement.
TERMS OF AGREEMENT
A. Acknowledgments, Affirmations and Representations and Warranties.
1. The Borrower acknowledges and affirms that:
a. All of the statements contained herein are true and correct and
that they understand that the Lender is relying on the truth and completeness of
such statements to enter into this Agreement.
b. As of the date hereof and without regard to the financial
accommodations contemplated herein, the Borrower is legally and validly indebted
to the Lender in the principal amount of $833,333.20 with respect to the Note,
plus interest and fees accrued and accruing thereon and costs and expenses of
collection, including without limitation, attorneys' fees, and there is no
defense, offset or counterclaim with respect to any of the foregoing or
independent claim or action against the Lender.
2. The Borrower represents and warrants to the Lender that:
a. The resolutions previously adopted by the Board of Directors of
the Borrower and provided to the Lender have not in any way been rescinded or
modified and have been in full force and effect since their adoption to and
including the date hereof and are now in full force and effect, except to the
extent that they have been modified or supplemented to authorize this Agreement
and the documents and transactions described herein.
2
<PAGE> 3
b. The Borrower has the corporate power and authority to enter
into, and have taken all necessary corporate action to authorize, this Agreement
and the transactions contemplated hereby.
c. All representations, warranties and covenants contained in, and
schedules and exhibits attached to, the Loan Documents are true and correct on
and as of the date hereof, are incorporated herein by reference and are hereby
remade.
d. Other than the defaults previously waived in writing by the
Lender, the Borrower is not currently in default under any of the Loan
Documents, and no condition exists which would constitute an event of default
under any of the Loan Documents but for the giving of notice or passage of time,
or both.
e. The consummation of the transactions contemplated hereby is not
prevented or limited by, nor does it conflict with or result in a breach of
terms, conditions or provisions of the Borrower's Certificate of Incorporation
or Bylaws or any evidence of indebtedness, agreement or instrument of whatever
nature to which the Borrower is a party or by which it is bound, does not
constitute a default under any of the foregoing and does not violate any
federal, state or local law, regulation or order or any order of any court or
agency which is binding upon the Borrower.
B. Modification of Note.
The Borrower and the Lender agree that the terms of the Note are hereby
modified in accordance with the following:
1. Paragraph (15) entitled "Permanent Interest Rate" on page four of
the Note is hereby deleted in its entirety and the following is substituted in
lieu thereof:
(15) "PERMANENT INTEREST RATE" shall mean a variable rate, at
Borrower's election pursuant to Section I, below, equal to
(a) the Prime Rate, (b) the LIBOR Rate plus one hundred fifty
(150) basis points or (c) Cost of Funds Rate plus one hundred
fifty (150) basis points, provided, however, that if Borrower
achieves an Operating Leverage Ratio (as defined in the Loan
Agreement) of less than or equal to 2.0 to 1.0 for the
quarterly period tested, the Lender in its sole and absolute
discretion may lower the interest rate on the Construction
Loan if it bears interest with reference to the LIBOR Rate by
one-quarter of one percent (.25%).
3
<PAGE> 4
C. Modification of Mortgage.
The Borrower and Lender hereby agree that the terms of the Mortgage are
hereby modified in accordance with the following:
1. Any and all references in the Mortgage to the term "Note" or words
of similar import shall be deemed to mean and refer to the Note as modified by
this Agreement.
2. The form of the Note attached as Schedule D to the Mortgage is
hereby modified in accordance with Section B. above.
D. Miscellaneous
1. Except as specifically modified hereby, all of the terms and
conditions of the Note and Mortgage shall remain in full force and effect, and
Borrower hereby ratifies and affirms each of its respect obligations, terms,
conditions, covenants, representations and warranties contained therein, except
to the extent expressly modified hereby. Borrower agrees to be bound by the
terms and conditions of said instruments, as modified by this Agreement.
2. The rights and duties of the parties under this Agreement shall be
governed by the laws of the State of Connecticut.
3. This Agreement shall be binding upon the Borrower, the Lender and
each of their respective successors and assigns.
4. Nothing contained in this Agreement shall constitute a repayment of
the Note, or affect the priority of the lien of the Mortgage.
[Remainder of the page intentionally left blank]
4
<PAGE> 5
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as a sealed instrument by their duly authorized representatives as of the date
first above written.
Witnesses: EDAC TECHNOLOGIES CORPORATION
By: /s/ Ronald G. Popolizio
------------------------------
Ronald G. Popolizio
Its Vice President-Finance
FLEET NATIONAL BANK f/k/a
FLEET NATIONAL BANK OF
CONNECTICUT f/k/a SHAWMUT
BANK CONNECTICUT, N.A.
By: /s/ Edgar Ezerins
------------------------------
Edgar Ezerins
Its Vice President
STATE OF CONNECTICUT)
) ss.: ____________
COUNTY OF HARTFORD )
On this 30th day of June, 1998, before me, personally appeared RONALD G.
POPOLIZIO, known to me to be the Vice President-Finance of EDAC TECHNOLOGIES
CORPORATION, a Wisconsin corporation, signer and sealer of the foregoing
instrument and acknowledged the same to be his free act and deed and the free
act and deed of said corporation.
_________________________________
Commissioner of the Superior Court
Notary Public
My Commission Expires:____________
5
<PAGE> 6
STATE OF CONNECTICUT)
) ss.: ____________
COUNTY OF HARTFORD )
On this 30th day of June, 1998, before me, personally appeared Edgar
Ezerins, known to me to be the Vice President of FLEET NATIONAL BANK f/k/a
FLEET NATIONAL BANK OF CONNECTICUT f/k/a SHAWMUT BANK CONNECTICUT, N.A., a
national banking association, signer and sealer of the foregoing instrument and
acknowledged the same to be his free act and deed and the free act and deed of
said banking association.
____________________________________
Commissioner of the Superior Court
Notary Public
My Commission Expires:
6
<PAGE> 1
NINTH MODIFICATION AGREEMENT
TO OPEN-END MORTGAGE DEED
THIS AGREEMENT made this 30th day of June, 1998, by and between EDAC
TECHNOLOGIES CORPORATION, a Wisconsin corporation with its principal place of
business at 1790 New Britain Avenue, Farmington, Connecticut 06032 (hereinafter
referred to as the "BORROWER") and FLEET NATIONAL BANK f/k/a FLEET NATIONAL
BANK OF CONNECTICUT f/k/a SHAWMUT BANK CONNECTICUT, N.A. f/k/a THE CONNECTICUT
NATIONAL BANK, a national banking association with an office at 777 Main
Street, MSN 240, Hartford, Connecticut 06115 (hereinafter referred to as the
"LENDER").
W I T N E S E T H:
WHEREAS, on May 12, 1989, the Borrower granted to the Lender a mortgage on
certain premises located at 1790 New Britain Avenue, Farmington, Connecticut,
which mortgage was recorded in the Farmington Land Records on May 15, 1989 in
Volume 394 at Page 521, and which mortgage was modified by that certain
Mortgage Modification Agreement dated November 10, 1989 and recorded in the
Farmington Land Records on November 21, 1989 in Volume 403 at Page 644
(collectively, the "MORTGAGE");
WHEREAS, on July 30, 1992, the parties modified the Mortgage by entering
into that certain Second Modification Agreement to Open-End Mortgage Deed
recorded in the Farmington Land Records on August 6, 1992 in Volume 446 at Page
002;
WHEREAS, on December 23, 1992, the parties modified the Mortgage by
entering into that certain Third Modification Agreement to Open-End Mortgage
Deed recorded in the Farmington Land Records on February 25, 1993 in Volume 456
at Page 1010;
WHEREAS, on March 22, 1993, the parties modified the Mortgage by entering
into that certain Fourth Modification Agreement to Open-End Mortgage Deed
recorded in the Farmington Land Records on March 31, 1993 in Volume 458 at Page
738;
WHEREAS, on March 29, 1994, the parties modified the Mortgage by entering
into that certain Fifth Modification Agreement to Open-End Mortgage Deed
recorded in the Farmington Land Records on April 19, 1994 in Volume 480 at Page
855;
WHEREAS, on February 28, 1995, the parties modified the Mortgage by
entering into that certain Sixth Modification Agreement to Open-End Mortgage
Deed recorded in the Farmington Land Records on March 3, 1995 in Volume 496 at
Page 1; and
<PAGE> 2
WHEREAS, on April 10, 1996, the parties modified the Mortgage by entering
into that certain Seventh Modification Agreement to Open-End Mortgage Deed
recorded in the Farmington Land Records in Volume 515 at Page 376; and
WHEREAS, on March 27, 1997, the parties modified the Mortgage by entering
into that certain Eighth Modification Agreement to Open-End Mortgage Deed
recorded in the Farmington Land Records in Volume 535 at Page 535; and
WHEREAS, the parties desire to further modify the Mortgage to amend and
restate certain notes attached to the Mortgage;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, it is hereby agreed by and between the parties that the
Mortgage be modified as follows:
1. The first "WHEREAS" clause on Page 2 of the Mortgage is hereby amended
in its entirety to read as follows:
"WHEREAS, the Lender and the Borrower have entered into a Fifth Amended
and Restated Revolving Loan, Term Loan and Security Agreement, dated
February 28, 1995, as amended from time to time and now in effect, (such
Fifth Amended and Restated Revolving Loan, Term Loan, Equipment Loan and
Security Agreement, as amended from time to time and now in effect, is
hereinafter referred to as the "EDAC LOAN AGREEMENT"), pursuant to which
the full amount of the revolving loan therein authorized (the "EDAC
REVOLVING LOAN") is THIRTEEN MILLION DOLLARS ($13,000,000.00). Pursuant to
the EDAC Loan Agreement, all or part of the Revolving Loan proceeds are
permitted to be advanced from time to time (the "EDAC REVOLVING LOAN
ADVANCES") and shall be secured by this Mortgage. The EDAC Revolving Loan
shall be evidenced by the promissory note annexed hereto and made a part
hereof as SCHEDULE K (the "REVOLVING PROMISSORY NOTE"). The initial EDAC
Revolving Loan Advance and future EDAC Revolving Loan Advances, if any, may
be either evidenced by additional notes or recorded in an account on the
books of the Lender as specified in SECTION 4.1 hereof. The EDAC Loan
Agreement provides for repayment of all or a portion of the outstanding
balance of the EDAC Revolving Loan proceeds, together with interest
thereon, from time to time. The entire principal balance of the EDAC
Revolving Loan, together with accrued interest, shall be due and payable ON
DEMAND; and"
2. The last "WHEREAS" clause of the Mortgage (which collectively defines
all of the obligations of the Borrower to the Lender as the "LOAN") is hereby
amended in its entirety to read as follows:
"WHEREAS, the obligations of the Borrower to repay principal under the
Term Note, the ESOT Guaranty, the Equipment Promissory Note III, the Second
Term Note; the EDAC Revolving Loan, the Revolving Promissory Note and the
EDAC Loan Agreement
-2-
<PAGE> 3
(hereinafter collectively referred to as the "LOAN") shall not exceed in
the aggregate $18,864,354.75;"
3. SCHEDULE K to the Mortgage is hereby deleted and replaced with SCHEDULE
K attached hereto and made a part hereof.
4. All capitalized terms not otherwise defined herein shall have the same
meaning as set forth in the Mortgage.
5. Except as modified by this Agreement and any previous modifications,
the rights, privileges, duties and obligations of the parties hereto under the
Mortgage shall remain unchanged, in full force and effect and binding upon the
parties thereto. Nothing herein contained shall operate to release the
Mortgagor from its liability to pay the obligations, and to keep and perform
all of the terms, conditions, obligations and agreements, contained in the
Mortgage, as hereinbefore modified.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and their respective seals to be affixed hereto as of the date set
forth on the first page hereof.
WITNESS: BORROWER:
EDAC TECHNOLOGIES CORPORATION
By: /s/ Ronald G. Popolizio
-------------------------------------
Ronald E. Popolizio
Its Vice President
Duly Authorized
LENDER:
FLEET NATIONAL BANK f/k/a FLEET NATIONAL
BANK OF CONNECTICUT f/k/a SHAWMUT BANK
CONNECTICUT, N.A.
By: /s/ Edgar Ezerins
-------------------------------------
Edgar Ezerins
Its Vice President
Duly Authorized
-3-
<PAGE> 4
STATE OF CONNECTICUT)
) ss.: __________
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 30th day of June,
1998, by RONALD E. POPOLIZIO, the Vice President of EDAC TECHNOLOGIES
CORPORATION, a Wisconsin corporation, on behalf of the corporation.
_________________________________________
Commissioner of Superior Court
Notary Public
My Commission Expires:
STATE OF CONNECTICUT)
) ss.: __________
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 30th day of June,
1998, by Edgar Ezerins, the Vice President of Fleet National Bank f/k/a Fleet
National Bank of Connecticut f/k/a SHAWMUT BANK CONNECTICUT, N.A., a national
banking association, on behalf of the banking association.
_________________________________________
Commissioner of Superior Court
Notary Public
My Commission Expires:
-4-
<PAGE> 1
GUARANTY AGREEMENT
This GUARANTY AGREEMENT (the "GUARANTY") dated June 30, 1998 from the
undersigned, APEX MACHINE TOOL COMPANY, INC. f/k/a APEX ACQUISITION
CORPORATION, a Connecticut corporation, with an address at 1806 New Britain
Avenue, Farmington, Connecticut 06032 (the "GUARANTOR"), to FLEET NATIONAL
BANK, a national banking association with a place of business at 777 Main
Street, Hartford, Connecticut 06115 ("LENDER").
In consideration of and as a material inducement for the Lender having
extended or in the future extending loans, advances or otherwise giving credit
to EDAC TECHNOLOGIES CORPORATION, (the "BORROWER"), including, but not limited
to: (i) a $13,000,000.00 revolving loan (the "REVOLVING LOAN") as evidenced by
a certain Second Amended and Restated Revolving Promissory Note of even date
herewith (the "REVOLVING NOTE"), (ii) a $541,153.34 term loan (the
"CONSOLIDATED EQUIPMENT LOAN") as evidenced by a certain Amended and Restated
Promissory Note dated March 27, 1997 (the "CONSOLIDATED EQUIPMENT NOTE"), (iii)
a $4,000,000.00 term loan (the "TERM LOAN") as evidenced by a certain Term
Promissory Note dated March 22, 1993 (the "TERM NOTE"), (iv) a $1,000,000.00
construction to permanent loan (the "CONSTRUCTION LOAN") as evidenced by a
certain Construction to Permanent Loan Promissory Note dated July 31, 1995 (the
"CONSTRUCTION NOTE"), (v) a $3,000,000.00 equipment loan (the "THIRD EQUIPMENT
LOAN") as evidenced by a certain Equipment Promissory Note III dated as of
March 27, 1997 (the "THIRD EQUIPMENT NOTE"), (vi) a $3,000,000 equipment loan
(the "FOURTH EQUIPMENT LOAN") as evidenced by a certain Equipment Promissory
Note IV dated as of May 22, 1998 (the "FOURTH EQUIPMENT NOTE"), and (vii) a
$14,000,000.00 term loan (the "ACQUISITION TERM LOAN" and collectively with the
Revolving Loan, Consolidated Equipment Loan, Term Loan, Construction Loan,
Third Equipment Loan and fourth Equipment Loan, the "LOANS"), as evidenced by
a certain Term Promissory Note of even date herewith (the "ACQUISITION TERM
NOTE" and collectively with the Revolving Note, Consolidated Equipment Note,
Term Note, Construction Note, Third Equipment Note, and Fourth Equipment Note,
the "NOTES") the Guarantor does hereby represent, warrant, covenant and agree
as follows:
ARTICLE I
COVENANTS AND AGREEMENTS
Section 1.1 The Guaranty. The Guarantor hereby absolutely and
unconditionally guarantees to the Lender the full and prompt payment and
performance of all liabilities of the Borrower to the Lender arising in
connection with the Loans. As used herein, "LIABILITIES" means any and all
indebtedness, liabilities and obligations of the Borrower to the Lender of
every kind and description, whether direct or indirect, primary or secondary,
absolute or contingent, due or to become due, now existing or hereafter
arising, including without limitation, those obligations arising under the
Notes, and all extensions, renewals and substitutions therefor, and further
including without
<PAGE> 2
limitation, all reasonable costs, expenses and attorneys' and other
professionals' fees incurred in the collection of said liabilities and in any
litigation arising from any of the liabilities or this Guaranty or in the
defense, protection, preservation, realization or enforcement of any rights,
liens or remedies against the Borrower in connection with the Loans or in the
defense, protection, preservation, realization and enforcement of any rights,
liens or remedies against the Guarantor under this Guaranty. All payments by
the Guarantor shall be paid in lawful money of the United States of America.
Each and every payment obligation or liability guaranteed hereunder shall give
rise to a separate cause of action, and separate suits may but need not be
brought hereunder as each cause of action arises.
Section 1.2 Unconditional Nature of Guaranty.
A. The obligations of the Guarantor under this Guaranty shall be
absolute and unconditional and shall remain in full force and effect until
every payment, obligation or liability guaranteed hereunder shall have been
fully and finally paid and performed. The Guarantor further guarantees that all
payments made by the Borrower with respect to any liabilities hereby guaranteed
will, when made, be final and agrees that if any such payment is recovered from
or repaid by the Lender in whole or in part in any bankruptcy, insolvency or
similar proceeding instituted by or against the Borrower, this Guaranty shall
continue to be fully applicable to such liabilities to the same extent as though
the payment so recovered or repaid had never been originally made on such
liabilities. The obligations of the Guarantor shall not be affected, modified,
released, discharged or impaired, in whole or in part, upon the happening from
time to time of any event, including without limitation, any of the following,
whether or not with notice to, or consent of, the Guarantor:
(1) The compromise, settlement, release, change or
modification (whether material or otherwise) or termination of any or all of the
liabilities;
(2) The failure to give notice to the Guarantor of the
occurrence of a default or an event of default (howsoever defined), or of the
occurrence or existence of an event or condition which would constitute a
default or event of default but for the giving of notice or passage of time, or
both, under the terms and provisions of this Guaranty, the Notes, or any other
instruments, agreements or documents evidencing, securing or otherwise relating
to any of the liabilities or securing or otherwise relating to this Guaranty
(collectively, including the Notes, and this Guaranty, the "LOAN AGREEMENTS");
(3) The modification, amendment, rescission or waiver by the
Lender of the payment, performance or observance by the Borrower or the
Guarantor of any of their respective obligations, conditions, covenants or
agreements contained in any of the Loan Agreements;
(4) The extension of time for payment of any principal,
interest or any other amount due and owing under any of the Loan Agreements, or
of the time for performance of any other obligations, covenants or agreements
under or arising out of any of the Loan Agreements, or the extension or the
renewal of any thereof or the Lender's continuing to make advances under the
-2-
<PAGE> 3
provisions of the Loan Agreements to the Borrower after default and/or after
there is a material adverse change in the Borrower's financial condition;
(5) The modification or amendment (whether material or
otherwise) of any duty, obligation, covenant or agreement set forth in any of
the Loan Agreements;
(6) The taking or the failure to take any of the actions
referred to in any of the Loan Agreements;
(7) Any failure, omission, delay or lack on the part of the
Lender to enforce, assert or exercise any right, power or remedy conferred on
the Lender in any of the Loan Agreements;
(8) The full or partial discharge of the Borrower or of any
of the Other Guarantors (as defined below), if any, in bankruptcy or similar
proceeding or otherwise;
(9) The release or discharge, in whole or in part, or the
death, bankruptcy, liquidation or dissolution of any other person or entity
other than the Guarantor which is primarily or secondarily liable with respect
to the liabilities, including without limitation, any of the Other Guarantors
(as defined below);
(10) The addition, exchange, release or surrender of all or
any of the collateral held by the Lender as security for the liabilities and/or
the Guarantor's liabilities hereunder; or
(11) The default or failure of the Guarantor fully to perform
any of the Guarantor's obligations set forth in this Guaranty.
B. The Guarantor agrees that no delay, act of commission or
omission of any kind or at any time upon the part of the Lender or its
successors and assigns with respect to any matter whatsoever shall in any way
impair the right of the Lender to enforce any right, power or benefit under this
Guaranty or under any of the other Loan Agreements to which the Guarantor is a
party or be construed to be a waiver thereof. Any such right may be exercised
from time to time and as often as may be deemed expedient. No set-off,
counterclaim, reduction, or diminution of any obligation, or any defense of any
kind or nature which the Guarantor has or may have against the Lender, or any
assignee or successor thereof shall be available hereunder to the Guarantor
against the Lender or its successors and assigns.
Section 1.3 Right of the Lender to Proceed Against Guarantor.
A. Upon any failure in the payment or performance of any of the
liabilities or of any of the obligations of the Guarantor under this Guaranty,
the liability of the Guarantor shall be effective immediately without notice or
demand and shall be payable or performable on demand without any suit or action
against the Borrower.
-3-
<PAGE> 4
B. The Lender, in its sole discretion, shall have the right to
proceed first and directly against the Guarantor under this Guaranty without
proceeding against or exhausting any other remedies which it may have against
the Borrower or any other person primarily or secondarily liable for any of the
liabilities, including without limitation, any of the Other Guarantors (as
defined below), if any, and without resorting to any security held by the
Lender.
C. This Guaranty is entered into by the Guarantor for the benefit
of the Lender and its successors and assigns, all of whom shall be entitled to
enforce performance and observance of this Guaranty.
Section 1.4 Waivers, Payment of Costs and Other Agreements.
A. THE GUARANTOR ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS
GUARANTY IS A PART IS A COMMERCIAL TRANSACTION, AND HEREBY WAIVES THE
GUARANTOR'S RIGHTS TO: (1) NOTICE AND HEARING UNDER CHAPTER 903a OF THE
CONNECTICUT GENERAL STATUTES OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW
WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER MAY DESIRE TO USE, AND
(2) REQUEST THAT THE LENDER POST A BOND, WITH OR WITHOUT SURETY, TO PROTECT THE
GUARANTOR OR THE BORROWER AGAINST DAMAGES THAT MAY BE CAUSED BY ANY PREJUDGMENT
REMEDY SOUGHT OR OBTAINED BY THE LENDER BY VIRTUE OF ANY DEFAULT OR PROVISION OF
THIS GUARANTY OR ANY SECURITY AGREEMENT OR MORTGAGE SECURING THIS GUARANTY. THE
GUARANTOR HEREBY FURTHER EXPRESSLY WAIVES DILIGENCE, DEMAND, PRESENTMENT,
PROTEST, NOTICE OF NONPAYMENT OR PROTEST, NOTICE OF THE ACCEPTANCE OF THIS
GUARANTY, NOTICE OF ANY RENEWALS OR EXTENSIONS OF THE NOTES AND OF ANY LOANS
MADE OR EXTENSIONS OR OTHER FINANCIAL ACCOMMODATIONS GRANTED TO THE BORROWER OR
OTHER ACTION TAKEN IN RELIANCE HEREON AND ALL OTHER DEMANDS AND NOTICES OF ANY
DESCRIPTION IN CONNECTION WITH THIS GUARANTY, ANY OF THE LIABILITIES OR
OTHERWISE.
B. THE GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY
SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY
WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS GUARANTY IS A PART
AND/OR THE ENFORCEMENT OF ANY OF THE LENDER'S RIGHTS AND REMEDIES, INCLUDING
WITHOUT LIMITATION, TORT CLAIMS.
C. THE GUARANTOR EXPRESSLY WAIVES ALL DEFENSES BASED UPON SURETYSHIP OR
IMPAIRMENT OF COLLATERAL.
D. The Guarantor hereby fully subordinates to the liabilities owed to
the Lender any right of subrogation that the Guarantor may have against the
Borrower, including without limitation, any
-4-
<PAGE> 5
right of subrogation by virtue of the Guarantor's making payments hereunder,
(the "SUBORDINATED CLAIMS"). The Guarantor will not accept any payment upon any
of the Subordinated Claims, and will not have the right to take action to
collect any of the Subordinated Claims, until the liabilities have been fully
and finally paid. The Guarantor will not claim any set-off or counterclaim
against the Borrower with respect to any liability of the Guarantor to the
Borrower. The Guarantor waives any benefit of and any right to participate in
any collateral which may be held by the Lender.
E. THE GUARANTOR ACKNOWLEDGES THAT THE GUARANTOR MAKES THE WAIVERS SET
FORTH IN SUBSECTIONS (A), (B), (C) AND (D) ABOVE KNOWINGLY, VOLUNTARILY AND
WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THOSE
WAIVERS WITH THE GUARANTOR'S ATTORNEYS.. THE GUARANTOR FURTHER ACKNOWLEDGES THAT
THE LENDER HAS NOT AGREED WITH OR REPRESENTED TO THE GUARANTOR OR ANY OTHER
PARTY HERETO THAT THE PROVISIONS OF SUBSECTIONS (A), (B), (C) AND (D) ABOVE WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.
F. The Guarantor agrees to pay all reasonable costs and expenses,
including attorneys fees, arising out of or with respect to the validity,
enforcement, realization, protection or preservation of this Guaranty or any of
the liabilities.
G. If, for an reason, the Borrower has no legal existence or is under no
legal obligation to discharge any liabilities or if any liabilities have become
irrecoverable from the Borrower by operation of law or for any other reason,
this Guaranty shall nevertheless be binding on the Guarantor to the same extent
as if the Guarantor at all times had been the principal obligor on all such
liabilities. In the event that acceleration of the time for payment of any
liabilities is stayed upon the insolvency, bankruptcy or reorganization of the
Borrower, or for any other reason, all such amounts otherwise subject to
acceleration under the terms of the Revolving Loan Note, the Loan Agreement or
any of the other Loan Documents shall be immediately due and payable by the
Guarantor, without notice or demand.
Section 1.5 Set-off. The Guarantor hereby gives the Lender a lien and
right of set-off for all the Guarantor's liabilities to the Lender upon and
against all the Guarantor's deposits, credits, collateral and property now or
hereafter in the possession or control of the Lender or in transit to it. The
Lender may, at any time, without notice to the Guarantor, apply or set-off the
same, or any part thereof, to any liability of the Guarantor to the Lender,
whether or not the Lender shall have made demand under this Guaranty and
although such obligations may be contingent or unmatured.
-5-
<PAGE> 6
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1 Guarantor Representations, Warranties and Covenants. The
Guarantor hereby represents, warrants and further covenants that:
A. The Guarantor is a corporation duly organized under the laws
of its state of incorporation and has the requisite power to enter into and
perform the obligations under this Guaranty and has taken all of the necessary
actions to authorize the execution, delivery and performance of this Guaranty.
B. Neither the execution and delivery of this Guaranty and the
other Loan Agreements to which the Guarantor is a party, the consummation of the
transactions contemplated hereby nor the fulfillment of or compliance with the
terms and conditions of this Guaranty is prevented or limited by or conflicts
with or results in a breach of the terms, conditions or provisions of any
contractual or other restriction on the Guarantor or any agreement or instrument
of whatever nature to which the Guarantor is now a party or by which the
Guarantor or the Guarantor's property is bound or constitutes a default under
any of the foregoing.
C. The Guarantor has received and will receive a direct and
material financial benefit from the accommodations extended by the Lender to the
Borrower.
D. All authorizations, consents and approvals of governmental
bodies or agencies required in connection with the execution and delivery of
this Guaranty and the other Loan Agreements to which the Guarantor is a party,
or in connection with the performance of the Guarantor's obligations hereunder
or thereunder have been obtained as required hereunder or by law.
E. This Guaranty constitutes a valid and legally binding
obligation of the Guarantor, enforceable in accordance with its terms.
F. There is no action or proceeding pending or threatened against
the Guarantor before any court or administrative agency that might adversely
affect the ability of the Guarantor to perform the Guarantor's obligations under
this Guaranty.
G. Failure of the Guarantor to comply with any of the covenants
herein or under any of the other Loan Agreements to which the Guarantor is a
party shall constitute a default of the liabilities, entitling the Lender to
exercise all rights and remedies set forth in any of the Loan Agreements.
-6-
<PAGE> 7
ARTICLE III
NOTICE AND SERVICE OF PROCESS,
PLEADINGS AND OTHER PAPERS
Section 3.1 Designation of Agent for Service of Process. Guarantor
represents, warrants and covenants that the Guarantor is subject to service of
process in the State of Connecticut and that Guarantor will remain so subject
so long as any liabilities are outstanding. If for any reason Guarantor should
not be so subject, the Guarantor hereby designates and appoints, without power
of revocation, the Secretary of State of the State of Connecticut as the
Guarantor's agent upon whom may be served all process, pleadings, notices or
other papers which may be served upon the Guarantor as a result of any of the
Guarantor's obligations under this Guaranty.
Section 3.2 Consent to Service of Process. The Guarantor irrevocably (a)
agrees that any suit, action or other legal proceeding arising out of this
Guaranty may be brought in the courts of record of the State of Connecticut or
the courts of the United States located in such state; (b) consents to the
jurisdiction of each such court in any such suit, action or proceeding; and (c)
waives any objection which the Guarantor may have to the laying of venue of any
such suit, action or proceeding in any of such courts. For such time as any of
the liabilities is outstanding, the Guarantor's agent designated in Section 3.1
hereof shall accept and acknowledge on the Guarantor's behalf services of any
and all process in any such suit, action or proceeding brought in any such
court. The Guarantor agrees and consents that any such services of process upon
such agent and written notice of such service to the Guarantor by registered
mail shall be taken and held to be valid personal service upon the Guarantor
and that any such service of process shall be of the same force and validity as
if services were made upon the Guarantor according to the laws governing the
validity and requirements of such service in such state, and waives all claim
of error by reason of any such service.
Section 3.3 Notices. All notices or other communications required or
permitted to be given hereunder shall be considered effective and properly
given if sent by a nationally recognized overnight messenger service or mailed
first class United States mail, postage prepaid, registered or certified mail,
with return receipt requested, or by delivery of same to the address beneath
the Guarantor's signature below by prepaid messenger or telegram, whether or
not receipt thereof is acknowledged or is refused by the addressee or any
person at such address, or at such other place as any party hereto may be
notified in writing as a place for service or notice hereunder.
ARTICLE IV
GENERAL
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<PAGE> 8
Section 4.1 No Remedy Exclusive; Effect of Waiver. No remedy herein
conferred upon or reserved to the Lender is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Guaranty or now or hereafter existing at law or in equity. In order to entitle
the Lender to exercise any remedy reserved to it in this Guaranty, it shall not
be necessary to give any notice, other than such notice as may be herein
expressly required. No waiver, amendment, release or modification of this
Guaranty shall be established by conduct, custom or course of dealing, but
solely by an instrument in writing duly executed by the parties thereunto duly
authorized. A waiver on one occasion shall not be a bar to or waiver of any
right of any other occasion. The Guarantor acknowledges that this Guaranty
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and is intended
as a final expression and a complete and exclusive statement of the terms of
this Guaranty.
Section 4.2 Severability. The invalidity or unenforceability of any one or
more phrases, sentences, clauses or Sections contained in this Guaranty shall
not affect the validity or enforceability of the remaining portions of this
Guaranty, or any part thereof.
Section 4.3 Connecticut Law. This Guaranty shall be governed by the laws
of the State of Connecticut (but not its conflicts of law provisions).
Section 4.4 Other Guarantors. The Guarantor acknowledges that other
individuals or entities have or may also from time to time guaranty the
liabilities of the Borrower (including each other guarantor, the "OTHER
GUARANTORS") and that the Guarantor is unconditionally delivering this Guaranty
to the Lender. The Guarantor further acknowledges that the failure of any of
the Other Guarantors, if any, to execute and deliver their respective
guarantees or the discharge of any of such Other Guarantors and their
respective guarantied obligations shall not discharge the liability of the
Guarantor.
Section 4.5 Cross Default. The occurrence of a default or event of
default (howsoever defined) under any instrument, agreement or document
evidencing, governing, securing or relating to any other indebtedness,
obligation or liability of the Guarantor to the Lender (the "OTHER
INDEBTEDNESS") shall constitute an event of default hereunder and a default
hereunder shall constitute a default under any of the Other Indebtedness.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty on the date
first above written.
WITNESSES: APEX MACHINE TOOL COMPANY, INC.
f/k/a APEX ACQUISITION CORPORATION
By: /s/ Ronald G. Popolizio
--------------------------------
Its Vice President
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<PAGE> 1
OPEN-END MORTGAGE DEED,
SECURITY AGREEMENT, COLLATERAL
ASSIGNMENT OF RENTS AND FINANCING STATEMENT
THIS OPEN-END MORTGAGE DEED, SECURITY AGREEMENT, COLLATERAL ASSIGNMENT OF
RENTS AND FINANCING STATEMENT (the "MORTGAGE") is made this 30th day of June,
1998 by EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation, with a
principal place of business at 1806 New Britain Avenue, Farmington, Connecticut
06032 ("BORROWER"), to FLEET NATIONAL BANK, a national banking association,
with a principal place of business at 777 Main Street, Hartford, Connecticut
06103 ("LENDER").
IN CONSIDERATION OF THE MORTGAGE DEBT (hereinafter defined) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower does hereby give, grant, bargain, sell and confirm, with
MORTGAGE COVENANTS, unto Lender, Lender's successors and assigns forever, the
following property:
LAND: Those certain pieces or parcels of real property known as 1790, 1794
and 1806 New Britain Avenue, Farmington, Connecticut, more particularly
described in Schedule A attached hereto and made a part hereof, and all
permits, approvals, rights, privileges and easements appurtenant thereto (the
"LAND").
IMPROVEMENTS: All the buildings, structures and improvements now or
hereafter placed on the Land (the "IMPROVEMENTS").
SERVICE EQUIPMENT: All fixtures, appliances, machinery and equipment now
or hereafter installed upon the Land or the Improvements, including, without
limitation, gas and electric fixtures, radiators, heaters, engines and
machinery, boilers, stoves, ranges, elevators, escalators, incinerators,
motors, dynamos, sinks, disposals, dishwashers, water closets, basins, medicine
chests, pipes, faucets and other plumbing and heating fixtures, ventilating
apparatus, dryers, washing machines, heating, ventilating and air-conditioning
equipment and units, paneling, refrigerating plants, refrigerators, whether
mechanical or otherwise, alarm, fire prevention and extinguishing apparatus,
shades, awnings, screens, blinds, rugs, carpeting, wall cabinets, furniture and
furnishings, trees, shrubbery and other plantings, and such other goods,
chattels and personal property as are now or hereafter attached to, or used or
furnished in connection with the letting or operation of, the Land and/or the
Improvements, or in connection with the activities conducted thereon, and all
proceeds, renewals or replacements thereof or additions thereto or articles of
substitution thereof (the "SERVICE EQUIPMENT").
<PAGE> 2
CONDEMNATION PROCEEDS: All awards or payments, including interest
thereon, which may be made with respect to the Land, the Improvements or the
Service Equipment as a result of the exercise of the right of eminent domain.
LEASES: All right, title and interest of Borrower in and to any and
all leases, tenancies or rights of use and occupancy, with amendments, if any,
and any extensions, renewals or guaranties of the tenants' obligations
thereunder, now or hereafter on or affecting the Land and/or the Improvements,
whether or not recorded, with all security therefor and all monies payable
thereunder, and all books and records which reflect payments made under such
leases (collectively, the "LEASES").
PROPERTY INCOME: All rents, income, profits, security deposits and
other benefits to which Borrower may now or hereafter be entitled from the Land
and/or Improvements, and/or the business operations conducted thereat or
therefrom (the "PROPERTY INCOME").
TAX REFUNDS: All rights of Borrower now or hereafter arising in and to
any refunds of Taxes (as defined herein), or other charges relating to the Land
and/or the Improvements, or the debt secured hereby.
TO HAVE AND TO HOLD the above granted and bargained premises, with the
privileges and appurtenances thereof (collectively referred to herein as the
"PROPERTY"), but subject to those encumbrances, if any, listed upon Schedule B
attached hereto (the "PERMITTED ENCUMBRANCES"), unto Lender, Lender's
successors and assigns forever, to Lender's and their own proper use and
behoof.
THE CONDITION OF THIS DEED IS SUCH THAT:
WHEREAS, Borrower is justly indebted to Lender pursuant to a certain term
note of even date herewith in the principal amount of $14,000,000.00 (the
"LOAN"), a copy of which note is attached hereto and made a part hereof as
SCHEDULE C (the "NOTE").
WHEREAS, This Mortgage is also subject to the following additional terms
and conditions:
ARTICLE
COVENANTS AND REPRESENTATIONS OF BORROWER
Borrower covenants and represents to Lender as follows:
PAYMENT AND PERFORMANCE. Borrower shall pay the Loan and all other
indebtedness secured hereby, in lawful money of the United States and pay and
perform all of its obligations under this Mortgage, the Note, the commitment
letter
<PAGE> 3
signed and accepted by Borrower in connection with the Loan (the "COMMITMENT
LETTER") and every other instrument now or hereafter securing, evidencing or
relating to the Loan (this Mortgage, the Note, the Commitment Letter and such
other instruments being collectively referred to herein as the "LOAN
DOCUMENTS") at the times and in the manner set forth in such Loan Documents.
All amounts due the Lender under any of the aforesaid instruments shall be
secured by the lien of this Mortgage and shall hereinafter be referred to as
the "MORTGAGE DEBT". If Borrower consists of more than one party, all of the
obligations, covenants and warranties of Borrower contained in this Mortgage
shall be the joint and several obligations of all the parties constituting
Borrower.
INSURANCE.
Borrower shall keep the Property insured against loss by fire, flood
and other hazards, casualties, contingencies and all other "extended coverage"
risks, including builder's risk, rent, business interruption, liability,
indemnity, earthquake, war risk and war damage insurance, if available, in such
amounts and with such deductibles and companies as Lender may reasonably
require. Borrower shall promptly pay when due the premiums on such insurance
policies. Each insurance policy shall contain, in a form reasonably acceptable
to Lender, a provision to the effect that the policy will not be canceled
without at least ten (10) days prior written notice to Lender, the standard
non-contributing mortgagee endorsement (entitling Lender to collect all
proceeds payable under such insurance), the standard waiver of subrogation
endorsement, and any other endorsement reasonably required by Lender. All
liability insurance carried on the Property must show Lender as an additional
insured. Borrower shall deliver copies of all existing policies (or such other
evidence of insurance reasonably acceptable to Lender) to Lender at Lender's
request and shall deliver copies of all additional and renewal policies (or
such other evidence of renewal reasonably acceptable to Lender), with current
premium bills therefor marked "Paid", to Lender at least thirty (30) days
before the expiration of the old policies.
After the happening of any casualty to the Property, Borrower shall
give prompt written notice thereof to Lender, all proceeds of insurance
maintained with respect to the Property (the "INSURANCE PROCEEDS") shall be
payable to Lender, and Lender is hereby authorized and empowered by Borrower to
make proof of loss on, and to collect, settle, adjust or compromise, any claims
for loss, damage or destruction under any policy or policies of insurance.
Provided, however, that so long as no Event of Default has then occurred, (a)
if such loss is for less than $250,000, Lender shall deliver such proceeds to
Borrower to repair and restore the Property, and (b) Lender will consult with
Borrower in connection with the settlement, adjustment or compromise of any
such claim, but such right of consultation shall not affect or diminish the
rights of Lender to make all determinations and decisions in respect of the
settlement, adjustment or compromise of any such claim. Borrower does hereby
indemnify Lender and hold Lender harmless against and from any and all claims
and liabilities asserted against Lender in connection with the collection,
adjustment or
<PAGE> 4
compromise of any insured loss. Each insurer is authorized and directed hereby
to make payment under such insurance policies, including return of unearned
premiums, directly to Lender instead of to Borrower and Lender jointly, and
Borrower appoints Lender, irrevocably, as Borrower's attorney-in-fact to
endorse any draft therefor. All such Insurance Proceeds received by Lender
shall be held by Lender and applied and disbursed in its sole discretion,
either to the principal balance of the Loan or to the repair and restoration of
the Property.
TAXES.
Borrower shall pay, before the same become delinquent, all taxes,
assessments, and governmental charges and impositions of any kind whatsoever
for which lien rights exist, which may now or hereafter be assessed or levied
upon any part of the Property, or in lieu of or in addition to a tax on the
Property (all such charges and payments collectively referred to herein as the
"TAXES"). If Borrower fails to pay any such Taxes as aforesaid, Lender may pay
same and the amount of such payments shall constitute Lender Advances pursuant
to SECTION hereof. Borrower shall deliver to Lender, at its request, receipts
for the payment of each item specified above, prior to the date the item will
become delinquent. Borrower shall promptly notify Lender of the delinquency in
the payment of any Taxes due. Notwithstanding the foregoing, Borrower may
contest in good faith, by appropriate proceedings, the payment of Taxes for
which Borrower has either paid such Taxes (or portion thereof) as may be
required as a condition to instituting such a proceeding, or established on its
books or by deposit of cash with Lender, at the option of Lender, a reserve for
the payment thereof in such amount as Lender may require, so long as such
contest: operates to prevent collection, stay any proceedings which may be
instituted to enforce payment of such item, and prevent a sale of the Property
to pay such item; is maintained and prosecuted with due diligence; and shall
not have been terminated or discontinued adversely to Borrower.
Upon the request of Lender, Borrower shall pay to Lender, together
with and in addition to the monthly installments of principal and interest
provided in the Loan Agreement, an amount (as estimated from time to time by
Lender in its sole discretion) equal to one-twelfth (1/12th) of the yearly
Taxes assessed against the Property and sufficient funds to pay the insurance
premiums required under SECTION when due. Borrower agrees that any funds
deposited with or paid to Lender pursuant to this SUBSECTION B. shall create
only an indebtedness, and not a trust or agency relationship, between Borrower
and Lender, which shall be liquidated to the extent of Lender's payments as
aforesaid. Unless otherwise required by law, no interest shall be payable on
such funds. If the tax escrow payments are not sufficient to pay the Taxes on
the date they become due and payable, Borrower shall pay to Lender the amount
necessary to make up the deficiency on or before said date. Upon, and any time
after, the occurrence of an Event of Default, Lender may, at its option, apply
the accumulated escrow balance remaining as a credit against the Mortgage Debt.
<PAGE> 5
CONDEMNATION. Borrower shall give Lender immediate notice of the
actual or (if known to Borrower) threatened commencement of any eminent domain
proceedings affecting any part of the Property, and shall deliver to Lender
copies of all papers served in connection therewith. Borrower hereby appoints
Lender as its attorney-in-fact, coupled with an interest, and authorizes Lender
to collect, receive, and retain, the proceeds of any such award or payment, to
give proper receipts therefor and, if an Event of Default has occurred, to
adjust, compromise and settle the claim therefor. Lender shall have the right
to intervene and participate in any eminent domain proceedings, and Borrower
shall consult with Lender in all matters pertaining to the adjustment,
compromise or settlement of such proceedings and shall not enter into any
agreement with respect to such matters without the prior written consent of
Lender, which shall not be unreasonably withheld. Borrower agrees to execute
and deliver upon request any other instruments deemed necessary by Lender to
confirm or assign to Lender all awards and other compensation to be made for
any taking of the Property. Lender may, in its sole discretion, retain and
apply any eminent domain award or payment toward payment of the Mortgage Debt
or pay same over wholly or in part to Borrower. If a part of the Property
shall have been taken in any eminent domain proceedings and the remaining part
of the Property shall have been sold in foreclosure of this Mortgage prior to
the receipt by Lender of the award or payment, Lender, to the extent permitted
by applicable law, shall have the right to receive the award or payment to the
extent of any deficiency found to be due upon such sale, with legal interest
thereon, and including reasonable counsel fees, costs and disbursements
incurred by Lender in connection with the collection of such award or payment.
COMPLIANCE WITH LAW, ETC.
Borrower presently does, and shall continue to, observe and comply
with all laws, regulations, zoning and subdivision ordinances, building codes,
rules, and orders affecting the Property or the business operations thereon;
the terms of each insurance policy applicable to the Property; and all
conditions and requirements necessary to preserve and maintain all rights,
licenses, permits, privileges, franchises and concessions which are applicable
to the Property or business activities conducted at or from the Property, or
which have been granted to or contracted for by Borrower or by any tenant under
the Leases. Upon receipt, Borrower shall promptly furnish to Lender copies of
all notices, orders, summonses, correspondence and other similar items
delivered to or served upon Borrower pertaining to any of the foregoing.
Upon receipt, Borrower shall promptly furnish to Lender, or its
designee, copies of all correspondence from the Connecticut Department of
Environmental Protection (the "DEP"), the Federal Environmental Protection
Agency (the "EPA"), the Occupational Safety and Health Administration, or any
similar entity (individually, a "REGULATORY AUTHORITY") to Borrower (other than
routine mass informational mailings) and, upon request, shall direct such
entity to send copies of all such correspondence directly to Lender. Borrower
shall furnish to Lender copies of all
<PAGE> 6
correspondence, permit applications, and property transfer related forms and
reports from Borrower to any Regulatory Authority, copies of all periodic
reports required by any environmental law or any permit, and copies of all
records, forms and documents which Borrower is required to produce or maintain
pursuant to any environmental law or any permit. If, as a result of a Spill
(as defined below) or a release of hazardous waste, Borrower may be legally
obligated to report to or notify any Regulatory Authority, Borrower shall
promptly notify Lender in writing that such obligation has been triggered.
Failure to comply with this requirement shall constitute an Event of Default
hereunder.
Lender may, at any time and from time to time, cause to be conducted
and completed by engineers, consultants and others selected by Lender, such
investigations, studies, sampling and testing of the condition of the Property
and the compliance by Borrower and all occupants of the Property with
applicable environmental laws as Lender, in its sole discretion, shall deem
reasonably appropriate. All such investigations, studies, sampling and testing
shall be at Borrower's expense, provided, however, that Borrower shall not be
required to bear such expense so long as there is no Event of Default
hereunder, and Lender has no cause to believe, in its reasonable judgment,
that there has been a Spill (as defined below) or threatened Spill at the
Property or that Borrower is in violation of any environmental law. Borrower
agrees to cooperate with Lender and all persons retained by Lender to conduct
such investigations and to provide them with access to the Property and the
books and records of Borrower.
Borrower shall indemnify Lender and hold Lender harmless from and
against all loss, liability, damage and expense, including attorneys' fees and
diminution in property value, suffered or incurred by Lender, whether as holder
of this Mortgage, as mortgagee in possession or as a successor in interest to
Borrower as owner of the Property by virtue of foreclosure or acceptance of a
deed in lieu of foreclosure under or on account of any remedial or other
environmental or health and safety related obligation imposed by laws such as
Chapter 446K of the Connecticut General Statutes Revision of 1958, as amended
(the "ACT") or related regulations, or any similar applicable federal laws or
regulations, including the assertion of any lien thereunder; with respect to
any release, discharge, spillage, uncontrolled loss, seepage or filtration of
oil or petroleum or chemical liquids or solid, liquid or gaseous products or
hazardous waste which, if contained or removed or mitigated by the State of
Connecticut, could give rise to a lien under Connecticut General Laws Section
22a-452a, as amended (a "SPILL") affecting the Property (whether or not the
same originates or emanates from the Property or any contiguous real estate)
including any loss of value of the Property as a result of such Spill; and with
respect to any other matter affecting the Property and governed by the
provisions of the Act, other environmental or health and safety laws, their
related regulations, or any similar applicable federal laws or regulations.
<PAGE> 7
In the event of any Spill or release affecting the Property, whether
or not the same originates or emanates from the Property or any contiguous real
estate, Borrower shall contain, remove or mitigate same in accordance with
applicable laws and regulations and any directives of the State of Connecticut.
If Borrower shall fail to remedy such Spill or otherwise comply with any of the
requirements of the Act or related regulations or any other environmental law
or regulation, Lender may at its election, but without the obligation to do so,
give such notices and/or cause such work to be performed at the Property and/or
take any and all other actions as Lender shall deem necessary or advisable in
order to remedy the Spill or cure such failure of compliance in order to
protect its security in interest in the Property, and any amounts paid as a
result thereof shall be reimbursed by Borrower upon demand by Lender, shall
bear interest at the "Default Rate" provided for in the Note, and shall be
secured by the lien of this Mortgage. Borrower shall provide Lender, its
agents and contractors access to the Property for such remedial work to occur.
Borrower hereby indemnifies and holds Lender harmless from all loss, expense
and liability arising out of such remedial activity.
MAINTENANCE AND REPAIR; INSPECTION
Borrower shall keep and maintain the Property in good condition,
working order and repair; not permit, commit or suffer any waste of the
Property; (i) not permit the Property or any part thereof to become vacant,
deserted or unguarded; (ii) repair, replace, rebuild or restore any part of the
Property which may be damaged or destroyed by any casualty or affected by
eminent domain, whether or not the proceeds of any insurance or eminent domain
proceedings are available therefor, provided, however, if Lender receives
Borrower's proceeds of insurance from any such loss or casualty, Borrower's
duty to repair and restore the Property will be contingent upon Lender's
turning over such proceeds to Borrower; (iii) complete and pay for when due any
construction undertaken on the Property; and (iv) make all other repairs and
replacements to the Property which Lender may reasonably require. All such
work shall be done promptly in good and workmanlike manner.
Lender and any person authorized by Lender shall have the right to
enter and inspect the Property at all reasonable times.
SALE, ENCUMBRANCE AND USE.
Borrower shall not, without Lender's prior written consent, which may
be withheld in Lender's sole discretion for any reason whatsoever, initiate or
allow any Transfer (as defined in subsection C. below) of title to all or any
part of the Property; voluntarily create or grant any liens, mortgages or
encumbrances against such title; initiate or allow any change in the nature of
the use and occupancy of the Property, including any such change which
materially increases the possibility of a Spill; or record any Declaration of
Common Interest Community.
<PAGE> 8
Borrower shall keep and maintain the Property free from the claim of
all persons supplying labor or materials in connection with the construction or
repair of any Improvements constituting a part of the Property. Borrower shall
furnish, at Lender's request, all waivers and releases of liens or claims upon
or with respect to the Property or any Service Equipment.
The term "Transfer" as used in this SECTION shall mean:
any sale, conveyance, transfer, gift or other disposition of
the Property or any interest therein, whether voluntary, involuntary, or by
operation of law, or Borrower's entry into any contract or option agreement to
accomplish same;
if Borrower is a corporation any change in the articles of
incorporation of the corporation.
any dissolution or liquidation of, or the filing of a suit to
dissolve or liquidate, a corporate or partnership Borrower;
a lease or leases of the Land, Improvements or Service
Equipment, wherein the proposed tenant or tenants do not intend to occupy the
Property but intend to sell, sublease or assign their interest to effectuate a
long-term lease or sale and leaseback for financing purposes;
any other act by which the economic benefit, entrepreneurial
risk or management responsibility with respect to the Property is shifted to
someone other than Borrower.
Borrower shall promptly notify Lender if any lien, attachment or
encumbrance is recorded against the Property without Borrower's consent and
will cause the lien to be canceled and discharged of record within thirty (30)
days after its recording.
Any attempted action contrary to the provisions of this SECTION
shall be void, but shall constitute an Event of Default hereunder. Borrower
agrees that if the ownership of the Property or any part thereof becomes vested
in a person or entity other than Borrower, Lender may, upon notice to Borrower,
deal in any way with such successor or successors in interest without in any
way impairing or discharging Borrower's liability hereunder, under the Note or
the Mortgage Debt.
LEASES. Borrower shall not take any action, the effect of which would
be to cause any Lease to cease to be in full force and effect, and will not,
except with the prior written consent of Lender, cancel or terminate any
Lease, or consent to any cancellation, termination or surrender thereof, or any
assignment thereof; amend, modify or subordinate any Lease; enter into any
new Lease; waive any default under or breach of any Lease; or consent to any
prepayment or discount of rent or advance
<PAGE> 9
rent under any Lease. Lender shall have the right to review and reasonably
refuse written consent to any of the above proposed actions of Borrower based
upon the substance of the proposed transaction, the creditworthiness of
Borrower or the tenant, and the financial condition of the Property.
PROPERTY INCOME. Borrower hereby assigns, transfers and grants a
security interest to Lender in and to the Property Income to secure the
Mortgage Debt. Borrower shall not otherwise assign, transfer or encumber the
Property Income in any manner. Borrower may, so long as no Event of Default
has occurred hereunder, collect and use the Property Income, as the same
becomes due and payable, but may not collect same more than thirty (30) days in
advance of the date the same becomes due. Upon the occurrence of an Event of
Default, the permission hereby given to Borrower to collect the Property Income
shall terminate. The foregoing provisions hereof shall constitute an absolute
and present assignment of the Property Income, subject, however, to the
conditional permission given to Borrower to collect and use such Property
Income as hereinabove provided. The existence or exercise of such right of
Borrower shall not operate to subordinate this assignment to any subsequent
assignment, in whole or in part, and any such subsequent assignment by Borrower
shall be subject to the rights of Lender hereunder.
REMOVALS, ALTERATIONS AND DEMOLITION. Improvement or Service
Equipment shall be removed, altered, demolished or erected without the prior
written consent of Lender. All such changes, additions and alterations shall
become part of the Property immediately upon installation. Any replacement
equipment shall constitute Service Equipment and be subject to the lien of this
Mortgage.
PROTECTION OF LIEN AND OTHER EXPENSES. Borrower shall pay,
indemnify, defend and hold Lender harmless from: all costs, disbursements,
expenses and reasonable counsel fees incurred by Lender in connection with
protecting or sustaining the lien of this Mortgage; any proceeding, action,
suit, hearing, motion or application in which Lender is a party by reason
hereof or in which, in Lender's opinion, it becomes necessary to defend and
uphold the terms or priority of this Mortgage; the preparation for enforcement
of the Loan Documents after the occurrence of an Event of Default and
negotiations with Borrower in connection with the existence or cure of such an
Event of Default; any proposed refinancing by Lender of the Mortgage Debt; the
transfer of the Property in lieu of foreclosure; the approval by Lender of
actions taken or proposed to be taken by Borrower or others, which approval is
required by the terms of this Mortgage or other Loan Documents; and all
damages, reasonable costs and expenses (including, without limitation,
attorney's fees) paid by or imposed upon Lender in connection with any bodily
injury, death or property damage occurring in or upon, or in the vicinity of,
the Property through any cause whatsoever or asserted against Lender on account
of any act performed or omitted to be performed hereunder (other than such acts
or omissions constituting the gross negligence of Lender) or on account of any
transaction arising out of or in any way connected with the Property, this
Mortgage or the Mortgage Debt.
<PAGE> 10
ESTOPPEL CERTIFICATES; INSTRUMENTS OF FURTHER ASSURANCE. Borrower
shall deliver to Lender within ten (10) days after any request a duly
acknowledged certificate setting forth the amount of principal and interest due
and payable on the Loan and whether any offsets or defenses exist with respect
to this Mortgage or the Mortgage Debt. Upon Lender's request, Borrower shall
use its best efforts and due diligence to obtain delivery of the duly
acknowledged certificate of any person having or acquiring an interest in or
encumbrance on all or any part of the Property setting forth the nature and
extent of the interest and stating that the interest is subordinate to this
Mortgage and whether any offsets or defenses exist with respect to this
Mortgage or the Mortgage Debt.
BOOKS, RECORDS AND ACCOUNTS. Borrower shall keep and maintain proper
and accurate books, records and accounts reflecting all items of income and
expense received or paid by Borrower or any other person in connection with the
Property and all business operations conducted at or from the Property. Lender
shall have the right at any time during normal business hours to examine and
copy any such books, records and accounts wherever located.
FINANCING STATEMENT AND SECURITY AGREEMENT.
This Mortgage constitutes a security agreement and is intended
to be effective as a financing statement pursuant to the Connecticut Uniform
Commercial Code. Borrower hereby grants to Lender a security interest in the
Service Equipment, Leases, Property Income and other personal property included
in the Property, and all replacements thereof, substitutions therefor,
additions thereto and proceeds thereof, as well as the personal property
described on SCHEDULE D attached hereto and made a part hereof (collectively,
the "PERSONAL PROPERTY") as security for the Mortgage Debt. Lender is the
secured party and Borrower is the debtor with respect to this financing
statement and the mailing addresses of the secured party and the debtor for the
purpose of this financing statement are set forth in SECTION hereof. Upon
request, Borrower shall execute and deliver to Lender any security agreement,
financing or continuation statement or other document Lender deems necessary to
protect or perfect its lien on the Service Equipment, and pay all filing fees
and other costs, disbursements, expenses and reasonable counsel fees incurred
by Lender in connection therewith. Borrower authorizes Lender, to the extent
permitted by applicable law, to sign and file any financing or continuation
statement at any time with respect to the Service Equipment in the absence of
any signature by or on behalf of Borrower.
Borrower hereby warrants, represents and covenants as follows:
except for the security interest granted hereby, and as permitted under a
certain Fifth Amended and Restated Loan Agreement dated February 20, 1995 by
and between Lender and Borrower, as amended and in effect from time to time,
Borrower is, and as to the portions of the Personal Property to be acquired
after the date hereof will be, the sole owner of the Personal Property free
from any lien, security interest, encumbrance
<PAGE> 11
or claim thereon of any kind whatsoever. Borrower will notify Lender of, and
will defend the Personal Property against, all claims and demands of all
persons at any time claiming the Personal Property or any interest therein;
Borrower will not assign, pledge, encumber, lease, sell, convey or in any
manner transfer the Personal Property or portions thereof without the prior
written consent of Lender, except as otherwise permitted under the Loan
Documents, and all of the Personal Property attached to, incorporated into or
to be incorporated into the Property will be kept free and clear of all chattel
mortgages, liens, conditional vendor's liens, encumbrances and security
interests, except as expressly waived in writing by Lender; the Personal
Property is not and will not be used or acquired for personal, family or
household purposes; the Personal Property will be kept on or at the Property,
and Borrower will not remove any portion or item of Personal Property affixed
or attached to the Property without the prior written consent of Lender, except
such portions or items of Personal Property which are consumed or worn out in
ordinary usage, and are promptly replaced by Borrower with new items of equal
or greater quality; and notwithstanding any release of any or all of the
Property which is deemed "real property", any proceedings to foreclose this
Mortgage or the release of this Mortgage of record, the terms hereof shall
survive as a security agreement with respect to the security interest created
hereby until the repayment or satisfaction in full of the Mortgage Debt.
REQUIRED NOTICES. Borrower shall notify Lender promptly of the
occurrence of any of the following: (i) an event requiring notice with
respect to the following matters under the following subsections of this
Mortgage:
1.2.C. (Loss or Damage to Property)
1.3.B. (Taxes)
1.4.A. (Condemnation)
1.5.B. (Compliance with Law)
1.7.D. (Recordation of Liens)
1.10. (Removal of Improvements and Service Equipment)
1.20B.&D. (Compliance of Construction with Law);
(ii) receipt of notice from any governmental authority relating to the
Property; (iii) receipt of any notice from the holder of any other lien or
security interest in the Property; or (iv) commencement of any judicial or
administrative proceedings by or against or otherwise affecting Borrower, the
Property or any entity controlled by or under common control of Borrower, or
any other action by any creditor thereof as a result of any default under the
terms of any loan.
OTHER DOCUMENTS. Borrower upon request shall deliver to Lender
copies or originals of all reports, licenses, permits, approvals, orders,
contracts, agreements, rights, options, franchises and applications relating to
or affecting the Property and all business operations conducted at or from the
Property.
<PAGE> 12
GENERAL REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants that as of the date of this Mortgage:
Borrower is generally paying its debts as such debts become
due, the fair market value of its assets exceeds its liabilities and no
bankruptcy or insolvency proceedings are pending or contemplated by or against
Borrower.
All reports, statements and other data furnished by Borrower
to Lender in connection with the Loan are true, correct and complete in all
material respects and do not omit any fact or circumstance which would make the
statements contained therein misleading; present fairly the financial position
of Borrower as of the date stated therein, and the results of Borrower's
operation and changes in financial position for the years then ended and the
statements are prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and that no material adverse change
has occurred in the financial condition of Borrower or the Property since the
date of said financial statement.
The Property and all Improvements thereon have not suffered any
damage from fire or other casualty, no part of the Property has been condemned
or taken by eminent domain and no condemnation or other taking of the Property
or any part thereof is threatened or pending, or has been threatened with, any
other title proceedings.
To Borrower's best knowledge, there does not now exist on,
under or within the Property (or any contiguous land included in the legal
description of the Property within three years prior to the date hereof) any
Spill. To Borrower's best knowledge, there does not now exist any condition,
nor will the current or proposed operations cause there to exist any condition
upon the Property or said contiguous land which would materially increase the
possibility of the occurrence of a Spill, or a material violation of the Act
or any related regulations or any similar federal laws or regulations.
Borrower if a corporation, is a valid corporation in good
standing under the laws of the jurisdiction of incorporation and is authorized
to do business in the State of Connecticut, if a limited liability company, is
a valid limited liability company, legally existing under the laws of the
jurisdiction of its formation, and is authorized to do business in the State of
Connecticut, or if a limited partnership, is a valid limited partnership
legally existing under the laws of the jurisdiction of its formation and is
authorized to do business in the State of Connecticut.
Borrower has the legal capacity and is authorized to execute
and deliver all Loan Documents; the Loan Documents are valid and binding
obligations enforceable in accordance with their respective terms, and the
execution and delivery thereof do not contravene any contract or agreement to
which Borrower is a party or by
<PAGE> 13
which Borrower or any of its respective properties may be bound, and do not
contravene any law, order, decree, rule or regulation to which Borrower is
subject.
Except as previously disclosed in writing to Lender, there is no
action, suit or proceeding pending, or, to the knowledge of Borrower, threatened
against or materially affecting Borrower or the Property or the business
operations conducted at or from the Property or which involve the possibility of
any judgment or liability not fully covered by insurance or which, in Borrower's
opinion, might result in any adverse change in the business, assets or
operations of Borrower which would, in any way, materially and adversely affect
the Property or the validity or enforceability of the Loan Documents. Borrower
is not a party to or bound by any contract, agreement or other instrument, or
subject to any charter or other restriction or any judgment, order, writ,
injunction, decree, rule or regulation which now or in the future may materially
and adversely affect the business, operations, properties, assets or condition,
financial or otherwise, of Borrower.
Borrower has filed all required federal, state and local tax
returns, and no claims have been asserted and/or unpaid with respect to such
taxes.
The Property has frontage on, and direct access for ingress and
egress to, the public street(s) appurtenant thereto.
Electric, gas, sewer, septic, water facilities and any other
necessary utilities are or will be, available in sufficient capacity to service
the Property satisfactorily, and any easements necessary to the furnishing of
such utility service by Borrower have been or will be obtained and duly
recorded.
Borrower is not in default under the terms of any instrument
evidencing or securing any indebtedness of Borrower and there has occurred no
event which would, if uncured or uncorrected, constitute a default under any
such instrument with the giving of notice, passage of time, or both.
Borrower (and the undersigned representative of Borrower, if
any) has full power and authority to subject the Property to this Mortgage and
to execute and deliver the Note, this Mortgage, the Loan Documents and all other
documents and instruments required of it by Lender. No consent of any person or
entity and no consent, approval, or authorization is required by Borrower in
connection with the foregoing.
PREJUDGMENT REMEDY WAIVER. Borrower hereby represents and
agrees that the transaction of which this Mortgage is a part is a commercial
transaction as defined by the statutes of the State of Connecticut. BORROWER
HEREBY WAIVES ALL RIGHTS TO NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER UNDER
CONNECTICUT GENERAL STATUTES
<PAGE> 14
SECTION 52-278A ET SEQ., AS AMENDED, OR UNDER ANY OTHER STATE OR FEDERAL LAW
WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES LENDER MAY EMPLOY TO ENFORCE
ITS RIGHTS AND REMEDIES HEREUNDER. MORE SPECIFICALLY, BORROWER ACKNOWLEDGES
THAT LENDER'S ATTORNEY MAY, PURSUANT TO CONNECTICUT GENERAL STATUTES SECTION
52-278F, ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A COURT ORDER.
BORROWER ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT
TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY BY LENDER'S ATTORNEY, AND
LENDER ACKNOWLEDGES BORROWER'S RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE
OF SAID WRIT. BORROWER FURTHER HEREBY WAIVES ANY REQUIREMENT OR OBLIGATION OF
LENDER TO POST A BOND OR OTHER SECURITY IN CONNECTION WITH ANY PREJUDGMENT
REMEDY OBTAINED BY LENDER BASED ON ANY OFFSETS, CLAIMS, DEFENSES OR
COUNTERCLAIMS OF BORROWER OR ANY OTHER OBLIGATED PARTY TO ANY ACTION BROUGHT BY
LENDER. BORROWER ALSO WAIVES ANY AND ALL OBJECTION WHICH IT MIGHT OTHERWISE
ASSERT, NOW OR IN THE FUTURE, TO THE EXERCISE OR USE BY LENDER OF ANY RIGHT OF
SETOFF, REPOSSESSION OR SELF HELP AS MAY PRESENTLY EXIST UNDER STATUTE OR COMMON
LAW, AND TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL PRESENT AND FUTURE
VALUATION, APPRAISEMENT, HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM
LAWS. BORROWER ACKNOWLEDGES AND AGREES THAT ALL OF THE WAIVERS CONTAINED IN THIS
SECTION HAVE BEEN MADE KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY,
AND WITH THE ADVICE OF ITS COUNSEL.
WAIVER OF TERMINATION RIGHTS. Borrower hereby waives, for itself and
any of its assigns who assume this Mortgage, any right it or they may have under
Section 49-2(c)(7) of the Connecticut General Statutes, as amended, or
otherwise, to terminate the right of Lender to make "optional future advances"
as defined under said statute, including without limitation, Loan Advances made
by Lender pursuant to this Mortgage, the Loan Agreement and/or any other Loan
Documents.
ARTICLE ARTICLE
DEFAULT
EVENTS OF DEFAULT
Any one or more of the following shall constitute an "EVENT OF
DEFAULT" hereunder:
<PAGE> 15
The failure to pay any portion of the Mortgage Debt in full by
the "Maturity Date" as defined in Schedule C hereto or the failure to pay any
other installment of principal and/or interest or any other sums due with
respect to the Mortgage Debt upon maturity when such installment is otherwise
due and payable.
The occurrence of an Event of Default (as defined therein) under,
or demand for the payment of, any Loan Documents beyond any grace periods set
forth in said agreements, if any.
The breach of any covenant or obligation of Borrower contained in
SECTIONS , , , , , or hereof.
The actual or threatened waste, removal or demolition of, or
material alteration to, any part of the Property without Lender's prior written
consent.
The failure to observe or perform any other agreements, covenants
or representations of Borrower contained in this Mortgage for a period of thirty
(30) days after the occurrence of such failure.
The occurrence of a default under, or demand for the payment of,
any other note or obligation secured by a mortgage on or security interest in
the Property.
The cancellation, revocation, suspension or failure to receive a
grant or renewal of any and all franchises, concessions, licenses and permits
pertaining to or necessary for the construction and operation of the
Improvements on the Property.
The taking of all or any part of the Property through
condemnation, or if the value of the Property shall be impaired by condemnation
or casualty, either temporarily for a period in excess of thirty (30) days, or
permanently.
If Borrower shall be deprived of title, possession or control of
the Property by process or operation of law or order of any court, or if any
foreclosure proceeding shall be instituted with regard to any lien or mortgage
of any kind affecting the Property.
ARTICLE
REMEDIES
Whenever an Event of Default shall have occurred, Lender may take any
one or more of the following remedial steps:
ACCELERATION. Lender may declare, without demand or notice to
Borrower, the outstanding principal amount of the Loan and the interest accrued
<PAGE> 16
thereon, and the Mortgage Debt, to be due and payable immediately, and upon
such declaration such principal and interest and other sums shall immediately
become, and be, due and payable.
FORECLOSURE. Lender may foreclose this Mortgage and exercise its
rights as a secured party for all or any portion of the Mortgage Debt which is
then due and payable, subject to the continuing lien of this Mortgage for the
balance not then due and payable. If this Mortgage is foreclosed there shall be
included in the Mortgage Debt, to the extent permitted by law, the costs,
disbursements, and fees paid or incurred by Lender in connection with such
foreclosure.
POSSESSION OF PROPERTY; APPOINTMENT OF RECEIVER.
Without notice to Borrower, and without regard to the adequacy of
the security for the Mortgage Debt, proof of depreciation of the value of the
Property or the financial condition of Borrower, Lender may, at its option: by
itself or by agent, with or without bringing any action, suit or proceeding,
immediately enter upon and take possession and control of the Property and the
Property Income with those rights and powers more particularly set forth in
SUBSECTION 3.3 C. hereof; make application to a court of competent jurisdiction
for and obtain the immediate ex parte appointment of a receiver authorized to
immediately enter upon and take possession and control of the Property and the
Property Income with those rights and powers more particularly set forth in
SUBSECTION 3.3 C. hereof; without taking possession and control of the
Property, collect directly all Property Income due to Borrower with full rights
and powers to notify all parties liable to make payments of Property Income to
make said payments directly to Lender or its agents, and Lender or its agents
shall have the further power and authority to sue for or otherwise collect and
receive all Property Income; or (iv) exercise any or all of the remedies
available to a secured party under the Uniform Commercial Code, including,
without limitation:
Either personally or by means of a court appointed receiver,
taking possession of all or any of the Service Equipment or any other part of
the Property which is personal property (the "PERSONAL PROPERTY") and thereafter
holding, storing, using, operating, maintaining and controlling the Personal
Property, and exercising all rights and powers of Borrower in respect thereof.
If Lender demands or attempts to take possession of the Personal Property,
Borrower shall promptly to turn over and deliver complete possession thereof to
Lender;
Without notice to or demand upon Borrower, making such payments
and doing such acts as Lender may deem necessary to protect its security
interest in the Personal Property;
Requiring Borrower to assemble the Personal Property, or any
portion thereof, and make it available to Lender at a place designated by Lender
and reasonably convenient to both parties. Lender and its agents and
representatives
<PAGE> 17
shall have the right to enter upon any or all of Borrower's property to
exercise Lender's rights hereunder; and
Selling, leasing or otherwise disposing of the Personal Property
at public sale, with or without having the Personal Property at the place of
sale, and upon such terms and in such manner as Lender may determine. Lender may
be a purchaser at any such sale. Borrower agrees that sales for cash or on
credit to a wholesaler, retailer, or user of property of the type of the
Personal Property, or at public or private auction, are all commercially
reasonable. Notwithstanding any other notice provision in this Mortgage or the
Loan Documents, unless the Personal Property is perishable or threatens to
decline speedily in value, or is of a type customarily sold on a recognized
market, Lender shall give Borrower reasonable notice of the time and place of
any public sale thereof, or of the time after which any private sale or any
other intended disposition thereof is to be made. The requirements of
reasonable notice shall be met if such notice is mailed to Borrower as provided
in SECTION 4.4 hereof, at least five (5) days before the time of the sale or
other disposition.
Borrower hereby waives to the fullest extent permitted by law all
rights to prior notice or court hearing in connection with any action by Lender
of the types set forth in SUBSECTIONS 3.3 A.(1), (2), and (3) above, and
Borrower further waives any requirement that Lender provide any bond, surety, or
other security in connection with any said action.
If Lender, Lender's agent and/or a receiver enters upon and takes
possession and control of the Property and/or the Property Income pursuant to
SUBSECTIONS 3.3 A.(1), (2) and/or (3), such person or entity shall have all of
Borrower's rights and powers with respect to the Property and/or the Property
Income in addition to such other rights and powers as may subsequently be
authorized including without limitation the right and power to: hold, store,
use, operate, manage and control the Property and conduct the business which is
or may be conducted therefrom; make all necessary and proper maintenance,
repairs, renewals, replacements, additions, betterments and improvements to the
Property and purchase or otherwise acquire additional fixtures, personalty and
other property; obtain such insurance with respect to the Property and the
business operations conducted therefrom as may be determined necessary; manage
and operate the Property and the business conducted therefrom and exercise all
the rights and powers of Borrower in its name or otherwise with respect to the
same; enter into agreements with others to exercise the powers herein granted,
all as Lender, its agents or a receiver from time to time may determine; collect
and receive all Property Income; enforce all terms of existing Leases at the
Property and all other contracts or agreements pertaining to the Property or the
business operations conducted therefrom; and enter into such new or additional
leases and such other contracts or agreements pertaining to the Property or the
business operations conducted at or from the Property from time to time as
Lender, its agents or the receiver may determine necessary in its sole
discretion.
<PAGE> 18
All Property Income collected by Lender, Lender's agent or a
receiver pursuant to SUBSECTIONS 3.3 A.(1), (2) or (3) above, shall be applied
to the following in such order of priority as Lender may determine in its sole
discretion: (i) interest and principal due on the Mortgage Debt; (ii) taxes,
assessments and insurance premiums due with respect to the Property and/or the
business operations conducted from the Property; (iii) all costs and expenses of
constructing the Improvements, operating, maintaining, repairing and improving
the Property and conducting the business operations which are or may be
conducted at the Property; and (iv) the compensation, salaries, expenses and
disbursements of any agents, employees, attorneys or other representatives of
Lender, Lender's agent or the receiver in connection with the possession,
control, construction of the Improvements and/or operation of the Property and
the business operations conducted therefrom, expressly including the payment of
any management agent's fees, and in the event Lender manages the Property itself
with its own employees, Lender shall be entitled to charge and collect a
management fee equal to the customary management agent's fee charged for
performing similar management functions in the area where the Property is
located.
Lender, its agents, or any receiver acting pursuant to
SUBSECTIONS 3.3 A.(1), (2) or (3) hereof shall in no event be liable or
accountable for more monies than actually are received from the Property during
the period during which Lender, its agent or any receiver actually is in
possession and control of the Property. Neither Lender, its agents nor any
receiver shall be liable or accountable in any manner for the failure to collect
Property Income for any reason whatsoever.
All costs, expenses and liabilities of every character incurred
by Lender in managing, operating and maintaining the Property, not paid from
Property Income as hereinabove provided, shall constitute and be treated as
Lender Advances pursuant to SECTION hereof.
Borrower shall pay monthly, in advance, to Lender, its agent or
any receiver in possession and control of the Property pursuant to SUBSECTIONS
3.3 A.(1), (2) or (3) above, the fair and reasonable rental value for all or any
part of the Property which is in the use, occupancy and possession of Borrower.
In the event of foreclosure, Lender, its agent or any receiver
acting pursuant to SUBSECTIONS 3.3 A.(1), (2) or (3) above, may remain in
possession of the Property until (i) the foreclosure sale; (ii) the redemption
of the Property; or (iii) the expiration of any redemption period of the United
States of America extending subsequent to the foreclosure sale, if a deficiency
exists. Lender, its agents or the receiver shall incur no liability for, nor
shall Borrower assert any claim or setoff as a result of, any action taken while
Lender, its agent or a receiver is in possession of the Property.
LENDER ADVANCES
<PAGE> 19
Lender may, without notice or demand, pay any amount which
Borrower has failed to pay, or perform any act which Borrower has failed to
perform hereunder, including, without limitation, (i) the payment of insurance
premiums and/or the furnishing of insurance required under SECTION 1.2 hereof;
(ii) the payment of Taxes required under SECTION hereof; (iii) the performance
of and the payment for repairs and replacements required under SECTION . hereof;
(iv) the cost of discharging any liens or encumbrances under SUBSECTION 1.7.D.
hereof; (v) all expenses incurred or other amounts paid by Lender pursuant to
SECTION and and ARTICLE 3 hereof; (vi) the payment of costs attendant to
Lender's possession as set forth in SUBSECTION 3.3.F. hereof; and (vii) the
payment of sums for all purposes for which Loan Advances are otherwise allowed
under the Loan Agreement. The costs, disbursements, expenses and reasonable
counsel fees incurred by Lender in connection with the foregoing, together with
interest thereon from the date the expense is paid or incurred at the highest
interest rate allowed under the Note ("LENDER ADVANCES"), shall be (x) added to
the Mortgage Debt, (y) payable on demand to Lender, and (z) secured by the lien
of this Mortgage, prior to any right, title, interest, lien or claim attaching
or accruing to the Property subsequent to the lien hereof.
Lender, in making any Lender Advances which relate to Taxes
asserted against the Property, may do so according to any bill, statement or
estimate procured from the appropriate public office without inquiry into the
accuracy or validity thereof; insurance premiums, may do so according to any
notice, bill, statement or estimate procured from the appropriate insurer
without inquiry into the accuracy or validity thereof; any apparent or
threatened adverse title, lien or encumbrance, shall be the sole judge of the
legality or validity of same; the expense of repairs or replacement of any
Property, shall be the sole judge of the state of repairs and the necessity for
incurring the expense of any such repairs or replacement; any other purpose
referred to in SUBSECTION 3.4.A. above, may do so whenever, in its sole judgment
and discretion, such payment shall seem necessary or desirable to protect the
full security intended to be created by this Mortgage.
NO MARSHALLING. Lender shall not be compelled to release, or be
prevented from foreclosing or enforcing this Mortgage upon all or any part of
the Property, unless the entire Mortgage Debt shall be paid; required to accept
any part or parts of the Property, as distinguished from the entire whole
thereof, as payment of or upon the Mortgage Debt to the extent of the value of
such part or parts; compelled to accept or allow any apportionment of the
Mortgage Debt to or among any separate parts of the Property; or prevented from
selling the Property in one or more parcels or as an entirety, and in such
manner and order, as Lender in its sole discretion may elect.
LENDER'S DISCRETION. Lender, in exercising any remedy provided
herein under which it may make payments or perform actions which Borrower has
failed to do or make, may do so in its sole discretion whenever in its opinion
such payment or performance is necessary or desirable to protect the full
security intended by this Mortgage.
<PAGE> 20
REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved
to Lender is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Mortgage or now or hereafter existing at law
or in equity.
DELAY OR OMISSION NO WAIVER. No delay or omission on the part of
Lender to exercise any of its rights hereunder or under any of the Loan
Documents shall impair or operate as a waiver of Lender's right to exercise such
right or any other right of Lender hereunder or under the Loan Documents. In
order to entitle Lender to exercise any remedy reserved to it in this Mortgage,
it shall not be necessary to give any notice, other than such notice as may be
herein expressly required. Any waiver, express or implied, of any breach or
default hereunder shall not constitute a waiver of any subsequent or different
breach or default.
POWER OF ATTORNEY. Borrower hereby irrevocably appoints, grants
and constitutes Lender its attorney-in-fact, coupled with an interest, to so
execute, deliver and submit all applications, requests, forms or reports of any
kind for all applicable, desirable or necessary licenses, permits, approvals,
authorization, tax credits or abatements or benefits, of any kind relating,
applicable to or affecting the use and enjoyment of, or construction on, or the
business operations conducted at or from the Property; provided, the foregoing
power of attorney shall be exercisable by Lender only after the occurrence of
one or more Events of Default. Any party dealing with Lender shall not be
required to investigate the right of Lender to exercise its authority or to take
any action under or pursuant to this power of attorney nor inquire as to whether
or not any Event of Default exists or has occurred.
NO MERGER. If Lender shall acquire title to the Property by
conveyance from Borrower or as a result of the foreclosure of any other mortgage
which Lender at any time holds with respect to the Property, this Mortgage shall
not merge in the fee of the Property but shall remain and continue as an
existing and enforceable lien for the Mortgage Debt secured hereby until the
same shall be released of record by Lender in writing.
ARTICLE
MISCELLANEOUS PROVISIONS
FUTURE ADVANCES. This is an "Open-End Mortgage" securing a
commercial revolving loan and the holder hereof shall have all of the rights,
powers and protections to which the holder of any Open-End Mortgage is entitled
under Connecticut law. At no time shall the principal amount of the Mortgage
Debt exceed the full amount of the Loan authorized in the Loan Agreement, nor
shall the maturity of any future advance secured hereby extend beyond the date
the final principal payment is due on the Loan.
<PAGE> 21
GOVERNING LAW; BINDING EFFECT. The rights and duties of Borrower
and Lender under this Mortgage shall be governed by the internal laws of the
State of Connecticut. All covenants, conditions and agreements herein shall run
with the land, and shall bind the heirs, executors, administrators, successors
and assigns of Borrower, and shall inure to the benefit of Lender and its
successors and assigns.
MODIFICATIONS, ETC. No provision of this Mortgage may be waived,
modified or discharged, including, without limitation, by conduct, custom or
course of dealing, other than by an express writing signed by the party against
whom enforcement of such waiver, modification or discharge is sought.
NOTICE. Any notice, report, demand or other written instrument
required under SECTION hereof, or otherwise permitted or required to be given,
made, or sent under this Mortgage, shall be in writing, signed by the party
giving or making the same, and shall be sent hand-delivered, effective upon
receipt, sent by United States Express Mail or by overnight courier, effective
upon receipt, or sent by certified mail, postage prepaid, return receipt
requested, deemed effective on the earlier of the day of actual delivery as
shown by the addressee's return receipt or the expiration of three (3) business
days after the date of mailing, addressed to the party intended to receive the
same at the address set forth below:
If to Lender: with a copy to:
Fleet National Bank Pepe & Hazard LLP
777 Main Street Goodwin Square
Hartford, CT 06103 Hartford, CT 06103
Attn: Edgar Ezerins, Vice President Attn: John C. Bombara, Esq.
If to Borrower: with a copy to:
EDAC Technologies Corporation Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, S.C.
1806 New Britain Avenue 1000 North Water Street
Farmington, CT 06032 Milwaukee, Wisconsin 53202-0900
Attn: Ronald G. Popolizio, Vice President attn: Daniel J. Brink, Esq.
Any party hereto shall have the right to change the place to which any such
notice shall be sent by a similar notice sent in like manner to all parties
hereto.
NO AGENCY OR JOINT VENTURE. Nothing contained in this mortgage
shall be construed to cause borrower to become the agent for, or a joint
venturer with, lender for any purpose whatsoever, nor shall lender be
<PAGE> 22
responsible for any shortage, discrepancy, damage, loss or destruction of any
part of the property for whatever cause unless same is the direct result of the
gross negligence of lender. Whether or not lender elects to employ any or all
remedies available to it upon demand or after the occurrence of an event of
default under the loan documents, lender shall not be liable for the payment of
any expense incurred in connection with the exercise of any remedy available to
lender or for the performance or nonperformance of any other obligation of
borrower.
SEVERANCE. The invalidity or unenforceability of any one or more
phrases, sentences, clauses or sections contained in this mortgage shall not
affect the validity or enforceability of the remaining portions of this
mortgage, or any part thereof.
INTERPRETATION. In this mortgage, unless the context otherwise
requires, (i) the term "borrower" shall mean and include any guarantor of all
or any part of the mortgage debt or any other person directly or indirectly
responsible for the payment of all or any part of the mortgage debt; and (ii)
the use of any gender shall include the other genders and either the singular
or the plural shall include the other. This mortgage shall be interpreted
without regard to any presumption or other rule requiring construction against
the party which drafted this mortgage.
CAPITALIZED TERMS. Any capitalized words used in this mortgage and
not herein defined shall have the meanings ascribed to such terms in the loan
documents.
NOW, THEREFORE, if all agreements and provisions contained herein are
fully kept and performed by borrower, and all the mortgage debt shall be fully
paid in all respects, then this deed shall be void; otherwise to remain in full
force and effect.
IN WITNESS WHEREOF, borrower has caused this instrument to be executed and
delivered as of the date first above written.
Signed, sealed and delivered BORROWER:
in the presence of: EDAC TECHNOLOGIES CORPORATION
________________________________ By: /s/ Ronald G. Popolizio
--------------------------
Name: Ronald G. Popolizio
Title: Vice President
________________________________
<PAGE> 23
STATE OF CONNECTICUT )
) ss.: ________
COUNTY OF HARTFORD )
On this 30th day of June, 1998, before me, the undersigned officer,
personally appeared Ronald G. Popolizio, Vice President of EDAC TECHNOLOGIES
CORPORATION, signer and sealer of the foregoing instrument and acknowledged the
same to be his free act and deed and the free act and deed of said corporation.
Commissioner of the Superior Court
Notary Public
My Commission Expires: __________
SCHEDULE C
Promissory Note
SCHEDULE D
Personal Property
A. All inventory, of every type and nature relating to the Property or the
operation thereof or used in connection therewith, wherever located, now owned
or hereafter acquired (and whether by way of substitution, return,
replacement or otherwise) by Borrower, all contract rights with respect
thereto, all documents representing said inventory, all proceeds thereof
(including insurance proceeds with respect thereto and inventory returned or
repossessed from sale, disposition or otherwise), all accessions to said
inventory and all products thereof. The term "inventory" includes all goods
held for sale or lease by Borrower or to be furnished under contract of
service, and all raw materials, goods in process, and all materials used or
consumed in Borrower's business; and all proceeds of the foregoing.
B. All receivables relating to the Property or the operation thereof which
now exist or which hereafter arise, or in which Borrower now has or may
hereafter acquire
<PAGE> 24
any rights, which term shall include all accounts, contract rights,
instruments, documents, chattel paper, general intangibles and all other forms
of obligations owing to Borrower, including, but not limited to, retainages,
security deposits and insurance proceeds, and all proceeds of all such
Receivables and all rights to any goods which are represented thereby.
C. All instruments, drafts, acceptances, documents, chattel paper,
contract rights, general intangibles, securities, deposit accounts,
certificates of deposit and notes, relating to the Property or the operation
thereof under which Borrower now has or in the future acquires any rights and
all proceeds of all of the foregoing.
D. All intangible property and rights relating to the Property or the
operation thereof, or used in connection therewith, including but not limited
to all names under or by which the Property or any present or future
Improvements on the Property may at any time be operated or known, and all
rights to carry on business under any such names, or any variant thereof, and
all trade names and trademarks, licenses and franchises relating in any way to
the Property, and good will in any way relating to the Property.
E. All causes of action, claims, compensation and recoveries for any
damage, condemnation or taking of the Property, or for any conveyance in lieu
thereof, whether direct or consequential, or for any damage or injury to the
Property, or for any loss or diminution in value of the Property.
F. All of the right, title and interest of Borrower in and to all refunds
and rebates of taxes and assessments of every kind and nature imposed upon the
Property.
G. All awards or payments, including interest thereon, which may be made
with respect to all or any portion of the above-described personal property,
fixtures or Property as a result of the exercise of the right of eminent
domain.
H. All reserves, deferred payments, deposits, refunds, cost savings and
payments of any kind relating to the construction of any Improvement on the
Property.
I. All plans and specifications prepared for, or governmental permits
issued with respect to, the construction of the Improvements on the Property
and all studies, data and drawings related thereto; and also all contracts and
agreements of Borrower relating to the aforesaid plans and specifications or to
the aforesaid studies, data and drawings or to the construction of the
Improvements on the Property.
J. All goods used or to be used in connection with the construction of the
Improvements at the Property, including, without limitation, structural steel,
building materials and supplies, equipment, tools and machinery, in which
Borrower now or hereafter acquires any rights, during all periods of time when
Borrower has acquired rights therein whether or not said goods are
incorporated into the buildings and the
<PAGE> 25
Improvements on the Property and expressly including such periods of time
prior to the time when any said goods may be incorporated into any such
Improvements.
The foregoing collateral includes all additions, replacements and
substitutions thereof and thereto and all proceeds of all of the foregoing, as
these terms are used and defined in the Uniform Commercial Code.
<PAGE> 1
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of June 30, 1998, between APEX MACHINE
TOOL COMPANY, INC. F/K/A APEX ACQUISITION CORPORATION, a Connecticut
corporation (the "Guarantor"), and FLEET NATIONAL BANK, a national banking
association (the "Lender").
WHEREAS, EDAC TECHNOLOGIES CORPORATION (the "Borrower") has entered into a
certain Revolving Loan and Security Agreement which has been amended and
restated in its entirety by a certain Fifth Amended and Restated Revolving
Loan, Term Loan, Equipment Loan and Security Agreement dated February 28, 1995,
as amended by a certain Sixth Amendment to Revolving Loan, Term Loan, Equipment
Loan and Security Agreement dated July 31, 1995, as further amended by a
certain Seventh Amendment to Revolving Loan, Term Loan, Equipment Loan and
Security Agreement and Reaffirmation of Guaranties dated as of January 26,
1996, as further amended by a certain Eighth Amendment to Revolving Loan, Term
Loan, Equipment Loan and Security Agreement and Reaffirmation of Guaranties
dated as of April 10, 1996, as further amended by a certain Ninth Amendment to
Revolving Loan, Term Loan, Equipment Loan, Security Agreement, Modification of
Notes and Reaffirmation of Guaranties dated May 27, 1997 between Borrower and
Lender, as further amended by a certain Tenth Amendment to Revolving Loan, Term
Loan, Equipment Loan and Security Agreement and Reaffirmation of Guaranties
dated May 22, 1998 and as further amended by a certain Eleventh Amendment to
Loan and Security Agreement, Modification of Notes and Reaffirmation of
Guaranties of even date herewith (as amended and in effect from time to time,
the "LOAN AGREEMENT"), subject to the terms and conditions contained therein
has made and is to make loans to the Lender. Capitalized terms used herein and
not defined herein shall have the meanings given to them in the Loan Agreement;
and
WHEREAS, it is a condition precedent to the Lender's making any loans to
the Borrower under the Loan Agreement that the Guarantor execute and deliver to
the Lender a security agreement in substantially the form hereof; and
WHEREAS, the Guarantor wishes to grant security interests in favor of the
Lender as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Certain capitalized terms used herein have the
meaning ascribed to them in Exhibit A hereof. All capitalized terms used
herein but not defined in Exhibit A hereof or elsewhere in this Agreement shall
have the respective meanings provided therefor in the Loan Agreement.
<PAGE> 2
Section 2. Grant of Security Interest.
(1) The Guarantor hereby grants to the Lender, to secure the
payment and performance in full of all of the Obligations, a security interest
in and so pledges and assigns to the Lender the properties, assets and rights of
the Guarantor wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof (all of the same being
hereinafter called the "Collateral"):
All personal and fixture property of every kind and nature,
including, without limitation, all furniture, fixtures, equipment, raw
materials, inventory, goods, accounts, contract rights, rights to the payment of
money, insurance refund claims and all other insurance claims and proceeds, tort
claims, chattel paper, documents, instruments (including certificated
securities), deposit accounts, security entitlements, investment property, and
all general intangibles, including, without limitation, all uncertificated
securities, tax refund claims, license fees, patents, patent applications,
trademarks, trademark applications, trade names, copyrights, copyright
applications, rights to sue and recover for past infringement of patents,
trademarks and copyrights, computer programs, computer software, engineering
drawings, service marks, customer lists, goodwill, and all licenses, permits,
agreements of any kind or nature pursuant to which the Guarantor possesses, uses
or has authority to possess or use property (whether tangible or intangible) of
others or others possess, use or have authority to possess or use property
(whether tangible or intangible) of the Guarantor, and all recorded data of any
kind or nature, regardless of the medium of recording, including, without
limitation, all software, writings, plans, specifications and schematics.
(2) Pursuant to the terms hereof, the Guarantor has endorsed,
assigned and delivered to the Lender all negotiable or non-negotiable
instruments (including certificated securities) and chattel paper pledged by it
hereunder, together with instruments of transfer or assignment duly executed in
blank as the Lender may have specified. In the event that the Guarantor shall,
after the date of this Agreement, acquire any other negotiable or non-negotiable
instruments (including certificated securities) or chattel paper to be pledged
by it hereunder, the Guarantor shall forthwith endorse, assign and deliver the
same to the Lender, accompanied by such instruments of transfer or assignment
duly executed in blank as the Lender may from time to time specify. To the
extent that any securities, certificated or uncertificated, are subject to
book-entry transfer procedures, such securities have been or, in the case of
book-entry securities hereafter acquired by the Guarantor, will at the time of
such acquisition be, duly transferred to the account of the Lender or one or
more nominees of the Lender with such book-entry facility or other appropriate
financial intermediary, with the Lender having at all times the right to obtain
definitive certificates (in the Lender's name or in the name of one or more
nominees of the Lender) where the issuer customarily or otherwise issues
certificates, all to be held as Collateral hereunder. The Guarantor hereby
acknowledges that the Lender may, in its discretion, appoint one or more
financial institutions to act as the Lender's agent in holding in custodial
account instruments in which the Lender is granted a security interest
hereunder, including, without limitation, certificates of deposit and other
instruments evidencing short-term obligations. Notwithstanding anything to the
contrary contained in this Section 2.(b), so long as no Event of Default shall
have occurred and be continuing, the Guarantor may retain for
2
<PAGE> 3
collection in the ordinary course of business any Instruments received by it in
the ordinary course of business.
Section 3. Title to Collateral, Etc. The Guarantor is the owner of the
Collateral free from any adverse lien, security interest or other encumbrance,
except for this Agreement, other liens permitted by the Loan Agreement and a
lien on certain pieces of equipment in favor of the State of Connecticut as
previously disclosed to Lender (the "State Lien"). None of the account debtors
in respect of any accounts, chattel paper or general intangibles and none of
the obligors in respect of any instruments included in the Collateral is a
governmental authority subject to the Federal Assignment of Claims Act.
Section 4. Continuous Perfection. The Guarantor's place of business or,
if more than one, chief executive office is indicated on the Certificate by
Officers completed by Guarantor and delivered to the Lender on the date hereof.
The Guarantor will not change the same, or the name, identity or corporate
structure of the Guarantor in any manner, without providing at least thirty
(30) days prior written notice to the Lender, and if required by Lender,
delivering an opinion of counsel with respect thereto, in accordance with this
Section 4. In each case, the opinion of counsel required by this Section 4
shall be provided at Guarantor's sole cost and expense, shall be an opinion of
counsel acceptable to the Lender, shall be satisfactory in form and substance
to the Lender, and shall be to the effect that all financing statements and
amendments or supplements thereto, continuation statements and other documents
required to be recorded or filed in order to perfect and protect Lender's
security interest in the Collateral against all creditors of and purchasers
from the Guarantor, for a period specified in such opinion, have been filed in
each filing office necessary for such purpose and that all filing fees and
taxes, if any, payable in connection with such filings have been paid in full.
Section 5. No Liens. Except for (a) the security interest granted
herein, (b) as permitted in the Loan Agreement and (c) the State Lien, the
Guarantor shall be the owner of the Collateral free from any lien, security
interest or other encumbrance, and the Guarantor shall defend the same against
all claims and demands of all persons at any time claiming the same or any
interests therein adverse to the Lender. The Guarantor shall not pledge,
mortgage or create, or suffer to exist a security interest in the Collateral in
favor of any person other than the Lender.
Section 6. No Transfers. The Guarantor will not sell, offer to sell,
lease or otherwise transfer the Collateral or any interest therein except for
(a) sales and leases of inventory and licenses of general intangibles in the
ordinary course of business and (b) sales or other dispositions of obsolescent
items of equipment in the ordinary course of business consistent with past
practices.
Section 7. Insurance. The Guarantor will maintain insurance as required
by Borrower for its assets in of the Loan Agreement.
3
<PAGE> 4
Section 8. Accounts.
(1) As of the time when each of its Accounts arises, the Guarantor
shall be deemed to have represented and warranted that such Accounts and all
records, papers and documents relating thereto (i) are genuine and in all
respects what they purport to be, (ii) represent the legal, valid and binding
obligation of the related Account Debtor evidencing indebtedness unpaid and owed
by such Account Debtor arising out of the sale or lease (or both) and delivery
of the merchandise listed therein, (iii) will, except for the original or
duplicate original invoice sent to a purchaser evidencing such purchaser's
account, be the only original writings evidencing and embodying such obligation
of the Account Debtor named therein, (d) constitute and evidence true and valid
obligations, enforceable in accordance with their respective terms, not subject
to the fulfillment of any contract or condition whatsoever or to any defenses,
setoffs or counterclaims (except with respect to refunds, returns and allowances
in the ordinary course of business), or stamp or other taxes, and (e) are in all
material respects in compliance and conform with all applicable federal, state
and local laws and applicable laws of any relevant foreign jurisdiction;
(2) The Guarantor shall keep and maintain at its own cost and
expense satisfactory and complete records of each Account for at least five
years (with the exception of sales slips which shall be retained for at least
six months) from the date on which such Account comes into existence, including
records of all payments received, all credits granted thereon, all merchandise
returned and all other documentation relating thereto, and the Guarantor shall
make the same available to the Lender for inspection, at the Guarantor's sole
cost and expense, in the same manner required in the Loan Agreement by the
Guarantor. Upon the occurrence and during the continuance of an Event of
Default, the Guarantor shall, at its own cost and expense, deliver all tangible
evidence of Accounts (including all documents evidencing Accounts) and such
books and records to the Lender or to its representatives (copies of which
evidence and books and records may be retained by the Guarantor) at any time
upon the Lender's demand. Upon the occurrence and during the continuance of
Event of Default, the Lender may transfer a full and complete copy of the
Guarantor's books, records, credit information, reports, memoranda and all other
writings relating to the Accounts to and for the use by any person that has
acquired or is contemplating acquisition of an interest in the Accounts or the
Lender's security interest therein without the consent of the Guarantor;
(3) The Guarantor shall legend, in form and manner satisfactory to
the Lender, the Accounts and other books, records and documents of the Guarantor
evidencing or pertaining to the Accounts with an appropriate reference to the
fact that the Accounts have been assigned to the Lender and that the Lender has
a security interest therein.
(4) The Guarantor shall use all commercially reasonable efforts to
cause to be collected from its Account Debtors, as and when due, any and all
amounts owing under or on account of each Account (including, without
limitation, Accounts which are delinquent, such Accounts to be collected in
accordance with lawful collection procedures) and shall apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account. Subject to the rights of the Lender if an Event of Default
shall have occurred and be continuing, the Guarantor
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<PAGE> 5
may in the ordinary course of business (to the extent consistent with its
historical collection practices) allow as adjustments to amounts owing under its
Accounts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which the Guarantor finds
appropriate in accordance with sound business judgment and (ii) a refund or
credit due as a result of returned or damaged merchandise. The costs and
expenses (including, without limitation, attorney's fees) of collection, whether
incurred by the Guarantor or the Lender, shall be borne by the Guarantor.
(5) If at any time Guarantor shall take and perfect a security
interest in any property of an Account Debtor or any other Person to secure
payment and performance of an Account, the Guarantor shall promptly assign such
security interest to the Lender. Such Assignment need not be filed of public
record unless necessary to continue the perfected status of the security
interest against creditors of and transference from the Account Debtor or other
person granting the security interest.
Section 9. Equipment. The Guarantor shall not permit any Equipment to
become a fixture to real estate or accession to other personal property unless
the Lender shall have a first priority Lien thereon.
Section 10. Maintenance of Collateral; Compliance with Law. The Guarantor
will keep the Collateral in good order and repair and will not use the same in
violation of law or any policy of insurance thereon. The Lender, or its
designee, may inspect the Collateral at any reasonable time, wherever located.
The Guarantor will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use
or operation of such Collateral or incurred in connection with this Agreement.
The Guarantor has at all times operated, and the Guarantor will continue to
operate, its business in compliance with all applicable provisions of the
federal Fair Labor Standards, as amended.
Section 11. Collateral Protection Expenses; Preservation of Collateral.
(1) In its discretion, the Lender may discharge taxes and other
encumbrances at any time levied or placed on any of the Collateral, make repairs
thereto and pay any necessary filing fees. The Guarantor agrees to reimburse
the Lender on demand for any and all expenditures so made. The Lender shall
have no obligation to the Guarantor to make any such expenditures, nor shall the
making thereof relieve the Guarantor of any default.
(2) Anything herein to the contrary notwithstanding, the Guarantor
shall remain liable under each contract or agreement comprised in the Collateral
to be observed or performed by the Guarantor thereunder. The Lender shall not
have any obligation or liability under any such contract or agreement by reason
of or arising out of this Agreement or the receipt by the Lender of any payment
relating to any of the Collateral, nor shall the Lender be obligated in any
manner to perform any of the obligations of the Guarantor under or pursuant to
any such contract or agreement, to make inquiry as to the nature or sufficiency
of any payment received by the Lender in respect of the Collateral or as to the
sufficiency of any performance by any party under any such contract or
5
<PAGE> 6
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Lender or to which the Lender may be entitled at any time or
times. The Lender's sole duty with respect to the custody, safe-keeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Uniform Commercial Code of the State of Connecticut or otherwise, shall
be to deal with such Collateral in the same manner as the Lender deals with
similar property for its own account.
Section 12. Securities and Deposits. The Lender may at any time, at its
option, transfer to itself or any nominee any securities constituting
Collateral, receive any income thereon and hold such income as additional
Collateral or apply it on the Obligations. Whether or not Obligations are due,
the Lender may demand, sue for, collect, or make any settlement or compromise it
deems desirable with respect to the Collateral. Regardless of the adequacy of
Collateral or any other security for the Obligations, any deposits or other sums
at any time credited by or due from the Lender to the Guarantor may at any time
be applied to or set off against any of the Obligations.
Section 13. Notification to Account Debtors and Other Obligors. If an
Event of Default shall have occurred and be continuing, the Guarantor shall, at
the request of the Lender, notify account debtors on accounts, chattel paper
and general intangibles of the Guarantor and obligors on instruments for which
the Guarantor is an obligee of the security interest of the Lender in any
account, chattel paper, general intangible or instrument and that payment
thereof is to be made directly to the Lender or to any financial institution
designated by the Lender as the Lender's agent therefor, and the Lender may
itself, without notice to or demand upon the Guarantor, so notify account
debtors and obligors. After the making of such a request or the giving of any
such notification, the Guarantor shall hold any proceeds of collection of
accounts, chattel paper, general intangibles and instruments received by the
Guarantor as trustee for the Lender without commingling the same with other
funds of the Guarantor and shall turn the same over to the Lender in the
identical form received, together with any necessary endorsements or
assignments. The Lender shall apply the proceeds of collection of accounts,
chattel paper, general intangibles and instruments received by the Lender to
the Obligations, such proceeds to be immediately entered after final payment in
cash or solvent credits of the items giving rise to them.
Section 14. Further Assurances. The Guarantor, at its own expense, shall
do, make, execute and deliver all such additional and further acts, things,
deeds, assurances, assignments, documents, agreements and instruments as the
Lender may require more completely to vest in and assure to the Lender its
rights hereunder or in any of the Collateral, including, without limitation (a)
executing, delivering and, where appropriate, filing financing statements and
continuation statements under the Uniform Commercial Code, (b) obtaining
governmental and other third party consents and approvals, (c) obtaining
waivers from mortgagees and landlords, and (d) taking all actions required by
Article 8 or "Revised Article 8", of the Uniform Commercial Code, as applicable
in each relevant jurisdiction, with respect to certificated and uncertificated
securities. To the extent permitted by applicable law, the Guarantor hereby
authorizes the Lender to execute and file financing statements or continuation
statements without the Guarantor's signature appearing thereon. The Guarantor
agrees that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a
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<PAGE> 7
financing statement is sufficient as a financing statement. The Guarantor shall
pay the costs of, or incidental to, any recording or filing of any financing or
continuation statements.
Section 15. Power of Attorney.
(1) The Guarantor hereby irrevocably constitutes and appoints the
Lender and any officer or agent thereof, with full power of substitution, as its
true and lawful attorneys-in-fact with full irrevocable power and authority in
the place and stead of the Guarantor or in the Lender's own name, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments that may
be necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, hereby gives said attorneys
the power and right, on behalf of the Guarantor, without notice to or assent by
the Guarantor upon the occurrence of an Event of Default or a Default (as
defined in the Loan Agreement), to do the following:
(1) to receive, open and dispose of all mail addressed to
Guarantor, to notify the Post Office authorities to
change the address for delivery of mail addressed to
Guarantor to such address as Lender may designate; to
endorse the name of Guarantor on any notes, acceptances,
checks, drafts money orders, instruments or other
evidence of payment or proceeds of the Collateral that
may come into Lender's possession; to sign the name of
Guarantor on any invoices, bills of lading, documents,
drafts against and notices (which also may direct, among
other things, that payment be made directly to Lender) to
Account Debtors or obligors of Guarantor, assignments and
requests for verification of Accounts; to execute proofs
of claim and loss; to execute any endorsements,
schedules, assignments, or other instruments of
conveyance or transfer, to adjust and compromise any
claims under insurance policies; to execute releases;
(2) upon the occurrence and during the continuance of an
Event of Default, generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with
any of the Collateral in such manner as is consistent
with the Uniform Commercial Code of the State of
Connecticut and as fully and completely as though the
Lender were the absolute owner thereof for all purposes,
and to do at the Guarantor's expense, at any time, or
from time to time, all acts and things which the Lender
deems necessary to protect, preserve or realize upon the
Collateral and the Lender's security interest therein, in
order to effect the intent of this Agreement, all as
fully and effectively as the Guarantor might do,
including, without limitation (A) the filing and
prosecuting of registration and transfer applications
with the appropriate federal or local agencies or
authorities with
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<PAGE> 8
respect to trademarks, copyrights and patentable
inventions and processes, (B) upon written notice to the
Guarantor, the exercise of voting rights with respect to
voting securities, which rights may be exercised, if the
Lender so elects, with a view to causing the liquidation
in a commercially reasonable manner of assets of the
issuer of any such securities, and (C) the execution,
delivery and recording, in connection with any sale or
other disposition of any Collateral, the endorsements,
assignments or other instruments of conveyance or
transfer with respect to such Collateral; and
(3) to file such financing statements with respect hereto,
with or without the Guarantor's signature, or a photocopy
of this Agreement in substitution for a financing
statement, as the Lender may deem appropriate and to
execute in the Guarantor's name such financing statements
and continuation statements which may require the
Guarantor's signature;
(4) to do all other acts and things necessary and advisable
in the sole discretion of Lender to carry out and enforce
this Agreement.
(2) To the extent permitted by law, the Guarantor hereby ratifies
all that said attorneys shall lawfully do or cause to be done by virtue hereof.
This power of attorney is a power coupled with an interest and shall be
irrevocable.
(3) The powers conferred on the Lender hereunder are solely to
protect its interests in the Collateral and shall not impose any duty upon it to
exercise any such powers. The Lender shall be accountable only for the amounts
that it actually receives as a result of the exercise of such powers and neither
it nor any of its officers, directors, employees or agents shall be responsible
to the Guarantor for any act or failure to act, except for the Lender's own
gross negligence or willful misconduct.
Section 16. Remedies.
(1) If an Event of Default shall have occurred and be continuing,
the Lender may, without notice or demand to the Guarantor, declare this
Agreement to be in default, and the Lender shall thereafter have in any
jurisdiction in which enforcement hereof is sought, in addition to all other
rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code, including, without limitation, the right to take
possession of the Collateral, and for that purpose the Lender may, so far as the
Guarantor can give authority therefor, enter upon any premises on which the
Collateral may be situated and remove the same therefrom. The Lender may in its
discretion require the Guarantor to assemble all or any part of the Collateral
at such location or locations within the state(s) of the Guarantor's principal
office(s) or at such other locations as the Lender may designate. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type
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<PAGE> 9
customarily sold on a recognized market, the Lender shall give to the Guarantor
at least five (5) business days prior written notice of the time and place of
any public sale of Collateral or of the time after which any private sale or any
other intended disposition is to be made. The Guarantor hereby acknowledges
that five (5) business days prior written notice of such sale or sales shall be
reasonable notice. In addition, the Guarantor waives any and all rights that it
may have to judicial hearing in advance of the enforcement of any of the
Lender's rights hereunder, including, without limitation, its right following an
Event of Default to take immediate possession of the Collateral and exercise its
rights with respect thereto.
(2) Without limiting the generality of the foregoing, the
Guarantor agrees that the Lender shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of all or any part
of the Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the Lender
shall deem appropriate. The Lender shall be authorized at any such sale (if it
deems it advisable to do so) to restrict the prospective bidders or purchasers
to persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution or
sale thereof, and upon consummation of any such sale the Lender shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of Guarantor,
and Guarantor hereby waives (to the fullest extent permitted by applicable law)
all rights of redemption, stay and appraisal that Guarantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.
(3) Any public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Lender may fix and
state in the notice (if any) of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Lender may (in its sole and absolute discretion) determine. The
Lender shall not be obligated to make any sale of any Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Lender may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Lender until the sale price is paid by the purchaser or
purchasers thereof, but the Lender shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
notice. For purposes hereof, (a) a written agreement to purchase the Collateral
or any portion thereof shall be treated as a sale thereof, (b) the Lender shall
be free to carry out such sale pursuant to such agreement and (c) no Guarantor
shall be entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Lender shall have entered into
such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Lender may proceed by a suit or suits at law or in
equity to foreclose upon the Collateral and to sell the Collateral or any
portion
9
<PAGE> 10
thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any
sale pursuant to the provisions of this Section 16 shall be deemed to conform to
the commercially reasonable standards as provided in Section 9-504(3) (or any
successor thereto) of the Uniform Commercial Code as in effect in the State of
Connecticut or its equivalent in other jurisdictions.
Section 17. No Waiver, Etc. The Guarantor waives demand, notice, protest,
notice of acceptance of this Agreement, notice of loans made, credit extended,
Collateral received or delivered or other action taken in reliance hereon and
all other demands and notices of any description. With respect to both the
Obligations and the Collateral, the Guarantor assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of Collateral, to the addition or release of
any party or person primarily or secondarily liable, to the acceptance of
partial payment thereon and the settlement, compromising or adjusting of any
thereof, all in such manner and at such time or times as the Lender may deem
advisable. The Lender shall have no duty as to the collection or protection of
the Collateral or any income thereon, nor as to the preservation of rights
against prior parties, nor as to the preservation of any rights pertaining
thereto beyond the safe custody thereof. The Lender shall not be deemed to
have waived any of its rights upon or under the Obligations or the Collateral
unless such waiver shall be in writing and signed by the Lender. No delay or
omission on the part of the Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver on any one occasion shall
not be construed as a bar to or waiver of any right on any future occasion.
All rights and remedies of the Lender with respect to the Obligations or the
Collateral, whether evidenced hereby or by any other instrument or papers,
shall be cumulative and may be exercised singularly, alternatively,
successfully or concurrently at such time or at such times as the Lender deems
expedient.
Section 18. Marshaling. The Lender shall not be required to marshal any
present or future collateral security (including, but not limited to, this
Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of its rights hereunder
and in respect of such collateral security and other assurances of payment
shall be cumulative and in addition to all other rights, however existing or
arising. To the extent that it lawfully may, the Guarantor hereby agrees that
it will not invoke any law relating to the marshaling of collateral which might
cause delay in or impede the enforcement of the Lender's rights under this
Agreement or under any other instrument creating or evidencing any of the
Obligations or under which any of the Obligations is outstanding or by which
any of the Obligations is secured or payment thereof is otherwise assured, and,
to the extent that it lawfully may, the Guarantor hereby irrevocably waives the
benefits of all such laws.
Section 19. Proceeds of Dispositions; Expenses. The Guarantor shall pay
to the Lender on demand any and all expenses, including reasonable attorneys'
fees and disbursements, incurred or paid by the Lender in protecting,
preserving or enforcing the Lender's rights under or in respect of any of the
Obligations or any of the Collateral. After deducting all of said expenses,
the residue of any proceeds of collection or sale of the Obligations or
Collateral shall, to the extent actually received
10
<PAGE> 11
in cash, be applied to the payment of the Obligations in such order or
preference as the Lender may determine, proper allowance being made for any
Obligations not then due. Upon the final payment and satisfaction in full of
all of the Obligations and after making any payments required by Section
9-504(1)(c) (or any successor thereto) of the Uniform Commercial Code of the
State of Connecticut, any excess shall be returned to the Guarantor, and the
Guarantor shall remain liable for any deficiency in the payment of the
Obligations.
Section 20. Overdue Amounts. Until paid, all amounts due and payable by
the Guarantor hereunder shall be a debt secured by the Collateral and shall
bear, whether before or after judgment, interest at the rate of interest for
overdue principal set forth in the Loan Agreement.
Section 21. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT. The
Guarantor agrees that any suit for the enforcement of this Agreement may be
brought in the courts of the State of Connecticut or any federal court sitting
therein and consents to the non-exclusive jurisdiction of such court and to
service of process in any such suit being made upon the Guarantor by mail at
the address specified in Section 10.2 of the Loan Agreement. The Guarantor
hereby waives any objection that it may now or hereafter have to the venue of
any such suit or any such court or that such suit is brought in an inconvenient
court.
Section 22. Prejudgment Remedies. THE GUARANTOR AGREES THAT THIS IS A
COMMERCIAL TRANSACTION AND NOT A CONSUMER TRANSACTION, AND WAIVES WITH RESPECT
TO ALL RIGHTS OF CREDITORS TO PROPERTY UNDER CONNECTICUT LAW, ANY RIGHT TO A
NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, AS
AMENDED, OR OTHER STATUTE OR STATUTES AFFECTING PREJUDGMENT REMEDIES AND
AUTHORIZES LENDER'S ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT
COURT ORDER, PROVIDED THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER, AND
WAIVES ANY CLAIM IN TORT, CONTRACT OR OTHERWISE AGAINST LENDER'S ATTORNEY WHICH
MAY ARISE OUT OF SUCH ISSUANCE OF THE WRIT FOR A PREJUDGMENT REMEDY WITHOUT
COURT ORDER. FURTHER, TO THE EXTENT ALLOWED UNDER APPLICABLE LAW, GUARANTOR
HEREBY WAIVES DEMAND, PRESENTMENT FOR PAYMENT, PROTEST, NOTICE OF PROTEST,
NOTICE OF DISHONOR, DILIGENCE IN COLLECTION, NOTICE OF NONPAYMENT OF THIS
AGREEMENT AND ANY AND ALL NOTICES OF A LIKE NATURE.
Section 23. Waiver of Jury Trial. GUARANTOR HEREBY EXPRESSLY WAIVES ANY
AND ALL RIGHTS IT MAY HAVE TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR
CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH
11
<PAGE> 12
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND GUARANTOR HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THE LENDER MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF
DEBTOR'S CONSENT TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. Except as
prohibited by law, the Guarantor waives any right which it may have to claim or
recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or any damages other than, or in addition to, actual
damages. The Guarantor (a) certifies that neither the Lender nor any
representative, agent or attorney of the Lender has represented, expressly or
otherwise, that the Lender would not, in the event of litigation, seek to
enforce the foregoing waivers, and (b) acknowledges that, in entering into the
Loan Agreement and the other Loan Documents to which the Lender is a party, the
Lender is relying upon, among other things, the waivers and certifications
contained in this Section 23.
Section 24. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given in the
same manner as provided in the Loan Agreement for the Borrower.
Section 25. Security Interest Absolute. All rights of the Lender
hereunder, the security interest granted herein and all obligations of the
Guarantor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Loan Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations or any other amendment or waiver of or any consent to any departure
from the Loan Agreement, any other Loan Document or any other agreement or
instrument relating to the foregoing, (c) any exchange, release or
nonperfection of any of the Collateral or any other collateral, or any release
or amendment or waiver of or consent to or departure from any Guarantee, for
all or any of the Obligations or (d) any other circumstance that might
otherwise constitute a defense available to, or a discharge of Guarantor in
respect of the Obligations or in respect of this Agreement (other than the
indefeasible payment in full of all of the Obligations).
Section 26. Miscellaneous. The headings of each section of this Agreement
are for convenience only and shall not define or limit the provisions thereof.
This Agreement and all rights and obligations hereunder shall be binding upon
the Guarantor and its respective successors and assigns, and shall inure to the
benefit of the Lender and its successors and assigns. If any term of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity
of all other terms hereof shall in no way be affected thereby, and this
Agreement shall be construed and be enforceable as if
12
<PAGE> 13
such invalid, illegal or unenforceable term had not been included herein. The
Guarantor acknowledges receipt of a copy of this Agreement.
IN WITNESS WHEREOF, intending to be legally bound, the Guarantor has
caused this Agreement to be duly executed as of the date first above written.
APEX MACHINE TOOL COMPANY, INC. f/k/a
APEX ACQUISITION CORPORATION
By: /s/ Ronald G. Popolizio
----------------------------------
Its Vice President
FLEET NATIONAL BANK
By: /s/ Edgar Ezerins
----------------------------------
Edgar Ezerins
Its Vice President
13
<PAGE> 14
SCHEDULE I
COLLATERAL DESCRIPTION
References herein to the (i) "Security Agreement" shall mean the Security
Agreement dated as of June 30, 1998 between Apex Machine Tool Company, Inc.
f/k/a Apex Acquisition Corporation ("Debtor") and Fleet National Bank, and (ii)
"UCC" shall mean the Uniform Commercial Code as in effect in the State of
Connecticut or its equivalent in other jurisdictions.
All of the Debtor's right, title and interest in and to the following
property, whether now owned or existing or hereafter arising or acquired and
regardless of where located (such property being referred to collectively as
the "Collateral"):
(1) Accounts. All "accounts" (as defined in the UCC) now owned or
hereafter acquired by the Debtor, and all accounts receivable, contract rights,
book debts, notes, drafts and other obligations or indebtedness owing to the
Debtor arising from the sale, lease or exchange of goods or other property by it
and/or the performance of services by it (including, without limitation, any
such obligation which might be characterized as an account, contract right or
general intangible under the Uniform Commercial Code in effect in any
jurisdiction) and all of the Debtor's rights in, to and under all purchase order
for goods, services or other property represented by any of the foregoing
(including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to the Debtor under all contracts for the sale,
lease or exchange of goods or other property and/or the performance of services
by it (whether or not yet earned by performance on the part of the Debtor), in
each case whether now in existence or hereafter arising or acquired including,
without limitation, the right to receive the proceeds of said purchase orders
and contracts and all collateral security and guarantees of any kind given by
any Person with respect to any of the foregoing;
(2) Books and Records. All books and records (including), without
limitation, customer lists, credit files, computer programs, printouts and other
computer materials and records) of the Debtor pertaining to any of the
Collateral;
(3) Capital Stock. All of the Debtor's right, title and interest
in the capital stock of any corporation, now owned or hereafter acquired, by
Debtor, and all income and profits thereon, and all dividends and other payments
and distributions with respect thereto, and all proceeds of the foregoing;
(4) Chattel Paper. All "chattel paper" (as defined in the UCC)
evidencing, representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the Accounts, including
(but not limited to) promissory notes, drafts, bills of exchange and trade
acceptances, now owned or hereafter acquired by the Debtor;
1
<PAGE> 15
(5) Copyrights. All copyrights, whether published or unpublished,
all registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Copyright Office or in any similar
office or agency of the United States, and all renewals thereof;
(6) Documents. All "documents" (as defined in the UCC) or other
receipts covering, evidencing or representing goods, now owned or hereafter
acquired by the Debtor;
(7) Equipment. All "equipment" (as defined in the UCC) now owned
or hereafter acquired by the Debtor (excluding motor vehicles), including
without limitation, all of Debtor's now owned or hereafter acquired machinery,
equipment, furniture, furnishings, fixtures and all tangible personal property
similar to any of the foregoing, including, without limitation, fixtures,
together with tools, machine parts, aircraft and motor vehicles of every kind
and description, all supplies used or consumed in the operation of any of the
above items, and all improvements, accessions or appurtenances thereto, and any
proceeds, including insurance proceeds, thereof;
(8) General Intangibles. All "general intangibles" (as defined in
the UCC), now owned or hereafter acquired by the Debtor, including, without
limitation, (i) all obligations or indebtedness owing to the Debtor (other than
Accounts) from whatever source arising, (ii) all licenses, patents, patent
licenses, trademarks, trademark licenses, rights in intellectual property,
goodwill, trade names, service marks, trade secrets, copyrights and permits,
(iii) all rights or claims in respect of refunds for taxes paid and (iv) all
rights in respect of any pension plan or similar arrangement maintained for
employees of Guarantor or of any ERISA Affiliate. As used herein, "ERISA
Affiliate" means any trade or business (whether or not incorporated) which is a
member of a group of which Guarantor is a member or which is under common
control with the Guarantor within the meaning of Section 414 of the Internal
Revenue Code of 1986, as the same may be amended from time to time, and the
regulations promulgated and rulings issued thereunder.
(9) Instruments. All "instruments" or "letters of credit" (each
as defined in the UCC) evidencing, representing, arising from or existing in
respect of, relating to, securing or otherwise supporting the payment of, any of
the Accounts, including (but not limited to) promissory notes, drafts, bills of
exchange and trade acceptances, now owned or hereafter acquired by the Debtor;
(10) Inventory. All "inventory" (as defined in the UCC), now owned
or hereafter acquired by the Debtor, wherever located, including, without
limitation, all raw materials and other materials and supplies, work-in-process
and finished goods and any products made or processed therefrom and all
substances, if any, commingled therewith or added thereto;
(11) Security Entitlements; Investment Property. All "security
entitlements" and all "investment property" (each as defined in the UCC) now
owned or hereafter acquired by the Debtor, wherever located.
2
<PAGE> 16
(12) Proceeds. All proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, Collateral, including without limitation all licenses, permits,
authorizations, and applications, all claims of the Debtor against third parties
for loss of, damage to or destruction of, or for proceeds payable under, or
unearned premiums with respect to, policies of insurance in respect of, any
Collateral, and any condemnation or requisition payments with respect to any
Collateral, in each case whether now existing or hereafter arising;
(13) Trademarks. All of the following: (i) all trademarks, trade
names, corporate names, company names, business names, logos, other source or
business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, and (ii) all extensions or
renewals thereof;
(14) Trademark License. All written agreements now or hereafter in
existence granting to the Debtor any right to use any Trademark.
3
<PAGE> 17
EXHIBIT A
As used in this Security Agreement, the following terms shall have the
respective meanings ascribed to them below:
"Accounts" means all "accounts" (as defined in the UCC) now owned or
hereafter acquired by the Guarantor, and shall also mean and include all
accounts receivable, contract rights, book debts, notes, drafts and other
obligations or indebtedness owing to the Guarantor arising from the sale, lease
or exchange of goods or other property by it and/or the performance of services
by it (including, without limitation, any such obligation which might be
characterized as an account, contract right or general intangible under the
Uniform Commercial Code in effect in any jurisdiction) and all of the
Guarantor's rights in, to and under all purchase order for goods, services or
other property represented by any of the foregoing (including returned or
repossessed goods and unpaid sellers' rights of rescission, replevin,
reclamation and rights to stoppage in transit) and all monies due to or to
become due to the Guarantor under all contracts for the sale, lease or exchange
of goods or other property and/or the performance of services by it (whether or
not yet earned by performance on the part of the Guarantor), in each case
whether now in existence or hereafter arising or acquired including, without
limitation, the right to receive the proceeds of said purchase orders and
contracts and all collateral security and guarantees of any kind given by any
Person with respect to any of the foregoing.
"Account Debtor" means any person who is or who may become obligated to
Guarantor under, with respect to or on an Account.
"Chattel Paper" means all "chattel paper" (as defined in the UCC)
evidencing, representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the Accounts, including
(but not limited to) promissory notes, drafts, bills of exchange and trade
acceptances, now owned or hereafter acquired by the Debtor;
"Collateral" has the meaning set forth in Section 2.
"Copyrights" means (a) all copyrights, whether published or unpublished,
all registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Copyright Office or in any similar
office or agency of the United States and (b) all renewals thereof.
"Documents" means all "documents" (as defined in the UCC) or other
receipts covering, evidencing or representing goods, now owned or hereafter
acquired by the Guarantor.
"Equipment" means all "equipment" (as defined in the UCC) now owned or
hereafter acquired by the Guarantor (excluding motor vehicles), including
without limitation, all of Guarantor's now owned or hereafter acquired
machinery, equipment, furniture, furnishings, fixtures and all tangible
personal property similar to any of the foregoing, including, without
limitation, fixtures, together with
<PAGE> 18
tools, machine parts, aircraft and motor vehicles of every kind and description,
all supplies used or consumed in the operation of any of the above items, and
all improvements, accessions or appurtenances thereto, and any proceeds,
including insurance proceeds, thereof.
"General Intangibles" means all "general intangibles" (as defined in the
UCC), now owned or hereafter acquired by the Guarantor, including, without
limitation, (i) all obligations or indebtedness owing to the Guarantor (other
than Accounts) from whatever source arising, (ii) all licenses, patents, patent
licenses, trademarks, trademark licenses, rights in intellectual property,
goodwill, trade names, service marks, trade secrets, copyrights and permits,
(iii) all rights or claims in respect of refunds for taxes paid and (iv) all
rights in respect of any pension plan or similar arrangement maintained for
employees of any member of the Controlled Group.
"Instruments" means all "instruments", "chattel paper" or "letters of
credit" (each as defined in the UCC) evidencing, representing, arising from or
existing in respect of, relating to, securing or otherwise supporting the
payment of, any of the Accounts, including (but not limited to) promissory
notes, drafts, bills of exchange and trade acceptances, now owned or hereafter
acquired by the Guarantor.
"Inventory" means all "inventory" (as defined in the UCC), now owned or
hereafter acquired by the Guarantor, wherever located, and shall also mean and
include, without limitation, all raw materials and other materials and
supplies, work-in-process and finished goods and any products made or processed
therefrom and all substances, if any commingled therewith or added thereto.
"Obligations" means the obligations secured under this Agreement including
(a) all obligations of the Guarantor under or in respect of the Loan Agreement,
including its obligations in respect of principal of and interest on any
Revolving Advance under, or any Notes issued pursuant to, the Loan Agreement,
and all other amounts payable under the Loan Agreement, (b) all other amounts
payable by the Guarantor hereunder or under any other Loan Document, (c) all
interest on the Obligations listed in the foregoing clauses (a), and (b) and
(c), including without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Guarantor or any other Loan
Party, or which would accrue but for the commencement of such case, proceeding
or other action, whether or not allowed or allowable as a claim in any such
proceeding and (d) any renewals or extensions, replacements, modifications,
substitutions, amendments and restatements of any of the foregoing
"Proceeds" means all proceeds of, and all other profits, products, rents
or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, Collateral, including without limitation all licenses, permits,
authorizations, and applications, all claims of the Guarantor against third
parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any Collateral, and any condemnation or requisition payments with respect
to any Collateral, in each case whether now existing or hereafter arising.
A-2
<PAGE> 19
"Trademarks" means all of the following: (i) all trademarks, trade names,
corporate names, company names, business names, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and
all applications in connection therewith, including registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, and (ii) all extensions or
renewals thereof.
"Trademark License" means any written agreement now or hereafter in
existence granting to the Guarantor any right to use any Trademark.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of Connecticut; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
Security Interests in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than Connecticut, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.
A-3
<PAGE> 1
HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT
THIS HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT (this "AGREEMENT") is made
as of the 30th day of June, 1998, by and between EDAC TECHNOLOGIES CORPORATION,
a Wisconsin corporation with its chief executive office and principal place of
business at 1806 New Britain Avenue, Farmington, Connecticut 06032 (the
"BORROWER"), APEX MACHINE TOOL COMPANY, INC. F/K/A APEX ACQUISITION
CORPORATION, a Connecticut corporation with a mailing address c/o Borrower at
1806 New Britain Avenue, Farmington, Connecticut 06072, and GROS-ITE
INDUSTRIES, INC., a Connecticut corporation with a mailing address c/o Borrower
at 1806 New Britain Avenue, Farmington, Connecticut 06072 (collectively, the
"GUARANTORS"), and FLEET NATIONAL BANK, a national banking association with a
place of business at 777 Main Street, Hartford, Connecticut 06115 (the
"LENDER"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Loan Agreement as defined below.
R E C I T A L S:
WHEREAS, the Borrower and Lender hereto have entered into a certain Fifth
Amended and Restated Revolving Loan, Term Loan, Equipment Loan and Security
Agreement dated February 28, 1995, as amended from time to time and now in
effect (the "LOAN AGREEMENT") pursuant to which the Lender has extended certain
loans to the Borrower (the "LOANS"); and
WHEREAS, the Guarantors have guaranteed repayment of the Loans; and
WHEREAS, the Borrower operates and conducts business at 1790, 1794 and
1806 New Britain Avenue, Farmington, Connecticut (the "BORROWER PROPERTY"); and
WHEREAS, Apex Machine Tool Company, Inc. f/k/a Apex Acquisition
Corporation operates and conducts business at 55 Spring Lane, Farmington,
Connecticut and owns or shall own 17, 21 and 55 Spring Lane, Farmington,
Connecticut (collectively, the "GUARANTOR PROPERTY" and collectively with the
Borrower Property, the "PROPERTY"); and
WHEREAS, the Lender has required, as a condition of entering into the
Loans, that the Borrower and Guarantors indemnify and hold the Lender harmless
against and from certain obligations for which the Lender may incur liability,
by reason of the threat or presence of any hazardous substance at or near the
Property;
NOW, THEREFORE, in consideration of the Lender's execution and delivery of
the Loan Documents and Ten Dollars ($10.00), and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Borrower and Guarantors, intending to be legally bound, hereby agree as
follows:
1. RECITALS. The foregoing recitals are incorporated into this Agreement
by this reference.
<PAGE> 2
2. REPRESENTATIONS AND WARRANTIES. Borrower and Guarantors hereby
represent and warrant that except as set forth in (a) the environmental reports
set forth in Schedule 4.18 of a certain Purchase and Sale Agreement by and
among Guarantor, Apex Machine Tool Company, Inc., Gerald S. Biondi, James G.
Biondi and Michael Biondi, and (b) the environmental reports previously
provided to Lender (collectively, the "ENVIRONMENTAL REPORTS"):
a. No substances, including, without limitation, asbestos or any
substance containing asbestos and deemed hazardous under any Hazardous
Substances Law (as defined below), the group of organic compounds known as
polychlorinated biphenyls, flammable explosives, radioactive materials,
chemicals known to cause cancer or reproductive toxicity, pollutants, effluents,
contaminants, emissions or related materials and any items included in the
definition of hazardous or toxic waste, materials or substances ("HAZARDOUS
SUBSTANCES") under any law relating to environmental conditions and industrial
hygiene, including, without limitation, the Resource Conservation and Recovery
Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq., the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42
U.S.C. Section 9601 et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Section 6901 et seq., the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq., the Clean Air Act, 42 U.S.C. Section 741 et seq., the
Clean Water Act, 33 U.S.C. Section 7401, et seq., the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., the Safe Drinking Water Act, 42 U.S.C.
Section 300f et seq., Title 22a of the Connecticut General Statutes, the
environmental laws of Indiana, California, Florida, Nevada and all other states
in which the Borrower conducts business, as the same may be amended from time to
time, and all other applicable federal, state and local environmental laws,
statutes, ordinances and the regulations, orders and decrees now or hereafter
promulgated thereunder (individually, a "HAZARDOUS SUBSTANCES LAW", and
collectively, the "HAZARDOUS SUBSTANCES LAWS"), have been or are or shall be,
installed, used, generated, manufactured, treated, handled, refined, produced,
processed, stored, disposed of, spilled, discharged, released or otherwise
deposited or located in, on or under the Property;
b. No activity has been or shall be, undertaken on the Property which
has caused or would cause (i) the Property to become a hazardous waste
treatment, storage or disposal facility or "establishment" as such terminology
is defined and classified under any Hazardous Substances Law, (ii) a release or
threatened release of any Hazardous Substance from the Property in violation of
any Hazardous Substances Law, or (iii) the discharge of any Hazardous Substance
into the atmosphere or into any watercourse, body of or surface or subsurface
water or wetland which would require a permit under any Hazardous Substances Law
and for which no such permit has been issued;
c. No activity has been undertaken or permitted to be undertaken on
the Property which would result in a violation under any Hazardous Substances
Law;
d. Neither the Borrower, Guarantors, any tenant or other occupant of
the Property nor any other party has, caused or suffered to occur, and the
Borrower and Guarantors will not hereafter cause or suffer to occur, a
discharge, spillage, uncontrolled loss, seepage or filtration of oil or
petroleum or chemical liquids or solid, liquid or gaseous products or hazardous
waste (a "SPILL"), as those terms are used in Chapter 446K of the Connecticut
General Statutes, as the same may be amended from time to time, at, upon, under
or within the Property, and neither the Borrower,
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Guarantors, any tenant or other occupant of the Property or any other party, has
been or is or will be, involved in operations at the Property, nor are there or
will there be any substances or conditions in or on the Property, which could
support a claim or cause of action or lead to the imposition on the Borrower, or
any other owner or operator of the Property of liability or the creation of a
lien on the Property under any Hazardous Substances Law.
3. COVENANTS.
a. The Borrower and Guarantors shall comply strictly and in all
respects with the requirements of the Hazardous Substances Laws and with all
similar laws and regulations and shall notify the Lender immediately in the
event of any discharge or discovery of any Hazardous Substance at, upon, under
or within the Property. The Borrower and Guarantors shall promptly forward to
the Lender copies of all orders, notices, permits, applications, correspondence
or other communications and reports received by the Borrower from, or sent to
the Borrower by the Connecticut Department of Environmental Protection ("DEP"),
the United States Environmental Protection Agency ("EPA") or any similar entity
in connection with any discharge, or the presence of any Hazardous Substance or
any other matters relating to the Hazardous Substances Laws or any similar laws
or regulations, as they may affect the Property. Upon request, the Borrower
shall provide the Lender with copies of all records, forms and other documents
that the Borrower is required to produce or maintain pursuant to any Hazardous
Substances Law or any permit.
b. The Borrower and Guarantors shall comply strictly and in all
respects with the requirements of any order issued by EPA, DEP or any other
federal, state or municipal department or agency having regulatory authority
over environmental matters with regard to the Property. If the Borrower or
Guarantors undertake any action to remedy any violation or potential violation
of any Hazardous Substances Law, they shall obtain and deliver to the Lender
certifications of engineers or other professionals acceptable to the Lender, in
form and substance satisfactory to the Lender, certifying that all necessary and
required actions to clean up, remove, contain, prevent and eliminate all
releases or threats of release of Hazardous Substances on or about the Property
to the levels required by the appropriate governmental agencies have been taken,
and that upon completion of such action, the Property is, to the knowledge of
such professional, then in compliance with applicable Hazardous Substances Laws
as then in effect and applicable to such actions.
c. The Borrower's and Guarantors' obligations under this Agreement
shall arise upon the execution of this Agreement and continue after the
discovery of the presence of any Hazardous Substance, whether or not EPA, DEP,
any other federal agency or any state or local environmental agency has taken or
threatened any action in connection with the presence of any Hazardous
Substance.
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4. INDEMNITY.
a. The Borrower and Guarantors shall at all times indemnify and hold
the Lender harmless against and from any and all claims, suits, actions, debts,
damages, costs, losses, liabilities, obligations, judgments, charges, and
expenses, of any nature whatsoever suffered, incurred or paid by the Lender,
under or on account of the Hazardous Substances Laws or any similar laws or
regulations, including the assertion of any lien thereunder, with respect to:
(i) any discharge of any Hazardous Substance, the threat of a
discharge of any Hazardous Substance, or the presence of any
Hazardous Substance at or affecting the Property, whether or not
the same originates or emanates from the Property, including any
loss of value of any of the Property as a result of any of the
foregoing;
(ii) any costs of removal or remedial action incurred by the
United States Government, the State of Connecticut, or the Lender,
or any costs incurred by any other person or damages from injury
to, destruction of, or loss of natural resources, including
reasonable costs of assessing such injury, destruction or loss
incurred pursuant to any Hazardous Substances Laws;
(iii) liability for personal injury or property damage arising
under any statutory or common law tort theory, including, without
limitation, damages assessed for the maintenance of a public or
private nuisance or for the carrying on of an abnormally dangerous
activity at or near the Property;
(iv) any other environmental matter affecting the Property within
the jurisdiction of EPA, DEP, any other federal agency, or any
state or local environmental agency;
(v) any failure by the Borrower or Guarantors to comply with the
terms of any order issued by EPA, DEP, or any other federal, state
or municipal department or agency having regulatory authority over
environmental matters with regard to the Property (an "ORDER");
and/or
(vi) the breach of any warranty, covenant or representation by
the Borrower or Guarantors relating to environmental matters as
set forth herein or any other documents relating to the Loan.
b. In the event the Borrower or Guarantors shall fail to comply with
any of the requirements of the Hazardous Substances Laws or any other
environmental law or regulation, or of any Order, the Lender may at its
election, but without the obligation so to do, at any time and from time to
time, give such notices and/or cause such work to be performed at the Property
and/or take any and all other actions as the Lender shall deem necessary or
advisable in order to cure the Borrower's or Guarantors' noncompliance with the
Hazardous Substances Laws or any Order. The Lender may also, at any time and
from time to time (but not more often than once per year unless an
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Event of Default shall have occurred and be continuing or a Spill or other
material violation of any Hazardous Substances Law shall have occurred) cause to
be conducted and completed by engineers, consultants and others selected by the
Lender, such investigations, studies, sampling and testing of the condition of
the Property and the compliance by the Borrower and all occupants of the
Property with the Hazardous Substance Laws as the Lender, in its sole
discretion, shall deem reasonably appropriate. All such investigations,
studies, sampling and testing shall, if an Event of Default shall have occurred
and be continuing or if a Spill or other material violation of any Hazardous
Substances Law shall have occurred, be at the Borrower's and Guarantors'
expense. The Borrower and Guarantors agree to cooperate with the Lender and all
persons retained by the Lender to conduct such investigations and to provide
them with access to the Property and the books and records of the Borrower and
Guarantors.
5. ATTORNEY'S FEES. If the Lender, or any of its authorized agents,
employees or representatives retains the services of any attorney in connection
with the enforcement of any of the provisions of, or the undertaking by the
Lender of any obligation under, this Agreement, the Borrower and Guarantors
shall pay the Lender's costs and reasonable attorneys' fees thereby incurred.
The Lender may employ an attorney of the Lender's own choice.
6. INTEREST. If the Lender incurs any obligations, costs or expenses
under this Agreement, such costs or expenses shall be deemed to be Obligations.
The Borrower and Guarantors shall pay the Lender such Obligations immediately,
on demand. If such payment is not received within fifteen (15) days after
demand thereof, interest on such amount shall, after the expiration of such
15-day period, accrue at the Default Rate of interest, until such amount is
paid in full.
7. JOINT AND SEVERAL LIABILITY. The Borrower's and Guarantors' liability
for any obligations arising under this Agreement is joint and several with any
other person now or hereafter obligated under this Agreement. Separate actions
may be brought and prosecuted against any of the entities which comprise the
Borrower, whether or not such action is brought against any of the other
entities or any other person or whether or not any other person is joined in
such action.
8. CONSENT TO JURISDICTION. The Borrower and Guarantors consent to the
exercise of personal jurisdiction over it by any federal or state court in the
State of Connecticut and consent to the selection of venue in any jurisdiction
or locality in the State of Connecticut. Service shall be effected by any
means permitted by the court in which any action is filed or, at the Lender's
option, by mailing process, postage prepaid, by certified mail, return receipt
requested, to the Borrower's and Guarantors' agent at the foregoing address or
to the Borrower and Guarantors at the address hereinafter set forth. Service
shall be deemed effective upon receipt. The Borrower and Guarantors may
designate a change of address of such agent by written notice to the Lender by
certified mail, return receipt requested, at least ten (10) days before such
change of address is to become effective.
9. NOTICE. All notices, demands, requests and other communications
required hereunder shall be in writing and shall be deemed to have been
properly given if personally delivered or sent by United States certified or
registered mail, return receipt requested, postage prepaid, addressed to the
party for whom it is intended at its address hereinafter set forth:
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If to the Borrower or Guarantors:
EDAC Technologies Corporation
1806 New Britain Avenue
Farmington, CT 06032
Attn: Ronald Popolizio, Vice President
If to the Lender:
Fleet National Bank
777 Main Street - CTMO 0240
Hartford, CT 06115
Attn: Edgar Ezerins, Vice President
Notice shall be deemed given upon receipt. Any party may designate a change of
address by written notice to the others given at least ten (10) days before
such change of address is to become effective.
10. NO WAIVER. The Borrower and Guarantors waive any right to require the
Lender at any time to pursue any remedy in the Lender's power whatsoever. The
failure of the Lender to insist upon strict compliance with any of the terms
hereof shall not be considered to be a waiver of any such terms, and it shall
not prevent the Lender from insisting upon strict compliance with this
Agreement or any of the Loan Documents at any time thereafter.
11. SURVIVABILITY. The agreement to indemnify and hold harmless under
this Agreement will survive the repayment of the Loan and the discharge and
release of any other Loan Documents.
12. SEVERABILITY. If any clause or provision herein contained operates or
would prospectively operate to invalidate this Agreement in whole or in part,
then such clause or provision shall be void and treated as if not contained
herein, and the remainder of this Agreement shall remain operative and in full
force and effect.
13. INCONSISTENCIES AMONG THE LOAN DOCUMENTS. Nothing contained herein is
intended to modify in any way the obligations of the Borrower and Guarantors to
Lender under any of the Loan Documents. Any inconsistencies among the Loan
Documents shall be construed, interpreted and resolved so as to benefit the
Lender, and without regard to, and with no negative inference attached to,
whether this Agreement was drafted by the Lender or its attorneys.
14. ADDITIONAL DOCUMENTS. The Borrower shall from time to time, upon the
request of the Lender, execute and deliver any necessary or desirable further
documents or modifications or amendments hereto in confirmation of or with
respect to the indemnification provided for herein.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrower's and Guarantors' successors and assigns and shall inure to the
benefit of the Lender and its successors and assigns.
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16. CONTROLLING LAWS. This Agreement shall be governed by and construed
in accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be executed
as of the date first above written.
BORROWER:
EDAC TECHNOLOGIES CORP.
By: /s/ Ronald G. Popolozio
-----------------------------------
Ronald Popolizio
Its Vice President-Finance
Duly Authorized
GUARANTORS:
APEX MACHINE TOOL COMPANY, INC. f/k/a
APEX ACQUISITION CORPORATION
By: /s/ Ronald G. Popolizio
-----------------------------------
Its Vice President
GROS-ITE INDUSTRIES, INC.
By: /s/ Ronald G. Popolizio
-----------------------------------
Its Secretary
LENDER:
FLEET NATIONAL BANK
By: /s/ Edgar Ezerins
-----------------------------------
Edgar Ezerins
Its Vice President
Duly Authorized
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