Collateral Assignment of Rents,
Leases and Profits
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THIS COLLATERAL ASSIGNMENT OF RENTS, LEASES AND PROFITS (this “Assignment”) is
made and entered into as of the 9th day of March, 2015, by AIR REALTY GROUP, LLC
, a Connecticut limited liability company (the “Assignor”), with an address at
283 Sullivan Avenue, South Windsor, Connecticut 06074 in favor of PNC BANK,
NATIONAL ASSOCIATION (the “Bank”), with an address at Two Tower Center
Boulevard, East Brunswick, New Jersey  08816.

WHEREAS, the Assignor has executed and delivered to the Bank a Continuing
Unlimited Guaranty of even date herewith (the “Guaranty”) pursuant to a certain
Amended and Restated Revolving Credit, Term Loan and Security Agreement by and
among  AIR INDUSTRIES MACHINING, CORP. (as successor by merger with Gales
Industries Acquisition Corp., Inc.) (“Air”), a corporation organized under the
laws of the State of New York, WELDING METALLURGY, INC. (as successor by merger
with WMS Merger Corp.) (“WM”), a corporation organized under the laws of the
State of New York, NASSAU TOOL WORKS, INC. (formerly known as NTW Operating
Inc.) (“NTW”), a corporation organized under the laws of the State of New York,
WOODBINE PRODUCTS, INC. (“WP”), a corporation organized under the laws of the
State of New York, MILLER STUART INC. (“MS”), a corporation organized under the
laws of the State of New York, EUR-PAC CORPORATION (“Eur-Pac”), a corporation
organized under the laws of the State of New York, ELECTRONIC CONNECTION
CORPORATION (“ECC”), a corporation organized under the laws of the State of
Connecticut, AMK WELDING, INC., (“AMK”) a corporation organized under the laws
of the State of Delaware, and THE STERLING ENGINEERING CORPORATION
(“STERLING”  and collectively with Air, WM, NTW, WP, MS, EUR-PAC, ECC and AMK,
the “Borrower”), a corporation organized under the laws of the State of
Connecticut the Assignor, the Bank, the other financial institutions named
therein (collectively with the Bank, the “Lenders”), and the Bank as Agent for
the Lenders (Bank in such capacity, the “Agent”) dated June 27, 2013 (as may be
amended, modified, restated, replaced, increased and/or extended from time to
time, the “Loan Agreement”), pursuant to which the Borrower has borrowed from
the Lenders certain loans in the original principal amount of $35,112,464.56 (as
such amount may be increased and/or decreased from time to time, the “Loan”)
which Loan is evidenced by or incurred in connection with (i) a certain Third
Amended and Restated Revolving Credit Note executed by the Borrower in favor of
Agent for the benefit of Lenders in the original principal amount of $23,000,000
dated June 9, 2014; (ii) a certain Third Amended and Restated Term Note executed
by the Borrower in favor of the Agent for the benefit of Lenders in the original
principal amount of $2,612,464,56 dated June 9, 2014; (iii) a certain Term Note
executed by the Borrower in favor of the Agent for the benefit of the Lenders in
the original principal amount of $3,500,000 dated October 1, 2014; (iv) a
certain Term Note executed by the Borrower in favor of the Agent for the Benefit
of Lenders in the original principal amount of $2,500,000 dated December 31,
2014; and (v) a certain Term Note executed by the Borrower in Favor of the Agent
for the Benefit of Lenders in the original principal amount of $3,500,000 dated
the date hereof ((i) through (v) collectively the “Note”).  The Note and all
other promissory notes executed in connection with any Obligations, the Loan
Agreement, the Guaranty and any mortgage, deed of trust, deed to secure debt and
all of such related agreements, and all other documents evidencing, securing or
guaranteeing payment of any obligations to the Lenders, as any of the same may
be amended, modified, supplemented, replaced, or refinanced from time to time
are hereinafter collectively referred to as the “Loan Documents”), which Loan
Documents are incorporated herein by reference and made a part hereof; and
 
 
 

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WHEREAS, the obligations under the Loan Documents are secured by, among other
things, a certain Guaranty executed by the Assignor in favor of the Bank and a
certain Open-End Mortgage and Security Agreement executed by the Assignor in
favor of the Bank dated the date hereof (as the same may be amended, modified,
restated, replaced and/or refinanced from time to time, the “Mortgage”) against
certain premises described in Exhibit A attached hereto (the “Premises”), and
recorded or to be recorded in the real estate records of the Town of
Barkhamsted, County of Litchfield and State of Connecticut where the Premises
are located; and

WHEREAS, the Assignor has agreed to assign its interest under all present and
future leases, use agreements, occupancy agreements, licenses or other similar
instruments, as the same may be amended, modified, extended  or renewed from
time to time (collectively, the “Leases”) of all or a portion of the
improvements erected or to be erected on the Premises to the Bank in the manner
hereinafter provided as additional security for the payment of the Obligations
(as defined in the Mortgage);

NOW, THEREFORE, in consideration of the extension of credit under the Loan
Documents and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the
Assignor hereby assigns, transfers and sets over to the Bank, as security for
the payment of the Obligations and the observance and performance of all the
terms, covenants and provisions of the Loan Documents, the Mortgage and this
Assignment, all of the Assignor’s right, title and interest in and to the
Leases, all of the rents, additional rents, charges, issues, profits and other
payments for the use or occupancy of the Premises (including rooms and other
public facilities in hotels, motels or other lodging properties) payable under
the Leases (which are now in existence or which may hereafter be executed during
the term hereof) and all cash or other property deposited by tenants to secure
performance of their obligations under the Leases, including, without
limitation, the immediate and continuing right to receive and collect all
condemnation awards and insurance proceeds, the right to accept or reject any
offer made by any tenant pursuant to its Lease to purchase the Premises and any
other property subject to the Lease as therein provided and to perform all other
necessary or appropriate acts with respect to such Leases as agent and
attorney-in-fact for Assignor, and the right to make all waivers and agreements,
to give and receive all notices, consents and releases, to take such action upon
the happening of a default under any Lease, including the commencement, conduct
and consummation of proceedings at law or in equity as shall be permitted under
any provision of any Lease or by any law, and to do any and all other things
whatsoever which the Assignor is or may become entitled to do under any such
Lease all from the date hereof to the end of the respective terms of the Leases
and any renewals and extensions thereof, and in all cases both before and after
the commencement by or against the Assignor of any case or proceeding under any
Federal or State bankruptcy, insolvency or similar law (collectively, the
“Rents”).  This Assignment is a present absolute and unconditional assignment
from the Assignor to the Bank and not merely the granting of a security
interest.  The Assignor further represents, warrants and covenants to the Bank
as follows:

1.           Status of Leases.  The Assignor represents and warrants that as of
the date hereof there are no Leases affecting the Premises.
 
 
 

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2.           Performance and Enforcement of Leases.  The Assignor shall, at its
sole cost and expense, (i) observe and perform, or cause to be observed and
performed, each and every term, covenant and provision of the Leases on the part
of the landlord thereunder to be observed and performed, (ii) promptly send
copies of all notices of default which the Assignor shall send or receive under
the Leases to the Bank, (iii) enforce, short of termination thereof, the
observance and performance of each and every term, covenant and provision of the
Leases on the part of the tenants thereunder to be observed and performed, and
(iv) appear in and defend any action or proceeding arising under or in any
manner connected with the Leases or with the obligations and undertakings of the
landlord or the tenants thereunder.  If the Assignor shall fail to pay, perform
or observe any of its covenants or agreements hereunder or under any of the
Leases, the Bank may pay, perform or observe the same and collect the cost
thereof from the Assignor.

3.           Restrictions on Actions Under Leases.  The Assignor shall not,
without the prior written consent of the Bank, (i) further assign or attempt to
assign the Leases or any portion of the Rents due and payable or to become due
and payable thereunder, (ii) alter, modify, amend or change the terms of any of
the Leases or surrender, renew, cancel or terminate the same or do anything
whatsoever affecting any guaranty of any of the Leases or consent to any of the
foregoing, (iii) accept prepayments of any portion of the Rents for a period of
more than one (1) month in advance, (iv) enter into any lease, license or other
agreement for occupancy after the date hereof for the Premises, or any part
thereof, without the prior written consent of the Bank, or (v) discount any
future accruing rents.

4.           Bank Not Obligated Under Leases.  This Assignment shall not be
deemed or construed to obligate the Bank to take any action or incur any expense
or perform or discharge any obligation, duty or liability under the Leases, and
the Assignor hereby agrees to indemnify and hold the Bank harmless from and
against all liability, cost, loss or damage, including, but not limited to,
reasonable attorneys’ fees, which the Bank may or might incur under the Leases
(or any of them) or relating to the Premises or under or by reason of this
Assignment and from and against the Bank by reason of any alleged obligation or
undertaking on the Bank’s part to perform or discharge any of the terms,
covenants or provisions contained in the Leases.  Nothing contained in this
Assignment and no entry by the Bank upon the Premises as hereinafter provided,
shall be construed to constitute the Bank as a mortgagee in possession or render
the Bank liable in any way for any injury or damage to person or property
sustained by any person or entity in, on, or about the Premises.

5.           Revocable License; Event of Default.  This Assignment has been made
as additional security for the payment of the Obligations and the observance and
performance by the Assignor of the terms, covenants and provisions of the Loan
Documents on the Assignor’s part to be observed and performed.  So long as no
Event of Default shall exist under the Note, the Mortgage or any of the other
Loan Documents and no event shall have occurred which, by the lapse of time or
the giving of notice, or both, is or would become an Event of Default
thereunder, the Assignor shall have a license to occupy the Premises as landlord
or otherwise and to collect, use and enjoy the rents, issues and profits and
other sums payable under and by virtue of any Lease (but only as the same become
due under the provisions of such Lease) and to enforce the covenants of the
Leases, provided that any amounts collected by the Assignor shall be held by the
Assignor in trust for the benefit of the Bank for use in the payment of all sums
due on the Obligations.
 
 
 

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Upon the occurrence of an Event of Default under the Note, the Mortgage or any
of the other Loan Documents, the right and license granted to the Assignor in
this Assignment shall be automatically revoked without any notice or further
action whatsoever and the Bank, at its option, shall have the complete right,
power and authority (a) without taking possession, to demand, collect and
receive and sue for the Rents and other sums payable under the Leases and, after
deducting all reasonable costs and expenses of collection (including, without
limitation, reasonable attorneys’ fees) as determined by the Bank, apply the net
proceeds thereof to the payment of any indebtedness secured hereby; (b) to
declare all sums secured hereby immediately due and payable, and exercise any or
all of the rights and remedies contained in the Note, the Mortgage, the Loan
Documents or at law or in equity; and (c) without regard to the adequacy of the
security, with or without process of law, personally or by agent or attorney, or
by a receiver to be appointed by court, enter upon, take and maintain possession
of and hold, maintain, control and operate the Premises, or any part thereof,
together with all documents, books, records, papers, and accounts relating
thereto and exclude the Assignor and its agents and servants therefrom, as fully
and to the same extent as the Assignor could do if in possession and in such
event, without limitation and at the expense of the Assignor, from time to time
cause to be made all necessary or proper repairs, renewals, replacements, useful
alterations, additions, betterments and improvements to the Premises or any part
thereof, as the Bank deems judicious, and pay taxes, assessments and other
charges on the Premises, or any part thereof, and insure and reinsure the same,
and lease the Premises, or any part thereof, for such terms and on such terms as
the Bank deems desirable, including leases for terms expiring beyond the
maturity of the indebtedness secured by the Loan Documents and cancel any Lease
or sublease thereof for any cause or on any ground.  The Bank may retain and
apply the Rents toward payment of the Obligations in such priority and
proportions as the Bank, in its sole discretion, shall deem proper.

6.           INSTRUCTIONS TO TENANTS AFTER DEFAULT.  TIME  IS OF THE ESSENCE
HEREOF.  THE ASSIGNOR HEREBY CONSENTS TO AND IRREVOCABLY AUTHORIZES AND DIRECTS
THE TENANTS UNDER THE LEASES AND ANY SUCCESSOR TO THE INTEREST OF ANY OF SAID
TENANTS, UPON DEMAND AND NOTICE FROM THE BANK OF THE BANK’S RIGHT TO RECEIVE THE
RENTS AND OTHER AMOUNTS DUE UNDER SUCH LEASES, TO PAY TO THE BANK THE RENTS AND
OTHER AMOUNTS DUE OR TO BECOME DUE UNDER THE LEASES, AND SAID TENANTS SHALL HAVE
THE RIGHT TO RELY UPON SUCH DEMAND AND NOTICE FROM THE BANK AND SHALL PAY SUCH
RENTS AND OTHER AMOUNTS TO THE BANK WITHOUT ANY OBLIGATION OR RIGHT TO DETERMINE
THE ACTUAL EXISTENCE OF ANY DEFAULT OR EVENT CLAIMED BY THE BANK AS THE BASIS
FOR THE BANK’S RIGHT TO RECEIVE SUCH RENTS AND OTHER AMOUNTS AND NOTWITHSTANDING
ANY NOTICE FROM OR CLAIM OF ASSIGNOR TO THE CONTRARY, AND ASSIGNOR SHALL HAVE NO
RIGHT TO CLAIM AGAINST SAID TENANTS FOR ANY SUCH RENTS AND OTHER AMOUNTS SO PAID
BY SAID TENANTS TO THE BANK.

7.           Operation of Premises After Default.  Upon the occurrence of a
default or an Event of Default under the Note, the Mortgage or any of the other
Loan Documents, the Bank shall have the right, at its option, to enter and take
over and assume the management, operation and maintenance of the Premises and to
perform all necessary and proper acts and to expend such sums out of the income
of the Premises as may be necessary in connection therewith, in the same manner
and to the same extent as the Assignor might do, including the right to effect
new leases, cancel or surrender some or all of the Leases, alter, modify or
amend the provisions thereof, or make concessions to the tenants thereunder, and
the Assignor hereby releases and waives all claims against the Bank arising out
of such management, operation and maintenance. In addition to the above, upon
the occurrence of a default or an Event of Default under the Note, the Mortgage
or any of the other Loan Documents, the Assignor expressly consents to the
appointment of a receiver for the Premises, without notice, either by the Bank
or a court of competent jurisdiction, to take all acts in connection with the
Premises permitted by law or in equity and to deduct from any and all rents
received from the Leases the customary or statutory amount in the county wherein
the Premises is located to compensate such receiver for its actions.
 
 
 

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8.           Coverage of All Leases.  Any and all other Leases affecting the
Premises or any portion thereof presently in effect or hereafter entered into by
the Assignor shall be covered by the provisions of this Assignment and all such
Leases and all of the Assignor’s right, title and interest in all such Leases
and Rents are hereby assigned to the Bank until the end of the respective terms
thereof, including any renewals or extensions thereof, subject to all of the
terms, covenants and provisions of this Assignment.  The Assignor shall deliver
a true and correct copy of each such Lease to the Bank promptly after the
execution and delivery of the same.  The Assignor shall, upon the request of the
Bank, execute and deliver in recordable form all instruments which the Bank may
reasonably request to further evidence and confirm such assignment of each such
Lease.

9.           Notices.  All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder (“Notices”) must be in
writing and will be effective upon receipt.  Notices may be given in any manner
to which the parties may separately agree, including electronic mail.  Without
limiting the foregoing, first-class mail, facsimile transmission and commercial
courier service are hereby agreed to as acceptable methods for giving
Notices.  Regardless of the manner in which provided, Notices may be sent to a
party’s address as set forth above or to such other address as any party may
give to the other for such purpose in accordance with this section.

10.           Preservation of Rights.  No delay or omission on the Bank’s part
to exercise any right or power arising hereunder will impair any such right or
power or be considered a waiver of any such right or power, nor will the Bank’s
action or inaction impair any such right or power.  The Bank’s rights and
remedies hereunder are cumulative and not exclusive of any other rights or
remedies which the Bank may have under other agreements, at law or in
equity.  Without limiting the foregoing, nothing contained in this Assignment is
intended or shall be construed to prevent the Bank in the exercise of its
discretion from foreclosing the Mortgage or otherwise enforcing the provisions
thereof in accordance with its terms.  To the extent permitted by law, the
Assignor hereby waives any and all legal requirements that the Bank institute
any action or proceeding in law or in equity against any other party, or exhaust
its remedies under the Mortgage and the other Loan Documents, or in respect of
any other security held by the Bank as a condition precedent to exercising its
rights and remedies under this Assignment. The Assignor agrees that the
collection of rents and the application thereof as aforesaid or the entry upon
and taking of possession of the Premises, or any part thereof, by the Bank shall
not cure or waive any default, or waive, modify or affect any notice of default
under the Note or the Loan Documents, or invalidate any act done pursuant to
such notice, and the enforcement of such right or remedy by the Bank, once
exercised, shall continue for so long as the Bank shall elect.  If the Bank
shall thereafter elect to discontinue the exercise of any such right or remedy,
the same or any other right or remedy hereunder may be reasserted at any time
and from time to time following any subsequent default.

11.           Illegality.  If any provision contained in this Assignment should
be invalid, illegal or unenforceable in any respect, it shall not affect or
impair the validity, legality and enforceability of the remaining provisions of
this Assignment.

12.           Changes in Writing.  No modification, amendment or waiver of, or
consent to any departure by the Assignor from, any provision of this Assignment
will be effective unless made in a writing signed by the Bank, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.  No notice to or demand on the Assignor will entitle
the Assignor to any other or further notice or demand in the same, similar or
other circumstance.
 
 
 

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13.           Further Assurances.  Assignor will, at the cost of Assignor, upon
the Bank’s request, do, execute, acknowledge and deliver to the Bank such
further documents, assurances and statements and do or cause to be done all and
every such further acts, things, deeds, conveyances and the like as the Bank may
deem necessary or appropriate to effect the transactions contemplated hereby or
to confirm the assumption of and agreement to pay, perform and discharge the
liabilities and obligations hereby assumed and agreed to be paid, performed or
discharged, or intended so to be.

14.           Successors and Assigns.  This Assignment will be binding upon and
inure to the benefit of the Assignor and the Bank and their respective heirs,
executors, administrators, successors and assigns; provided, however, that the
Assignor may not assign this Assignment in whole or in part without the Bank’s
prior written consent and the Bank at any time may assign this Assignment in
whole or in part.

15.           Governing Law and
Jurisdiction.                                                                This
Assignment has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank’s office indicated above is located.  This
Assignment will be interpreted and the rights and liabilities of the parties
hereto determined in accordance with the laws of the State of Connecticut,
excluding its conflict of laws rules, except that the laws of the State where
the Premises are located (if different from the State where such office of the
Bank is located) shall govern the creation, perfection and foreclosure of the
liens created hereunder on such property or any interest therein.  The Assignor
hereby irrevocably consents to the exclusive jurisdiction of any state or
federal court in the county or judicial district where the Bank’s office
indicated above is located (and any State where the Premises are located);
provided that nothing contained in this Assignment will prevent the Bank from
bringing any action, enforcing any award or judgment or exercising any rights
against the Assignor individually, against any security or against any property
of the Assignor within any other county, state or other foreign or domestic
jurisdiction.  The Bank and the Assignor agree that the venue provided above is
the most convenient forum for both the Bank and the Assignor.  The Assignor
waives any objection to venue and any objection based on a more convenient forum
in any action instituted under this Assignment.

16.           Counterparts.  This Assignment may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but all
such copies shall constitute one and the same instrument.  Delivery of an
executed counterpart of a signature page to this Assignment by facsimile
transmission shall be effective as delivery of a manually executed
counterpart.  Any party so executing this Assignment by facsimile transmission
shall promptly deliver a manually executed counterpart, provided that any
failure to do so shall not affect the validity of the counterpart executed by
facsimile transmission.

17.           Entire Agreement.  This Assignment (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.
 
 
 

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18.           Interpretation.  In this Assignment, unless the Assignor and Bank
otherwise agree in writing, the singular includes the plural and the plural the
singular; words importing any gender include the other genders; references to
statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; the word “or”
shall be deemed to include “and/or”, the words “including”, “includes” and
“include” shall be deemed to be followed by the words “without limitation”,
references to articles, sections (or subdivisions of sections) or exhibits are
to those of this Assignment; and references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications to such instruments, but only to the extent such amendments and
other modifications are not prohibited by the terms of this Assignment.  Section
headings in this Assignment are included for convenience of reference only and
shall not constitute a part of this Assignment for any other purpose.  If this
Assignment is executed by more than one party as Assignor, the obligations of
such persons or entities will be joint and several.

19.           WAIVER OF JURY TRIAL.  THE ASSIGNOR IRREVOCABLY WAIVES ANY AND ALL
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
NATURE RELATING TO THIS ASSIGNMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH
THIS ASSIGNMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.  THE
ASSIGNOR ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

20.           Termination. Notwithstanding anything to the contrary contained
herein, this Assignment shall terminate and the obligations of the Assignor and
the rights of the Lenders shall cease upon the granting by the Agent, on behalf
of the Lenders, of a release and satisfaction of the Mortgage.
 
 
 

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The Assignor acknowledges that it has read and understood all the provisions of
this Assignment, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.
 
WITNESS the due execution hereof as a document under seal, as of the date first
written above.

WITNESS:
AIR REALTY GROUP, LLC
   
/s/ James Sartori
By: /s/ Daniel R. Godin
Name:  JAMES SARTORI
       Name:  DANIEL R. GODIN
Title:    Vice President
       Title:    President

 
 
 

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ACKNOWLEDGMENTS

STATE OF NEW YORK                     )
                                                                )           ss:
COUNTY OF NEW YORK                 )

On the 9th day of March in the year 2015 Before me, the undersigned, personally
appeared Daniel R. Godin, personally known to me or proved to me on the basis of
satisfactory evidence to be the President of AIR REALTY GROUP, LLC., individual
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
 

 
/s/ Kristie Ciaccio
Notary Public

 
 
 
 

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ASSIGNMENT OF RENTS, LEASES AND PROFITS

________________________________________________

 
AIR REALTY GROUP, LLC,

Assignor

AND

PNC BANK, NATIONAL ASSOCIATION,

Bank
________________________________________________

Return to:

Wilentz, Goldman & Spitzer P.A.
90 Woodbridge Center Drive
Woodbridge, New Jersey  07095
Attn:  Stuart A. Hoberman, Esq.