Exhibit 10.17
 
ENVIRONMENTAL INDEMNITY AGREEMENT
 
This ENVIRONMENTAL INDEMNITY AGREEMENT (the “Agreement”) is made as of this 1st
day of June, 2012 from EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation,
with a place of business at 1806 Farmington Avenue, Farmington, Connecticut
06032 (“Edac”), GROS-ITE INDUSTRIES, INC., a Connecticut corporation, with a
place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032
(“Gros-Ite”), APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation, with a
place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032
(“Apex”) and EBTEC CORPORATION, a Delaware corporation, with a place of business
at 120 Shoemaker Lane, Agawam, Massachusetts 01001 (“EBTEC”, together with Apex,
Gros-Ite and Edac, collectively, the “Indemnitor”), to TD BANK, N.A., a national
banking association with an office located at 102 West Main Street, New Britain,
Connecticut 06050-0174 (the “Bank”).

Preliminary Statement

WHEREAS, EBTEC is the owner of a fee interest in certain real property located
at 120 Shoemaker Lane, Agawam, Massachusetts, as more particularly described in
Exhibit A to the Mortgage (as hereinafter defined) (the “Land”; the Land,
together with all improvements now or hereafter located on the Land, being
hereinafter referred to as the “Property”);

WHEREAS, this Agreement is made pursuant to a certain Credit Agreement by and
between Edac, Gros-Ite and Apex (together the “Original Borrowers”) and Bank and
dated as of May 27, 2009, as amended by that certain First Amendment to Credit
Agreement and Modification of Mortgage (the “First Amendment”) by and between
Original Borrowers and Bank and dated July 21, 2010, and as further amended by
that certain Second Amendment to Credit Agreement and Modification of Mortgage
(the “Second Amendment”) by and between Original Borrowers and Bank and dated
November 24, 2010, as amended by that certain Third Amendment to Credit
Agreement and Modification of Mortgage (the “Third Amendment”) by and between
Original Borrowers and Bank and dated July, 27, 2011 and as further amended by
that certain Fourth Amendment to Credit Agreement and Modification of Mortgage
and Joinder (the “Fourth Amendment”) by and between Indemnitor and Bank and
dated as of the date hereof (as further amended and in effect from time to time,
the “Credit Agreement”), pursuant to which the Bank has made a Fifth Term Loan
in the amount of NINE HUNDRED THOUSAND AND 00/100 DOLLARS ($900,000.00) (the
“Loan”), which Loan is evidenced by a certain Fifth Term Note of even date
herewith in the original amount of NINE HUNDRED THOUSAND AND 00/100 DOLLARS
($900,000.00) (the “Note”); and

WHEREAS, the Note is secured by, among other things, a certain Mortgage
Deed,  Security Agreement and Financing Statement from EBTEC in favor of Bank
(as amended from time to time, the “Mortgage”) encumbering the Property; and

WHEREAS, as a condition to making the Loan, Bank requires Indemnitor to provide
certain indemnities concerning existing and future asbestos, polychlorinated
biphenyls and petroleum products and any other hazardous or toxic materials,
wastes and substances which are defined, determined or identified as such in any
Laws (as hereinafter defined) (any such asbestos, polychlorinated biphenyls and
petroleum products and any such other hazardous or toxic materials, wastes and
substances being hereinafter collectively referred to as “Hazardous Materials”);
as used in this Agreement, the term “Laws” means all federal, state and local
laws, rules and regulations (whether now existing or hereafter enacted or
promulgated), including, but not limited to, the Remediation Standard
Regulations, §22a-133k, et seq., and all judicial and administrative
interpretations thereof, including any judicial or administrative orders,
directives and judgments;
 
 
 

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WHEREAS, to induce Bank to consummate the above described transaction and to
lend the indicated amount to Indemnitor, Indemnitor has agreed to enter into
this Agreement;

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Indemnitor hereby represents, warrants and covenants to Bank as follows:

1.           Indemnitor covenants and agrees, at its sole cost and expense, to
defend, indemnify, protect and save (i) Bank; (ii) any persons or entities owned
or controlled by, owning or controlling, or under common control or affiliated,
with Bank; (iii) any participants in the Loan; (iv) the directors, officers,
partners, employees and agents of Bank and/or such persons or entities; and (v)
the heirs, personal representatives, successors and assigns of each of the
foregoing persons or entities (each an “Indemnified Party”) harmless against and
from, and, if and to the extent paid, reimburse them on demand for, any and all
damages, losses, liabilities, obligations, penalties, claims, litigation,
demands, defenses, judgments, suits, proceedings, costs, disbursements and
expenses (including, without limitation, attorneys’ and experts’ reasonable fees
and disbursements) of any nature whatsoever (collectively, the “Indemnified
Matters”) which may at any time be required by or imposed upon, incurred by or
asserted or awarded against Bank or an Indemnified Party arising directly or
indirectly from, out of, or any way related to:

 
a.
any Hazardous Materials on, in, under, affecting or emanating from all or any
portion of the Property;

 
b.
the enforcement of this Agreement or the assertion by Indemnitor of any defense
to its obligations hereunder (except the successful defense of actual
performance not subject to further appeal);

 
c.
any act, omission, event or circumstance existing or occurring in connection
with the handling, treatment, containment, removal, storage, decontamination,
clean-up, transport or disposal of any Hazardous Material which is at any time
on the Property;

 
d.
the breach of any representation, warranty, covenant or agreement contained in
this Agreement;

 
 
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e.
any violation of any Laws regardless of whether any act, omission, event or
circumstance giving rise to the violation constituted a violation at the time of
the occurrence or inception of such act, omission, event or circumstance; and/or

 
f.
any environmental claim, or the filing or imposition of any environmental lien
against the Property, because of, resulting from, in connection with, or arising
out of any of the matters referred to in subparagraphs (a) through (e)
preceding;

whether any of such matters arise before or after foreclosure of the Mortgage or
other taking of title to all or any portion of the Property by Bank or any
affiliate of Bank (provided, however, that any such indemnity shall not, as to
any Indemnified Party, be available to the extent that any Indemnified Matter
resulted from the actions of an Indemnified Party after title to the Property
has been conveyed to such Indemnified Party).  Indemnified Matters shall
include, without limitation, all of the following:  (i) the costs of
remediation, removal or abatement (“remedial activities”) of Hazardous Materials
from the Property or, when applicable, the surrounding areas (except that the
indemnity provided for under this Agreement shall not cover the costs of such
remedial activities unless either (a) such remedial activities are required by
any Law, (b) such remedial activities constitute accepted practice by owners of
similar properties, (c) any present or future use, operation, development,
transfer, sale, lease, construction, alteration or reconstruction of all or any
portion of the Property is or would be conditioned or affected in any way upon,
or is or would be limited in any way until the completion of, such remedial
activities, or (d) such removal is necessary to bring the surrounding areas into
compliance with the Remediation Standard Regulations, §22a-133k et seq.); (ii)
additional costs required to take necessary precautions to protect against, or
to mitigate the effects of, the release of Hazardous Materials on, in, under,
affecting or emanating from the Property or into the air, any body of water, any
other public domain or any surrounding areas; and (iii) costs incurred to
comply, in connection with all or any portion of the Property or, when
applicable, any surrounding areas, with all applicable Laws with respect to
Hazardous Materials (all remedial activities referred to in clause (i) above,
all work and other actions to take precautions against any release referred to
in clause (ii) above and all work and other actions performed in order to comply
with Laws referred to in clause (iii) above being hereinafter collectively
referred to as “Corrective Work”).  Bank’s rights under this Agreement shall be
in addition to all rights of Bank under the Credit Agreement, the Mortgage, the
Note and any guaranty or guaranties (whether of payment and/or performance)
given to Bank in connection with the Loan and under any other documents
evidencing, securing or relating to the Loan (which documents together with the
Mortgage, the Note and any such guaranty or guaranties, as amended from time to
time, being hereinafter referred to as the “Loan Documents”), and payments by
Indemnitor under this Agreement shall not reduce Indemnitor’s obligations and
liabilities under the Loan Documents.

2.           Bank hereby agrees that, prior to Bank’s taking the actions
described in clauses (x) and (y) below, Indemnitor may, at its sole cost and
expense, (x) contest the assertion by any governmental authority or any third
party of any obligation or liability affecting Indemnitor, Bank or the Property
relating to the Corrective Work and (y) perform the Corrective Work, provided
that at all times all of the following conditions are satisfied in full:
 
 
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a.
no default, Default or Event of Default (as defined in the various Loan
Documents) (subject to applicable notice and/or the expiration of any cure
periods) exists under any of the Loan Documents, and Bank has not commenced or
completed foreclosure or a sale under power of sale or accepted a deed in lieu
of foreclosure or otherwise taken title to all or any portion of the Property;

 
b.
the value of the collateral for the Loan will not, in the reasonable judgment of
Bank, be materially impaired by reason of the delay in performance of the
Corrective Work, and Bank (and its agents, employees and contractors) shall not
be subject to any criminal or civil penalties by reason of such contest or the
performance of such Corrective Work or any delays in connection therewith;

 
c.
Indemnitor shall notify Bank within five (5) days after commencement of any such
contest or Corrective Work, and shall give Bank a monthly report, during the
period of such contest or the performance of such Corrective Work, on
Indemnitor’s progress with respect thereto, and shall promptly give Bank such
other information with respect thereto as Bank may reasonably request;

 
d.
with respect to contests, any such contest shall be instituted promptly after
Indemnitor obtains actual knowledge of an action, suit, proceeding or
governmental order or directive asserting any obligation or liability affecting
Indemnitor, Bank or the Property, and such contest shall at all times be
diligently prosecuted until a final judgment is obtained that negates such
assertion of obligation or liability;

 
e.
with respect to contests, Bank, at its expense, shall have the right (but not
the obligation) to join in any action or proceeding in which Indemnitor contests
any such assertion by any governmental authority or third party;

 
f.
with respect to Corrective Work, any such Corrective Work shall be instituted
promptly no later than the later to occur of:  (i) a determination by the
applicable judicial or administrative authority that any contest theretofore
instituted was not successful, which determination is not, or ceases to be,
subject to further appeal, or (ii) the date on which Indemnitor obtains actual
knowledge of any Hazardous Materials on, in, under, affecting or emanating from
the Property or (when applicable) any surrounding areas, and such Corrective
Work shall at all times be diligently prosecuted to completion; and

 
g.
with respect to any Corrective Work, Indemnitor shall, not less than fifteen
(15) days prior to commencement of such Corrective Work, submit to Bank for its
review reasonably detailed plans for such Corrective Work, and, if, within said
fifteen (15) day period, Bank, in its reasonable judgment, rejects such plans,
Indemnitor shall promptly submit revised plans to Bank and shall obtain Bank’s
acceptance of such plans prior to commencement of such Corrective Work, and
Indemnitor shall comply with the plans submitted to Bank (and, if applicable,
accepted by Bank) in performing such Corrective Work.

 
 
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So long as all of such conditions are satisfied in full at all times, Bank
further agrees that it will not enter into any settlement agreement binding upon
Indemnitor without its prior consent; Indemnitor agrees that, in any event, its
consent to any such settlement agreement shall not be unreasonably withheld or
delayed.

3.           Promptly after the receipt by Bank of written notice of any demand
or claim or the commencement of any action, suit or proceeding in respect of any
of the Indemnified Matters, Bank shall promptly notify Indemnitor thereof; but
the failure by Bank promptly to give such notice shall not relieve Indemnitor of
any liability that such party may have to Bank hereunder.

4.           It is expressly understood and agreed that failure by Bank to
object to any actions taken by Indemnitor shall not be construed to be an
approval by Bank of such actions.  It is further expressly understood and agreed
that this Agreement shall not be construed as creating any obligation upon Bank
to initiate any contest of the nature described in Section 2 above, to review
any plans for Corrective Work, or to perform, or review Indemnitor’s or any
other party’s performance of, any Corrective Work.

5.           The liability of Indemnitor under this Agreement shall in no way be
limited or impaired by, and Indemnitor hereby consents to and agrees to be bound
by, any amendment of the provisions of the Loan Documents to or with Bank by
Indemnitor or any person who succeeds Borrower as owner of the Property.  In
addition, the liability of Indemnitor under this Agreement shall in no way be
limited or impaired by (i) any extensions of time for performance required by
any of the Loan Documents, (ii) any sale, assignment or foreclosure of the Note
or Mortgage or any sale or transfer of all or any part of the Property, (iii)
any exculpatory provision in any of the Loan Documents limiting Bank’s recourse
to property encumbered by the Mortgage or to any other security, or limiting
Bank’s rights to a deficiency judgment against Indemnitor, (iv) the accuracy or
inaccuracy of the representations and warranties made by Indemnitor under any of
the Loan Documents, (v) the release of Indemnitor or any other person from
performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Loan Documents by operation of law, Bank’s
voluntary act, or otherwise, (vi) the release or substitution in whole or in
part of any security for the Loan, or (vii) Bank’s failure to record the
Mortgage or file any UCC financing statements (or Bank’s improper recording or
filing of any thereof) or to otherwise perfect, protect, secure or insure any
security interest or lien given as security for the Loan; and, in any such case,
whether with or without notice to Indemnitor and with or without consideration.

6.           Indemnitor waives any right or claim of right to cause a marshaling
of Indemnitor’s assets or to cause Bank to proceed against any of the security
for the Loan before proceeding under this Agreement against Indemnitor or to
proceed against Indemnitor in any particular order; Indemnitor agrees that any
payments required to be made hereunder shall become due on demand; Indemnitor
expressly waives and relinquishes all rights and remedies accorded by applicable
Law to Indemnitors or guarantors, except any rights of subrogation that
Indemnitor may have; provided that the indemnity provided for hereunder shall
neither be contingent upon the existing of any such rights of subrogation nor
subject to any claims or defenses whatsoever that may be asserted in connection
with the enforcement or attempted enforcement of such subrogation rights
including, without limitation, any claim that such subrogation rights were
abrogated by any acts of Bank.  Indemnitor hereby agrees to postpone the
exercise of any rights of subrogation to the rights of Bank against Indemnitor
hereunder and any rights of subrogation to any collateral securing the Loan
until the Loan is paid in full.
 
 
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7.           No delay on Bank’s part in exercising any right, power or privilege
under any of the Loan Documents shall operate as a waiver of any such right,
power or privilege.

8.           Any one or more of those parties constituting Indemnitor, or any
other party liable upon or in respect of this Agreement or the Loan, may be
released without affecting the liability of any party not so released.

9.           Except as herein provided, this Agreement shall be binding upon and
inure to the benefit of Indemnitor and Bank and its respective heirs, personal
representatives, successors and assigns, including, as to Bank, without
limitation, any affiliate of Bank that acquires all or any part of the Property
by any sale, assignment or foreclosure under the Mortgage, by deed or other
assignment in lieu of foreclosure, or otherwise.  Notwithstanding the foregoing,
Indemnitor, without the prior consent of Bank in each instance, may not assign,
transfer or set over to another, in whole or in part, all or any part of its
benefits, rights, duties and obligations hereunder.

10.         The rights of Bank under this Agreement shall not inure to the
benefit of (i) any purchaser of the Property at a foreclosure sale or sale
pursuant to a power of sale under the Mortgage, (ii) any person or entity taking
title to the Property by deed in lieu of foreclosure or (iii) any successor or
assign of any purchaser, person or entity described in clauses (i) and (ii)
above, except that Bank’s rights shall inure to the benefit of a party described
in clauses (i), (ii) and (iii) above if any such party is Bank (including its
successors and assigns as holder of the Note) or its
affiliates.  Notwithstanding any ownership by Bank or its affiliates at any time
of all or any portion of the Property, in no event shall Bank or its affiliates
be bound by any obligations or liabilities of Indemnitor.

11.         The representations, warranties, covenants and agreements in this
Agreement shall not terminate on the Transition Date or upon the release,
foreclosure or other termination of the Mortgage, but will survive the
Transition Date, the payment in full of the Loan, foreclosure of the Mortgage or
conveyance in lieu of foreclosure, the release or termination of the Mortgage
and any and all of the other Loan Documents, any investigation by or on behalf
of Bank, any bankruptcy or other debtor relief proceeding, and any other event
whatsoever.

As used in this paragraph, the term “Transition Date” means the earlier of the
following two (2) dates: (i) the date on which the indebtedness and obligations
secured by the Mortgage have been paid and performed in full and the Mortgage
has been released; or (ii) the date on which the lien of the Mortgage is fully
and finally foreclosed or a conveyance by deed in lieu of such foreclosure is
fully and finally effective and possession of the Property has been given to and
accepted by the purchaser or grantee free of occupancy and claims to occupancy
by Indemnitor and their representatives, successors and assigns; provided that,
if such payment, performance, release, foreclosure or conveyance is challenged,
in bankruptcy proceedings or otherwise, the Transition Date shall be deemed not
to have occurred until such challenge is validly released, dismissed with
prejudice or otherwise barred by law from further assertion.
 
 
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12.         Bank shall, at all times, be free independently to establish to its
satisfaction and in its absolute discretion the existence or nonexistence of any
fact or facts the existence or nonexistence of which is a condition of this
Agreement.

13.         This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original.  Said counterparts shall constitute but one
and the same agreement and shall be binding upon, and shall inure to the benefit
of, each of the undersigned individually as fully and completely as if all had
signed the same counterpart.  The joint and several liability of those parties
constituting Indemnitor hereunder shall be unaffected by the failure of any of
the parties constituting Indemnitor to execute any or all of said counterparts.

14.         All notices hereunder shall be in writing and shall be deemed to
have been sufficiently given or served for all purposes when sent by registered
or certified mail, postage prepaid, return receipt requested:  if to Indemnitor,
at its address stated on the cover page hereof, with a copy to Robinson & Cole
LLP, 280 Trumbull Street, Hartford, CT  06103-3597, Attn.:  Edward J.
Samorajczyk, Esq.; and if to Bank, at its address stated on the cover page
hereof, Attention: John E. Cookley, with a copy to Updike, Kelly & Spellacy,
P.C., 100 Pearl Street, Hartford, CT 06103, Attention: Robert J. Martino, Esq.,
or at such other address of which a party shall have notified the party giving
such notice in accordance with the foregoing requirements.  Any written notice
sent by registered or certified mail shall be deemed to have been given two (2)
business days after the date it is mailed.

15.         This Agreement is intended by the parties as the final, complete and
exclusive statement of the transactions evidenced by this Agreement. All prior
or contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Agreement, and no party is relying
on any promise, agreement or understanding not set forth in this
Agreement.  This Agreement may not be amended or modified except by a written
instrument describing such amendment or modification executed by Indemnitor and
Bank.

16.         This Agreement and the rights and obligations of the parties
hereunder shall be construed and interpreted in accordance with the laws of the
State of Connecticut (the “Governing State”) (excluding the laws applicable to
conflicts or choice of law).  INDEMNITOR AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE STATE OF CONNECTICUT OR ANY FEDERAL COURT SITTING THEREIN
AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON INDEMNITOR BY MAIL AT THE ADDRESS
STATED ON THE COVER PAGE HEREOF.  INDEMNITOR 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 FORUM.
 
 
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THE INDEMNITOR AND EACH AND EVERY ENDORSER, GUARANTOR AND SURETY OF THE
OBLIGATIONS SECURED BY THIS AGREEMENT, AND EACH OTHER PERSON WHO IS OR WHO SHALL
BECOME LIABLE FOR ALL OR ANY PART OF THE OBLIGATIONS SECURED BY THIS AGREEMENT,
HEREBY ACKNOWLEDGE THAT THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART IS A
COMMERCIAL TRANSACTION AND WAIVE THEIR RIGHTS TO NOTICE AND HEARING UNDER
CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES OR BY OTHER APPLICABLE LAW WITH
RESPECT TO ANY PREJUDGMENT REMEDY WHICH BANK MAY DESIRE TO USE.

INDEMNITOR AND BANK (BY ACCEPTANCE OF THIS AGREEMENT) 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
AGREEMENT 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, INCLUDING, WITHOUT LIMITATION, ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF BANK RELATING TO
THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE
THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS
PROHIBITED BY LAW, INDEMNITOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. INDEMNITOR
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF BANK HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR
BANK TO ACCEPT THIS AGREEMENT AND MAKE THE LOAN.

[Remainder of Page Intentionally Blank / Signature Page Follows]
 
 
 
 
 
 
 
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[Signature Page 1 of 1 to Environmental Indemnity Agreement]

IN WITNESS WHEREOF, Indemnitor has caused this Agreement to be executed as of
the date first written above.

INDEMNITORS:

EDAC TECHNOLOGIES CORPORATION

By: /s/Glenn L. Purple                                
      Name: Glenn L. Purple
      Its Chief Financial Officer
      Duly Authorized

GROS-ITE INDUSTRIES, INC.

By: /s/Glenn L. Purple                                
      Name: Glenn L. Purple
      Its Secretary
      Duly Authorized

APEX MACHINE TOOL COMPANY, INC.

By: /s/Glenn L. Purple                                
      Name: Glenn L. Purple
      Its Secretary
      Duly Authorized

EBTEC CORPORATION

By: /s/Glenn L. Purple                                
      Name: Glenn L. Purple
      Its  Treasurer
      Duly Authorized

 
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