Exhibit 10.21

 

ADA AND ENVIRONMENTAL INDEMNITY AGREEMENT

 

THIS ADA AND ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”) made as of the
___ day of November, 2017, by 555 N Research Corporation, a New York
corporation, having an address at 555 North Research Place, Central Islip, New
York 11722 (“Borrower”) and CVD Equipment Corporation, a New York corporation,
having an address at 355 South Technology Drive, Central Islip, New York 11722
(the “Obligor” and collectively with Borrower, the “Indemnitor”) in favor of
HSBC Bank USA, National Association, a bank organized under the laws of the
United States of America, having an address at 534 Broad Hollow Road, Melville,
New York 11747 (“Indemnitee”) and other Indemnified Parties (defined herein).

 

W I T N E S S E T H:

 

WHEREAS, Indemnitee is prepared to make a loan to Indemnitor in the principal
amount of Ten Million Three Hundred Eighty-Seven Thousand Five Hundred and
00/100 Dollars ($10,387,500.00) (the “Loan”), pursuant to a Fee and Leasehold
Mortgage and Security Agreement, dated as of the date hereof, by and between
Indemnitor, and Indemnitee (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the “Loan Agreement”),
which Loan is secured by, among other things, that certain property more
particularly described on Exhibit A attached hereto (the “Property”).
Capitalized terms not otherwise defined herein shall have the meaning set forth
in the Loan Agreement;

 

WHEREAS, Indemnitee is unwilling to make the Loan unless Indemnitor agrees to
provide the indemnification, representations, warranties, covenants and other
matters described in this Agreement for the benefit of the Indemnified Parties;
and

 

WHEREAS, Indemnitor is entering into this Agreement to induce Indemnitee to make
the Loan.

 

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, covenants and agrees for the benefit of
the Indemnified Parties as follows:

 

1.           Representations And Warranties.

 

(a)     Except as otherwise disclosed by that certain Phase I environmental
report in respect of the Property delivered to Indemnitee (referred to below as
the “Environmental Report”), a copy of which has been provided to Indemnitor,
(i) there are no Hazardous Substances (defined below) or underground storage
tanks in, on, or under the Property, except those that are both (A) in
compliance with all Environmental Laws (defined below) and with permits issued
pursuant thereto and (B) fully disclosed to Indemnitee in writing pursuant to
the Environmental Report; (ii) there are no past, present or threatened Releases
(defined below) of Hazardous Substances in, on, under or from the Property which
have not been fully remediated in accordance with Environmental Law; (iii) there
is no threat of any Release of Hazardous Substances migrating to the Property;
(iv) there is no past or present non-compliance with Environmental Laws, or with
permits issued pursuant thereto, in connection with the Property which has not
been fully remediated in accordance with Environmental Law; (v) Indemnitor does
not know of, and has not received, any written or oral notice or other
communication from any Person (including but not limited to a governmental
entity) relating to Hazardous Substances or Remediation (defined below) thereof,
or possible liability of any Person pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with any of the
foregoing; and (vi) Indemnitor has truthfully and fully provided to Indemnitee,
in writing, any and all information relating to conditions in, on, under or from
the Property that is known to Indemnitor and that is contained in files and
records of Indemnitor, including but not limited to any reports relating to
Hazardous Substances in, on, under or from the Property and/or to the
environmental condition of the Property.

 

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(b)     Except as otherwise disclosed by that certain Physical Conditions Report
in respect of the Property, a copy of which has been provided to Indemnitor by
Indemnitee, the Property complies in all respects with the ADA.

 

2.           Covenants.

 

(a)     Indemnitor covenants and agrees that: (i) all uses and operations on or
of the Property, whether by Indemnitor or any other Person, shall be in
compliance with all Environmental Laws and permits issued pursuant thereto;
(ii) there shall be no Releases of Hazardous Substances in, on, under or from
the Property; (iii) there shall be no Hazardous Substances in, on, or under the
Property, except those that are both (A) in compliance with all Environmental
Laws and with permits issued pursuant thereto and (B) fully disclosed to
Indemnitee in writing; (iv) Indemnitor shall keep the Property free and clear of
all liens and other encumbrances imposed pursuant to any Environmental Law,
whether due to any act or omission of Indemnitor or any other Person (the
“Environmental Liens”); (v) Indemnitor shall, at its sole cost and expense,
fully and expeditiously cooperate in all activities pursuant to Section 3 of
this Agreement, including but not limited to providing all relevant information
and making knowledgeable Persons available for interviews; (vi) Indemnitor
shall, at its sole cost and expense, perform any environmental site assessment
or other investigation of environmental conditions in connection with the
Property, pursuant to any reasonable written request of Indemnitee (including
but not limited to sampling, testing and analysis of soil, water, air, building
materials, and other materials and substances whether solid, liquid or gas), and
share with Indemnitee the reports and other results thereof, and Indemnitee and
the other Indemnified Parties shall be entitled to rely on such reports and
other results thereof; (vii) Indemnitor shall, at its sole cost and expense,
comply with all reasonable written requests of Indemnitee to (A) effectuate
Remediation of any condition (including but not limited to a Release of a
Hazardous Substance) in, on, under or from the Property; (B) comply with any
Environmental Law; (C) comply with any directive from any governmental
authority; and (D) take any other reasonable action necessary or appropriate for
protection of human health or the environment; (viii) Indemnitor shall not do or
allow any tenant or other user of the Property to do any act that materially
increases the dangers to human health or the environment, poses an unreasonable
risk of harm to any Person (whether on or off the Property), impairs or may
impair the value of the Property, is contrary to any requirement of any insurer,
constitutes a public or private nuisance, constitutes waste, or violates any
covenant, condition, agreement or easement applicable to the Property; and
(ix) Indemnitor shall immediately notify Indemnitee in writing of (A) any
presence or Releases or threatened Releases of Hazardous Substances in, on,
under, from or migrating towards the Property; (B) any non-compliance with any
Environmental Laws related in any way to the Property; (C) any actual or
potential Environmental Lien; (D) any required or proposed Remediation of
environmental conditions relating to the Property; and (E) any written or oral
notice or other communication of which any Indemnitor becomes aware from any
source whatsoever (including but not limited to a governmental entity) relating
in any way to Hazardous Substances or Remediation thereof, possible liability of
any Person pursuant to any Environmental Law, other environmental conditions in
connection with the Property, or any actual or potential administrative or
judicial proceedings in connection with anything referred to in this Agreement.

 

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(b)     Indemnitor covenants and agrees that (i) the Property shall at all times
comply with all requirements of the ADA, (ii) Indemnitor shall, at its sole cost
and expense, comply with all reasonable written requests of Indemnitee to
(A) effectuate compliance with the ADA and (B) comply with any directive from
any governmental authority relating to ADA compliance and (iii) Indemnitor shall
immediately notify Indemnitee in writing of (A) any non-compliance with the ADA
related in any way to the Property and (B) any written or oral notice or other
communication of which Indemnitor becomes aware from any source whatsoever
(including but not limited to a governmental entity) relating in any way to the
ADA or compliance therewith, possible liability of any Person pursuant to the
ADA, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Agreement.

 

3.           Indemnified Rights/Cooperation and Access.

 

(a)     In the event the Indemnified Parties have reason to believe that an
environmental hazard exists on the Property that does not, in the sole
discretion of the Indemnified Parties, endanger any Tenants or other occupants
of the Property or their guests or the general public or materially and
adversely affects the value of the Property, upon reasonable notice from the
Indemnitee, Indemnitor shall, at Indemnitor’s expense, promptly cause an
engineer or consultant satisfactory to the Indemnified Parties to conduct any
environmental assessment or audit (the scope of which shall be determined in the
sole and absolute discretion of the Indemnified Parties) and take any samples of
soil, groundwater or other water, air, or building materials or any other
invasive testing requested by Indemnitee and promptly deliver the results of any
such assessment, audit, sampling or other testing; provided, however, if such
results are not delivered to the Indemnified Parties within a reasonable period
or if the Indemnified Parties have reason to believe that an environmental
hazard exists on the Property that, in the sole judgment of the Indemnified
Parties, endangers any tenant or other occupant of the Property or their guests
or the general public or may materially and adversely affect the value of the
Property, upon reasonable notice to Indemnitor, the Indemnified Parties and any
other Person designated by the Indemnified Parties, including but not limited to
any receiver, any representative of a governmental entity, and any environmental
consultant, shall have the right, but not the obligation, to enter upon the
Property at all reasonable times to assess any and all aspects of the
environmental condition of the Property and its use, including but not limited
to conducting any environmental assessment or audit (the scope of which shall be
determined in the sole and absolute discretion of the Indemnified Parties) and
taking samples of soil, groundwater or other water, air, or building materials,
and reasonably conducting other invasive testing. Indemnitor shall cooperate
with and provide the Indemnified Parties and any such Person designated by the
Indemnified Parties with access to the Property.

 

(b)     In the event the Indemnified Parties have reason to believe that the
Property is not in compliance with the ADA, upon reasonable notice from the
Indemnitee, Indemnitor shall, at Indemnitor’s expense, promptly cause an
engineer or consultant satisfactory to the Indemnified Parties to conduct any
ADA assessment required by Indemnitee (the scope of which shall be determined in
the sole and absolute discretion of the Indemnified Parties) and promptly
deliver the results of any such assessment. Indemnitor shall cooperate with and
provide the Indemnified Parties and any such Person designated by the
Indemnified Parties with access to the Property.

 

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4.           Indemnification.

 

Indemnitor covenants and agrees, at its sole cost and expense, to protect,
defend, indemnify, release and hold Indemnified Parties harmless from and
against any and all Losses (defined below) imposed upon or incurred by or
asserted against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following: (a) any presence
of any Hazardous Substances in, on, above, or under the Property; (b) any past,
present or threatened Release of Hazardous Substances in, on, above, under or
from the Property; (c) any activity by Indemnitor, any Person affiliated with
Indemnitor, and any tenant or other user of the Property in connection with any
actual, proposed or threatened use, treatment, storage, holding, existence,
disposition or other Release, generation, production, manufacturing, processing,
refining, control, management, abatement, removal, handling, transfer or
transportation to or from the Property of any Hazardous Substances at any time
located in, under, on or above the Property; (d) any activity by Indemnitor, any
Person affiliated with Indemnitor, and any tenant or other user of the Property
in connection with any actual or proposed Remediation of any Hazardous
Substances at any time located in, under, on or above the Property, whether or
not such Remediation is voluntary or pursuant to court or administrative order,
including but not limited to any removal, remedial or corrective action; (e) any
past, present or threatened non-compliance or violations of any Environmental
Laws (or permits issued pursuant to any Environmental Law) in connection with
the Property or operations thereon, including but not limited to any failure by
Indemnitor, any Person affiliated with Indemnitor, and any tenant or other user
of the Property to comply with any order of any governmental authority in
connection with any Environmental Laws; (f) the imposition, recording or filing
or the threatened imposition, recording or filing of any Environmental Lien
encumbering the Property; (g) any administrative processes or proceedings or
judicial proceedings in any way connected with any matter addressed in this
Agreement; (h) any past, present or threatened injury to, destruction of or loss
of natural resources in any way connected with the Property, including but not
limited to costs to investigate and assess such injury, destruction or loss;
(i) any acts of Indemnitor, any Person affiliated with Indemnitor, and any
tenant or other user of the Property in arranging for disposal or treatment, or
arranging with a transporter for transport for disposal or treatment, of
Hazardous Substances at any facility or incineration vessel containing such or
similar Hazardous Substances; (j) any acts of Indemnitor, any Person affiliated
with any Indemnitor, and any tenant or other user of the Property in accepting
any Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites from which there is a Release, or a threatened
Release of any Hazardous Substance which causes the incurrence of costs for
Remediation; (k) any personal injury, wrongful death, or property or other
damage arising under any statutory or common law or tort law theory, including
but not limited to damages assessed for private or public nuisance or for the
conducting of an abnormally dangerous activity on or near the Property; and
(l) any past present or future non-compliance with the ADA; and
(m) misrepresentation or inaccuracy in any representation or warranty or
material breach or failure to perform any covenants or other obligations
pursuant to this Agreement, the Loan Agreement or the Mortgage.

 

5.           Duty to Defend and Attorneys and Other Fees and Expenses.

 

Upon written request by any Indemnified Party, Indemnitor shall defend same (if
requested by any Indemnified Party, in the name of the Indemnified Party) by
attorneys and other professionals approved by the Indemnified Parties.
Notwithstanding the foregoing, any Indemnified Party may, in its sole and
absolute discretion, engage its own attorneys and other professionals to defend
or assist it, and, at the option of the Indemnified Party, its attorneys shall
control the resolution of any claim or proceeding, providing that no compromise
or settlement shall be entered without Indemnitor’s consent, which consent shall
not be unreasonably withheld. Upon demand, Indemnitor shall pay or, in the sole
and absolute discretion of the Indemnified Party, reimburse, the Indemnified
Party for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith.

 

6.           Definitions. As used in this Agreement, the following terms shall
have the following meanings:

 

“ADA” shall mean the Americans with Disabilities Act of 1990, as amended and
supplemented from time to time.

 

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“Environmental Law” means any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law,
relating to protection of human health or the environment, relating to Hazardous
Substances, relating to liability for or costs of other actual or threatened
danger to human health or the environment. The term “Environmental Law”
includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations promulgated pursuant thereto, and any
state or local statutes, ordinances, rules, regulations and the like addressing
similar issues: the Comprehensive Environmental Response, Compensation and
Liability Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource Conservation and Recovery
Act (including but not limited to Subtitle I relating to underground storage
tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational
Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation Act.
The term “Environmental Law” also includes, but is not limited to, any present
and future federal, state and local laws, statutes ordinances, rules,
regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a governmental
authority of the environmental condition of the Property; requiring notification
or disclosure of Releases of Hazardous Substances or other environmental
condition of the Property to any Governmental Authority or other Person, whether
or not in connection with transfer of title to or interest in property; imposing
conditions or requirements in connection with permits or other authorization for
lawful activity; relating to nuisance, trespass or other causes of action
related to the Property; and relating to wrongful death, personal injury, or
property or other damage in connection with any physical condition or use of the
Property.

 

“Hazardous Substances” shall mean but is not limited to any and all substances
(whether solid, liquid or gas) defined, listed, or otherwise classified as
pollutants, hazardous wastes, hazardous substances, hazardous materials,
extremely hazardous wastes, or words of similar meaning or regulatory effect
under any present or future Environmental Laws or that may have a negative
impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives, but excluding substances of kinds and in amounts ordinarily and
customarily used or stored in similar properties for the purposes of cleaning or
other maintenance or operations and otherwise in compliance with all
Environmental Laws.

 

“Indemnified Parties” shall mean Indemnitee, any Person who is or will have been
involved in the origination of the Loan, any Person who is or will have been
involved with the servicing of the Loan, any Person in whose name the
encumbrance created by the Mortgage is or will have been recorded, Persons who
may hold or acquire or will have held a full or partial interest in the Loan as
well as the respective directors, officers, shareholders, partners, employees,
agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including but not limited to any other Person who holds or acquires
or will have held a participation or other full or partial interest in the Loan
or the Property, whether during the term of the Loan or as a part of or
following a foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of Indemnitee’s assets and business).

 

“Legal Action” shall mean any claim, suit or proceeding, whether administrative
or judicial in nature.

 

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“Losses” shall mean any losses, damages, costs, fees, expenses, claims, suits,
judgments, awards, liabilities (including but not limited to strict
liabilities), obligations, debts, diminutions in value, fines, penalties,
charges, costs of Remediation (whether or not performed voluntarily), amounts
paid in settlement, foreseeable and unforeseeable consequential damages,
litigation costs, attorneys’ fees, engineers’ fees, environmental consultants’
fees, and investigation costs (including but not limited to costs for sampling,
testing and analysis of soil, water, air, building materials, and other
materials and substances whether solid, liquid or gas), of whatever kind or
nature, and whether or not incurred in connection with any judicial or
administrative proceedings, actions, claims, suits, judgments or awards.

 

“Release” shall mean with respect to any Hazardous Substance but is not limited
to any release, deposit, discharge, emission, leaking, leaching, spilling,
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping,
disposing or other movement of Hazardous Substances.

 

“Remediation” shall mean but is not limited to any response, remedial, removal,
or corrective action; any activity to clean up, detoxify, decontaminate, contain
or otherwise remediate any Hazardous Substance; any actions to prevent, cure or
mitigate any Release of any Hazardous Substance; any action to comply with any
Environmental Laws or with any permits issued pursuant thereto; any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous Substances
or to anything referred to herein.

 

7.           Unimpaired Liability.

 

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 or modification of the provisions of the Note, the Loan Agreement, the
Mortgage or any other Loan Document to or with Indemnitee by Indemnitor or any
Person who succeeds Indemnitor or any Person as owner of the Property. In
addition, the liability of Indemnitor under this Agreement shall in no way be
limited or impaired by (a) any extensions of time for performance required by
the Note, the Loan Agreement, the Mortgage or any of the other Loan Documents,
(b) any sale or transfer of all or part of the Property, (c) any exculpatory
provision in the Note, the Loan Agreement, the Mortgage, or any of the other
Loan Documents limiting Indemnitee’s recourse to the Property or to any other
security for the Note, or limiting Indemnitee’s rights to a deficiency judgment
against Indemnitor, (d) the accuracy or inaccuracy of the representations and
warranties made by Indemnitor under the Note, the Loan Agreement, the Mortgage
or any of the other Loan Documents or herein, (e) the release of Indemnitor or
any other Person from performance or observance of any of the agreements,
covenants, terms or condition contained in any of the other Loan Documents by
operation of law, Indemnitee’s voluntary act, or otherwise, (f) the release or
substitution in whole or in part of any security for the Note, or
(g) Indemnitee’s failure to record the Mortgage or file any UCC financing
statements (or Indemnitee’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 Note; and, in any such case, whether with or without notice
to Indemnitor and with or without consideration.

 

8.           Enforcement.

 

Indemnified Parties may enforce the obligations of Indemnitor without first
resorting to or exhausting any security or collateral or without first having
recourse to the Note, the Loan Agreement, the Mortgage, or any other Loan
Documents or any of the Property, through foreclosure proceedings or otherwise,
provided, however, that nothing herein shall inhibit or prevent Indemnitee from
suing on the Note, foreclosing, or exercising any power of sale under, the
Mortgage, or exercising any other rights and remedies thereunder. It is not
necessary for an Event of Default to have occurred pursuant to and as defined in
the Mortgage or the Loan Agreement for Indemnified Parties to exercise their
rights pursuant to this Agreement. Indemnitor is fully and personally liable for
the obligations pursuant to this Agreement and such liability is not limited to
the original or amortized principal balance of the Loan or the value of the
Property.

 

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9.           Survival.

 

The obligations and liabilities of Indemnitor under this Agreement shall fully
survive indefinitely notwithstanding any termination, satisfaction, assignment,
entry of a judgment of foreclosure, exercise of any power of sale, or delivery
of a deed in lieu of foreclosure of the Mortgage.

 

10.         Interest.

 

Any amounts payable to any Indemnified Parties under this Agreement shall become
immediately due and payable on demand and, if not paid within five (5) days of
such demand therefor, shall bear interest at the Default Rate.

 

11.         Waivers.

 

(a)     Indemnitor hereby waives (i) any right or claim of right to cause a
marshaling of Indemnitor’s assets or to cause Indemnitee or other Indemnified
Parties to proceed against any of the security for the Loan before proceeding
under this Agreement against Indemnitor; (ii) and relinquishes all rights and
remedies accorded by applicable law to indemnitors or guarantors, except any
rights of subrogation which Indemnitor may have, provided that the indemnity
provided for hereunder shall neither be contingent upon the existence of any
such rights of subrogation nor subject to any claims or defenses whatsoever
which 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 Indemnitee or other
Indemnified Parties; (iii) the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against or by Indemnitee or other Indemnified Parties; (iv) notice of acceptance
hereof and of any action taken or omitted in reliance hereon; (v) presentment
for payment, demand of payment, protest or notice of nonpayment or failure to
perform or observe, or other proof, or notice or demand; and (vi) all homestead
exemption rights against the obligations hereunder and the benefits of any
statutes of limitations or repose. Notwithstanding anything to the contrary
contained herein, Indemnitor hereby agrees to postpone the exercise of any
rights of subrogation with respect to any collateral securing the Loan until the
Loan shall have been paid in full.

 

(b)     INDEMNITOR AND, BY ITS ACCEPTANCE HEREOF, INDEMNITEE, EACH HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE
APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE, THE MORTGAGE, THIS AGREEMENT OR
THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN
CONNECTION THEREWITH.

 

12.         Subrogation.

 

Indemnitor shall take any and all reasonable actions, including institution of
legal action against third parties, necessary or appropriate to obtain
reimbursement, payment or compensation from such Persons responsible for the
presence of any Hazardous Substances at, in, on, under or near the Property or
otherwise obligated by law to bear the cost. Indemnified Parties shall be and
hereby are subrogated to all of Indemnitor’s rights now or hereafter in such
claims.

 

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13.         Indemnitor’s Representations and Warranties. Indemnitor represents
and warrants that:

 

(a)     it has the full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; the execution, delivery and
performance of this Agreement by Indemnitor has been duly and validly
authorized; and all requisite action has been taken by Indemnitor to make this
Agreement valid and binding upon Indemnitor, enforceable in accordance with its
terms;

 

(b)     its execution of, and compliance with, this Agreement is in the ordinary
course of business of Indemnitor and will not result in the breach of any term
or provision of the charter, by-laws, partnership or trust agreement, or other
governing instrument of Indemnitor or result in the breach of any term or
provision of, or conflict with or constitute a default under, or result in the
acceleration of any obligation under, any agreement, indenture or loan or credit
agreement or other instrument to which Indemnitor or the Property is subject, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which Indemnitor or the Property is subject;

 

(c)     to the best of Indemnitor’s knowledge, there is no action, suit,
proceeding or investigation pending or threatened against it which, either in
any one instance or in the aggregate, may result in any material adverse change
in the business, operations, financial condition, properties or assets of
Indemnitor, or in any material impairment of the right or ability of Indemnitor
to carry on its business substantially as now conducted, or in any material
liability on the part of Indemnitor, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in connection
with the obligations of Indemnitor contemplated herein, or which would be likely
to impair materially the ability of Indemnitor to perform under the terms of
this Agreement;

 

(d)     it does not believe, nor does it have any reason or cause to believe,
that it cannot perform each and every covenant contained in this Agreement;

 

(e)     to the best of Indemnitor’s knowledge, no approval, authorization,
order, license or consent of, or registration or filing with, any governmental
authority or other person, and no approval, authorization or consent of any
other party is required in connection with this Agreement; and

 

(f)     this Agreement constitutes a valid, legal and binding obligation of
Indemnitor, enforceable against it in accordance with the terms hereof.

 

14.         No Waiver.

 

No delay by any Indemnified Party in exercising any right, power or privilege
under this Agreement shall operate as a waiver of any such privilege, power or
right.

 

15.         Notice of Legal Actions.

 

Each party hereto shall, within five (5) business days of receipt thereof, give
written notice to the other party hereto of (a) any notice, advice or other
communication from any governmental entity or any source whatsoever with respect
to Hazardous Substances or the ADA on, from or affecting the Property, and
(b) any legal action brought against such party or related to the Property, with
respect to which Indemnitor may have liability under this Agreement. Such notice
shall comply with the provisions of Section 18 hereof.

 

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16.         Examination of Books and Records.

 

Indemnified Parties and their accountants shall have the right to examine the
records, books, management and other papers of Indemnitor which reflect upon its
financial condition, at the Property or at the office regularly maintained by
Indemnitor where the books and records are located. Indemnified Parties and
their accountants shall have the right to make copies and extracts from the
foregoing records and other papers. In addition, at reasonable times and upon
reasonable notice, Indemnified Parties and their accountants shall have the
right to examine and audit the books and records of Indemnitor pertaining to the
income, expenses and operation of the Property during reasonable business hours
at the office of Indemnitor where the books and records are located.

 

17.         Taxes.

 

Indemnitor has filed all federal, state, county, municipal, and city income and
other Tax returns required to have been filed by it and has paid all Taxes and
related liabilities which have become due pursuant to such returns or pursuant
to any assessments received by it. Indemnitor has no knowledge of any basis for
any additional assessment in respect of any such Taxes and related liabilities
for prior years.

 

18.         Notices.

 

All notices or other written communications hereunder shall be made in
accordance with Section 10.6 of the Loan Agreement.

 

19.         Duplicate Originals; Counterparts.

 

This Agreement may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Agreement may be
executed in several counterparts, each of which counterparts shall be deemed an
original instrument and all of which together shall constitute a single
Agreement. The failure of any party hereto to execute this Agreement, or any
counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.

 

20.         No Oral Change.

 

This Agreement, and any provisions hereof, may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Indemnitor or any Indemnified Party, but only by an agreement
in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.

 

21.         Headings, Etc.

 

The headings and captions of various paragraphs of this Agreement are for
convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.

 

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22.         Number and Gender/Successors and Assigns.

 

All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the Person or
Persons referred to may require. Without limiting the effect of specific
references in any provision of this Agreement, the term “Indemnitor” shall be
deemed to refer to each and every Person comprising Indemnitor from time to
time, jointly and severally, and to include the heirs, executors,
administrators, legal representatives, successors and assigns of each such
Person. Without limiting the generality of the foregoing, the term “Indemnitor”
as used herein shall include any new or successor corporation, association,
partnership (general or limited), limited liability company joint venture, trust
or other individual or organization formed as a result of any merger,
reorganization, sale, transfer, devise, gift or bequest of any Person comprising
Indemnitor from time to time or any interest in such Person. All such Persons
shall be bound by the provisions of this Agreement, provided that no obligation
of Indemnitor may be assigned except with the written consent of Indemnitee.
Each reference herein to Indemnitee shall be deemed to include its successors
and assigns. This Agreement shall inure to the benefit of Indemnified Parties
and their respective successors and assigns forever.

 

23.         Release of Liability.

 

Any one or more parties liable upon or in respect of this Agreement may be
released without affecting the liability of any party not so released.

 

24.         Rights Cumulative.

 

The rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies which Indemnitee has under the Note, the Mortgage, the Loan
Agreement or the other Loan Documents or would otherwise have at law or in
equity.

 

25.         Inapplicable Provisions.

 

If any term, condition or covenant of this Agreement shall be held to be
invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.

 

26.         Governing Law.

 

(a)     THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY
INDEMNITOR AND ACCEPTED BY INDEMNITEE IN THE STATE OF NEW YORK, AND THE PROCEEDS
OF THE NOTE SECURED HEREBY WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, INDEMNITOR HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND
THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

 

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(b)     ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST INDEMNITEE OR INDEMNITOR
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT INDEMNITEE’S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE COUNTIES OF NASSAU OR SUFFOLK,
PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
INDEMNITOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON
VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
INDEMNITOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUIT, ACTION OR PROCEEDING. INDEMNITOR DOES HEREBY DESIGNATE AND APPOINT:

 

___________________

___________________
___________________

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN THE COUNTIES OF NASSAU OR SUFFOLK, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND AGREES THAT SERVICE
OF PROCESS UPON SAID AUTHORIZED AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID
SERVICE MAILED OR DELIVERED TO INDEMNITOR IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON INDEMNITOR IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. INDEMNITOR (I) SHALL GIVE
PROMPT NOTICE TO INDEMNITEE OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN SUFFOLK COUNTY, NEW YORK (WHICH SUBSTITUTE
AUTHORIZED AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR
SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS
AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN SUFFOLK COUNTY, NEW YORK OR IS
DISSOLVED WITHOUT LEAVING A SUCCESSOR.

 

27.         Entire Agreement.

 

The Note, the Loan Agreement, this Agreement and the other Loan Documents
constitute the entire understanding and agreement between Indemnitor and
Indemnitee with respect to the transactions arising in connection with the Debt
and supersede all prior written or oral understandings and agreements between
Indemnitor and Indemnitee with respect thereto. Indemnitor hereby acknowledges
that, except as incorporated in writing in the Note, the Loan Agreement, this
Agreement and the other Loan Documents, there are not, and were not, and no
persons are or were authorized by Indemnitor to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Note, the Loan Agreement,
this Agreement and the other Loan Documents.

 

28.         Miscellaneous.

 

(a)     Wherever pursuant to this Agreement (i) Indemnitee exercises any right
given to it approve or disapprove, (ii) any arrangement or term is to be
satisfactory to Indemnitee, or (iii) any other decision or determination is to
be made by Indemnitee, the decision of Indemnitee to approve or disapprove, all
decisions that arrangements or terms are satisfactory or not satisfactory and
all other decisions and determinations made by Indemnitee, shall be in the sole
and absolute discretion of Indemnitee and shall be final and conclusive, except
as may be otherwise expressly and specifically provided herein.

 

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(b)     Wherever pursuant to this Agreement it is provided that Indemnitor pay
any costs and expenses, such costs and expenses shall include, but not be
limited to, legal fees and disbursements of Indemnitee, whether retained firms,
the reimbursements for the expenses of the in-house staff or otherwise.

 

(c)     In the event of any inconsistencies between the terms and conditions of
this Section 28 and the other terms and conditions of this Agreement, the terms
and conditions of Section 28 shall control and be binding.

 

29.         Joint and Several Liability. If Indemnitor consists of more than one
person, all representations, warranties, covenants, obligations and liabilities
of each such person hereunder shall be joint and several. A default hereunder by
any such person shall be deemed a default by all such persons and Indemnitor.
The representations, warranties and covenants contained herein shall be read to
apply to the individual persons comprising Indemnitor when the context so
requires, but a breach of any such representation, warranty or covenant or a
breach of any obligation under this Agreement shall be deemed a breach by all
such persons and Indemnitor, entitling Indemnitee and other Indemnified Parties
to exercise all of their rights and remedies under this Agreement and under
applicable law.

 

 

 

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IN WITNESS WHEREOF, this Agreement has been executed by Indemnitor and is
effective as of the day and year first above written.

 

BORROWER:

 

555 N Research Corporation

 

By:     /s/ Glen Charles                                    

Glen Charles

Chief Financial Officer

 

 

OBLIGOR:

 

CVD EQUIPMENT CORPORATION

 

By:     /s/ Glen Charles                                    

Glen Charles

Chief Financial Officer

 

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EXHIBIT A

 

DESCRIPTION OF PROPERTY

 

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