Exhibit 10.6
This document prepared by and
after Recording Return to:
Updike, Kelly & Spellacy, P.C.
One State Street
P.O. Box 231277
Hartford, CT 06123-1277
Attn: Robert J. Martino, Esq.
Space Above for Recorder’s Use
OPEN-END
MORTGAGE DEED AND SECURITY AGREEMENT
FROM
EDAC TECHNOLOGIES CORPORATION
TO
TD BANK, N.A.
May 27, 2009

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OPEN-END MORTGAGE DEED AND SECURITY AGREEMENT
     TO ALL PEOPLE TO WHOM THESE PRESENTS SHALL COME, GREETINGS:
     KNOW YE, that EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation, with
a place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032
(hereinafter called the “Borrower”), for the consideration of ONE DOLLAR ($1.00)
and other good and valuable consideration received to the Borrower’s full
satisfaction from TD BANK, N.A., a national banking association with an office
located at 102 West Main Street, New Britain, Connecticut 06050-0174
(hereinafter called the “Bank”), does hereby give, grant, bargain, sell and
confirm, with MORTGAGE COVENANTS (hereinafter referred to as the “Mortgage”),
unto the Bank, its successors and assigns forever the real property and
improvements thereon known as 275 Richard Street, Newington, Connecticut and
described in more detail on Exhibit A attached hereto and made a part hereof
(the “Property”).
     TO HAVE AND TO HOLD the above granted and bargained Property, with the
privileges and appurtenances thereof unto it, the said Bank, its successors and
assigns forever, to its and their own proper use and behoof.
     THE CONDITION OF THIS DEED IS SUCH THAT:
     WHEREAS, pursuant to a Credit Agreement of even date herewith by and among
Borrower, GROS-ITE INDUSTRIES, INC., a Connecticut corporation, with a place of
business at 1806 Farmington Avenue, Farmington, Connecticut 06032, APEX MACHINE
TOOL COMPANY, INC., a Connecticut corporation, with a place of business at 1806
Farmington Avenue, Farmington, Connecticut 06032 (collectively with Borrower,
the “Credit Parties”) and Bank (the “Credit Agreement”), the Bank has made,
inter alia, (i) a Mortgage Loan in the amount of TWO MILLION SIX HUNDRED FORTY
THOUSAND AND 00/100 DOLLARS ($2,640,000.00) (the “Mortgage Loan”), which
Mortgage Loan is evidenced by a certain Mortgage Note of even date herewith in
the original amount of TWO MILLION SIX HUNDRED FORTY THOUSAND AND 00/100 DOLLARS
($2,640,000.00) (the “Mortgage Note”), a copy of which is attached hereto as
Exhibit B and made a part hereof, (ii) a Term Loan in the amount of FOUR MILLION
THREE HUNDRED SIXTY THOUSAND AND 00/100 DOLLARS ($4,360,000.00) (the “Term
Loan”), which Term Loan is evidenced by a certain Term Note of even date
herewith in the original amount of FOUR MILLION THREE HUNDRED SIXTY THOUSAND AND
00/100 DOLLARS ($4,360,000.00) (the “Term Note”), a copy of which is attached
hereto as Exhibit C and made a part hereof, and (iii) a Revolving Loan in the
amount of SEVEN MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($7,500,000.00)
(the “Revolving Loan”, together with the Mortgage Loan and the Term Loan,
collectively, the “Loan”), which Revolving Loan is evidenced by a certain
Revolving Credit Note of even date herewith in the original amount of SEVEN
MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($7,500,000.00) (the “Revolving
Credit Note”, together with the Mortgage Note and the Term Note, collectively,
the “Note”), a copy of which is attached hereto as Exhibit D and made a part
hereof; and

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     WHEREAS, a glossary of terms related to each Note is attached hereto as
Exhibit E; and
     WHEREAS, Credit Parties have entered into certain ISDA Master Agreements
(together with the confirmation thereof and all schedules thereto, and as may be
amended or substituted from time to time, the “Interest Rate Protection
Agreement”) dated as of the date hereof with the Bank in order to eliminate the
risk with respect to fluctuation of the interest rate in connection with the
Mortgage Loan and Term Loan, a copy of the confirmation forming a part of the
Interest Rate Protection Agreement related to the Mortgage Loan is attached
hereto as Exhibit F, and a copy of the confirmation forming a part of the
Interest Rate Protection Agreement related to the Term Loan is attached hereto
as Exhibit G; and
     WHEREAS, the amount and nature of the obligations of Borrower under the
Interest Rate Protection Agreement are set forth in and are determined pursuant
to the Interest Rate Protection Agreement, which has a final maturity date of
May 27,2014; and
     WHEREAS, the maximum amount of the obligations of Borrower, if any, under
the Interest Rate Protection Agreement secured hereby shall be ONE MILLION AND
NO/100 DOLLARS ($1,000,000.00); and
     WHEREAS, advances to be made by the Bank to or for the benefit of the
Credit Parties in respect of the Revolving Loan shall be made pursuant to the
terms of the Credit Agreement which shall constitute a commercial revolving loan
agreement within the meaning of
Section 49-2 of the Connecticut General Statutes, as amended; and
     WHEREAS, advances made by the Bank in respect of the Loan are payable in
the manner set forth in the Note; and
     WHEREAS, the Credit Parties are justly indebted to the Bank pursuant to the
terms of the Note and the Credit Agreement subject to the following additional
terms and conditions:
SECTION 1
DEFINITIONS
     The following terms as used herein shall have the following meanings:
     “Building Service Equipment” shall mean all apparatus, fixtures and
articles of personal property owned by the Borrower now or hereafter attached to
or used or procured for use in connection with the operation or maintenance of
any building, structure or other improvement located on or included in the
Property, including, but without limiting the generality of the foregoing, all
engines, furnaces, boilers, stokers, pumps, heaters, tanks, dynamos, motors,
generators, switchboards, electrical equipment, heating, plumbing, lifting and
ventilating apparatus, air-cooling and air-conditioning apparatus, gas and
electrical fixtures, elevators, escalators, fittings, and machinery and all
other equipment of every kind and description, used or procured for use in the
operation of the building standing on the Property (except apparatus, fixtures
or articles of personal property belonging to lessees or other occupants of such
building

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or to persons other than the Borrower, unless the same be abandoned by any such
lessee or other occupant or person), together with any and all replacements
thereof and additions thereto.
     “Disposal” shall have the meaning assigned to it in Section 3.6 hereof.
     “Event of Default” shall mean (a) any Event of Default under the Note or
the other Loan Documents, (b) any default in the payment or performance of the
obligations of the Borrower hereunder, or (c) any representation or warranty of
the Borrower hereunder proving to be untrue in any material respect.
     “Hazardous Materials” shall have the meaning assigned to it in
Section 2.6(b) hereof.
     “Hedging Contracts” means interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, or any other agreements or
arrangements entered into between Credit Parties and Bank and designed to
protect Credit Parties against fluctuations in interest rates or currency
exchange rates, including without limitation, the Interest Rate Protection
Agreement.
     “Hedging Obligations” means, with respect to Credit Parties, all
liabilities of Credit Parties to Bank under Hedging Contracts.
     “Loan Documents” shall mean the Credit Agreement, the Note, the Hedging
Contracts and all other documents, agreements or instruments executed in
connection therewith.
     “Note” shall have the meaning assigned to it in the recitals to this
Mortgage.
     “Obligations” shall mean all indebtedness, liabilities, obligations,
covenants and agreements of the Credit Parties to the Bank now existing or
hereafter arising or incurred under the Credit Agreement, the Note, this
Mortgage, the Hedging Contracts or the other Loan Documents, whether
individually or collectively, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising thereunder or hereunder by contract, operation of law or
otherwise and whether before or after any judgment relating to any of the
foregoing.
     “Permitted Encumbrances” shall mean the encumbrances listed on Exhibit H
attached hereto and incorporated herein by reference as if fully set out herein.
     “Property” shall mean the property described in Exhibit A attached hereto
and incorporated herein by reference as if fully set out herein.
     “Property Income” shall mean all rents, income, profits, security deposits
and other benefits to which the Borrower may now or hereafter be entitled from
any lease, tenancy or rights of use of all or any part of the Property and/or
the income generated from the business operations conducted at or from the
Property.
     “Release” shall have the meaning assigned to it in Section 3.6 hereof.

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     “Spill” shall have the meaning assigned to it in Section 3.6 hereof.
SECTION 2
REPRESENTATIONS AND WARRANTIES
     The Borrower hereby represents, covenants and warrants to the Bank as
follows:
     Section 2.1. Title to Property. The Borrower warrants it has good, fee
simple title to the Property (as described in Exhibit A annexed hereto) subject
only to the Permitted Encumbrances and that it shall warrant, defend and
preserve such title and the rights granted by this Mortgage with respect thereto
against all claims of all persons or entities.
     Section 2.2. Authority; No Encumbrances. The Property is now free and clear
of all encumbrances whatsoever except Permitted Encumbrances, and the Borrower
has good right and lawful authority to mortgage and convey the same in the
manner and form hereby mortgaged and conveyed.
     Section 2.3. No Conflicts. The execution and delivery of this Mortgage does
not, and the performance and observance of the terms hereof will not, contravene
any provision of existing law, ordinance, rule, regulation or order of any
Federal, state or local governmental body, instrumentality or agency, and will
not conflict with or result in any breach of the terms, conditions or provisions
of, or constitute a default under or result in or permit the creation or
imposition of any charge or encumbrance upon any of the properties or assets of
the Borrower pursuant to, any indenture, mortgage or other agreement or
instrument to which the Borrower is a party or by which its properties or assets
are bound.
     Section 2.4. Governmental Filings. Other than the recording of this
Mortgage and the filing of uniform commercial code financing statements with the
appropriate recording and filing offices in the State of Connecticut, no
approval, authorization or other action by, or filing with, any Federal, state,
or local body, instrumentality or agency, is required under existing law in
connection with the execution and delivery by the Borrower of this Mortgage.
     Section 2.5. No Leases. Except as set forth in Exhibit C attached hereto
and made a part hereof Schedule B to the Collateral Assignment of Leases,
Rentals, and Property Income executed by Borrower on the date hereof in
connection with the Loan (the “Collateral Assignment”), there are presently in
effect no leases of the Property or any part thereof.
     Section 2.6. Environmental Compliance. The Borrower has taken all necessary
steps to investigate the past and present condition and usage of the Property
and the operations conducted thereon and, based upon such diligent
investigation, makes the following representations and warranties.

  (a)   Except as set forth in any environmental reports delivered by Borrower
to the Bank (the “Environmental Reports”), none of the Borrower, or any operator
of

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      the Property, or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901
et seq. (“RCRA”) and regulations promulgated thereunder, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq. as amended (“CERCLA”), the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment (hereinafter “Environmental Laws”), which violation involves the
Property or would have a material adverse effect on the environment or the
business, assets or financial condition of the Borrower.     (b)   The Borrower
has not received notice from any third party including, without limitation, any
Federal, state or local governmental authority, (i) that it has been identified
by the United States Environmental Protection Agency (“EPA”) as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that any hazardous
waste, as defined by 42 U.S.C. Section 9601(5), any hazardous substances as
defined by 42 U.S.C. Section 9601(14), any pollutant or contaminant as defined
by 42 U.S.C. Section 9601(33) or any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any Environmental Laws
(“Hazardous Materials”) which it has generated, transported or disposed of have
been found at any site at which a Federal, state or local agency or other third
party has conducted or has ordered that the Borrower conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law; or (iii) that it is or shall be a named party to any claim, action, cause
of action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party’s incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Materials.     (c)   Except as set forth in the
Environmental Reports, (i) no portion of the Property has been used for the
handling, processing, storage or disposal of Hazardous Materials except in
accordance with applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Materials is located on any portion
of the Property; (ii) in the course of any activities conducted by the Borrower,
or the operators of their properties, no Hazardous Materials have been generated
or are being used on the Property, except in accordance with applicable
Environmental Laws; (iii) there has been no past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping (a “Release”) or threatened Release of Hazardous Materials
on, upon, into or from the Property, which Release would have a material adverse
effect on the value of any of the Property or adjacent properties or the
environment; (iv) to the best of

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      the Borrower’s knowledge, there have been no Releases on, upon, from or
into any real property in the vicinity of any of the Property which, through
soil or groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the value of, the Property; and (v) any
Hazardous Materials that have been generated on any of the Property have been
transported off-site only by carriers having an identification number issued by
the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Borrower’s
knowledge, operating in compliance with such permits and applicable
Environmental Laws.     (d)   Except as set forth in the Environmental Reports,
none of the Property is or shall be subject to any applicable environmental
clean-up responsibility law or environmental restrictive transfer law or
regulation, by virtue of the transactions set forth herein and contemplated
hereby.     (e)   The Borrower covenants and agrees that it will indemnify and
hold the Bank harmless from and against any and all expense, damage, loss or
liability incurred by the Bank (including, without limitation, all costs of
legal representation incurred by the Bank in connection with enforcing the
provisions hereof, or otherwise) arising from the application of any law,
including any so-called “Super Fund,” “Transfer Act” or “Super Lien”
legislation, relating to the presence of Hazardous Materials on the Property,
whether such legislation is Federal, state or local in nature. It is expressly
acknowledged by the Borrower that, notwithstanding anything to the contrary set
forth herein, this covenant of indemnification shall survive any foreclosure of
the lien and security interest of this Mortgage or the discharge of this
Mortgage and shall inure to the benefit of the Bank, its successors and assigns.

     Section 2.7. Absence of Litigation. There are no actions, suits,
proceedings or investigations, including, without limitation, condemnation and
eminent domain proceedings, pending or, to the best of the Borrower’s knowledge,
threatened, against or affecting the Property, or which may involve or affect
the validity of this Mortgage, and the Borrower is not in default with respect
to any order, writ, injunction, decree or demand of any Federal, state or local
governmental body, instrumentality or agency affecting the Property or the use
and occupancy thereof.
     Section 2.8. Execution, Delivery and Enforceability. The Borrower is duly
authorized to make and enter into this Mortgage and to carry out the
transactions contemplated by the Credit Agreement, the Note and the other Loan
Documents. This Mortgage has been duly executed and delivered by the Borrower
and is the legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms, subject only to the effect of any applicable
Bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors’ rights generally and the discretionary nature of specific
performance and other equitable remedies.

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     Section 2.9. Compliance with Law. The Property is in compliance with all
applicable Federal, state and local laws, rules, ordinances and regulations,
including but not limited to those governing zoning, land use, subdivision
control, health, safety, fire protection and protection of the environment.
     Section 2.10. Condition of the Property. The Property is in good order and
repair and is free of all defects other than such defects as have been
previously disclosed to and are acceptable to the Bank.
SECTION 3
CERTAIN COVENANTS AND CONDITIONS
     The Borrower covenants and agrees as follows:
     Section 3.1. Governmental Charges. The Borrower shall pay before the same
become delinquent all taxes, charges, sewer use fees, water rates and
assessments of every name and nature, whether or not assessed against the
Borrower, if applicable or related to the Property, or any interest therein, or
applicable or related to any of the Obligations, which, if unpaid, might by law
become a lien or charge upon all or any part of the Property; provided, however,
that so long as no distraint, foreclosure sale or other levy upon or transfer
with respect to the Property or any part thereof shall have been effected or
threatened, the Borrower shall not be required to pay any such taxes, charges,
fees, rates and assessments by reason of this Section 3.1 if (a) the amount,
applicability or validity thereof is currently being contested by the Borrower
in good faith by appropriate legal proceedings, (b) the Borrower shall have set
aside on its books reserves (segregated to the extent required by sound
accounting principles and practices) reasonably deemed by the Bank to be
adequate with respect thereto, and (c) the Borrower shall have provided to the
Bank a bond or other security of such nature and in such amount as the Bank
deems sufficient as security for payment thereof.
     Section 3.2. Provision For Payment of Governmental Charges and Other
Obligations. To assure the payment of all taxes, charges, sewer use fees, water
rates, ground rents and assessments of every name and nature, or any other
obligations which may have or acquire priority over this Mortgage, and which are
assessed or payable with reference to the Property, the Borrower, if so
requested by the Bank, shall deposit with the Bank, on the first day of each
month, a sum determined by the Bank to be sufficient to provide, in the
aggregate, a fund adequate to pay any such amounts at least ten (10) days before
the same become delinquent; and whenever the Bank determines sums accumulated
under the provisions of this Section 3.2 to be insufficient to meet the
obligation for which such deposits were made, the Borrower shall pay, on the
demand of the Bank, any amount required to cover the deficiency therein. Every
such deposit may, at the option of the Bank, be applied directly against the
obligation with reference to which it was made, or, to the fullest extent
permissible according to law, any other obligation of the Borrower secured
hereby. Such deposits may, to the fullest extent permitted by law, be commingled
with other assets of the Bank and, in the discretion of the Bank, invested by
the Bank for its own account, without any obligation to pay income from such
investment, or interest on such deposits, to the Borrower, or to account to the
Borrower for such income in any manner.

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     Section 3.3. Maintenance of Property; Alterations. Borrower shall keep and
maintain the Property in as good repair and condition as the same now is or may
hereafter be put (ordinary wear and tear excepted), damage from casualty
expressly not excepted, shall make all such needful and proper repairs,
replacements, additions and improvements thereto as shall be necessary for the
proper conduct of its business thereon, and shall not permit or commit waste on
the Property. The Borrower will make or cause to be made, as and when the same
shall become necessary, all structural and non-structural, exterior and
interior, ordinary and extraordinary, foreseen and unforeseen repairs, renewals
and replacements necessary to that end. The Borrower shall not permit removal or
alteration of anything which constitutes a part of the Property without the
consent of the Bank. The Borrower shall permit the Bank to enter the Property at
any reasonable time to determine whether the Borrower is in compliance with its
obligations under this Mortgage.
     Section 3.4. Insurance. The Borrower agrees, at the Borrower’s sole cost
and expense, to keep the Property insured at all times throughout the term of
this Mortgage with policies of insurance as follows:

  (a)   casualty or physical hazard insurance on an “all risks” basis, with
broad form earthquake coverage, and building code, valuable papers, extra
expenses, extended period of indemnity and electronic data processing coverages,
with a full replacement cost endorsement (including builder’s risk during any
period or periods of time that construction or remodeling is being performed on
the Property) and an “agreed amount” clause, in an amount equal to 100% of the
full replacement cost of all improvements (excluding only the reasonable value
of footings and foundations) and the Borrower’s contents therein, such amount to
be determined annually by an insurer or qualified appraiser selected and paid
for by the Borrower and acceptable to the Bank, and in any event, in an amount
sufficient to prevent the Borrower from incurring any coinsurance liability;    
(b)   if at any time the Property or any portion thereof is located in a “Flood
Hazard Area” pursuant to the Flood Disaster Protection Act of 1973 (or any
successor thereto), flood insurance in such total amount as the Bank shall
reasonably require from time to time (or the maximum amount available, if less);
and     (c)   insurance with respect to other insurable risks and coverages
relating to the Property (including, without limitation, commercial general
public liability insurance (broad form), loss of income (rent insurance or
business interruption insurance), boiler insurance, builder’s risk insurance and
worker’s compensation insurance) in such amounts and containing such terms and
conditions as the Bank may reasonably require from time to time.

     The Borrower shall deposit certified copies of all insurance policies (or
certificates thereof acceptable to the Bank) providing coverage applicable to
the Property, whether or not required by this Mortgage, with the Bank forthwith
after the binding thereof, and shall deliver to the Bank new policies (or
certificates acceptable to the Bank) for any insurance about to expire at

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least thirty (30) days before such expiration. All such insurance policies
(other than liability policies) shall be first payable in case of loss to the
Bank by means of a standard non-contributory mortgagee clause, shall be written
by such companies, on such terms, in such form and for such periods and amounts
as the Bank shall from time to time approve, shall be primary and without right
of contribution from other insurance which may be available, shall waive any
right of setoff, counterclaim, subrogation, or any deduction in respect of any
liability of the Borrower and the Bank, shall provide that with respect to the
Bank, the insurance shall not be invalidated by any action or inaction by the
Borrower including without limitation any representations made by the Borrower
in the procurement of such insurance, and shall provide that such policies shall
not be canceled or amended without at least thirty (30) days prior written
notice to the Bank. All public liability insurance policies shall include the
Bank as an additional named insured. All such insurance policies shall provide
that all losses thereunder shall be adjusted by the Borrower, so long as no
Event of Default has occurred and is continuing; provided, however, that in no
event shall the Borrower approve or consent to any final adjustment in an amount
exceeding ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000) without obtaining
the Bank’s prior written approval of the amount of such adjustment, and after an
Event of Default has occurred and so long as any such Event of Default
continues, the Borrower shall not consent to a final adjustment in any amount
without obtaining the Bank’s prior written approval. After an Event of Default,
the Borrower hereby grants the Bank full power and authority as irrevocable
attorney-in-fact of the Borrower to cancel or transfer such insurance, to
collect and endorse any checks issued in the name of the Borrower and to retain
any premium and to apply the same to the Obligations secured hereby.
     Section 3.5. Casualties and Takings. All proceeds of any property or
casualty insurance or awards of damages on account of any taking or condemnation
for public use of or injury to the Property shall be paid to the Bank. In the
case of a casualty loss or taking, the Bank may, in its discretion, apply such
proceeds to or toward the Obligations (in which event the Borrower shall be
relieved of the obligation in Section 3.3 of this Mortgage to repair the part of
the Property damaged by the loss or taking with respect to which such proceeds
are paid), or if the Bank shall require repair of that part of the Property so
damaged or remaining after such loss or taking, the Bank shall release to the
Borrower proceeds paid to it in accordance with the Bank’s usual procedures for
funding construction advances, and subject to any conditions on future advances
contained in the Credit Agreement, to be applied against the cost of repairing
and restoring the Property or the remaining portion thereof, with any balance
remaining to be applied to or toward the Obligations. Notwithstanding anything
in this Section 3.5 to the contrary, however, if there are no insurance proceeds
available with respect to a casualty loss for any reason, e.g., if a casualty
loss is not covered by any insurance applicable to the Property (whether or not
required by this Mortgage), or if any insurer shall deny a casualty loss is
covered by its policy, or if any insurer shall fail to pay a claim as a result
of the insurer’s insolvency, the Borrower shall not be relieved of any
obligations under Section 3.3 of this Mortgage.
     Section 3.6. Hazardous Materials; Asbestos. Borrower further covenants and
agrees that it will:

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  (a)   not store, Dispose of, Spill, Release or allow the Release of any
Hazardous Materials on the Property (except in compliance with all Federal,
state or local laws, rules, ordinances and regulations pertaining thereto);    
(b)   either directly nor indirectly transport or arrange for the transport of
any Hazardous Materials (except in compliance with all Federal, state or local
laws, rules, ordinances and regulations pertaining thereto);     (c)   in the
event of any change in the laws governing the assessment, Spill, Release or
removal of Hazardous Materials, which change would lead a prudent lender to
require additional testing to avail itself of any statutory insurance or limited
liability, take all such action (including, without limitation, the conducting
of engineering tests at the sole expense of the Borrower) to confirm that no
Hazardous Materials are or ever were Spilled, Released or Disposed of on the
Property;     (d)   provide the Bank with written notice:

  (i)   upon the Borrower’s obtaining knowledge of any known Spill, Release, or
threat of Release, of any Hazardous Materials at or from the Property;     (ii)
  upon the Borrower’s receipt of any notice to such effect from any Federal,
state or local governmental body, instrumental agency; or     (iii)   upon the
Borrower’s obtaining knowledge that any expense or loss has been incurred by
such governmental authority in connection with the assessment, containment,
removal or remediation of any Hazardous Materials for which expense or loss the
Borrower may be liable or for which expense a lien may be imposed on the
Property; and

  (e)   if any Spill, Release or Disposal of Hazardous Materials shall occur or
shall have occurred on the Property, (except in compliance with all Federal,
state or local laws, rules, ordinances and regulations pertaining thereto) cause
the prompt containment and removal of such Hazardous Materials and remediation
of the Property in full compliance with all applicable Federal, state or local
laws, rules, ordinances and regulations.

     The terms “Spill” (or “Spilled”) and “Release” (or “Released”) shall have
the meaning specified thereof in CERCLA and the term “Disposal” (or “Disposed”)
shall have the meaning specified in RCRA; provided, that in the event either
CERCLA or RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply as of the effective date of such
amendment and provided further, to the extent that the laws of the state where
the Property is located establish a meaning for “Spill”, “Release” or “Disposal”
which is broader than specified in either CERCLA or RCRA, such broader meaning
shall apply.

 

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     Section 3.7. Environmental Assessments. At any time after an Event of
Default shall have occurred hereunder, or, whether or not an Event of Default
shall have occurred, at any time after the Bank shall receive notice of a Spill,
Release or threatened Release of Hazardous Materials from the Borrower, or shall
have received notice from any other source deemed reliable by the Bank that a
Spill or Release of Hazardous Materials may have occurred, the Bank may at its
election after five (5) days prior notice to the Borrower obtain one or more
environmental assessments of the Property prepared by a geohydrologist, an
independent engineer or other qualified consultant or expert approved by the
Bank evaluating or confirming (i) whether any Hazardous Materials are present in
the soil or water at or adjacent to the Property, and (ii) whether the use and
operation of the Property comply with all applicable Environmental Laws relating
to air quality, environmental control, release of oil, hazardous materials,
hazardous wastes and hazardous substances, and any and all other applicable
environmental laws. Environmental assessments may include detailed visual
inspections of the Property including, without limitation, any and all storage
areas, storage tanks, drains, dry wells and leaching areas, and the taking of
soil samples, surface water samples and ground water samples, as well as such
other investigations or analyses as are necessary or appropriate for a complete
determination of the compliance of the Property and the use and operation
thereof with all applicable Environmental Laws. All such environmental
assessments shall be at the sole cost and expense of the Borrower.
     Section 3.8. Notice of Condemnation. The Borrower, immediately upon
obtaining knowledge of the institution of any proceeding for the condemnation or
requisition of the Property or any portion thereof, shall notify the Bank of the
pendency of such proceeding. The Bank may participate in such proceeding, and
the Borrower from time to time shall deliver to the Bank all instruments
requested by the Bank to permit such participation.
     Section 3.9. Leases; Assignments; Subordination. The Borrower shall not
lease the Property or any part thereof without the prior written consent of the
Bank. If the Bank shall consent and the Borrower shall enter into a lease, the
Borrower shall faithfully keep, observe and satisfy all the obligations on the
part of the lessor to be kept, performed and satisfied under every lease from
time to time in force with reference to the Property, and shall not alter or
terminate any such lease, or any guarantee of such lease, except in the ordinary
course of business, or accept any rentals for more than one (1) month in
advance. The Borrower shall submit to the Bank for its review and prior written
approval all draft agreements, related materials and all other information
relating to all proposed leases of the Property or any portion thereof, all
proposed lease modifications relating to the leases described in Schedule B of
the Collateral Assignment, and all proposed renewals of such leases. The
Borrower hereby assigns to the Bank all rents and profits under any and all
leases of the Property; provided, however, that the Borrower shall be entitled
to retain such rents and profits until an Event of Default shall have occurred.
At any time on notice from the Bank, the Borrower shall submit to the Bank for
examination all such leases and on the demand of the Bank, shall execute and
deliver a separate instrument collaterally assigning any or all such leases, or
the rents and profits thereof, in form satisfactory to the Bank. The Bank shall
have the right, by the execution of suitable written instruments from time to
time, to subordinate this Mortgage, and the rights of the Bank hereunder, to any
lease or leases from time to time in force with reference to the Property, and,
on the execution of any such instrument, this Mortgage shall be subordinate to
the lease for which such subordination is

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12

applicable with the same force and effect as if such lease had been executed and
delivered, and a notice thereof recorded to the extent required to give notice
to third persons, prior to the execution, delivery and recording of this
Mortgage. Nothing contained in this Section 3.9 is intended, nor shall it be
deemed, to constitute consent by the Bank to a subordination of the lien of this
Mortgage.
     Section 3.10. Prior Mortgages. If this Mortgage, by its terms, is now, or
at any time hereafter, becomes subject or subordinate to a prior mortgage, the
Borrower shall fully perform its obligations under such prior mortgage and shall
not, without the consent of the Bank, agree to the modification, amendment or
extension of the terms or conditions of such prior mortgage. Nothing contained
in this Section 3.10 is intended, nor shall it be deemed, to constitute consent
by the Bank to a subordination of the lien of this Mortgage.
     Section 3.11. Encumbrances. The Borrower shall not create or permit to be
created or permit to exist any encumbrance on the Property (other than a lien
for property taxes not yet due and payable and the Permitted Encumbrances) even
if such encumbrance is inferior to this Mortgage, without the prior express
written consent of the Bank. The Borrower shall not declare or otherwise subject
the Property to any form of common interest ownership including, but not limited
to, a condominium, cooperative, planned community, or planned unit development
form of ownership, without the prior express written consent of the Bank.
     Section 3.12. Transfers of Ownership. The Borrower shall not sell or permit
any transfer or other disposition, by operation of law or otherwise, of legal or
equitable title to or interest in the Property, or any part thereof (including,
without limitation, any sale, transfer or disposition of any corporate,
partnership or other legal or beneficial interest in the Borrower), without the
prior express written consent of the Bank, which consent may be withheld in the
Bank’s sole discretion for any reason whatsoever.
     Section 3.13. Expenses. The Borrower shall pay when due all fees and
charges (including reasonable attorneys’ fees) incurred by the Bank in
connection with the transactions evidenced by the Obligations and secured by
this Mortgage, the insurance of the security represented by this Mortgage,
protecting or sustaining the lien of this Mortgage and the enforcement of the
Obligations and this Mortgage, all either before or after obtaining judgment of
foreclosure of this Mortgage or judgment in or with respect to the Obligations,
including, without limitation, all filing, registration, recording, search,
appraisal and information fees, all title insurance premiums, all transfer taxes
and expenses incident to the execution and acknowledgment of this Mortgage and
all other documents securing the Obligations, and all Federal, state and local
taxes, duties, stamps, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Mortgage and the instruments
evidencing the Obligations. Such fees and charges shall be secured by the lien
of this Mortgage and shall accrue interest at the rate set forth in the Credit
Agreement and Note.
     Section 3.14. Priority of Lien; After-Acquired Property. This Mortgage is
and will be maintained as a valid mortgage lien on the Property subject only to
the Permitted Encumbrances. All property of every kind acquired by the Borrower
after the date hereof which, by the terms hereof, is required or intended to be
subjected to the lien of this Mortgage shall, immediately

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13

upon the acquisition thereof by the Borrower, and without any further mortgage,
conveyance, assignment or transfer, become subject to the lien of this Mortgage.
Any real property or easement across real property adjoining or adjacent to the
Property which is used for access to, providing utility service to or is granted
in lieu of a cash award for a condemnation of any portion of the Property now
existing or hereafter acquired shall be subject to the lien of this Mortgage.
The Borrower will do, execute, acknowledge and deliver all and every such
further conveyances, mortgages, and assurances as the Bank shall reasonably
require for accomplishing the purposes of this Mortgage. If any action or
proceeding shall be instituted to recover possession of the Property or for the
foreclosure of any other mortgage or for any other purpose affecting the
Property or this Mortgage, the Borrower will immediately, upon service thereof
on or by the Borrower, deliver to the Bank a true copy of each petition,
summons, complaint, notice, motion, order to show cause, and all other process,
pleadings and papers, however designated, served in any such action or
proceeding.
     Section 3.15. Waiver and Modification. Whether or not for additional
interest or other consideration paid or payable to the Bank, no forbearance on
the part of the Bank or extension of the time for the payment of the whole or
any part of the Obligations secured hereby, or any other indulgence given by the
Bank to the Borrower or to any other party claiming any interest in or to the
Property, shall operate to release or in any manner affect the original
liability of the Borrower, or the priority of this Mortgage or to limit,
prejudice or impair any right of the Bank, including, without limitation, the
right to realize upon the security, or any part thereof, for the Obligations
secured hereby or any of them, notice of any such extension, forbearance or
indulgence being hereby waived by the Borrower and all those claiming by,
through or under the Borrower. No consent or waiver, express or implied, by the
Bank to or of any default by the Borrower shall be construed as a consent or
waiver to or of any further default in the same or any other term, condition,
covenant or provision of this Mortgage or of the Obligations secured hereby.
Borrower waives presentment, demand, notice, protest, notice of acceptance of
this Mortgage, notice of loans made, credit extended or other collateral
received or delivered or other action taken in reliance hereon and all other
demands and notices of any description. With respect both to the Obligations and
the Property, Borrower assents to any extension or postponement of the time of
payment or any other indulgence, to any substitution, exchange or release of the
Property, to the addition or release of any party or person primarily or
secondarily liable, to the acceptance of partial payments thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as Bank may deem advisable. Bank shall have no duty as to the
collection or protection of the Property or any income thereon, nor as to the
preservation of rights against prior parties, nor as to the preservation of any
rights pertaining thereto beyond the safe custody thereof. Bank may exercise its
rights with respect to the Property without resorting or regard to other
collateral or sources of reimbursement for liability. Bank shall not be deemed
to have waived any of its rights upon or under the Obligations or the Property
unless such waiver be in writing and signed by Bank.
     Section 3.16. Fixtures and Equipment; Financing Statement. This Mortgage
constitutes a security agreement under the Uniform Commercial Code as enacted in
the State of Connecticut, and the Borrower hereby grants to the Bank to secure
the payment and performance of the Obligations and also to secure the
performance of all agreements and covenants herein contained, a security
interest in all fixtures, Building Service Equipment and any other property

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14

(hereinafter referred to as the “Personalty”) included in the Property, now
owned or hereafter acquired by the Borrower, which might otherwise be deemed
“personal property” (and all accessions thereto and the proceeds thereof). The
Borrower covenants and agrees that, upon the subsequent acquisition of fixtures,
Personalty or Building Service Equipment, it will provide to the Bank such
further assurances as may be required by the Bank to establish the Bank’s first
and prior security interest in such fixtures, Personalty and Building Service
Equipment. IT IS INTENDED BY THE GRANTOR AND THE GRANTEE THAT THIS MORTGAGE BE
EFFECTIVE AS A FINANCING STATEMENT FILED WITH THE REAL ESTATE RECORDS AS A
FIXTURE FILING. The Borrower shall execute, deliver and cause to be recorded and
filed from time to time with all necessary public offices, at the Borrower’s
sole cost and expense, continuation statements and such other instruments as
will maintain the Bank’s priority of security in all fixtures, Personalty and
Building Service Equipment. If Borrower shall fail to furnish any such financing
and continuation statements within ten (10) days after their request by the
Bank, then, pursuant to the provisions of the Uniform Commercial Code, Borrower
hereby authorizes the Bank, without signature of the Borrower, to execute and
file any such financing and continuation statements. The filing of any financing
or continuation statements in the office of the Secretary of the State shall not
be construed as in any way impairing the right of the Bank to proceed against
fixtures, Personalty or Building Service Equipment as real property.
     Section 3.17. Zoning Changes. The Borrower shall submit to the Bank for its
prior written approval all applications and other information relating to any
proposed zoning change, variance or other action with respect to the use of the
Property or any portion thereof.
     Section 3.18. Change in Management. The Borrower shall submit to the Bank
for its review and prior written approval all information relating to any
proposed change in the management of the Property or the business conducted
thereon.
SECTION 4
DEFAULT AND REMEDIES
     Section 4.1. Default; Acceleration of Obligations. If an Event of Default
shall occur, then the Bank may exercise the remedies provided under this
Mortgage, under the Credit Agreement, under the Note, under the other Loan
Documents or under the laws of the State of Connecticut or any one or more of
such remedies.
     Section 4.2. Remedies Cumulative. No remedy herein conferred on the Bank is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing.
     Section 4.3. Right of Mortgagee to Cure an Event of Default. If an Event of
Default shall occur, the Bank shall have the right, but without any obligation
so to do, to cure such default for the account of the Borrower and to make any
payment or take any action necessary to effect such cure. Without limiting the
generality of the foregoing, the Borrower hereby authorizes the Bank to pay all
taxes, sewer use fees, water rates and assessments, with interest,

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15

costs and charges accrued thereon, which may at any time be a lien upon the
Property, or any part thereof; to pay the premiums for any insurance required
hereunder; to incur and pay reasonable expenses in protecting its rights
hereunder and the security hereby granted; and to pay any balance due under any
security agreement on any fixtures and equipment included as a part of the
Property; and the payment of all amounts so incurred shall be secured hereby as
fully and effectually as any other obligation of the Borrower secured hereby. If
the Bank shall make any payment or take action in accordance with this
Section 4.3, the Bank will give to the Borrower written notice of the making of
any such payment or the taking of any such action. In any such event, the Bank
and any person designated by the Bank shall have, and is hereby granted, the
right to enter upon the Property at reasonable times and from any time and from
time to time for the purpose of taking any such action, and all monies expended
by the Bank in connection therewith (including, but not limited to, reasonable
legal expenses and disbursements), together with interest thereon at the Default
Rate as specified in the Note (or the highest rate permitted by law, whichever
shall be less), from the date of each such expenditure, shall be paid by the
Borrower to the Bank forthwith upon demand by the Bank, and shall be secured by
this Mortgage, and the Bank shall have, in addition to any other right or remedy
of the Bank, the same rights and remedies in the event of non-payment of any
such sums by the Borrower as in the case of a default by the Borrower in the
payment of any installment of principal or interest due and payable under the
Note.
     Section 4.4. Foreclosure. Without limiting any of the Bank’s rights set
forth in Section 4.5 hereof, if an Event of Default shall occur, the Bank may
foreclose this Mortgage and exercise its rights as a secured party for all or
any portion of the Obligations which is then due and payable, subject to the
continuing lien of this Mortgage for the balance not then due and payable.
     Section 4.5. Possession of Property; Appointment of Receiver.
          (a) Without limiting any of the Bank’s rights set forth in Section 4.4
hereof, if an Event of Default shall occur the Bank may, at its option:
(i) enter upon and take possession and control of the Property and the Property
Income with those rights and powers more particularly set forth in
Section 4.5(b) hereof; (ii) make application to a court of competent
jurisdiction for and obtain the immediate ex parte appointment of a receiver
authorized to immediately enter upon and take possession and control of the
Property and the Property Income with those rights and powers more particularly
set forth in Section 4.5 (b) hereof; and (iii) without taking possession and
control of the Property, immediately (with or without commencing any legal
action or proceeding in any court of competent jurisdiction) collect directly
all Property Income in the place and stead of the Borrower with full rights and
powers to notify all parties liable to make payments of Property Income to make
said payments directly to the Bank or its agents, and the Bank or its agents
shall have the further power and authority to sue for or otherwise collect and
receive all Property Income.
          (b) In the event the Bank or a receiver enters upon and takes
possession and control of the Property and/or the Property Income pursuant to
Section 4.5(a) hereof, said person or entity shall, in addition to such other
rights and powers as may subsequently be authorized, have the right and power to
(i) operate, manage and control the Property and exercise all the rights and
powers of the Borrower in its name or otherwise with respect to the same;
(ii) make all necessary

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and proper maintenance, repairs, replacements, and improvements to the Property;
(iii) collect and receive all Property Income; and (iv) enforce all terms of
existing contracts pertaining to the Property and enter into such new contracts
as the Bank or the receiver may determine necessary in their sole discretion.
          (c) All Property Income collected by the Bank, the Bank’s agent or a
receiver, pursuant to Section 4.5(a) hereof, shall be applied in such order of
priority as the Bank may determine in its sole discretion to (i) interest and
principal due on the Obligations; (ii) taxes, assessments and insurance premiums
due with respect to the Property and/or the business operations conducted from
the Property; (iii) all costs and expenses of operating, maintaining, repairing
and improving the Property; and (iv) the compensation, salaries, expenses and
disbursements of any agents, employees, attorneys or other representatives of
the Bank, the Bank’s agent or the receiver in connection with the possession,
control and/or operation of the Property and the business operations conducted
therefrom.
          (d) The Bank, its agents, or any receiver acting pursuant to
Section 4.5(a) hereof shall in no event be liable or accountable for more monies
than actually are received from the Property during the period which the Bank,
its agent or any receiver actually is in possession and control of the Property.
Neither the Bank, its agents or any receiver shall be liable or accountable in
any manner for the failure to collect Property Income for any reason whatsoever.
          (e) All costs, expenses and liabilities of every character incurred by
the Bank in managing, operating and maintaining the Property, not paid from
Property Income as herein above provided, shall constitute advances by the Bank
pursuant to Section 4.3.
          (f) In the event of foreclosure, the Bank, its agent or any receiver
acting pursuant to Section 4.5(a) hereof may, if a deficiency exists, remain in
possession of the Property until (i) the foreclosure sale; (ii) the redemption
of the Property; or (iii) the expiration of any redemption period of the United
States of America extending subsequent to the foreclosure sale. The Bank, its
agents or the receiver shall incur no liability for, nor shall the Borrower
assert any claim or setoff as a result of, any action taken while the Bank, its
agent or a receiver is in possession of the Property.
     Section 4.6. Uniform Commercial Code. If the provisions of the Uniform
Commercial Code as enacted in the State of Connecticut are applicable to any
property or security given to secure the indebtedness secured hereby which is
sold in combination with or as a part of the Property, or any part thereof, at
one or more foreclosure sales, any notice required under such provisions shall
be fully satisfied by any notice given in connection with such foreclosure sales
of the Property or any part thereof.
     Section 4.7. Rights Cumulative. Each right, power and remedy conferred upon
the Bank by this Mortgage, the Credit Agreement, the Note and the other Loan
Documents, and conferred by law or in equity, is cumulative and in addition to
every other right, power and remedy herein or therein set forth or otherwise so
existing, may be exercised from time to time, as often, and in such order, as
may be deemed expedient by the Bank, and the exercise or the beginning of the
exercise of one right, power or remedy shall not be a waiver of the right to
exercise at
the same

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17

time or thereafter any other right, power or remedy, and no delay or omission
of, or discontinuance by, the Bank in the exercise of any right, power or remedy
accruing hereunder or arising otherwise shall impair any such right, power or
remedy, or be construed to be a waiver of any default or acquiescence therein.
To constitute a waiver, there must be a writing signed by an officer of the Bank
and directed to the Borrower, specifying the waiver.
     No delay or omission of the Bank to exercise any right, power or remedy
accruing upon any Event of Default shall exhaust or impair any such right, power
or remedy nor shall it be construed to be a waiver of any such default or an
acquiescence therein, and every right, power and remedy given by this Mortgage
to the Bank may be exercised from time to time and as often as may be deemed
expedient by the Bank.
     In case the Bank shall have proceeded to enforce any right or remedy under
this Mortgage, the Credit Agreement, the Note or the other Loan Documents by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Bank, then and in every such case the Borrower and the Bank
shall be restored to their former positions and rights hereunder, and all
rights, powers and remedies of the Bank shall continue as if no such proceeding
had been taken. In the event of a breach or default or an Event of Default under
this Mortgage, the Credit Agreement, the Note or other Loan Documents, the
Borrower agrees to pay and to indemnify and hold harmless the Bank for all
reasonable expenses, attorneys’ fees, taxes and other court costs occasioned by
such breach or default.
     Section 4.8. No Merger. In the event the Bank shall acquire title to the
Property by conveyance from the Borrower or as a result of the foreclosure of
any other mortgage which the Bank at any time holds with respect to the
Property, this Mortgage shall not merge in the fee of the Property but shall
remain and continue as an existing and enforceable lien for the Obligations
secured hereby until the same shall be released of record by the Bank in
writing.
SECTION 5
MISCELLANEOUS
     Section 5.1. Notices. All notices, requests and other communications
hereunder shall be made in writing (including telex and telecopy
communications), shall be sent by first-class mail, postage prepaid, or sent by
commercial overnight courier delivery service, charges prepaid, or sent by
telex, telecopier or hand delivery, addressed as follows:

         
 
  (a)   If to the Borrower, at:
 
       
 
      EDAC Technologies Corporation
 
      1806 New Britain Avenue
 
      Farmington, CT 06032
 
      Attn: Dominick Pagano, President

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18

         
 
      With a copy to:
 
       
 
      Robinson & Cole LLP
 
      280 Trumbull Street
 
      Hartford, CT 06103-3597
 
      Attn.:  Edward J. Samorajczyk, Esq.

or at such other address for notice as the Borrower shall last have furnished in
writing to the person giving the notice;

         
 
  (b)   If to the Bank, at:
 
       
 
      TD Bank, N.A.
 
      102 West Main Street
 
      New Britain, CT 06050-0174
 
      Attn: John E. Cookley, Senior Vice President
 
       
 
      With a copy to:
 
       
 
      Updike, Kelly, & Spellacy, P.C.
 
      One State Street
 
      P.O. Box 231277
 
      Hartford, CT 06123-1277
 
      Attn: Robert J. Martino, Esq.

or at such other address for notice as the Bank shall last have furnished in
writing to the person giving the notice.
     Section 5.2. COMMERCIAL WAIVER. THE BORROWER AND EACH AND EVERY ENDORSER,
GUARANTOR AND SURETY OF THE OBLIGATIONS SECURED BY THIS MORTGAGE, AND EACH OTHER
PERSON WHO IS OR WHO SHALL BECOME LIABLE FOR ALL OR ANY PART OF THE OBLIGATIONS
SECURED BY THIS MORTGAGE, HEREBY ACKNOWLEDGE THAT THE TRANSACTION OF WHICH THIS
MORTGAGE IS A PART IS A COMMERCIAL TRANSACTION AND WAIVE THEIR RIGHTS TO NOTICE
AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES AS AMENDED OR
BY OTHER APPLICABLE LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE BANK
MAY DESIRE TO USE.
     SECTION 5.3. JURY TRIAL WAIVER. BORROWER AND BANK (BY ACCEPTANCE OF THIS
MORTGAGE) 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 MORTGAGE OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH

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19

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, BORROWER 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. BORROWER 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 MORTGAGE AND MAKE THE LOAN.
     Section 5.4. Open-End Mortgage. This is an “open-end” mortgage and the Bank
and any other holder hereof shall have all the rights, powers and protection to
which the holder of any open end mortgage is entitled under Section 49-2 of the
Connecticut General Statutes, as amended. Periodic advances in respect of the
Revolving Loan are permitted under the Revolving Credit Note (which shall
constitute a commercial revolving loan agreement pursuant to Section 49-2 of the
Connecticut General Statutes, as amended) and hereunder and the Bank shall
record such advancements in its books and records. It is further agreed that, in
addition to periodic advances contemplated by the Revolving Credit Note, upon
request of the Borrower, the Bank may hereafter, at its option, at any time
before full payment of the indebtedness secured by this Mortgage, make further
advances, to the Borrower, in amounts and at such rates of interest as the Bank
shall determine, and every such further advance, with interest, shall be secured
by this Mortgage and evidenced by an additional instrument given by the Borrower
provided, that the amount of the aggregate principal secured by this Mortgage
and remaining unpaid shall at no time exceed the original aggregate principal
sum secured hereby and provided that the time of repayment of such advances
shall not extend the time of repayment beyond the maturity of the original debt
hereby secured.
     Section 5.5. Cross Default and Cross Collateral. In addition to the terms
and conditions set forth in the Cross Collateralization and Cross Default
Agreement executed on even date herewith between the Borrower and the Bank, the
Borrower acknowledges and agrees that the occurrence of an Event of Default
under the terms of this Mortgage shall constitute a default under the other Loan
Documents in effect at the time of any such default and under the documents
evidencing any other loan now existing or hereafter made by the Bank to the
Borrower, and a default under the other Loan Documents or any of them or any of
said existing or future loans shall constitute an Event of Default under this
Mortgage.
     Section 5.6. Expenses. The Borrower will pay all expenses arising out of
the preparation, administration, amendment, protection, collection and/or other
enforcement of this

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20

Mortgage (including, without limitation, the reasonable fees and expenses of the
Bank’s legal counsel, accountants and appraisers).
     Section 5.7. Stamp Tax. The Borrower will pay any stamp or other tax which
becomes payable in respect of this Mortgage.
     Section 5.8. Schedules and Exhibits. The Schedules and Exhibits which are
attached hereto are and shall constitute a part of this Mortgage.
     Section 5.9. This Mortgage 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).
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS MORTGAGE 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 BORROWER
BY MAIL AT THE ADDRESS SET FORTH IN SECTION 5.1 OF THIS MORTGAGE. BORROWER
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.
     Section 5.10. Survival of Representations. All representations, warranties,
covenants and agreements contained in this Mortgage shall continue in full force
and effect until all of the Obligations shall have been paid in full.
     Section 5.11. Amendments. No modification or amendment of this Mortgage
shall be effective unless same shall be in writing and signed by the parties
hereto.
     Section 5.12. Successors and Assigns. This Mortgage shall be binding upon
and shall inure to the benefit of the Borrower, the Bank and their respective
permitted [heirs, executors, administrators] successors and assigns.
     Section 5.13. Severability. Any provision of this Mortgage which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
     Section 5.14. Headings. All article and section headings in this Mortgage
are included for convenience of reference only and shall not constitute a part
of this Mortgage for any other purpose.
     Section 5.15. Interpretation and Construction. The following rules shall
apply to the interpretation and construction of this Mortgage unless the context
requires otherwise: (a) the

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singular includes the plural and the plural, the singular; (b) words importing
any gender include the other genders; (c) references to statutes are to be
construed as including all statutory provisions consolidating, amending or
replacing the statute to which reference is made and all regulations promulgated
pursuant to such statutes; (d) references to “writing” includes printing,
photocopying, typing, lithography and other means of reproducing words in a
tangible visible form; (e) the words “including”, “includes” and “include” shall
be deemed to be followed by the words “without limitation”; (f) references to
the introductory paragraph, preliminary statements, articles, sections (or
subdivisions of sections), exhibits or schedules are to those of this Mortgage
unless otherwise indicated; (g) 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 that such amendments
and other modifications are permitted or not prohibited by the terms of this
Mortgage; (h) references to persons include their respective permitted
successors and assigns; and (i) “or” is not exclusive.
     Section 5.16. Replacement of Promissory Note. Upon receipt of an affidavit
of an officer of Bank as to the loss, theft, destruction or mutilation of the
Note or any other security document which is not of public record, and, in the
case of any such loss, theft, destruction or mutilation, upon cancellation of
such Note or other security document, Borrower will issue, in lieu thereof, a
replacement note or other security document in the same principal amount thereof
and otherwise of like tenor.
     This Mortgage is made upon the Statutory Condition.
[remainder of page intentionally left blank; signature page follows]

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[signature page 1 of 1 to Open-End Mortgage Deed]
     NOW THEREFORE, if the indebtedness which in accordance with the provisions
hereof shall be secured hereby, and any extensions or renewals thereof and any
and all other amounts due hereunder, under the Credit Agreement, the Note shall
be well and truly paid according to their tenor, and if all agreements and
provisions contained in the Credit Agreement, the Note and herein are fully kept
and performed, then this Mortgage shall become null and void; otherwise to
remain in full force and effect.
     IN WITNESS WHEREOF, the Borrower has executed and delivered this Mortgage
as of this 27th day of May, 2009.

          Signed, sealed and delivered in the presence of:   BORROWER
 
            EDAC TECHNOLOGIES CORPORATION
 
       
 
  By:   /s/ Dominick A. Pagano
 
    Name: Dominick A. Pagano
 
      Its President
 
      Duly Authorized
 
       

                   
STATE OF CONNECTICUT
  )              
 
  )     at        
COUNTY OF                    
  )        
 
   

     On this the 27th day of May, 2009, before me, the undersigned officer,
personally appeared                                         , known to me (or
satisfactorily proven) to be the                                          of
EDAC Technologies Corporation and acknowledged that [he/she] executed the
foregoing instrument for the purposes therein contained as [his/her] free act
and deed and the free act and deed of said corporation.
     In Witness Whereof I hereunto set my hand.

         
 
 
 
Notary Public/My Commission Expires:    
 
  Commissioner of the Superior Court