Exhibit 10.1
 

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REVERE HIGH YIELD FUND, LP

WITH

RANOR, INC.

 

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TERM LOAN AND SECURITY AGREEMENT

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Dated as of December 22, 2014

 
 
 
 
 
 

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THIS TERM LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of December
22, 2014 between REVERE HIGH YIELD FUND, LP, a  Delaware  limited partnership
having an office and place of business located at 105 Rowayton Avenue, Suite
100, Rowayton, CT 06853 (the “Lender”) and RANOR, INC., a Delaware corporation
having an address of 1 Bella Vista Drive, Westminster, MA 01473 (the
“Borrower”).
 

W I T N E S S E T H:

WHEREAS, at the request of the Borrower, Lender is making a term loan to
Borrower on the date hereof, in the maximum principal amount of ONE MILLION FIVE
HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00) (the “Note A Loan”) and a
term loan to Borrower on the date hereof, in the maximum principal amount of
SEVEN HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($750,000.00) (the
“Note B Loan”) to provide funds for the repayment of a loan held by Santander
Bank, N.A. which Loan shall mature on the Maturity Date. Borrower acknowledges
receipt of all of proceeds of the Note A Loan and the Note B Loan and that no
amount repaid in respect of the Note A Loan and/or the Note B Loan may be
reborrowed; and
 

WHEREAS, Lender is willing to provide Borrower with such credit facility
pursuant to the terms, conditions and limitations set forth in this Agreement.
 

NOW, THEREFORE, in consideration of the foregoing the parties hereto agree to
the following:

I.  
DEFINITIONS

 

SECTION 1.01. Definitions. As used herein, the terms defined in the preamble
shall have the same meaning when used in this Agreement and the following words
and terms shall have the following meanings:
 

“Account” means an account (as that term is defined in the Code).
 

“Account Debtor” means any Person who is obligated under, with respect to, or on
account of, an Account, chattel paper, or a General Intangible.
 

“Additional Documents” shall have the meaning set forth in Section 7.04 hereof.
 

“Affiliate” shall mean as to any Person, any other Person (i) which directly or
indirectly through one or more intermediaries Controls, or is Controlled by, or
is under common Control with, such Person; or (ii) which, directly or
indirectly, beneficially owns or holds ten percent (10%) or more of any class of
stock or any other ownership interest in such Person; or (iii) ten percent (10%)
or more of the direct or indirect ownership of which is beneficially owned or
held by such Person; or (iv) which is a member of the family (as defined in
Section 267(c)(4) of the Code) of such Person or which is a trust or estate the
beneficial owners of which are members of the family (as defined in Section
267(c)(4) of the Code) of such Person; or (v) which directly or
indirectly  is  a  general  partner,  controlling  shareholder,  managing  member,  officer,  director,
trustee or employee of such Person.
 
 
 

 
 
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“Assignment of Leases and Rents” shall mean that certain Assignment of Leases
and Rents, dated as of the date hereof, from Borrower in favor of Lender which
shall be recorded on or about the date hereof in the Worcester District Registry
of Deeds with respect to the  Property
 
“Bankruptcy Code” means title 11 of the United States Code, as in effect from
time to  time.
 
“Bankruptcy Proceeding” has the meaning set forth in Section 3.05 hereof.

“Books” means all of Borrower’s now owned or hereafter acquired books and
records (including (i) all of their Records indicating, summarizing, or
evidencing their assets (including the Borrower Collateral) or liabilities, (ii)
all of Borrower’s Records relating to their business operations or financial
condition, and (iii) all of their goods or General Intangibles related to such
information).

“Borrower Collateral” means collectively all of the Borrower Note A Collateral
and all of the Borrower Note B Collateral, or any portion thereof, as
applicable.

“Borrower Note A Collateral” means all of Borrower’s now owned or hereafter
acquired right, title, and interest in the Property and each of the following of
Borrower:

 
(a)
all of its Equipment, and

 
 
(b)
the proceeds and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance covering any or all of the foregoing.

 
“Borrower Note B Collateral” means all of Borrower’s now owned or hereafter
acquired right, title, and interest in each of the following of Borrower:
 

 
(a)
all of its Accounts,

 
(b)
all of its Inventory,

 
(c)
all of its Equipment, and

 
(d)
the proceeds and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance covering any or all of the foregoing.

 
“Borrower’s Counsel” shall mean William A. Scari, Jr., Pepper Hamilton, LLP, 400
Berwyn Park, 899 Cassatt Road, Berwyn, Pennsylvania 19312-1183 or such other
counsel as shall be mutually acceptable to the Lender and the Borrower.
 
“Business Day” shall mean any day not a Saturday, Sunday or legal holiday, on
which the Lender is open for business.
 
 
 
 
 
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“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
 
“Capitalized Lease Obligation” means that portion of the obligations under a
Capital Lease that is required to be capitalized in accordance with GAAP.
 
“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any State of the United States or any political
subdivision of any such State or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit or
bankers’ acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any State
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) demand Deposit Accounts maintained with (i)
any bank that satisfies the criteria described in clause (d) above, or (ii) any
other bank organized under the laws of the United States or any State thereof so
long as the amount maintained with any such other bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, and (f)
Investments in money market funds substantially all of whose assets are invested
in one or more of the types of assets described in clauses (a) through (e)
above.

“Charges” shall have the meaning set forth in Section 5.11 hereof.
"Closing Date" shall mean December 2014.
 
“Code” means the Massachusetts Uniform Commercial Code, as in effect from time
to time; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority, or
remedies with respect to Lender’s Lien on any Borrower Collateral is governed by
the Uniform Commercial Code as enacted and in effect in a jurisdiction other
than Commonwealth of Massachusetts, the term “Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for
purposes of the provisions thereof relating to such attachment, perfection,
priority, or remedies.
 
“Collateral” means all of the property, rights and interests of the Borrower
that are or are intended to be subject to the security interests and security
title created by the Loan Documents.
 
“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in any Borrower Collateral, in each case, in form and substance satisfactory to
Lender.
 
 
 

 
 
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“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds,
and tax refunds).

“Control” shall mean with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management  and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise. “Controlled by,” “Controlling” and
“under common Control with” shall have the respective correlative meaning
thereto.

“Default Rate” shall mean the lesser of twenty-four percent (24%) per annum, or
(ii) the highest rate of interest permitted under the laws of the Commonwealth
of Massachusetts.
 
“Deposit Account” means any deposit account (as that term is defined in the
Code).
 
“Environmental Indemnity” shall mean that certain Environmental Indemnity
Agreement dated as of the date hereof, in favor of Lender, from Borrower and
each Guarantor.

“Equipment” means equipment (as that term is defined in the Code) and includes
machinery, chattels, machine tools, dies, jigs, molds, parts, small tools,
perishable tools, motors, furniture, furnishings, fixtures, vehicles (including
motor vehicles), computer hardware, tools, parts, and goods (other than consumer
goods, farm products, or Inventory), wherever located, including all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing and all parts and equipment which may
be attached to or which are necessary to the operation and use of any or all of
the foregoing..

“Event of Default” has the meaning set forth in Section 8.01 hereof.

“Executive Officer” means with respect to a Person (other than an individual),
the Executive Chairman, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer or the Secretary
of such Person, or any other officer having substantially the same authority and
responsibility.

“GAAP” shall mean generally accepted accounting principles.

“General Intangibles” means general intangibles (as that term is defined in the
Code), including payment intangibles, contract rights, rights to payment, rights
arising under common law, statutes, or regulations, choses or things in action,
goodwill, patents, trade names, trade secrets, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, infringement claims, computer
programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, insurance premium rebates, tax refunds, and tax
refund claims, and any other personal property other than Accounts, commercial
tort claims, Deposit Accounts, goods, Investment Property, and Negotiable
Collateral.
 
 
 

 
 
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“Governmental Authority” shall mean any court, board, agency, commission, office
or authority of any nature whatsoever or any governmental unit (federal, State,
county, district, municipal, city or otherwise) now or hereafter in existence.
 
“Guarantor” shall mean Techprecision Corporation, a Delaware corporation.
“Guaranty” shall mean the guaranty of payment referred to in Section 4.04
executed and
delivered by each Guarantor.

“Hedge Agreement” means any and all agreements or documents now existing or
hereafter entered into by Borrower that provide for an interest rate, credit,
commodity or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging Borrower’s exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security, or currency valuations or
commodity prices.

“Impositions” shall mean all taxes, installments of assessments, water charges,
sewer charges, and other fees, taxes, charges and assessments of every kind and
nature whatsoever assessed or charged against or constituting a lien on the
Property or any interest therein or the Term Loan.

“Indebtedness” means (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all
reimbursement or other obligations in respect of letters of credit, bankers
acceptances, interest rate swaps, or other financial products, (c) all
obligations as a lessee under Capital Leases, (d) all obligations or liabilities
of others secured by a Lien on any asset of a Person or its Subsidiaries,
irrespective of whether such obligation or liability is assumed, (e) all
obligations to pay the deferred purchase price of assets (other than trade
payables incurred in the ordinary course of business  and repayable in
accordance with customary trade practices), (f) all obligations owing under
Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.

“Interest Rate” shall mean a rate equal to twelve percent (12%) per annum
computed on the basis of the actual days elapsed on the assumption that each
month contains thirty (30) days and each year contains three hundred sixty (360)
days.

“Inventory” means inventory (as that term is defined in the Code).

“Investment” means, with respect to any Person, any investment by such Person in
any other Person (including Affiliates) in the form of loans, guaranties,
advances, or capital contributions (excluding (a) commission, travel, and
similar advances to officers and employees of such Person made in the ordinary
course of business, and (b) bona fide Accounts arising in the ordinary course of
business consistent with past practice), purchases or other acquisitions of
Indebtedness, Stock, or all or substantially all of the assets of such other
Person (or of any
division  or  business  line  of  such  other  Person),  and  any  other  items  that  are  or  would  be
classified as investments on a balance sheet prepared in accordance with GAAP.
 
 
 
 
 
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“Investment Property” means investment property (as that term is defined in the
Code).

“Leases” shall mean any and all leases and subleases, now or hereafter approved
by the Lender in its sole discretion, relating to the use or occupancy of the
Collateral and in effect between the Borrower, as lessor or sublessor, and the
tenants or subtenants named therein, as the same may be amended or modified with
the Lender’s prior approval.

“Legal Requirements” shall mean statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions of Governmental Authorities
affecting the Borrower, any member or general partner of Borrower, any Loan
Document, all or part of the Borrower Collateral, all or part of the Property or
the construction, ownership, use, alteration or operation thereof, whether now
or hereafter enacted and in force, and all permits, licenses and authorizations
and regulations relating thereto, and all covenants, agreements, restrictions
and encumbrances contained in any instrument, either of record or known to
Borrower, at any time in force affecting all or part of the Property.

“Lender’s Counsel” shall mean Mayo Crowe LLC, CityPlace II, 185 Asylum Street,
Hartford, CT 06103.

“Lender Expenses”  means all (a)  costs or  expenses (including taxes,  and
insurance premiums) required to be paid by Borrower under any of the Loan
Documents that are paid, advanced, or incurred by Lender, (b) fees or charges
paid or incurred by Lender in connection with Lender’s transactions with
Borrower, including, fees or charges for photocopying, notarization, couriers
and messengers, telecommunication, public record searches (including tax lien,
litigation, and UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles),
filing, recording, or publication, (c) fees and charges paid or incurred by
Lender in connection with appraisals and collateral valuations (including
initial and subsequent periodic collateral appraisals or valuations or business
valuations to the extent of the fees and charges therefor (and up to the amount
of any limitation contained in this Agreement)), real estate surveys, real
estate title policies and endorsements, and environmental audits, (d) costs and
expenses incurred by Lender in the disbursement of funds to Borrower (by wire
transfer or otherwise), (e) charges paid or incurred by Lender resulting from
the dishonor of checks, (f) costs and expenses paid or incurred by Lender to
correct any default or enforce any provision of the Loan Documents, or in
gaining possession of, maintaining, handling, preserving, storing, shipping,
selling, preparing for sale, or advertising to sell the Borrower Collateral, or
any portion thereof, irrespective of whether a sale is consummated, (g) audit
fees and expenses of Lender related to audit examinations of the Books to the
extent of the fees and charges (and up to the amount of any limitation)
contained in this Agreement, (h) costs and expenses of third-party claims or any
other suit paid or incurred by Lender in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan
Documents or Lender’s relationship with Borrower or any Guarantor (excluding any
costs and expenses related to such claims or suits that are attributable to
Lender’s
gross  negligence  or  willful  misconduct),  (i)  Lender’s  third-party  out-of-pocket  costs  and
expenses (including attorneys’ fees) incurred in advising, structuring,
drafting, reviewing, administering, or amending the Loan Documents, and (j)
Lender’s costs and expenses (including attorneys, accountants, consultants,
and  other advisors’ fees and expenses) incurred  in terminating, enforcing
(including attorneys, accountants, consultants, and other advisors’ fees and
expenses incurred in connection with a “workout,” a “restructuring,” or a
Bankruptcy Proceeding concerning Borrower or any Guarantor or in exercising
rights or remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any remedial action
concerning the Borrower Collateral.

“Lender’s Liens” means the Liens granted by Borrower to Lender under this
Agreement or the other Loan Documents.

“Lien” means any interest in an asset securing an obligation owed to, or a claim
by, any Person other than the owner of the asset, irrespective of whether (a)
such interest is based on the common law, statute, or contract, (b) such
interest is recorded or perfected, and (c) such interest is contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances. Without limiting the generality of the foregoing,
the term “Lien” includes the lien or security interest arising from a mortgage,
deed of trust, deed to secure debt, encumbrance, pledge, hypothecation,
assignment, deposit arrangement, security agreement, conditional sale or trust
receipt, or from a lease, consignment, or bailment for security purposes and
also includes reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases, and other title exceptions and
encumbrances affecting Real Property.

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Guaranty, the Mortgage, the Assignment of Leases and Rents,  the  Environmental
Indemnity and all other documents, certificates and instruments executed in
connection therewith.

“Loan Policy” shall have the meaning set forth in Section 4.06 hereof.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) taken as a
whole, (b) the ability of the Borrower to perform its obligations under this
Agreement or the other Loan Documents, or (c) the validity or enforceability of
the rights or remedies of the Lender hereunder or under the other Loan
Documents.

“Maturity Date” shall have the meaning set forth in Section 2.03 hereof.

“Massachusetts Property” means that certain real property more particularly
described in the  Mortgage and commonly known as 48 Farm Town Road, Westminster,
Massachusetts.

“Minimum Guaranteed Interest” shall mean an amount equal to the greater of (i)
six (6) months interest at the Interest Rate on the amount outstanding on the
Loan, or (ii) interest due on any amount Advanced under this agreement at the
Interest Rate.

“Mortgage” shall mean that certain Mortgage Deed, Assignment of Leases and
Rents, Security Agreement and Fixture Filing, dated of the date hereof, in favor
of Lender, by Borrower which mortgage shall be recorded on or about the date
hereof in the Worcester District Registry of Deeds with respect to the Property.
 
 
 
 
 
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“Negotiable Collateral” means letters of credit, letter of credit rights,
instruments, promissory notes, drafts, documents, and chattel paper (including
electronic chattel paper and tangible chattel paper).

“Net Income” means for any period net income of Borrower for such period
determined in accordance with GAAP.

“Note” shall mean collectively Note A and Note B.

“Note  A”  shall  mean  that  certain  term  note  in  the  original  principal  amount  of $1,500,000.00
dated as of the date hereof from Borrower in favor of Lender.

“Note  B”
 shall  mean  that  certain  term  note  in  the  original  principal  amount  of
$750,000.00 dated as of the date hereof from Borrower in favor of Lender.

“Note A Exit Fee” means $45,000.00.

“Note B Exit Fee” means $22,500.00.

“Obligations” means (a) all loans including, without limitation, the Loan,
debts, principal, interest, premiums, liabilities, obligations (including
indemnification obligations), fees, charges, costs, Lender Expenses (including
any fees or expenses that, but for the commencement of an Insolvency Proceeding,
would have accrued), lease payments, guaranties, covenants, and duties of any
kind and description owing by Borrower to Lender pursuant to or evidenced by the
Loan Documents and irrespective of whether for the payment of money,
whether  direct  or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest not paid when due and
all Lender Expenses that Borrower is required to pay or reimburse by the Loan
Documents, by law, or otherwise. Any reference in this Agreement or in the Loan
Documents to the Obligations shall include all extensions, modifications,
renewals, supplements, restatements or alterations thereof.

“Payment Date” shall have the meaning set forth in Section 2.02 hereof.

“Permitted Indebtedness” means the Indebtedness described in  Section 6.01
hereof.

“Permitted Dispositions” means (a) sales or other dispositions of Equipment that
is substantially worn, damaged, or obsolete in the ordinary course of business,
(b) sales of Inventory to buyers in the ordinary course of business, (c) the use
or transfer of money or Cash Equivalents in a manner that is not prohibited by
the terms of this Agreement or the other Loan Documents, and (d) the licensing,
on a non-exclusive basis, of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business.
 
 
 

 
 
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“Permitted Liens” means (a) Liens held by Lender, (b) Liens for unpaid taxes
that either (i) are not yet delinquent, or (ii) do not constitute an Event of
Default hereunder and are the subject of Permitted Protests, (c) Liens set forth
on Schedule P, (d) the interests of lessors under operating leases, (e) Liens
arising by operation of law in favor of warehousemen, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course
of business and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, (f) Liens on amounts deposited in connection with obtaining
worker’s  compensation  or  other  unemployment insurance, (g) Liens on amounts
deposited in connection with the making or entering into of bids, tenders, or
leases in the ordinary course of business and not in connection with the
borrowing of money, (h) Liens on amounts deposited as security for surety or
appeal bonds in connection with obtaining such bonds in the ordinary course of
business, (i) Liens resulting from any judgment or award that is not an Event of
Default hereunder, and (j) rights of setoff or bankers’ liens upon deposits of
cash in favor of banks of banks or other depository institutions; and (k) with
respect to any Real Property, easements, rights of way, and zoning restrictions
that do not materially interfere with or impair the use or operation thereof as
reasonably determined by  Lender, including those matters described in Schedule
B of that certain Lender’s title insurance policy from Fidelity National Title
Insurance  Company provided to Lender  in connection with the recording of the
Mortgage.

“Permitted Protest” shall mean the right of Borrower to protest any Lien (other
than any Lien that secures the Obligations), taxes (other than payroll taxes or
taxes that are the subject of a United States federal tax lien), or rental
payment, provided that (a) a reserve with respect to such obligation is
established on the Books in such amount as is required under GAAP, (b) any such
protest is instituted promptly and prosecuted diligently by Borrower, as
applicable, in good faith, and (c) Lender is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
or priority of any of the Lender’s Liens.

“Person” shall mean any natural person, limited liability company, corporation,
business trust, joint venture, association, company, partnership or government,
or any agency or political subdivision thereof.
 
“Property” shall mean the Massachusetts Property and all improvements thereon.
“Purchase  Money  Indebtedness”  means  Indebtedness  (other  than  the  Obligations),
incurred at the time of, or within 20 days after, the acquisition of any fixed
assets for the purpose of financing all or any part of the acquisition cost
thereof.

“Record” shall mean information that is inscribed on a tangible medium or which
is stored in an electronic or other medium and is retrievable in perceivable
form.

“Restricted Payments” means (a) any dividend or other distribution, in cash or
other property, direct or indirect, on account of any class of membership
interests or other ownership interests in Borrower, now or hereafter
outstanding, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any class of
membership interests or other ownership interests in Borrower, now or hereafter
outstanding, (c) any payment made to retire, or obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
membership interests or other ownership interests in Borrower, now or hereafter
outstanding, (d) any payment or prepayment of principal, or redemption,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to, any Indebtedness owing to a member or general partner in Borrower or
Guarantor or an Affiliate of a member or general partner in Borrower, or (e) any
payment to a member or a general partner in Borrower or Guarantor or an
Affiliate of Borrower or Guarantor or any member or general partner in Borrower
or Guarantor not expressly authorized herein.
 
 
 
 
 
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“Securities Account” means a securities account (as that term is defined in the
Code). “Solvent”  shall  mean,  with  respect  to  any
Person  on  a  particular  date,  that,  at  fair
valuations, the sum of such Person’s assets is greater than all of such Person’s
debts.
 
“Stock” shall mean all shares, options, warrants, membership interests, units of
membership interests, partnership interests, other interests, participations, or
other equivalents (regardless of how designated) of or in a Person, whether
voting or nonvoting,  including common stock, preferred stock, or any other
“equity security” (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the SEC under the Exchange Act).
 
“Subsidiary”
 of  a  Person  shall  mean  a  corporation,  partnership,  limited  liability
company, or other entity in which that Person directly or indirectly owns or
controls the shares of Stock having ordinary voting power to elect a majority of
the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company, or other entity.

“Supporting Obligation” means a letter-of-credit right or secondary  obligation
that supports the payment or performance of an Account, chattel paper, document,
General Intangible, instrument, or Investment Property.

"Term Loan" shall mean the term loan pursuant to Section 2.01 hereof.
“Title Company” shall mean Fidelity National Title Insurance Company.
“Utica” shall mean Utica Leaseco., LLC, a Florida limited liability company.
 
“Utica Loan” shall mean a commercial loan by Utica to Borrower in the  original
principal amount of $4,150,000.00.

“Utica Senior Debt Documents” shall mean a certain Loan and Security Agreement
and other loan documents executed by Borrower to and for the benefit of Utica
with respect to the Utica Loan.

 
II.
THE TERM LOAN

SECTION 2.01. Term Loan. The Lender agrees, upon the terms and subject to the
conditions hereof, to make to Borrower the Note A Loan and the Note B Loan, each
of which shall have a twelve (12) month term. The Note A Loan and the Note B
Loan shall be collectively referred to herein as the “Term Loan” or the “Loan”.
The Term Loan shall be fully advanced to Borrower on the date hereof.

SECTION 2.02. The Note. The Term Loan shall be evidenced by Note A and Note B,
in the forms attached hereto as Exhibit A-1 and Exhibit A-2, respectively,
appropriately completed, payable to the order of the Lender, duly executed and
delivered on behalf of the Borrower, and dated as of the Closing Date. The Note
shall be with interest accruing at the Interest Rate and payable on the first
day of each month (a “Payment Date”), commencing on February 1, 2015 until and
including the Maturity Date with a final payment of the principal balance plus
accrued and unpaid interest due and payable on the Maturity Date. Note A shall
be secured by the Mortgage on the Property and a perfected security interest in
Borrower’s Equipment, subject only to the Permitted Liens. Note B shall be
secured by a perfected first priority UCC-1 security interest in Borrower’s
Accounts and Inventory and by  a  perfected security interest in Borrower’s
Equipment, subject only to the Permitted Liens.

SECTION 2.03. Maturity Date. The maturity date of the Term Loan is
December 31, 2015 (the “Maturity Date”). If the Borrower requests an extension
in writing at least sixty 60 days but no more than 90 days prior to the Maturity
Date then if the following conditions are determined by the Lender in its
reasonable discretion to have been satisfied, then Lender  will  extend  the
Maturity Date as it relates to Note A and/or Note B for one (1) period of six
(6) months (the “Extension”): (a) such request is accompanied by an explanation
of the need for the extension and documentation supporting such explanation, (b)
the Borrower has submitted the balance sheet and income and expense statement
for the fiscal quarter most recently ended with respect to Borrower and the
Property in such detail as Lender may reasonably require if they have not been
previously delivered to the Lender; (c) Borrower is not in default under any
Loan Document; (d) there has not been a material adverse change in the financial
condition of the Borrower or any Guarantor; (e) the Borrower, each Guarantor,
and the Lender have executed an acknowledgement of the extension which includes
a reaffirmation by the Guarantor of its obligations;  (f) the Borrower has paid
the Lender an extension fee in the amount of $15,000.00 in the event that the
Maturity Date as it relates to Note A is extended and $7,500.00 in the event
that the Maturity Date as it relates to Note B is extended; (g) the Borrower has
provided the Lender with such additional documentation as the Lender may
reasonably request including, without limitation, evidence of the priority of
the lien of the Deed of Trust; (h) the Borrower has represented to the Lender in
writing the accuracy of all submissions supporting the extension request, that
Borrower is not in default under any Loan Document, that the representations
made by the Borrower and any Guarantor in the Loan Documents are true on the
date of the extension and that there have been no material adverse changes to
the financial condition of the Borrower or any Guarantor; (i) the Borrower has
complied with such other conditions for the granting of the extension as may be
reasonably required by the Lender which conditions may include payment of
accrued interest and a portion of the principal balance of the Loan; and (j)
such other conditions as may be reasonably required by the Lender.

SECTION 2.04. Interest and Principal Payments on the Term Loan. On each Payment
Date, commencing on February 1, 2015 until and including the Maturity Date,
Borrower shall pay interest in arrears on the principal balance of the Loan from
time to time outstanding at a per annum rate equal to the Interest Rate of 12%
per annum. The principal balance plus accrued and unpaid interest shall be due
and payable on the Maturity Date. In addition to such monthly payments of
interest and principal, on the earlier to occur of (i) prepayment of the Loan in
accordance with Section 2.05 below or otherwise, and (ii) the Maturity Date,
Borrower shall pay to Lender the Minimum Guaranteed Interest.
 
 
 
 
 
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SECTION 2.05. Prepayment of the Term Loan. Borrower may prepay the Term Loan in
whole but not in part, at any time, but only after advance written notice to
Lender of at least forty-five (45) days provided that no Default or Event of
Default shall have occurred and be continuing. If the Loan is prepaid anytime
during the term of the Loan, Borrower shall pay to Lender the Minimum Guaranteed
Interest. Lender’s acceptance of any prepayment under this Section 2.05 shall
not waive any of Lender’s rights and remedies under the Loan Documents arising
pursuant to an Event of Default.

SECTION 2.06. Late Charge. If any sum payable under the Note or hereunder is not
paid within five (5) days after the date on which it is due, the Borrower shall
pay, upon demand, an amount equal to ten percent (10%) of such unpaid sum as a
late payment charge.

SECTION 2.07. Funds; Manner of Payment. Each payment of principal and interest
on the Note shall be made in immediately available federal funds without set-off
or counterclaim to the Lender. Whenever any payment to be made hereunder or
under the Note shall be Stated to be due, or whenever any Payment Date would
otherwise occur on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest.

SECTION 2.08.  Default Rate. In addition to the late payment charge set forth at
Section 2.6 hereof, if any monthly installments of the Note, or the entire
principal balance of the Note, as the case may be, is not paid within five (5)
days following the applicable due date, the Borrower shall thereafter pay
interest on the principal balance at a rate per annum equal to the Default Rate.

SECTION 2.09. Use of the Term Loan Proceeds. The proceeds of the Term Loan shall
be used by the Borrower for the repayment of a loan in the amount of
$1,447,261.11 plus breakage fees on the related interest rate swap of
approximately $220,000 from Santander Bank, N.A.and the residual proceeds of the
Term Loan shall be used for general corporate purposes.

SECTION 2.10. Exit Fee.

 
(a)           On the earlier of (i) the Maturity Date of Note A and (ii) such
earlier time that the Note A is paid in full or accelerated, Borrower shall pay
to Lender an amount equal to the Note A Exit Fee.

(b)           On the earlier of (i) the Maturity Date of Note B and (ii) such
earlier time that the Note B is paid in full or accelerated, Borrower shall pay
to Lender an amount equal to the Note B Exit Fee.
 
 
 
 
 
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III.
REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender, that:

SECTION 3.01. Organization. Each of Borrower and Guarantor has been  duly
organized, is validly existing and in good standing under the laws of the State
of its formation, with requisite power and authority, and all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to own its
properties and to transact the business in which it is now engaged. Each of
Borrower and Guarantor is duly qualified to do business and is in good standing
in each jurisdiction where it is required to be so qualified in connection with
its properties, business and operations.

SECTION 3.02.  Authorization; No Contravention.

 
(a)      The execution, delivery and performance of this Agreement and the other
Loan Documents by the Borrower and the borrowings by such Borrower hereunder (a)
have been duly authorized, (b) will not violate (i) any provision of law or any
governmental rule or regulation applicable to such Borrower or, (ii) any order
of any court or other agency of government binding on Borrower or any indenture,
agreement or other instrument to which Borrower is a party, or by which Borrower
or any of its properties are bound, and (c) will not be in conflict with, result
in a breach of or constitute (with due notice and/or lapse of time) a default
under, any such indenture, agreement or other instrument, or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of its properties or assets other than as contemplated by
the Loan Documents. Each person executing the Loan Documents on behalf of
Borrower has full authority to execute and deliver the same.

(b)        The execution, delivery and performance of the Guaranty and the other
Loan Documents by Guarantor, as applicable (i) have been duly authorized, (ii)
will not violate (1) any provision of law or any governmental rule or regulation
applicable to such Guarantor or, (2) any order of any court or other agency of
government binding on such the Guarantor or  any indenture, agreement or other
instrument to which such each Guarantor is a party, or by which such Guarantor
or any of its properties are bound, and (iii) will not be in conflict with,
result in a breach of or constitute (with due notice and/or lapse of time) a
default under, any such indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of its properties or assets other than as contemplated by
the Loan Documents. Each person executing the Loan Document on behalf of the
Borrower and each Guarantor has full authority to execute and deliver the same.

SECTION 3.03. Litigation. (a) There are no actions, suits or proceedings pending
or, to the knowledge of the Borrower and each Guarantor, threatened in writing
against or affecting the Borrower or Guarantor, at law or in equity or before or
by any Federal, State, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which are
undisclosed and involve any of the transactions contemplated herein or which, if
adversely determined against the Borrower or Guarantor would have
a  Material  Adverse Effect; and (b) neither the Borrower nor Guarantor is in
default with respect to any judgment, writ, injunction, decree, rule or
regulation of any court or Federal, State, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which would have a Material Adverse Effect.
 
 
 

 
 
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SECTION 3.04. Agreements. Neither the Borrower nor any Guarantor is a party to
any agreement or instrument or subject to any judgment, order, writ, injunction,
decree or regulation materially and adversely affecting its business, properties
or assets, operations or condition (financial or otherwise). Neither the
Borrower nor any Guarantor is in default in any manner which would have a
Material Adverse Effect or materially and adversely affect the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any other agreement or instrument to which it is a party.

SECTION 3.05. No Bankruptcy Filing. Neither the Borrower nor any Guarantors or
any shareholder, members or general partner of the Borrower, are contemplating
either the filing of a petition by it under any State or federal bankruptcy or
insolvency law or the liquidation of all or a major portion of its property (a
“Bankruptcy Proceeding”), and the Borrower and any Guarantor have no knowledge
of any Person contemplating the filing of any such petition against either the
Borrower, the Guarantors, any member or partner of Borrower. In addition,
neither the Borrower, any Guarantor, any shareholder, member or partner of
Borrower, nor any principal nor Affiliate of the Borrower have been a party to,
or the subject of a Bankruptcy Proceeding for the past ten years.
 
SECTION 3.06. Intentionally omitted.

SECTION 3.07. Fraudulent Transfer. Each of the Borrower, any Guarantor, and each
of its respective Subsidiaries is Solvent. No transfer of property is being made
by the Borrower, any Guarantor or each of its respective Subsidiaries and no
obligation is being incurred by the Borrower, the Guarantor or each of its
respective Subsidiaries in connection with the transactions contemplated by this
Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of the Borrower; no transfer of
property is being made by Guarantor and no obligation is being incurred by any
Guarantor in connection with the transactions contemplated by this Agreement or
the other Loan Documents with the intent to hinder, delay, or defraud either
present or future creditors of any Guarantor.

SECTION 3.08. No Plan Assets. As of the date hereof and throughout the term of
the Term Loan (i) neither the Borrower nor any Guarantor is or will be an
“employee benefit plan,” as defined in Section 3(3) of ERISA, (ii) none of the
assets of the Borrower or any Guarantor will constitute “plan assets” of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101, (iii)
neither the Borrower nor any Guarantor is or will be a “governmental plan”
within the meaning of Section 3(32) of ERISA, and (iv) transactions by or with
the Borrower or the Guarantor are not and will not be subject to State statutes
regulating investment of, and fiduciary obligations with respect to,
governmental plans. As of the date hereof, neither the Borrower nor any
Guarantor nor any member of a “controlled group of corporations” (within the
meaning of Section 414 of the Code) maintains, sponsors or contributes to a
“defined benefit plan” (within the meaning of Section 3(35) of ERISA) or a
“multiemployer pension plan” (within the meaning of Section 3(37)(A) of ERISA).

SECTION 3.09. Federal Reserve Regulations; Investment Company Act. No part of
the proceeds of the Term Loan will be used for the purpose of purchasing or
acquiring any “margin stock” within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System or for any other purpose that would be
inconsistent with such Regulation U or any other regulation of such Board of
Governors, or for any purpose prohibited by Legal Requirements or any Loan
Document. Borrower is not (i) an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended; or (ii) subject to any other federal or State law or
regulation which purports to restrict or regulate its ability to borrow money.
 
 
 
 
 
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SECTION 3.10. Proceeds of the Term Loan. The proceeds of the Term Loan shall be
applied by the Borrower for the purposes described in Section 2.09.

 
SECTION 3.11. Purchase Options. Neither the Property nor any part thereof is
subject to any purchase options or other similar rights in favor of third
parties.

SECTION 3.12. Hazardous Substances Except as set forth in that certain Phase I
Environmental Site Assessment Report prepared by GZA dated November 3, 2010 and
that certain Phase 1 Environmental Site Assessment prepared by Triumvirate
Environmental, Inc. dated June 18, 2014 (collectively, the “Environmental
Report”), (i) the Property is not  in violation of any Legal Requirement
pertaining to or imposing liability or standards of conduct concerning
environmental regulation, contamination or clean-up, including the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act, the Emergency Planning and Community
Right-to-Know Act of 1986, the Hazardous Substances Transportation Act, the
Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic
Substance Control Act, the Safe Drinking Water Act, the Occupational Safety and
Health Act, any State super-lien and environmental clean-up statutes (including
with respect to Toxic Mold), any local law requiring related permits and
licenses and all amendments to and regulations in respect of the foregoing laws
(collectively, “Environmental Laws”); (ii) the Property is not subject to any
private or governmental Lien or judicial or administrative notice or action or
inquiry, investigation or claim relating to hazardous, toxic and/or dangerous
substances, toxic mold or fungus of a type that may pose a risk to human health
or the environment or would negatively impact the value of the Property
(“Toxic Mold”) or any other substances or materials which are included under or
regulated by Environmental Laws (collectively, “Hazardous Substances”); (iii) no
Hazardous Substances are or have been (including to the best of Borrower’s
knowledge, the period prior to Borrower’s acquisition of the Property),
discharged, generated, treated, disposed of or stored on, incorporated in, or
removed or transported from the Property other than in compliance with all
Environmental Laws; (iv) to the best of Borrower’s knowledge, no Hazardous
Substances are present in, on or under any nearby real property which could
migrate to or otherwise affect the Property; (v) no Toxic Mold is on or about
the Property which requires remediation; (vi) no underground storage tanks exist
on the Property and the Property has never been used as a landfill; and (vii)
there have been no environmental investigations, studies, audits, reviews or
other analyses conducted by or on behalf of Borrower or any Guarantor and within
Borrower’s or any Guarantor’s possession which have not been provided to Lender.

SECTION 3.13. Governmental Approval. No registration with or consent or approval
of, or other action by, any Federal, State or other governmental authority or
regulatory body is required in connection with the execution, delivery and
performance of the Loan Documents or the borrowings hereunder, except any such
registrations, consents or approvals obtain on or prior to the date hereof or
necessary to perfect Lender’s security interest granted under any of the Loan
Documents.
 
 
 
 
 
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SECTION 3.14. Indebtedness.   No Indebtedness of Borrower or Guarantor shall
remain outstanding after the Closing Date, except as set forth on
Schedule 6.01 attached hereto.
 
SECTION 3.15. Full Disclosure. All written information heretofore furnished by
the Borrower and any Guarantor to the Lender for purposes of or in connection
with this Agreement is, and all such information hereafter to be furnished by
the Borrower and any Guarantor to the Lender will, to the best of Borrower’s and
Guarantor’s knowledge, be true and accurate in all material respects on the date
as of which such information is Stated or certified. The Borrower and each
Guarantor have disclosed to the Lender in writing any and all facts which, in
the reasonable judgment of the Borrower and Guarantor, has or would be
reasonably likely to cause a Material Adverse Effect.

SECTION 3.16. Borrower Collateral. Except for the Permitted Liens, Borrower has,
or will have, when acquired by it, good and marketable title to the Borrower
Collateral free from any adverse liens, security interests or encumbrances, and
no financing statements covering all or any part of the Borrower Collateral are
on file in the office of the Secretary of the State of the State of Delaware.

SECTION 3.17. Binding Effect. This Agreement and each other Loan Document to
which the Borrower is a party constitutes the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.

SECTION 3.18.  Equipment/Inventory.  The list of Equipment attached hereto as
Exhibit B is hereby certified as a true and correct as of the date hereof. The
book value of the Equipment and the Inventory listed on the balance sheet as of
March 31, 2014 is accurate and complete as of such date in all material
respects, is current and saleable in the ordinary course of Borrower’s business
and has not been subject to any material change since the date thereof other
than for ordinary and customary changes consistent with Borrower’s ordinary
business.

 
IV.
CONDITIONS OF THE TERM LOAN

 
The willingness of the Lender to make the Term Loan hereunder is subject to  the
following conditions precedent:

SECTION 4.01. Representations and Warranties; No Default. As of the Closing
Date, the representations and warranties set forth in Article III hereof shall
be true and correct in all material respects.

 
SECTION 4.02. Organizational Documents. As applicable, on or prior to the
Closing Date, the Lender shall have received a certified copy of the filing
receipt, articles of incorporation and bylaws of the Borrower and each
Guarantor, together with evidence of the consent of the board of directors of
the Borrower and each Guarantor to execute this Agreement and the other Loan
Documents

SECTION 4.03. Opinion of Counsel. On or prior to the Closing Date, the Lender
shall have received a legal opinion of Borrower’s Counsel reasonably acceptable
to Lender and Lender’s Counsel.

SECTION 4.04. Guaranty of Payment. On or prior to the Closing Date, the Lender
shall have received from each Guarantor a guaranty of payment substantially in
the form of Exhibit C, attached hereto.

SECTION 4.05. Mortgage On or prior to the Closing Date, the Lender shall have
received the Mortgage in the form attached hereto as Exhibit D with respect to
the Property.

 
SECTION 4.06. Security Interest in the Borrower Collateral. On or prior to the
Closing Date, the Lender shall have received a perfected first priority security
interest under the Uniform Commercial Code in the Borrower Collateral (subject
to Permitted Liens).

SECTION 4.07. Origination Fee. On or prior to the Closing Date, the Lender shall
have received the amount of three (3%) of the Loan (Sixty-Seven Thousand Five
Hundred and 00/100 Dollars ($67,500.00)) from the Borrower, which amount shall
represent an origination fee due to Lender with respect to the Loan.

SECTION 4.08.                           Utica Agreements.  On or prior to the
Closing Date, the Lender shall have received the Intercreditor and Subordination
Agreement and the Mortgagee’s Disclaimer and Consent, each in the form attached
hereto as Exhibit E.

 
 
 
 
 
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V.
AFFIRMATIVE COVENANTS

The Borrower covenants and agrees with the Lender that, so long as this
Agreement shall remain in effect or any of the principal of or interest on the
Note shall remain unpaid, it will comply with the following:

SECTION 5.01  Insurance.  Borrower shall maintain, at all times:

 
(a)           Insurance on its properties against loss by fire and all available
extended coverage risks in such amounts and with such insurers as may be
reasonably satisfactory to Lender, which insurance shall by the terms of the
policy provide that (x) in the event of loss or damage, if any, the proceeds
thereof shall be payable to Lender, as the holder of a security interest,
mortgage or other lien or interest in the personal or real property of Borrower
insured under the policy as Lender’s interest may appear; (y) the insurance, as
to the interest of Lender, shall not be invalidated by any act or neglect of
Borrower, its directors, officers, agents or employees, by any
foreclosures,  or  other  proceeding,  or notice of sale relating to said
property or any of it; by any change in the title or ownership of the property,
or any of it; or by the occupation of the premises where the property, or any of
it, is located for purposes more hazardous than are permitted by the policy; and
(z) if the policy is cancelled, for whatever reason, the insurance shall
continue in full force and effect for the benefit of Lender for not less than
thirty (30) days after written notice of cancellation to Lender from the insurer
which notice the insurer shall agree to give to Lender. Borrower shall cause the
insurer to supply the Lender certificates, or other evidence of the insurance
reasonably satisfactory to Lender, indicating compliance with the foregoing,
including evidence of continuation thereof not later than thirty (30) days prior
to the expiration of any policy of insurance. Lender shall have the right to
apply the proceeds of any such insurance in reduction of the Obligations,
whether or not then due and payable, in such manner as Lender in its sole
discretion may determine or to pay over, at such times and in such amounts, such
proceeds or part thereof, as Lender in its sole discretion may determine, to
Borrower for the purpose of replacing the Borrower Collateral affected by any
loss relating thereto. Notwithstanding the above, the Lender shall allow
Borrower to use the insurance proceeds for the restoration or replacement of the
Borrower Collateral provided that (i) the proceeds total less than $50,000.00
for any single event of loss, or (ii) Lender shall reasonably determine that (a)
the restoration or replacement of the Borrower Collateral can be completed prior
to the Maturity Date, (b) that the insurance proceeds will be sufficient to
complete the restoration or, if the amount of the insurance proceeds will be
insufficient to restore or replace the Borrower Collateral, Borrower deposits
with Lender an amount equal to the difference between Lender’s estimated costs
of such restoration or replacement and the amount of the insurance proceeds, and
(c) the Borrower Collateral will be restored or replaced such that the fair
market value (as reasonably determined by Lender) of the Borrower Collateral
shall be at least equal to the pre-casualty value. Such insurance maintained by
Borrower shall include, without limitation, insurance coverage on Borrower
Collateral in the possession of Lender or its agent or contractor. Borrower and
any other obligor by becoming bound by the Obligations, hereby indemnifies
Lender against any loss  or damage to Borrower Collateral not insured by
Borrower and for any deficiency in any effective insurance coverage required to
be maintained by Borrower pursuant to this section, which indemnification
obligation shall constitute part of the Obligations; and

(b)           General public liability insurance against claims for personal
injury, death or property damage in such amounts as are reasonably satisfactory
to Lender and, in the case of Borrower, Worker’s Compensation insurance in
statutory  amounts  with companies licensed to do business in the states in
which the Borrower operates.

(c)           In the event the Borrower shall fail to maintain insurance
coverage satisfactory to the Lender, the Lender may obtain such insurance at
the  Borrower’s expense and such expense shall be added to the unpaid principal
balance of the Term Loan. The Borrower shall also furnish to the Lender,
promptly following the Borrower’s receipt thereof (i) copies of all insurance
policies, including title insurance, affecting the Property and (ii) the
original or copy of all recorded documents affecting the Property.

SECTION 5.02. Preservation of Borrower Collateral. Borrower shall  maintain  and
preserve the Borrower Collateral in good repair, working order and condition,
reasonable wear and tear excepted, and make all needed and commercially
reasonable repairs, renewals, replacements, additions or improvements thereto
and immediately notify Lender of any event causing loss or depreciation in the
value of the Borrower Collateral and the amount of such loss or depreciation to
the extent any such loss or depreciation could reasonably be expected to cause a
Material Adverse Effect;

SECTION 5.03. Defense of Borrower Collateral. Borrower shall use commercially
reasonable efforts to defend the Borrower Collateral against all claims
and  demands  of  all persons at any time claiming the same or any interest
therein and, in the event Lender’s security interest in the Borrower Collateral,
or any part thereof, would be impaired by  an  adverse decision, allow Lender to
contest or defend any such claim or demand in Borrower’s name and pay, upon
demand, Lender’s reasonable costs, charges and expenses, including, but not
limited to, attorneys’ fees, incurred by Lender in connection therewith.

SECTION 5.04. Books and Records. The Borrower shall maintain adequate books,
accounts and records in accordance with good accounting standards and practice.
The Lender shall have the right, upon reasonable prior written notice, to
examine such books and records (provided that such right shall not be exercised
by Lender more than twice each calendar year absent the occurrence of a Material
Adverse Effect or an Event of Default.

SECTION 5.05. Cash Covenant. Borrower shall on the dates set forth in
Schedule 5.05 hereto, have cash on hand not less than the amounts set forth in
such Schedule 5.05.

 
SECTION 5.06. Financial Statements, Reports. As applicable, the Borrower shall
furnish or cause to be furnished to Lender the following: (i) on or before July
30th of each year for the fiscal year most recently ended, the annual financial
statements with respect to Borrower and Guarantor and the Property showing
Borrower’s and Guarantor’s balance sheet and income and expense statement and
the annual rent roll, other income, and the detailed operating expenses of the
Property, prepared by Guarantor’s chief financial officer or its designee in
accordance with generally accepted accounting principles consistently applied;
(ii) within forty-five (45) days after the end of each fiscal quarter of
Borrower, the balance sheet and income and expense statement for the fiscal
quarter most recently ended with respect to Borrower and Guarantor and the
Property in such detail as Lender may reasonably require; (iii) for 2013 and all
subsequent years, as soon as available and not later than thirty (30) days after
the due date thereof, copies of all federal and State returns of: (1) Borrower
if Borrower files its own tax returns or (2) the entity in whose tax returns
Borrower is included for tax reporting purposes,  in  either  case together with
all supporting schedules; (iv) for 2014 and all subsequent years, as  soon  as
available and not later than 30 days after the due date thereof, copies of all
federal and State tax returns filed by Guarantor, together with all supporting
schedules; (v) such other information as to Borrower, the Guarantor and the
Property as Lender may reasonably require from time to time, all in such form
and detail as Lender may require; and (vi) such financial and other information
with respect to tenants and prospective tenants of any part of the Property as
Lender may reasonably require from time to time as available to Borrower and
Guarantor. Borrower shall be deemed to have satisfied the financial delivery
requirements of subsections (i) and (ii) herein above if Guarantor’s annual
report on Form 10-K or quarterly reports on Form 10-Q, as applicable, prepared
in accordance with the rules of the Securities and Exchange Commission, have
been posted to EDGAR within the foregoing time frames, and Borrower has notified
Lender that such report is available through EDGAR.
 
 
 

 
 
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SECTION 5.07. Taxes. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrower
or Guarantor or any of their assets to be paid in full, before delinquency or
before the expiration of  any extension period, except to the extent that the
validity of such assessment or tax shall be the subject of a Permitted Protest.
Subject to Permitted Protests, Borrower will  make timely payment or deposit of
all  tax payments and withholding taxes required of it and them by applicable
laws, including those laws concerning F.I.C.A., F.U.T.A., State disability, and
local, State, and federal income taxes, and will, upon request, furnish Lender
with proof satisfactory to Lender indicating that Borrower has made such
payments or deposits.

SECTION 5.08. Location of Borrower Collateral. Keep the Borrower Collateral only
at the Property, the locations identified on Schedule 5.08(a), or at the Lender,
and maintain the chief executive offices of Borrower only at the locations
identified on Schedule 5.08(b); provided, however, that Borrower may amend
Schedule 5.08(a) and Schedule 5.08(b) so long as such amendment occurs by
written notice to Lender not less than 30 days prior to the date on which such
Borrower Collateral is moved to such new location or such chief executive office
is relocated, so long as such new location is within the continental United
States, and so long as, at the time of such written notification, Borrower
provides to Lender a Collateral Access Agreement with respect thereto.

SECTION 5.09. Compliance with Laws. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

SECTION 5.10. Leases. Pay when due all rents and other amounts payable under any
leases to which Borrower or Guarantor is a party or by which Borrower’s  or
Guarantor’s properties and assets are bound, unless such payments are the
subject of a Permitted Protest.

SECTION 5.11. Tax and Insurance Deposits. To the extent required by the
Mortgage, Borrower shall make or shall cause Guarantor to make deposits to pay
the Impositions and insurance premiums, and such amounts shall be held and
applied by Lender, in accordance with the terms of the Mortgage.

SECTION 5.12.  Intentionally Omitted.

SECTION 5.13. Laborers, Subcontractors and Materialmen. The Borrower will
furnish to the Lender, upon request of the Lender at any time, and from time to
time, affidavits listing all laborers, subcontractors, materialmen, and any
other Persons who might or could claim statutory or common law liens and are
furnishing or have furnished labor or material to the Property or any part
thereof on behalf of Borrower or Guarantor, together with affidavits, or other
evidence satisfactory to the Lender, showing that such parties have been paid
all amounts then due for labor and materials furnished to the Property.
Following payment in full to each applicable party, the Borrower will also use
reasonable efforts to furnish to the Lender, at any time and from time to time
upon demand by the Lender, lien waivers bearing a then current date and prepared
on a form satisfactory to the Lender from the contractors, subcontractors or
materialmen as the Lender may reasonably require.
 
 
 
 
 
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SECTION 5.14. Further Assurances. The Borrower will cooperate with, and will do
such further acts and execute such further instruments and documents as the
Lender shall reasonably request, to preserve and protect the Collateral and to
carry out to its satisfaction the transactions contemplated by this Agreement
and the other Loan Documents.
 
SECTION 5.15.  Loss of Priority. If this Agreement or any other Loan Document
that purports to create a Lien, shall, for any reason, fail or cease to create a
valid and perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien on or security interest in the Borrower Collateral
covered hereby or thereby, except as a result of a disposition of the applicable
Borrower Collateral in a transaction permitted under this Agreement, then
Borrower shall promptly repay all of the Obligations in full.

 
VI.
NEGATIVE COVENANTS

Borrower covenants and agrees that, so long as any credit hereunder shall be
available and until termination of this Agreement and payment in full of the
Obligations, Borrower will not and will not permit Guarantor to do any of the
following without the prior written consent of Lender:

SECTION 6.01. Indebtedness. Create, incur, assume, suffer to exist, guarantee,
or otherwise become or remain, directly or indirectly, liable with respect to
any Indebtedness, except:

(a)           Indebtedness evidenced by this Agreement and the other Loan
Documents, and

(b)           Indebtedness  existing  on  the  Closing  Date  as  set  forth  on  Schedule  6.01(b)
(including any extensions or renewals thereof).
 
(c)   Endorsement of instruments or other payment items for deposit.

SECTION 6.02. Loss of Priority Subject to the Permitted Liens, fail or cease to
create a valid and perfected Lien (subject to Permitted Liens) on or security
interest in the Borrower Collateral covered hereby or thereby, except as a
result of a disposition of the applicable Borrower Collateral in a transaction
permitted under this Agreement.

 
SECTION 6.03. Liens.  Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.
 
SECTION 6.04.  Restrictions on Fundamental Changes.

 
(a)         Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock.
 
(b)         Liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution).
 
(c)         Convey, pledge, hypothecate, sell, lease, license, assign, transfer,
or otherwise dispose of, in one transaction or a series of transactions, all or
any substantial part of the Borrower Collateral, other than Permitted
Dispositions.
 
 
 
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SECTION 6.05. Disposal of Assets. Other than Permitted Dispositions, convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of Borrower
Collateral.

SECTION 6.06. Change Name. Change Borrower’s or Guarantor’s name, federal
employer identification number, organizational identification number, State of
organization or organizational identity; provided, however,  that Borrower
and/or Guarantor may change its name upon at least thirty (30) days’ prior
written notice to Lender of such change and so long as, at the time of such
written notification, Borrower and/or Guarantor provides any financing
statements necessary to perfect and continue perfected the Lender’s Liens.

SECTION 6.07. Nature of Business. Make any change in the principal nature of its
or their business.

 
SECTION 6.08. Prepayments and Amendments. Except in connection  with  the
Permitted Payments provided in Section 6.10, optionally prepay, redeem, defease,
purchase, or otherwise acquire any Indebtedness of Borrower, other than the
Obligations in accordance with this Agreement.

SECTION 6.09. Change of Control. Cause, permit, or suffer, directly or
indirectly, any change of Control of Borrower.

SECTION 6.10. Restricted Payments. Make any Restricted  Payment;  provided,
however, that, so long as no default or Event of Default shall have occurred and
be continuing or would occur as a result thereof and Lender shall have received
the financial statements required by Section 5.06, then Borrower may pay
quarterly dividends to Guarantor in an amount not to exceed $750,000 provided
Guarantor uses such dividends solely to fund Guarantor’s  operating budget.

SECTION 6.11. Accounting Methods. Modify or change its fiscal year or its method
of accounting (other than as may be required to conform to GAAP) or enter into,
modify, or terminate any agreement currently existing, or at any time hereafter
entered into with any third party accounting firm or service bureau for the
preparation or storage of Borrower’s or Guarantor’s accounting records  without
said accounting firm or service bureau agreeing to provide Lender information
regarding Borrower’s or Guarantor’s financial condition.
 
SECTION 6.12.  Investments.  Directly or indirectly, make or acquire any
Investment or incur any liabilities (including contingent obligations) for or in
connection with any Investment.

SECTION 6.13. Transactions with Affiliates. (a) Sell, lease, assign, transfer,
convey, license or otherwise dispose of any of Borrower’s property to any
Affiliate or (b) directly or indirectly enter into or permit to exist any other
transaction with any Affiliate of Borrower except for transactions that (i) are
in the ordinary course of Borrower’s business, (ii) are upon fair and reasonable
terms, (iii) are fully disclosed to Lender, and (iv) are no less favorable to
Borrower than would be obtained in an arm’s length transaction with a
non-Affiliate.
 
 
 
 
 
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SECTION 6.14. Change of Business. Suspend or change a substantial portion of its
or their business.

SECTION 6.15. Use of Proceeds. Use the proceeds of the Term Loan for any purpose
other than on the Closing Date, to pay transactional fees, costs and expenses
incurred in connection with this Agreement and, the other Loan Documents for the
purposes set forth in Section 2.09, and the transactions contemplated hereby and
thereby.

SECTION 6.16. Borrower Collateral with Bailees. Store any Borrower Collateral at
any time now or hereafter with a bailee, warehouseman, or similar party, other
than a custodian for the benefit of Lender.

SECTION 6.17. Borrower’s Actions with Guarantor; Correction Statements. Neither
Borrower nor Guarantor shall file a correction statement relating to the
Borrower Collateral or to any financing statement or fixture filing filed by
Lender without Lender’s prior written consent. Borrower and the Borrower
Subsidiaries acknowledge and agree that any pledge, mortgage or any security
interest, lien or other encumbrance in any of the Borrower Collateral in favor
of any person, other than Lender or as otherwise permitted under this Agreement,
without Lender’s express permission, will  violate the rights of Lender and
Lender may note this fact on any financings statement, fixture filing or other
record filed by Lender.

 
VII.
CREATION OF SECURITY INTEREST.

SECTION 7.01. Grant of Security Interest. Subject to the Permitted Liens,
Borrower hereby grants  to Lender, for the benefit of Lender, a continuing
security interest  in all of Borrower’s right, title, and interest in all
currently existing and hereafter acquired or arising: (i) Borrower Note A
Collateral in order to secure prompt repayment of any and all of the Obligations
under Note A; and (ii) Borrower Note B Collateral in order to secure prompt
repayment of any and all Obligations under Note B, in accordance with the terms
and conditions of the Loan Documents and in order to secure prompt performance
by Borrower of each of its covenants and duties under the Loan Documents. The
Lender’s Liens in and to the Borrower Note A Collateral shall attach to all
Borrower Note A Collateral without further act on the part of Lender or
Borrower. The Lender’s Lien in and to the Borrower Note B Collateral shall
attach to all Borrower Note B Collateral without further act on the part of
Lender or Borrower. Except as permitted by this Agreement or any other Loan
Document,  neither Borrower nor the Guarantor has authority, express or implied,
to dispose of any item or portion of the Borrower Note A Collateral or the
Borrower Note B Collateral other than Permitted Dispositions

SECTION 7.02. Negotiable Collateral. In the event that any Borrower Note A
Collateral and/or any Borrower Note B Collateral, including proceeds, is
evidenced by or consists of Negotiable Collateral, and if and to the extent that
Lender determines that perfection or priority of Lender’s security interest is
dependent on or enhanced by possession, Borrower, promptly upon the request of
Lender, shall endorse and deliver physical possession of such Negotiable
Collateral and all agreements and documents related thereto to Lender, provided
such Negotiable Collateral is not being held by another secured party as
otherwise permitted under this Agreement.
 
 
 
 
 
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SECTION 7.03.
Collection of Accounts, General Intangibles, and Negotiable Collateral. At any
time after the occurrence and during the continuation of an Event of Default,
Lender or Lender’s designee may (a) notify Account Debtors of Borrower that
Borrower’s Accounts, chattel paper, or General Intangibles have been assigned to
Lender or that Lender has a security interest therein, (b) cause a servicer to
take possession of, and collect, Borrower’s Accounts, or (c) collect Borrower’s
Accounts, chattel paper, or General Intangibles directly and charge the
collection costs and expenses to the balance of the Term Loan. At any time after
the occurrence and during the continuation of an Event of Default, Borrower
agrees that it will hold in trust for Lender, as Lender’s trustee, any of its
Collections that it receives and immediately will deliver such Collections to
Lender in their original form as received by Borrower.

SECTION 7.04.
Filing of Financing Statements; Commercial Tort Claims; Delivery of
Additional Documentation Required. Borrower authorizes Lender to file any
financing statement necessary or desirable to effectuate the transactions
contemplated by the Loan Documents, and any continuation statement or amendment
with respect thereto, in any appropriate filing office without the signature of
Borrower where permitted by applicable law. Borrower hereby ratifies the filing
of any financing statement filed without the signature of Borrower prior to the
date hereof. At any time upon the request of Lender, Borrower shall execute or
deliver to Lender any and all fixture filings, security agreements, pledges,
assignments, endorsements of certificates of title, and all other documents
(collectively, the “Additional Documents”) that Lender may request in its
reasonable discretion, in form and substance satisfactory to Lender, to create,
perfect, and continue perfected or to better perfect the Lender’s Liens in the
Borrower Collateral (whether now owned or hereafter arising or acquired,
tangible or intangible, real or personal), to create and perfect Liens in favor
of Lender in any Borrower Collateral acquired after the Closing Date, and in
order to fully consummate all of the transactions contemplated hereby and under
the other Loan Documents. To the maximum extent permitted by applicable law,
Borrower authorizes Lender to file such executed Additional Documents in any
appropriate filing office.

SECTION 7.05. Power of Attorney.  Borrower hereby irrevocably makes,
constitutes, and appoints Lender (and any of Lender’s officers, employees, or
agents designated by Lender) as Borrower’s true and lawful attorney, with power
to (a) if Borrower refuses to, or fails timely to execute and deliver any of the
documents described in Section 7.04, sign the name of Borrower on any of the
documents described in Section 7.04, (b) at any time that an Event of Default
has occurred and is continuing, sign Borrower’s name on any invoice or bill of
lading relating to the  Borrower  Collateral,  drafts against Account
Debtors,  or  notices to Account Debtors, (c) at any time that a Material
Adverse Effect or an Event of Default has occurred and is continuing, send
requests (or make telephone inquiry) for verification of Borrower’s Accounts,
(d) at any time that an Event of Default has occurred and is continuing, endorse
Borrower’s name on any of its payment items (including all of its Collections)
that may come into Lender’s possession, (e) at any time that an Event of Default
has occurred and is continuing, make, settle, and adjust all claims under
Borrower’s policies of insurance and make all determinations and decisions with
respect to such policies of insurance, and (f) at any time that an Event of
Default has occurred and is continuing, settle and adjust disputes and claims
respecting Borrower’s Accounts, chattel paper, or General Intangibles directly
with Account Debtors, for amounts and upon terms that Lender determines to be
reasonable, in Lender’s discretion, and Lender may cause to be executed and
delivered any documents and releases that Lender determines to be necessary. The
appointment of Lender as Borrower’s attorney, and each and every one of its
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully and finally repaid and performed and Lender’s
obligations to extend credit hereunder are terminated.
 
 
 
 
 
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SECTION 7.06. Right to Inspect and Verify. Lender (through any of its officers,
employees, or agents) shall have the right, from time to time hereafter (i) to
inspect the Books and make copies or abstracts thereof, during normal business
hours, (ii) upon reasonable prior written notice to Borrower not more than once
each calendar year absent the occurrence of a Material Adverse Effect or an
Event of Default, (iii) at any time that a Material Adverse Effect or an Event
of Default has occurred and is continuing, to communicate directly with any and
all Account Debtors to verify the existence and terms thereof, (iv) at any time
that a Material Adverse Effect or Event of Default has occurred and is
continuing, to check, test, and appraise the Borrower Collateral, or any portion
thereof, in order to verify Borrower’s financial condition or the amount,
quality, value, condition of, or any other matter relating to, the Borrower
Collateral; and (v) at any time that a Material Adverse Effect or an Event of
Default has occurred and is continuing, Borrower shall permit any designated
representative of Lender to visit and inspect any of the properties of the
Borrower to inspect and to discuss its finances and properties and Borrower
Collateral, upon reasonable notice and at such reasonable times during normal
business hours and as often as may be reasonably requested.
 

 
VIII.
EVENTS OF DEFAULT.

SECTION  8.01. Events of Default. Any one or more of the following events shall
constitute an event of default (each, an “Event of Default”) under this
Agreement:

 
(a)           If Borrower fails to pay when due and payable, or when declared
due and payable, all or any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due Lender,
reimbursement of Lender Expenses, or other amounts constituting Obligations);

(b)           If Borrower fails to (a) perform, keep, or observe any covenant or
other provision contained in Sections 5.04, 5.06, 5.07, 5.08 or 5.09 hereof and
such failure continues for fifteen (15) days after written notice from Lender,
(b) perform, keep, or observe any covenant or other provision contained in any
Section of this Agreement (other than a Section that is expressly dealt with
elsewhere in this Section 8.01), or the other Loan Documents, and such failure
continues for fifteen (15) days after written notice from Lender, or (c)
perform, keep, or observe any covenant or other provision contained in Section 5
(other than a subsection of Section 5 that is expressly dealt with elsewhere in
this Section 8.01), or Section 6 of this Agreement or any comparable provision
contained in any of the other Loan Documents;

(c)           If any material portion of Borrower’s assets or the Guarantor’s
assets is attached, seized, subjected to a writ or distress warrant, levied
upon, or comes into the possession of any third Person and such failure
continues for fifteen (15) days after written notice from Lender;
 
(d)           If a Bankruptcy Proceeding is commenced by Borrower or any
Guarantor;

(e)           If a Bankruptcy Proceeding is commenced against the Borrower or
Guarantor, and any of the following events occur: (a) the Borrower, or any
Guarantor consents to the institution of such Bankruptcy Proceeding against it,
(b) the petition commencing the Bankruptcy Proceeding is not timely
controverted; provided, however, that, during the pendency of such period,
Lender shall be relieved of its obligations to extend credit hereunder, (c) the
petition commencing the Bankruptcy Proceeding is not dismissed within 45
calendar days of the date of the filing thereof; provided, however, that, during
the pendency of such period, Lender shall be relieved of its obligation to
extend credit hereunder, (d) an interim trustee is appointed to take possession
of all or any substantial portion of the properties or assets of, or to operate
all or any substantial portion of the business of the Borrower or any Guarantor,
or (e) an order for relief shall have been entered therein;

(f)           If Borrower or any Guarantor is enjoined, restrained, or in any
way prevented by court order from continuing to conduct all or any material part
of its business affairs and such event continues for twenty (20) days after
written notice from Lender;

(g)           If a notice of Lien, levy, or assessment is filed of record with
respect to any of Borrower’s or any Guarantor’s assets by the United States, or
any department, agency, or instrumentality thereof, or by any State, county,
municipal, or governmental agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a Lien, whether choate or
otherwise, upon any of Borrower’s or any Guarantor’s assets and the same is not
paid before such payment is delinquent, and such event continues for twenty (20)
days after written notice from Lender without being discharged, satisfied,
vacated or bonded;
 
 
 
 
 
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(h)            Judgment or other claim in an amount in excess of $5,000.00
becomes a Lien or encumbrance upon any material portion of Borrower’s or any
Guarantor’s assets or any Borrower Collateral, except for judgments and claims
disclosed to Lender, in writing, prior to the date hereof, and such event
continues for twenty (20) days after written notice from Lender without being
discharged, satisfied, vacated or bonded;

(i)           If there is a default with respect to any agreement relative to
Borrower’s Indebtedness, the termination of which is reasonably likely to result
in a Material Adverse Effect, and such default (a) occurs at the final maturity
of the obligations thereunder, or (b) results in a right by the other party
thereto, irrespective of whether exercised, to accelerate the maturity of
Borrower’s or such Guarantor’s obligations thereunder, to terminate such
agreement or to refuse to renew such agreement in accordance with an automatic
renewal right therein, and such event described in clause (a) or (b) continues
for twenty (20) days after written notice from Lender;
 
(j)           If Borrower makes any payment on account of Indebtedness, except
for payments under the Loan Documents and payments otherwise expressly permitted
under this Agreement, and such default is not cured within twenty (20) days
after written notice from Lender;

(k)           If any material misstatement or misrepresentation exists as of the
date when made or deemed made, in any warranty, representation, statement, or
Record made to Lender by Borrower any Guarantor or any officer, employee, agent,
or director of Borrower or any Guarantor;

(l)           If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof
including with regard to the Permitted Liens, first priority Lien on or security
interest in the Borrower Collateral covered hereby or thereby, except as a
result of a disposition of the applicable Borrower Collateral in a transaction
permitted under this Agreement, and such event continues for fifteen (15) days
after written notice from Lender;

 
(m)           Any provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by Borrower or any Guarantor, or a proceeding shall
be commenced by Borrower or any Guarantor, or by any Governmental Authority
having jurisdiction over Borrower seeking to establish the invalidity or
unenforceability thereof, or Borrower or Guarantor, shall deny that Borrower or
any Guarantor has any liability or obligation purported to be created under any
Loan Document;

(n)           If any Executive Officer of Borrower shall become unable to
perform, or cease to be employed in his current position with Borrower and shall
not be replaced within 90 days by an individual with comparable
education,  experience  and other  qualifications or  otherwise acceptable to
Lender in its sole discretion;

(o)           If Borrower is in default of the Utica Loan including under any of
the Utica Senior Debt Documents; or

(q)           If any default or event of default as defined or described in any
of the other Loan Documents occurs and is not cured within the applicable cure
period, if any.
 
 
 
 
 
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IX.
LENDER’S RIGHTS AND REMEDIES.

SECTION 9.01. Rights and Remedies. Upon the occurrence, and during the
continuation, of an Event of Default, the Lender (at its election but without
notice of its election and without demand) may do any one or more of the
following, all of which are authorized by the Borrower:

(a)           Declare all or any portion of the Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable without presentment, demand, protest, or notice of any kind, all
of which are expressly waived by Borrower;
 
(b)           Terminate this Agreement and any of the other Loan Documents as to
any future liability or obligation of Lender, but without affecting any of the
Lender’s Liens in the Borrower Collateral and without affecting the Obligations;

(c)           Without notice to or demand upon Borrower or any Guarantor, make
such payments and do such acts as Lender considers necessary or reasonable to
protect its security interests in the Borrower Collateral. Borrower agrees to
assemble the Borrower Collateral if Lender so requires, and to make the Borrower
Collateral available to Lender at a place that Lender may designate which is
reasonably convenient to both parties. Borrower authorizes Lender to enter the
premises where the Borrower Collateral is located, to take and maintain
possession of the Borrower Collateral, or any part of it, and to pay, purchase,
contest, or compromise any Lien that in Lender’s reasonable determination,
appears to conflict with the priority of Lender’s Liens in and to the Borrower
Collateral and to pay all reasonable expenses incurred in connection therewith
and to charge to the balance of the Term Loan. With respect to any of Borrower’s
owned or leased premises, Borrower hereby grants to Lender a license to enter
into possession of such premises and to occupy the same, without charge, in
order to exercise any of Lender’s rights or remedies provided herein, at law, in
equity, or otherwise;

(d)           Without notice to Borrower (such notice being expressly waived),
and without constituting an acceptance of any collateral in full or partial
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of Borrower held
by Lender, or (ii) Indebtedness at any time owing to or for the credit or the
account of Borrower held by Lender;
 
(e)   Terminate any commitment to lend hereunder; and
 
(f)              Lender shall have all other rights and remedies available at
law or in equity or pursuant to any other Loan Document.

The rights and remedies of Lender under this Agreement, the other Loan
Documents, and all other agreements shall be cumulative. Lender shall have all
other rights and remedies not inconsistent herewith as provided under the Code,
by law, or in equity. No exercise by Lender of one right or remedy shall be
deemed an election, and no waiver by Lender of any Event of Default shall be
deemed a continuing waiver. No delay by Lender shall constitute a waiver,
election, or acquiescence by it. In the event of an Event of Default which is
not cured within any applicable cure period, Borrower  agrees to cooperate with
Lender  to assemble and to liquidate the Borrower Collateral.
 

 
X.
MISCELLANEOUS

SECTION 10.01. Notices. All notices, requests and other communications provided
for hereunder shall  be in writing and shall  be deemed to have been duly given
or made when delivered by hand at the address set forth below, or if sent by
certified mail, three days after the day on which mailed, or, in the case of an
overnight courier service, one business day after delivery to such courier
service, addressed as set  forth below, or to such other address the respective
parties hereto may hereafter designate in writing:
 
 
 
 
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(a)
if to Lender, at
     
c/o Revere High Yield Fund, LP
105 Rowayton Avenue, Suite 100
 
Rowayton, CT 06853
Attention:  Clark Briner
     
with a copy to:
     
Mayo Crowe LLC
CityPlace II
 
185 Asylum Street
 
Hartford, Connecticut 06103
Attention:  Katherine F. Troy
   
(b)
if to the Borrower, in the name of Borrower at:
      Ranor, Inc.  
1 Bella Drive
 
Westminster, MA 01473
     
with a copy to:
     
William A. Scari, Jr.
  PepperHamilton LLP   400 Berwyn Park  
899 Cassatt /Road
 
Berwyn, PA 19312-1183
   
(c)
as to each such party at such other address as such party  shall have designated
to the other in a written notice complying as to delivery with the provisions of
this Section 10.01.

SECTION 10.02. Survival of Agreement; Successors and Assigns. (a) All covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by Lender of the Loan and the
execution and delivery to Lender of the Note, and shall continue in full force
and effect so long as any of the Note is outstanding and unpaid or such longer
period if expressly set forth in this Agreement.

(b) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party.
All covenants, promises and agreements by or on behalf of the Borrower which is
contained in this Agreement shall bind and inure to the benefit of the
respective successors and assigns of the Lender. No other Person shall be a
direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with this Agreement or any of the other Loan
Documents.  The Lender shall not have any obligation to any Person not a party
to this Agreement or the other Loan Documents including without limitation,
legal fees of Lender’s counsel, UCC insurance costs, UCC Search fees, filing
fees and the origination fee set forth in Section 4.09.
 
 
 
 
 
25

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SECTION 10.03.  Expenses of the Lender; Indemnification.

 
(a)     The Borrower will pay all reasonable out-of-pocket costs and expenses
incurred by the Lender in connection with the preparation, development and
execution of this Agreement and the other Loan Documents.

(b)      The Borrower agrees to indemnify the Lender and its respective
directors, officers, employees and agents against, and to hold the Lender and
each such person harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees and expenses, actually
incurred by or asserted against the Lender or any such person arising out of, in
any way connected  with, or  as a result of  (i) this Agreement or  the other
Loan Documents, (ii) the breach of any representation or warranty or (iii) any
claim, litigation, investigation or proceedings relating to any of the
foregoing, whether or not the Lender or any such person is a party thereto;
provided, however, that such indemnity shall not, as to the Lender, apply to any
such losses, claims, damages, liabilities or related expenses to the extent that
they result solely from the negligence or misconduct of the Lender.

(c)     The provisions of this Section 10.03 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of the Loan,
the invalidity or unenforceability of any term or provision of this Agreement or
any of the Loan Documents, or any investigation made by or on behalf of the
Lender. All amounts due under this Section 10.03 shall be payable on written
demand therefor.

SECTION 10.04. Applicable Law. This Agreement, the Note and the other Loan
Documents shall be governed and construed by and interpreted in accordance with
the laws of the  Commonwealth of Massachusetts, without regard to conflict of
law provisions thereof.

SECTION 10.05.  Waiver of Rights by the Lender; Waiver of Jury Trial, etc.

 
(a)           Neither any failure nor any delay on the part of the Lender in
exercising any right, power or privilege hereunder or under the Loan Documents
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any other right, power or
privilege. Except as prohibited by law, each party hereto hereby waives any
right it may have to claim or recover in any litigation referred to in this
Section any special, exemplary, punitive or consequential damages or any damages
other than, or in addition to, actual damages. Each party hereto (i) certifies
that neither any representative, agent or attorney of the Lender has
represented, expressly or otherwise, that the Lender would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii) acknowledges that it
has been induced to enter into this Agreement or the Loan Documents, as
applicable, by, among other things, the mutual waivers and certifications
herein.
 
(b)           THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM OR ACTION IN ANY WAY, INVOLVING OR ARISING, DIRECTLY OR INDIRECTLY, OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
 
 
 
 
 
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SECTION 10.06.  Acknowledgments. The Borrower acknowledges that:

 
(a)           it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, the Note and the other Loan Documents;

(b)           the Lender does not have any fiduciary relationship with the
Borrower and the relationship between the Lender, on one hand, and the Borrower,
on the other hand, is solely that of debtor and creditor; and
 
(c)           no joint venture exists between the Borrower and the Lender.

SECTION 10.07.  Consent to Jurisdiction. (a)  The Borrower hereby irrevocably
submits to the non-exclusive jurisdiction of any United States federal or
Massachusetts State court in any action or proceedings arising out of or
relating to any Loan Documents and the Borrower hereby irrevocably agrees that
all claims in respect of such action or proceeding may be heard and determined
in any such court and irrevocably waives any objection it may now or hereafter
have as to the venue of any such action or proceeding brought in such a court or
the fact that such court is an inconvenient forum.

(b)      The Borrower irrevocably and unconditionally consents to the service or
process in any such action or proceeding in any of the aforesaid courts by the
mailing of copies of such process to them by certified or registered mail at its
address specified in Subsection 10.01.

SECTION 10.08. Extension of Maturity. Except as otherwise expressly provided
herein, whenever a payment to be made hereunder shall fall due and payable on
any day other than a Business Day, such payment may be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest.

SECTION 10.09. Modification of Agreement. No modification, amendment or waiver
of any provision of this Agreement or the Note shall in any event be effective
unless the same shall be in writing and signed by the Lender and the Borrower
and then such waiver, amendment or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on
the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in the same, similar or other circumstance.

SECTION 10.10. Participations and Assignments. The  Borrower may not assign or
transfer any of its interests under this Agreement, the Note or the Loan
Documents without the prior written consent of the Lender.
 
 
 
 
 
27

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SECTION 10.11. Reinstatement; Certain Payments. If a claim is ever made upon the
Lender for repayment or recovery of any amount or amounts received by the Lender
in payment or on account of any of the obligations under this Agreement, the
Lender shall give prompt notice of such claim to the Borrower, and if the Lender
repays all or part of said amount by reason of (i) any judgment, decree or order
of any court or administrative body having jurisdiction over the Lender or any
of its property, or (ii) any settlement or compromise of any such claim effected
by the Lender with any such claimant, entered into after consultation with
Borrower, then and in such event the Borrower agrees that any such judgment,
decree, order, settlement or compromise shall be binding upon such Borrower
notwithstanding the cancellation of the Note or other instrument evidencing the
obligations under this Agreement or the termination of this Agreement, and the
Borrower shall be and remain liable to the Lender hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by the Lender.

SECTION 10.12. Right of Setoff. In addition to any rights and remedies of the
Lender provided by law, the Lender is hereby authorized, following and during
the continuance of an Event of Default, to the fullest extent permitted by law,
to set off and apply any monies held by the Lender to or for the credit or the
account of the Borrower against any and all of  the obligations of the Borrower
now and hereafter existing under this Agreement, the Note or the other Loan
Documents held by the Lender, irrespective of whether or not the Lender shall
have made any demand under this Agreement, the Note or the other Loan Documents
and although such obligations may be in any currency, direct or indirect,
absolute or contingent, matured or unmatured. The Lender agrees to promptly
notify the Borrower after any such setoff and application made by the Lender,
but the failure to give such notice shall not affect the validity of such setoff
and application. The rights of the Lender under this Section are in addition to
other rights and remedies which the Lender may have.
 
SECTION 10.13. Severability. In case any one or more of the provisions contained
in this Agreement or in the Note should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby.

SECTION 10.14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.

SECTION 10.15.  Entire Agreement; Cumulative Remedies.

 
(a)           This Agreement, the Note and the other Loan Documents constitute
the entire agreement among the parties hereto and thereto as to the subject
matter hereof and thereof and supersede any previous agreement, oral or written,
as to such subject matter.

(b)           The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
 
SECTION 10.16. Headings. Section headings used herein are for convenience  of
reference only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.

SECTION 10.17. Exhibits and Schedules.  Exhibits A-1, A-2, B, C and D and
Schedules P, 5.05, 5.08(a), and 5.08(b) shall constitute an integral part of
this Agreement.

SECTION 10.18.  Intentionally Omitted.

 
SECTION 10.19. Cross Default and Cross Collateral. In furtherance of prior
provisions hereof, Borrower, each Guarantor and the mortgagor under the
Mortgage, agree and acknowledge that the occurrence of an Event of Default under
the terms of this Agreement shall constitute an Event of Default under the Note,
the Mortgage, and the other Loan Documents and under the documents evidencing
any other loan now existing or hereafter made by Lender to Borrower which is
secured by all or any portion of the Borrower Collateral, including without
limitation, the Property.  The security interests, liens and other rights and
interests in and relative to any of the Borrower Collateral now or hereafter
granted to Lender by Borrower by or in any instrument or agreement, including
but not limited to this Agreement and the other Loan Documents shall serve as
security for any and all liabilities of Borrower to Lender, including but not
limited to the liabilities described in this Agreement, the Note, the Mortgage,
and the other Loan Documents and, for the repayment thereof, Lender may resort
to any security held by it in such order and manner as it may elect

 
 
 
[Remainder of Page Intentionally Left Blank; Signature Page to Follow]

 
 
 
28

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IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement to be
duly executed by their duly authorized officers, all of the day and year first
above written.
 

     
LENDER:
             
REVERE HIGH YIELD FUND, LP,
     
a Delaware limited partnership
             
By:  Revere GP, LLC, its General Partner
             
By:  /s/ Clark Briner
     
    Name:  Clark Briner
     
    Title:  Manager
                       
STATE OF CONNECTICUT     
 )  
 
   )
ss: Westport
 
COUNTY OF FAIRFIELD      
 )  
 

 
On this the 19th day of December, 2014, before me, the undersigned officer,
personally appeared Clark Briner who acknowledged himself to be the Manager of
Revere GP, LLC, the General Partner of REVERE HIGH YIELD FUND, LP, and that he,
in such capacity, being authorized so to do, executed the foregoing instrument
for the purposes therein contained on behalf of such entity, as his and its free
act and deed.
 

IN WITNESS WHEREOF, I hereunto set my hand.
 

  /s/ Richard L. Morin Sr.  
Notary Public
 
My Commission Expires:

 
 

[Signature Page to Term Loan and Security Agreement]
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 

     
BORROWER:
             
RANOR, INC.,
     
a Delaware corporation
           
By:
/s/ Alexander Shen      
Name: Alexander Shen
     
Title: President
       
THE COMMONWEALTH OF MASSACHUSETTS
§
 
 
 
§ss.
   
COUNTY OF WORCESTER
§
 
 
       

 
 
On  this 19th day of December, 2014, personally appeared Alexander Shen,
President of RANOR, INC., signer and sealer of the foregoing instrument, and
acknowledged the same to be his free act and deed in his capacity as President,
and the free act and deed of RANOR, INC., before me.

  /s/ Richard L. Morin Sr.  
Name: Richard L. Morin Sr.
 
Notary Public,
 
My Commission Expires:
   

 

 
[Signature Page to Term Loan and Security Agreement - continued]
 
 
 
 
 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT A-1 & A-2
 
TERM NOTES
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit A-1 to Term Loan and Security Agreement
 

 
TERM NOTE
 
 

$1,500,000.00 December          , 2014        

 
FOR VALUE RECEIVED, the undersigned, RANOR, INC., a Delaware corporation with an
address of Bella Drive, Westminster, Massachusetts 01473 (the "Borrower"), DOES
HEREBY PROMISE to pay to the order of REVERE HIGH YIELD FUND, LP, a Delaware
limited partnership (the "Lender"), at the office of the Lender at 105 Rowayton
Avenue, Suite 100, Rowayton, Connecticut 06853, in lawful money of the United
States of America, in immediately available funds, the maximum principal amount
of ONE MILLION FIVE HUNDRED THOUSAND 00/100 DOLLARS ($1,500,000.00) or so much
thereof as may be advanced to Borrower pursuant to this Term Note and the
Agreement (as hereinafter  defined)  payable  as follows: (i) payments of
interest only on advanced principal on the first day of each month (a
“Payment Date”), commencing on February 1, 2015 until and including the Payment
Date immediately prior to the Maturity Date; and (ii) a balloon payment of the
advanced principal balance plus any accrued and unpaid interest on the Maturity
Date of December 31, 2015, provided, however, that Borrower may elect to extend
the Maturity Date for a period of six (6) months to June 30, 2016 conditioned
upon  Borrower providing to Lender, on or before the date which is sixty (60)
days prior to the initial Maturity Date but no more than ninety (90) days prior
to the initial Maturity Date: (a) written notice to Lender of its election to so
extend, and (b) payment to Lender of an extension fee in the amount of Fifteen
Thousand and No/100  Dollars  ($15,000.00). Interest hereunder shall accrue from
the date hereof on the unpaid principal amount hereof at a rate equal to twelve
percent (12%) per annum on the basis of the actual days elapsed on the
assumption that each month contains thirty (30) days and each  year contains
three hundred sixty (360) days, multiplied by the actual number of days elapsed,
in like money, at said office, as more specifically set forth in Article II of
that certain Term Loan and Security Agreement dated as of the date hereof (the
“Agreement”) and, upon a default, at a rate of the lesser of: (A) twenty-four
percent (24%) per annum, or (B) the highest rate of interest permitted under the
laws of the Commonwealth of Massachusetts.

This Term Note is given to evidence an actual loan (the “Loan”) in the maximum
principal amount of $1,500,000.00, and is the Term Note referred to as “Note A”
in Section 2.02 of the Agreement, and is subject to prepayment and acceleration
of maturity as set forth in the Agreement. This Term Note is secured by, among
other things, that certain Mortgage Deed, Assignment of Leases and Rents,
Security Agreement  and Fixture Filing from Borrower in favor of Lender,
Guaranty of Guarantor and Financing Statement from Borrower in favor of Lender
(the “Security Instrument”). All terms defined in the Agreement are used herein
with their defined meanings unless otherwise provided.

This Term Note shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts and any applicable laws of the United States
of America.
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit A-1 to Term Loan and Security Agreement

The Lender shall have the absolute right to sell and/or assign this Term Note
and the Security Instrument, in whole or in part, and/or to enter into one or
more participation agreements concerning this Term Note and the Security
Instrument. If Lender gives written notice of any such sale(s), assignment(s)
and/or participation(s) to Borrower, Borrower shall make, or cause to be made,
payments to such subsequent holder(s) or participant(s), as the case may be.

If any term of this Term Note, or the applications hereof to any person or set
of circumstances, shall to any extent be invalid, illegal, or unenforceable, the
remainder of this Term Note, or the application of such provision or part
thereof to persons or circumstances other than those as to which it is invalid,
illegal, or unenforceable, shall not be affected thereby, and each term of this
Term Note shall be valid and enforceable to the fullest extent consistent with
applicable law and this Term Note shall be interpreted and construed as though
such invalid, illegal, or unenforceable term or provision (or any portion
thereof) were not contained in this Term Note.

Borrower and all other parties liable hereunder, whether as principal, endorser
or otherwise, hereby severally waive presentment, demand for payment, protest
and notice of dishonor and waive recourse to defenses generally, including
extensions  of  time, release of security or other indulgences that may be
granted by Lender to Borrower or any other party liable hereon, and also agree
to pay all costs of collection, including reasonable attorneys’ fees incurred by
Lender in connection with enforcement of any of Lender’s rights hereunder or
under any other document in connection with, securing or evidencing this Term
Note.

BORROWER AND ANY SUBSEQUENT ENDORSER, GUARANTOR OR OTHER ACCOMMODATION BORROWER
WAIVE PRESENTMENT, DEMAND FOR PAYMENT AND NOTICE OF DISHONOR, TOGETHER WITH ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS TERM NOTE OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT
CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY
RELATED TO OR CONNECTED WITH THE OBLIGATIONS PROVIDED FOR HEREIN, OR ANY
CONDUCT  RELATING TO THE ADMINISTRATION OR ENFORCEMENT OF SUCH OBLIGATIONS OR
ARISING FROM THE DEBTOR/CREDITOR RELATIONSHIP OF THE PARTIES HERETO. BORROWER
ACKNOWLEDGES THAT THIS WAIVER MAY DEPRIVE IT OF AN IMPORTANT RIGHT AND THAT SUCH
WAIVER HAS WILLINGLY,  KNOWINGLY AND VOLUNTARILY BEEN AGREED TO BY BORROWER.

BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COMMONWEALTH OF MASSACHUSETTS AND WAIVES PERSONAL SERVICE
OF  ANY  AND ALL PROCESS UPON BORROWER, AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS AS SET
FORTH IN THIS TERM NOTE AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
ACTUAL RECEIPT THEREOF. BORROWER WAIVES ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND WILLINGLY, KNOWINGLY AND VOLUNTARILY CONSENTS TO THE
GRANTING OF ANY SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT.
 
 
 
 
 
2

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Exhibit A-1 to Term Loan and Security Agreement
 

BORROWER ACKNOWLEDGES AND REPRESENTS THAT THE LOAN EVIDENCED BY THIS TERM NOTE
IS A COMMERCIAL  TRANSACTION AND THAT THE PROCEEDS OF THE LOAN SHALL NOT BE USED
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. BORROWER AND ANY SUBSEQUENT
ENDORSER, GUARANTOR OR OTHER ACCOMMODATION BORROWER HEREBY WILLINGLY, KNOWINGLY
AND VOLUNTARILY WAIVE (TO THE MAXIMUM EXTENT PERMITTED BY LAW) ANY RIGHTS TO
NOTICE OR HEARING OR AS OTHERWISE REQUIRED BY ANY LAW WITH RESPECT TO ANY
PREJUDGMENT REMEDY WHICH THE HOLDER MAY ELECT TO USE OR WHICH IT MAY AVAIL
ITSELF. BORROWER FURTHER WAIVES, TO THE GREATEST EXTENT PERMITTED BY LAW, THE
BENEFITS OF ALL PRESENT AND FUTURE VALUATION, APPRAISEMENT, EXEMPTION, STAY,
REDEMPTION AND MORATORIUM LAWS. BORROWER FURTHER WAIVES ANY REQUIREMENTS THAT
HOLDER OBTAIN  A BOND OR ANY SIMILAR DEVICE IN CONNECTION WITH THE EXERCISE OF
ANY REMEDY OR THE ENFORCEMENT OF ANY RIGHT HEREUNDER OR PERTAINING TO THE LOAN.

BORROWER HEREBY EXPRESSLY AND UNCONDITIONALLY, WILLINGLY, KNOWINGLY AND
VOLUNTARILY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY
OR ON BEHALF OF LENDER ON THIS TERM NOTE, ANY AND EVERY RIGHT BORROWER MAY HAVE
TO (I) INJUNCTIVE RELIEF, (II) INTERPOSE ANY COUNTERCLAIM THEREIN (OTHER THAN
COMPULSORY COUNTERCLAIMS), AND (III) HAVE THE SAME CONSOLIDATED WITH ANY OTHER
OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING HEREIN CONTAINED SHALL PREVENT
OR PROHIBIT BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST
LENDER WITH RESPECT  TO  ANY ASSERTED CLAIM.

EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WILLINGLY, KNOWINGLY AND
VOLUNTARILY 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 PAYEE HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT PAYEE WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR PAYEE TO ACCEPT THIS TERM  NOTE AND MAKE THE LOAN.
 
 
 
 
 
3

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Exhibit A-1 to Term Loan and Security Agreement

It is the intention of Borrower and Lender to conform strictly to the usury laws
now or hereafter in force in the Commonwealth of Massachusetts,
and  any  interest payable under this Term Note or any other documents
evidencing or securing the Loan (the “Loan Documents”) shall be subject to
reduction to an amount not to exceed the maximum non-usurious amount for
commercial loans allowed under the usury laws of the state or commonwealth in
which the Property is located as now or hereafter construed by the courts having
jurisdiction over such matters. In the event such interest (whether designated
as interest, service charges, points, or otherwise) does exceed the maximum
legal rate, it shall be (i) cancelled automatically to the extent that such
interest exceeds the maximum legal rate; (ii) if already paid, at the option of
the Lender, either be rebated to Borrower or credited on the principal amount of
the Term Note; or (iii) if the Term Note has been prepaid in full, then such
excess shall be rebated to Borrower.

It is further agreed, without limitation of the foregoing, that all calculations
of the rate of interest (whether designed as interest, service charges, points,
or otherwise) contracted for, charged, or received under this Term Note, or
under any instrument evidencing or securing the loan evidenced hereby, that  are
made for the purpose of determining whether such rate exceeds the maximum legal
rate, shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating, and spreading throughout the full stated term of this
Term Note (and any extensions of the term hereof that may be hereafter granted)
all such interest at any time contracted for, charged, or received from the
Borrower or otherwise by the Lender so that the rate of interest on account of
the indebtedness evidenced by this Term Note, as so calculated, is uniform
throughout the term hereof. If the Borrower is exempt or hereafter becomes
exempt from applicable usury statutes or for any other reason the rate of
interest to be charged on this Term Note is not limited by law, none of the
provisions  of this paragraph shall be construed so as to limit or reduce the
interest or other consideration payable under this Term Note or any other Loan
Documents. The terms and provisions of this paragraph shall control and
supersede every other provision of all agreements between the parties hereto.

 

[Remainder of Page Intentionally Left Blank; Signature Page to Follow]
 
 
 
 
 
 
4

--------------------------------------------------------------------------------

 
 
 
Exhibit A-1 to Term Loan and Security Agreement

 

 
IN WITNESS WHEREOF, the Borrower has executed this Note as of the day and year
first above written at, Worcester County, Massachusetts.
 

     
BORROWER:
             
RANOR, INC.,
     
a Delaware corporation
           
By:
       
Name: Alexander Shen
     
Title: President
       
THE COMMONWEALTH OF MASSACHUSETTS
§
 
 
 
§ss.
   
COUNTY OF
§
 
 
       

 
On this                        day of December, 2014, personally appeared
Alexander Shen, President, of RANOR, INC., signer and sealer of the foregoing
instrument, and acknowledged the same to be his free act and deed in his
capacity as such President, and the free act and deed of RANOR, INC., before me.
 

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

 
 
[Signature Page to Term Note A]
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit A-2 to Term Loan and Security Agreement

 
TERM NOTE

 

$750,000.00  December           , 2014

                                                                                        

FOR VALUE RECEIVED, the undersigned, RANOR, INC., a Delaware corporation with an
address of Bella Drive, Westminster, Massachusetts 01473 (the "Borrower"), DOES
HEREBY PROMISE to pay to the order of REVERE HIGH YIELD FUND, LP, a Delaware
limited partnership (the "Lender"), at the office of the Lender at 105 Rowayton
Avenue, Suite 100, Rowayton, Connecticut 06853, in lawful money of the United
States of America, in immediately available funds, the maximum principal amount
of SEVEN HUNDRED FIFTY THOUSAND 00/100 DOLLARS ($750,000.00) or so much thereof
as may be advanced to Borrower pursuant to this Term Note and the Agreement (as
hereinafter defined) payable as follows: (i) payments of interest only on
advanced principal on the first day of each month (a “Payment Date”), commencing
on February 1, 2015 until and including the Payment Date immediately prior to
the Maturity Date; and (ii) a balloon payment of the advanced principal balance
plus any accrued and unpaid interest on the Maturity Date of December 31, 2015,
provided, however, that Borrower may elect to extend the Maturity Date for a
period of six (6) months to June 30, 2016 conditioned upon Borrower providing to
Lender, on or before the date which is sixty (60) days prior to the initial
Maturity Date but no more than ninety (90) days prior to the initial Maturity
Date: (a) written notice to Lender of its election to so extend, and (b) payment
to Lender of an extension fee in the amount of Seven Thousand Five Hundred and
No/100 Dollars ($7,500.00). Interest hereunder shall accrue from the date hereof
on the unpaid principal amount hereof at a rate equal to twelve percent (12%)
per annum on the basis of the actual days elapsed on the assumption that each
month contains thirty (30) days and each year contains  three hundred sixty
(360) days, multiplied by the actual number of days elapsed, in like money, at
said office, as more specifically set forth in Article II of that certain Term
Loan and Security Agreement dated as of the date hereof (the “Agreement”) and,
upon a default, at a rate of the lesser of: (A) twenty-four percent (24%) per
annum, or (B) the highest rate of interest permitted under the laws of the
Commonwealth of Massachusetts.

This Term Note is given to evidence an actual loan (the “Loan”) in the maximum
principal amount of $750,000.00, and is the Term Note referred
to  as  “Note  B”  in Section 2.02 of the Agreement, and is subject to
prepayment and acceleration of maturity as set forth in the Agreement. This Term
Note is secured by, among other things, that certain Guaranty of Guarantor and
Financing Statement from Borrower in  favor  of Lender (the
“Security Instrument”). All terms defined in the Agreement are used herein with
their defined meanings unless otherwise provided.

This Term Note shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts and any applicable laws of the United States
of America.
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit A-2 to Term Loan and Security Agreement

 
The Lender shall have the absolute right to sell and/or assign this Term Note
and the Security Instrument, in whole or in part, and/or to enter into one or
more participation agreements concerning this Term Note and the Security
Instrument. If Lender gives written notice of any such sale(s), assignment(s)
and/or participation(s) to Borrower, Borrower shall make, or cause to be made,
payments to such subsequent holder(s) or participant(s), as the case may be.

If any term of this Term Note, or the applications hereof to any person or set
of circumstances, shall to any extent be invalid, illegal, or unenforceable, the
remainder of this Term Note, or the application of such provision or part
thereof to persons or circumstances other than those as to which it is invalid,
illegal, or unenforceable, shall not be affected thereby, and each term of this
Term Note shall be valid and enforceable to the fullest extent consistent with
applicable law and this Term Note shall be interpreted and construed as though
such invalid, illegal, or unenforceable term or provision (or any portion
thereof) were not contained in this Term Note.

Borrower and all other parties liable hereunder, whether as principal, endorser
or otherwise, hereby severally waive presentment, demand for payment, protest
and notice of dishonor and waive recourse to defenses generally, including
extensions  of  time, release of security or other indulgences that may be
granted by Lender to Borrower or any other party liable hereon, and also agree
to pay all costs of collection, including reasonable attorneys’ fees incurred by
Lender in connection with enforcement of any of Lender’s rights hereunder or
under any other document in connection with, securing or evidencing this Term
Note.

BORROWER AND ANY SUBSEQUENT ENDORSER, GUARANTOR OR OTHER ACCOMMODATION BORROWER
WAIVE PRESENTMENT, DEMAND FOR PAYMENT AND NOTICE OF DISHONOR, TOGETHER WITH ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS TERM NOTE OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT
CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY
RELATED TO OR CONNECTED WITH THE OBLIGATIONS PROVIDED FOR HEREIN, OR ANY
CONDUCT  RELATING TO THE ADMINISTRATION OR ENFORCEMENT OF SUCH OBLIGATIONS OR
ARISING FROM THE DEBTOR/CREDITOR RELATIONSHIP OF THE PARTIES HERETO. BORROWER
ACKNOWLEDGES THAT THIS WAIVER MAY DEPRIVE IT OF AN IMPORTANT RIGHT AND THAT SUCH
WAIVER HAS WILLINGLY,  KNOWINGLY AND VOLUNTARILY BEEN AGREED TO BY BORROWER.

BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COMMONWEALTH OF MASSACHUSETTS AND WAIVES PERSONAL SERVICE
OF  ANY  AND ALL PROCESS UPON BORROWER, AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS AS SET
FORTH IN THIS TERM NOTE AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON
ACTUAL RECEIPT THEREOF. BORROWER WAIVES ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND WILLINGLY, KNOWINGLY AND VOLUNTARILY CONSENTS TO THE
GRANTING OF ANY SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT.
 

BORROWER ACKNOWLEDGES AND REPRESENTS THAT THE LOAN EVIDENCED BY THIS TERM NOTE
IS A COMMERCIAL  TRANSACTION AND THAT THE PROCEEDS OF THE LOAN SHALL NOT BE USED
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. BORROWER AND ANY SUBSEQUENT
ENDORSER, GUARANTOR OR OTHER ACCOMMODATION BORROWER HEREBY WILLINGLY, KNOWINGLY
AND VOLUNTARILY WAIVE (TO THE MAXIMUM EXTENT PERMITTED BY LAW) ANY RIGHTS TO
NOTICE OR HEARING OR AS OTHERWISE REQUIRED BY ANY LAW WITH RESPECT TO ANY
PREJUDGMENT REMEDY WHICH THE HOLDER MAY ELECT TO USE OR WHICH IT MAY AVAIL
ITSELF. BORROWER FURTHER WAIVES, TO THE GREATEST EXTENT PERMITTED BY LAW, THE
BENEFITS OF ALL PRESENT AND FUTURE VALUATION, APPRAISEMENT, EXEMPTION, STAY,
REDEMPTION AND MORATORIUM LAWS. BORROWER FURTHER WAIVES ANY REQUIREMENTS THAT
HOLDER OBTAIN  A BOND OR ANY SIMILAR DEVICE IN CONNECTION WITH THE EXERCISE OF
ANY REMEDY OR THE ENFORCEMENT OF ANY RIGHT HEREUNDER OR PERTAINING TO THE LOAN.
 

BORROWER HEREBY EXPRESSLY AND UNCONDITIONALLY, WILLINGLY, KNOWINGLY AND
VOLUNTARILY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY
OR ON BEHALF OF LENDER ON THIS TERM NOTE, ANY AND EVERY RIGHT BORROWER MAY HAVE
TO (I) INJUNCTIVE RELIEF, (II) INTERPOSE ANY COUNTERCLAIM THEREIN (OTHER THAN
COMPULSORY COUNTERCLAIMS), AND (III) HAVE THE SAME CONSOLIDATED WITH ANY OTHER
OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING HEREIN CONTAINED SHALL PREVENT
OR PROHIBIT BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST
LENDER WITH RESPECT  TO  ANY ASSERTED CLAIM.
 
 
 
 
2

--------------------------------------------------------------------------------

 
 
 
Exhibit A-2 to Term Loan and Security Agreement

EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WILLINGLY, KNOWINGLY AND
VOLUNTARILY 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 PAYEE HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT  PAYEE  WOULD  NOT,  IN  THE  EVENT  OF  LITIGATION,  SEEK  TO
ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR
PAYEE TO ACCEPT THIS TERM  NOTE AND MAKE THE LOAN.

It is the intention of Borrower and Lender to conform strictly to the usury laws
now or hereafter in force in the Commonwealth of Massachusetts,
and  any  interest payable under this Term Note or any other documents
evidencing or securing the Loan (the “Loan Documents”) shall be subject to
reduction to an amount not to exceed the maximum non-usurious amount for
commercial loans allowed under the usury laws of the state or commonwealth in
which the Property is located as now or hereafter construed by the courts having
jurisdiction over such matters. In the event such interest (whether designated
as interest, service charges, points, or otherwise) does exceed the maximum
legal rate, it shall be (i) cancelled automatically to the extent that such
interest exceeds the maximum legal rate; (ii) if already paid, at the option of
the Lender, either be rebated to Borrower or credited on the principal amount of
the Term Note; or (iii) if the Term Note has been prepaid in full, then such
excess shall be rebated to Borrower.

It is further agreed, without limitation of the foregoing, that all calculations
of the rate of interest (whether designed as interest, service charges, points,
or otherwise) contracted for, charged, or received under this Term Note, or
under any instrument evidencing or securing the loan evidenced hereby, that  are
made for the purpose of determining whether such rate exceeds the maximum legal
rate, shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating, and spreading throughout the full stated term of this
Term Note (and any extensions of the term hereof that may be hereafter granted)
all such interest at any time contracted for, charged, or received from the
Borrower or otherwise by the Lender so that the rate of interest on account of
the indebtedness evidenced by this Term Note, as so calculated, is uniform
throughout the term hereof. If the Borrower is exempt or hereafter becomes
exempt from applicable usury statutes or for any other reason the rate of
interest to be charged on this Term Note is not limited by law, none of the
provisions  of this paragraph shall be construed so as to limit or reduce the
interest or other consideration payable under this Term Note or any other Loan
Documents. The terms and provisions of this paragraph shall control and
supersede every other provision of all agreements between the parties hereto.

 

[Remainder of Page Intentionally Left Blank; Signature Page to Follow]

 
3

--------------------------------------------------------------------------------

 
 
 
Exhibit A-2 to Term Loan and Security Agreement

 
IN WITNESS WHEREOF, the Borrower has executed this Note as of the day and year
first above written at, Worcester County, Massachusetts.
 
 

     
BORROWER:
                     
RANOR, INC.,
     
a Delaware corporation
                   
By:
                                               
     
Name: Alexander Shen
     
Title: President
       
THE COMMONWEALTH OF MASSACHUSETTS
§
 
 
 
§ss.
   
COUNTY OF
§
 
 
       

 
On this                  day of December, 2014, personally appeared Alexander
Shen, President, of RANOR, INC., signer and sealer of the foregoing instrument,
and acknowledged the same to be his free act and deed in his capacity as such
President, and the free act and deed of RANOR, INC., before me.
 
 
 

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

 
 
 
[Signature Page to Term Note B]
 
 
 
 
 
 

--------------------------------------------------------------------------------

 

 
EXHIBIT B
 
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT
 
 
Ph#
Item
Description
 
1
TOS HOSTIVAR TYPE BN102B TOOL & CUTIER GRINDER, S/N: 049304
     
188
2
RUSH MDL. 250 DRILL SHARPENER, S/N: N A
     
188
3
6" BALDOR MDL. 2N GRINDER
     
189
4
ST 14" OPTICAL COMPARATOR
     
175
5
FARO LASER TRACKER (NEW 2007)
     
176
6
[HC-5] TOS MDL. WHN13C HORIZONTAL BORING MILL, 5.12" SPINDLE
         
DIAMETER, #50 TAPER, SPINDLE TRAVEL 48.8", X-137.85", Y-78.7", W-48.8", B
         
ROTARY TABLE SIZE 70.8" X 63", FANUC 11 CONTROL, SIN: 03-14 (1988)
 
195
 
7
 
[HC-6] TOSHIBA SHIBAURA MDL. BF13AQ FLOOR TYPE HORIZONTAL BORING
   
MILL, 5. 12" SPINDLE DIAMETER, #50 TAPER NMTB, SPINDLE TRAVEL 35.4",
   
SLEEVE TRAVEL 13.8", 178" X 116" TABLE, [5) 76" X 144" FLOOR PLATES,
   
FANUC OM CONTROL, S/N: 133791 (1978; RETROFIT 1995)
     
187
8
[HC-7] KURAKI MDL. KBT13DKA HORIZONTAL BORING MILL, 5.12" SPINDLE
   
DIAMETER, #50 TAPER, SPINDLE TRAVEL 27.5", X-118", Y-80.7", Z-51.2", B
   
ROTARY TABLE SIZE 70.9" X 63", FANUC 15 CONTROL, 40-POSITION
   
AUTOMATIC TOOL CHANGER, SIN: 1601 (1995)
     
199-200
9
[HC-8] MITSUBISHI MDL. MAFRS150 HORIZONTAL BORING MILL, 5.905"
   
SPINDLE DIAMETER, #50 TAPER, SPINDLE TRAVEL 35.4", X-277.7", Y-145.7", Z-
   
27.5", TABLE TRAVEL 59", B ROTARY TABLE 118" X 98.4", [3] RIGHT ANGLE
   
HEADS, [1] SPINDLE SUPPORT, FANUC 15 CONTROL, (2} 144" X 72-1/2" FLOOR
   
PLATES, S/N: H5202 (1980)
     
174
10
[HC-9] TITAN MDL. AFC130 CNC HORIZONTAL BORING MILL, 5" SPINDLE
   
DIAMETER, #50 TAPER, SPINDLE TRAVEL 35.5", X-98", Y-98", W-56.3", B
   
ROTARY TABLE SIZE 63" X 71", BUi T-IN ROTARY TABLE, 40-POSITION
   
AUTOMATIC TOOL CHANGER, FANUC 16 CONTROL, S/N; 101 (1996)
   
[CURRENTLY BEING REPAIRED; APPRAISED AS IF FIXED]
     
178
11
[VC-1] MAZAK MDL. MEGATURN A16 VERTICAL BORING MILL, 65" DIAMETER
   
TABLE, CHIP CONVEYOR, FANUC OT CONTROL, S N: 55443 (1984)
     
190
12
[VC-2] TITAN MDL. SC-30-43 CNC VERTICAL BORING MILL, 118" DIAMETER
TABLE, [2) HEADS, [1] LIVE SPINDLE, FANUC 16TT CONTROL (1996)

 
Koster Industries Inc.
 
 

 
 
Page 1 of 11

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B
 
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT
 
 
 
Ph#
Item
Description
     
191-192
13
[VC4] BLANSKO MDL SKJ32-636 CNC VERTICAL BORING MILL, SLIDING
   
TABLE, 250" MAX PORT SIZE, LIVE SPINDLE, FANUC OTT CONTROL, 126"
   
DIAMETER TABLE, S N: 43063-92 (1989)
   
SEE PHOT0 #1
     
196-197
14
[VC·5] TITAN MDL. SC22-2HG VERTICAL TURRET LATHE, 16-POSITION
   
AUTOMATIC TOOL CHANGER, [1) HEAD, LIVE SPINDLE, 78-1/2" DIAMETER
   
TABLE, FANUC 16T CONTROL, S/N: CNC-MSF-01 (1993)
     
239
16
[VC-6] PHOENIX MDL. 144/236 VERTICAL MACHINING CENTER, 144" TABLE, [1]
   
HEAD, LIVE SPINDLE, FANUC 161 CONTROL, S/N: M1031 (1999)
   
SEE PHOT0 #2
     
237-238
16
[VC-7] PHOENIX MOL 144/236 VERTICAL MACHINING CENTER, 144" TABLE, [1]
   
HEAD, LIVE SPINDLE, 20-POSITION AUTOMATIC TOOL CHANGER, FANUC 16i
   
CONTROL, S/N: M1032 (2000)
   
SEE PHOTQ #3
     
212
17
[VMC-1] MATSUURA MOL. MC-1500 V4 VERTICAL MACHINING CENTER, FANUC
   
6M CONTROL, S/N: 82052738
       
18
YAM MDL 850HG LATHE, XlY DIGITAL READOUT, SIN: 857123
       
19
BRIDGEPORT SERIES I 2HP VERTICAL MILLING MACHINE, XIY DIGITAL
   
READOUT, POWER FEED TABLE, SIN: 2J130021
       
20
OOYA MDL. RE3-2000 RADIAL DRILL, S/N: 7512462
     
193-194
21
[VC-8] TCI CNC VERTICAL BORING MILL, [2] HEADS, 116" DIAMETER TABLE, [2]
   
12-POSITION AUTOMATIC TOOL CHANGERS, CHIP CONVEYOR, S/N: 315 (NEW
   
2008)
   
SEE PHOT0 #4
     
184
22
[H-1] TOSHIBA SHIBAURA MDL. BT10BR1 HORIZONTAL BORING MILL, SPINDLE
   
DIAMETER 3.94", #50 SPINDLE TAPER NMTB, SPINDLE TRAVEL 28", Y-49", X-
   
55", Z-44.5", SONY DIGITAL READOUTS, 44" X 49" ROTARY TABLE, S/N: 6831
   
(1979)
     
177
23
[HC-1) NOMURA MDL. BN130SWRATC HORIZONTAL BORING MILL, SPINDLE
DIAMETER 5.12", #50 SPINDLE TAPER NMTB'S OR CAT'S, X-95", Y-83", Z-59", W-
34", FANUC 6M CONTROL, 71" X 79" ROTARY TABLE, 60-POSITION AUTOMATIC
TOOL CHANGER, S/N: 4000 (1982)

 
Koster Industries Inc.
 
 
 
 
Page 2 of 11

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B
 
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

 
Ph#
 
Item
 
Description                                                                                                                           
[HC-2] TOSHIBA SHIBAURA MDL BP13BP5 HORIZONTAL BORING MILL, SPINDLE DIAMETER
5.12", #50 TAPER SPINDLE, 27.5" SPINDLE TRAVEL, X-118", Y-99". Z-43", GE FANUC
181-T CONTROL, 118" X 59" TABLE, S/N: 130085 (1984)
SEE PHOTO #S
 
[HC-3] TOSHIBA SHIBAURA MDL BPN13R4 HORIZONTAL BORING MILL, SPINDLE DIAMETER
5.12", #50 TAPER SPINDLE, SPINDLE TRAVELS IN 4" STEPS, X-78", Y-90", Z-70.8",
78.8" X 63" BUILT-IN ROTARY TABLE, FANUC 6M CONTROL, S/N: 230017 (1982)
 
[HC-4) TOSHIBA SHIBAURA MDL. BF16A HORIZONTAL BORING MILL, SPINDLE DIAMETER
6.3", #50 TAPER SPINDLE NMTB, X-354", Y-134", Z-34", FANUC 6M CONTROL, 79" X 98"
ROTARY TABLE, SHIBAURA BR20/25B CONTROL, 6' IN I OUT TRAVEL, S/N: 51317 (1980)
 
MDL. QGV-75 75HP AIR COMPRESSOR, WITH QUINCY AIR DRYER, (2] AIR RECEIVING TANKS
 
RANOR 5 TON FREE STANDING OVERHEAD BRIDGE CRANE, 60' SPAN, 15 TON ROBBINS
& MEYERS, APPROXIMATELY  160' RUNWAY
 
M&M CNC PRECISION ROTARY TABLE, 72" DIAMETER GIDDINGS & LEWIS 72" X 72" ROTARY
TABLE
25 TON PHILADELPHIA & ROBBINS & MEYERS 15 TON FREE STANDING OVERHEAD BRIDGE
CRANE, 60' SPAN, 160' RUNWAY, WITH PENDANT CONTROLS
 
DeWALT MDL. ME1 CUTOFF SAW, S N: 536
 
TURN-PRO MDL. 01712058 7" HORIZONTAL BANDSAW, SIN: 03117009
 
OKAMOTO MDL. 6-18 6" X 18" SURFACE GRINDER, WITH 6" X 18" PERMANENT MAGNETIC
CHUCK, DIGITAL READOUT, S/N: N/A
 
MICCO TYPE NSGGHH 16'' X 24" SURFACE GRINDER, WITH 16" X 24" MAGNETIC CHUCK &
RECTIFIER, SIN: H3506
 
METOSA MDL. TAURUS 310 CNC LATHE, S N: 40839 RIDGID PIPE THREADER
POWERMATIC MDL 1200 20" FLOOR TYPE DRILL PRESS, SIN : 66-2225
186
24
 
 
186
 
 
25
 
 
234-236
 
 
26
 
 
179-180
 
 
27
 
181-182
 
28
 
183
 
29
198
30
201-202
31
 
 
32
203
33
204
34
 
 
35
 
205
 
36
206
37
207
38

 
 
Koster Industries Inc.
 
 
 
 
 
Page 3 of 11

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B
 
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

Ph#
Item
 Description 
208
39
BRIDGEPORT SERIES I2HP VERTICAL MILLING MACHINE, 9" X 42" WORKING
   
SURFACE OF TABLE, POWER FEED TO TABLE, DIGITAL READOUT, SIN:
   
12BR248938
     
209
40
[2) SHARP VERTICAL MILLING MACHINES, DIGITAL READOUT, POWER FEED
   
TO TABLE, 9" X 50" WORKING SURFACE OF TABLE, SIN'S: N A
       
41
RODGERS MDL. 5150-13-3 150 TON CAPACITY GARAGE TYPE HYDRAULIC
   
ARBOR PRESS, S N: 8150-1163
       
42
GIDOlNGS & LEWIS 60" X 60" ROTARY TABLE
     
210-211
43
VIEW OF ROTARY TABLES, V-BLOCKS, JAW RISERS, ANGLE IRONS, OFFSET
   
HEADS, SET-UP BLOCKS
     
213
44
HYUNDAI MDL WIAL400LMC CNC LATHE, 12-POSITION AUTOMATI C TOOL
   
CHANGER, [2) LIVE SPINDLES, FANUC 321 MDL. A CNC CONTROLS, SIN: G3199-
   
086 (2012)
     
214
45
YAM MDL. 850HG 24" / 34" X 36" GEARED HEAD ENGINE LATHE, 3-JAW CHUCK,
   
ALORIS TOOL POST, S/N: 857123
     
215
46
OOYA 18" X 72" RADIAL ARM DRILL, WITH BOX TABLE
     
218
47
JET PORTABLE HORIZONTAL BANDSAW
     
217
48
MILLER DELTAWELD 650 DC ARC WELDER, WITH WIRE FEED, PORTABLE
     
218
49
STOKES MDL. JRS VACUUM PRESS, WITH VARIAN CONTROL, MOUNTED ON
   
BERNARD PORTABLE LEAK TESTER
     
219
50
STOKES PUMP LEAK TESTER, WITH VARIAN 959 TURBO LEAK DETECTOR
   
CONTROL
     
220-222
51
PHOENIX MDL. 15/480 GANTRY MILL, 16'8" BETWEEN GANTRIES, 12' X 25'
   
WORKING SURFACE OF TABLE, [2] 36-POSITION AUTOMATIC TOOL
   
CHANGERS, FANUC 30i CNC CONTROL, SIN: M1747 (2011)
   
SEE PHOT0 #6
     
223
52
STOKES MDL. 615-7 VACUUM PUMP, S/N: 885700C81 198
     
224-225
53
[3] 50 TON COPCO FREE STANDING OVERHEAD BRIDGE CRANE SYSTEMS, 75'
SPAN, PENDANT CONTROLS, REMOTE CONTROL, 500' LONG, ALL DUAL
HOOKS

 
 
Koster Industries Inc.
 

 
 
Page 4 of 11

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B
 
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

226
54
PRESTON-EASTON MOL. PA100HD13 10,000# WELDING POSITIONER, S/N: PBIOOHD-14 (1980)
227
55
ROUNDO TYPE LH-35000 WELDING POSITIONER, S/N: 976098 (1997)
228
56
MILLER SYNCROWAVE 350LX WELDER, WITH BERNARD WIRE FEED
228
57
(2) LINCOLN ARC WELDERS, WITH COOL ARC 40
229
58
(2) MILLER MDL. 458 CC YY WELDERS, WITH MILLER WIRE FEED, BERNARD BOOM WELDER
230
59
LINCOLN POWER MIG 300 WELDER
231
60
MILLER SYNCROWAVE 351 AC/DC WELDING POWER SUPPLY
232
61
KOIKE ARONSON MD. HD25VF 2500# CAPACITY WELDING POSITIONER, S/N: 45933
233
62
MILLER DELTAWELD 452 POWER SOURCE
240
63
MG INDUSTRIES S TORCH BURNING MACHINE, WITH [1] PLASMA TORCH, 17'
   
WIDE X 55' LONG TABLE, BURNY 10 LCD PLUS CONTROL (1990)
   
SEE PHOT0 #7
241
64
FLOW MACH 3 MDL. 40208 WATER JET, 100" X 175" (2013)
SEE PHOT0 #8
242
65
FREE STANDING OVERHEAD BRIDGE CRANE SYSTEM, 60' SPAN, 500' LONG,
   
PENDANT CONTROLS
   
- 15 TON ROBBINS & MEYERS
   
- 20 TON ACECO
   
- 20 TON ACECO
   
- 40 TON PHILADELPHIA TRAMRAIL
243
66
HOMEMADE STRAIGHTENING TABLE, 24' X 8' WORKING SURFACE OF TABLE,
   
ENERPAC UNIT
244
67
MILLER MILLERMATIC POWER SOURCE
245-246
68
[5] MILLER DELTAWELO 452 DC POWER SOURCES, WITH BERNARD BOOM,
254-255
 
WIRE FEED, [1] W/O BOOM ·HANGING FROM HOIST, (1] W/ WIRE FEED
247-250
69
[3] MILLER DELTAWELD 450 DC POWER SOURCES, WITH BERNARD BOOM,
258
 
WIRE FEED

 
 
Koster Industries Inc.
 
 

 
Page 5 of 11

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 
Ph#
Item
Description
         
251-252
70
[2] MILLER XMT304 CC/CV, WITH WIRE FEED
         
253
71
MILLER SYNCROWAVE 351 WELDER
         
256-258
72
[6] MILLER A/C D/C 250 WELDERS, [2] W/ COOL-ARC 40, [1] WITH BERNARD
     
WIRE FEED
         
257
73
TELEDYNE 2500# CAPACITY WELDING POSITIONER, S/N: 103570
         
259
74
MILLER DELTAWELD 650 DC ARC WELDER
         
260, 268
75
[2] MILLER SYNCROWAVE 250 DX DC WELDERS, WITH TIGS
         
261
76
ARONSON MDL 2G12VRA12VLS-MKVT-26 BOOM WELDING MANIPULATOR,
     
WITH LINCOLN 600 IDEALARC WELDER, S/N: 8461
         
262-263
77
CYCLOMATIC SEAM TRACKER SYSTEM, WITH MILLER SYNCROWAVE 350 DC
     
WELDER, JETLINE MDL. ALC101 ARC LENGTH CONTROLLER, 9600 JETLINE
     
CONTROL
         
264, 311
78
[2] MILLER DELTAWELD 451 DC ARC WELDERS, WITH BERNARD BOOM &
     
MILLER 60 SERIES WIRE FEEDER
             
ASSORTED CANNABALIZED AREA
 
265-266
79
ASSORTED WELDERS, PLASMAS, WIRE FEEDS
           
80
EMPIRE REACH-IN TYPE SAND BLAST CABINET
             
AIR COMPRESSOR ROOM
 
269-270
81
[3] QST-245 50HP AIR COMPRESSORS, PYRAMID MDL. 2000 AIR DRYER, AIR
     
RECEIVING TANK
         
271-272
82
VACU BLAST CORP. SAND BLASTING UNIT, 18' WIDE X 24' DEEP X 16' HIGH
           
83
LARGE CAR BOTTOM FURNACE, 10' X 24', HONEYWELL CONTROL ROOM
         
273
84
PAINT SPRAY BOOTH
         
275
85
16" WILTON DRILL
         
276
86
[2] ARONSON MDL. HD700 70,000# CAPACITY WELDING POSITIONERS, S/N'S:
     
8523; 7715
         
277
87
12' ARONSON WELDING MANIPULATOR, WITH LINCOLN WELDER
 

 
 
Koster Industries Inc.

 
 
 

 
 
Page 6 of 11

--------------------------------------------------------------------------------

 
 
 
 
EXHIBIT B
 
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

Ph#
Item
Description
         
278
88
SKYJACK 500# CAPACITY MAN LIFT
         
279
89
LINCOLN POWERMATE 350, WITH COOL-ARC 40
         
280
90
LINCOLN IDEALARC 600 DC WELDER
         
281
91
LINCOLN IDEALARC 1500 DC WELDER
         
283
92
ARONSON MDL. S14VRA14CL-DKDT-32 WELDING MANIPULATOR, WITH [2] MILLER MDL. 451
WELDERS, S/N: 80253
         
284
93
ARONSON MDL HD100VF 10,000# CAPACITY WELDING POSITIONER, S/N: 43686 (NEW 2008)
           
94
MILLER DIMENSION 652 DC WELDER, WITH BOOM WELDER
         
286
95
PRESTON-EASTON 20,000# CAPACITY TANK TURNING ROLLS
         
287
96
ARONSON MDL. PC120A 120,000# CAPACITY WELDING TURN TABLE, S/N: 718
         
288
97
[6] LINCOLN 350 POWER MIG WELDERS
         
289
98
MILLER 652 DC WELDER, WITH BERNARD BOOM WELDER
         
291
99
MILLER DIMENSION 400 WELDER, WITH WIRE FEED
         
290
100
14" WILTON VERTICAL BANDSAW, S/N: 06062782
         
292
101
6" BM BELT SANDER
         
293
102
GEKA HYDRACROP MDL. 80/SD IRONWORKER, S/N: 6437 (1995)
         
294
103
MARVEL MDL. F2150PC3 VERTICAL BANDSAW, TOUCH SCREEN, COMPUTER CONTROLLED, S/N:
F2150-20237PC-3
         
295
104
MDL. HST-29 PLATE BEVELING MACHINE
         
308
105
PANDJIRIS BOOM MANIPULATOR, WITH 12' WIRE FEED, MILLER DIMENSION 452 WELDER
             
MAIN FABRICATION SHOP
 
301
106
IKEDA TYPE RM1375 RADIAL ARM DRILL, S/N: 80105
 

 
Koster Industries Inc.

 
 
 
Page 7 of 11

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B
 
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT
 
 
Ph#
Item
Description
 
302
107
CINCINNATI MDL. 1500 1500 TON CAPACITY HYDRAULIC POWER PRESS BRAKE, 20'6"
BETWEEN HOUSINGS, 30' LONG, S/N: 39561 (1975)
 
 
303
106
LARGE QUANTITY OF BRAKE DIES
 
 
304
109
ROUNDO TYPE R6S HORIZONTAL ANGLE ROLLS, 6 X 6 X 5/8, S/N: 986709
(1998)
 
 
 
305
 
110
CINCINNATI MDL. 750 750 TON CAPACITY HYDRAULIC POWER PRESS BRAKE, 20' LONG,
20'6" BETWEEN HOUSINGS, S/N: 41188
 
 
 
306
 
111
FREE STANDING OVERHEAD CRANE SYSTEM, 60' SPAN, 500' LONG, PENDANT CONTROLS
~ 5 TON CLEVELAND TRAMRAIL
~ [3] 15 TON ROBBINS & MEYERS
~ 10 TON ACECO
 
 
309
112
KOIKE ARONSON MDL. HD240VF 24,000# CAPACITY WELDING POSITIONER, S/N: 46425
 
 
310
113
ARONSON MDL. G8VRA80L-PK 8' BOOM WELDER, S/N: 80435
 
   
114
[3] MILLER DELTAWELD 452 WELDERS
 
   
115
KOIKE ARONSON MDL. TDRA-20HD 20 TON CAPACITY TANK TURNING ROLL, S/N: N/A
 
   
116
KOIKE ARONSON 30,000# CAPACITY TANK TURNING ROLL, S/N: 97531
 
 
314
117
[9] MILLER SYNCROWAVE 250 WELDERS
 
   
118
MILLER DIMENSION 400 WELDER
 
   
119
[2] BERNARD BOOMS
 
 
314
120
[2] MILLER DELTAWELD 451 WELDERS, WITH WIRE FEED
 
 
312
121
ARONSON MDL HD160A 16,000# CAPACITY WELDING POSITIONER, S/N: 75108
 
 
313
122
RANSOME MDL. 250P 25,000# CAPACITY WELDING POSITIONER, S/N: 6525507
 
   
123
[2] CULLEN-FIRESTEDT MDL. 140-347 10,000# CAPACITY WELDING POSITIONERS, S/N'S:
347; N A
 
 
315
124
MILLER SYNCROWAVE 351 WELDER
 

Koster Industries Inc.

 
 
 
 
Page 8 of 11

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 
Ph#
Item
Description
         
318
125
ARONSON MDL. SS14VRA14CL-PK 14' LONG X 14' HIGH MANIPULATOR, WITH
     
LINCOLN HEAD, S/N: 7613
 
 
317
126
MILLER MDL. XMT304 WIRE FEED & INVERTER
 
 
318
127
MILLER DELTAWELD 650 DC WELDER
 
 
319
128
ARONSON MDL. HD30A 5000# CAPACITY WELDING POSITIONER, S/N: 70300
 
 
320
129
ARONSON MDL. 2G12VRA12CL-RK 14" X 14" WELDING MANIPULATOR, WITH
     
MILLER 451 WELDER, S/N: 8020
 
   
130
MILLER SYNCROWAVE 350LX WELDER, WITH TIG
 
   
131
ARONSON MDL. HD45 5000# CAPACITY WELDING POSITIONER, S/N: 79388
 
 
321
132
KOIKE ARONSON MDL. HD25VF 2500# CAPACITY TANK TURNING ROLL, S/N:
     
45575
 
 
322, 325
133
LINCOLN SYSTEM 55 ELECTRIC AUTOMATION ROBOT STATION, WITH FANUC SYSTEM R-30iA,
FANUC M-710iC ROBOT
         
323-324
134
HYPERFORMANCE MDL. HPR260 PLASMA SYSTEM, WITH 260-AMP PLASMA
     
TORCH
 
   
135
LINCOLN POWERWAVE 455 ELECTRIC WELDER
 
 
326
136
SERTUM 2" X 12' PYRAMID TYPE BENDING ROLLS, WITH DROP END HOUSING
     
(1977)
     
SEE PHOTO #9
 
 
327
137
CINCINNATI MDL. 400 400 TON X 18' POWER PRESS BRAKE, 12'6" BETWEEN
     
HOUSINGS, 12" STROKE, S/N: 37225
 
 
328
138
CINCINNATI MDL. 2512 3/8" X 12' POWER SQUARING SHEAR, S/N: 36574
 
 
329
139
JETLINE MDL. IWS96Z SEAM WELDER, WITH CONTROLS, ARC LENGTH
     
CONTROL 101, S N: 85276
 
 
330
140
WEBB MDL. 15L-1510 3/4'' X 10' INITIAL TYPE BENDING ROLL, WITH DROP END,
     
S/N: 7190
 
     
GARAGE
 
296
141
QUINCY MDL. QSl-245 50HP AIR COMPRESSOR
 

 
 
 
Koster Industries Inc.
 
 
 
 
Page 9 of 11

--------------------------------------------------------------------------------

 
 
 
 
EXHIBIT B

 
TERM LOAN AND SECURITY AGREEMENT EQUIPMENT
 
 
Ph#
Item
Description
           
142
BM 6" SANDER
 
 
297
143
RANSOME MDL. 100P 10,000# CAPACITY WELDING POSITIONER, S/N: 655752
 
 
298
144
[2] RANSOME MDL. CPRR 90 TON CAPACITY TANK TURNING ROLLS, S/N'S: 3733015; N/A
             
DUE TO THE PLANT BEING IN FULL OPERATION, THE FORKLIFT TRUCKS WERE APPRAISED ON
A SAMPLE BASIS. THIS LIST WAS PROVIDED TO US BY MANAGEMENT.
   
145
TOYOTA MDL. 023FGC30 6000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 11442
           
146
TOYOTA MDL. 12712 5000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 423F625
           
147
CLARK MDL. GCX30E 5500# CAPACITY PROPANE FORKLIFT TRUCK, S/N: GX230-125-9245KF
           
148
CAT MDL. DPL40 9000# CAPACITY DIESEL FORKLIFT TRUCK, S/N: 3CM00437
 
   
149
NISSAN MDL. A115PV 3000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: CPJ01-9N296V
           
150
TOYOTA MDL. 02-3FD40 8800# CAPACITY DIESEL FORKLIFT TRUCK, S/N: FD45-1471
           
151
DATSUN MDL. CPF02 5000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 002808
           
152
CLARK MDL. C500-Y550 5500# CAPACITY DIESEL FORKLIFT TRUCK, S/N: 440654-4796
           
153
NISSAN MDL. CPJ02 5000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 9P0168
           
154
NISSAN MDL. UGJ02A30PV 6000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 9L0118
           
155
JOHN DEERE MDL. 544A LOADER, S/N: 000783CD
 
   
156
TENNANT SERIES II MDL. 27SII FLOOR SWEEPER, S/N: 275-5124
 
   
157
2010 DODGE CARAVAN, VIN: 2D4RNGDX4AR426237
 

 
 
 
 
 
Koster Industries Inc.
 
 
 

 
 
Page 10 of 11

--------------------------------------------------------------------------------

 
 
 
EXHIBIT B

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 
 
Ph#
 
Item
 
Description
 
 
158
 
2003 FORD MDL F-350 PICKUP TRUCK, VIN: 1FTSF31F63EA52607
   
159
1995 GMC 3500 DUMP TRUCK, VIN: 1GDJK34KOSE533852
   
160
1987 INTERNATIONAL MDL F-2575 TRACTOR, VIN: 1HSZJG2R5HH462325
   
161
GENIE MDL S-60 MANLIFT, S/N: 735
   
162
FARO LASER TRACKER (NEW 2007)
   
163
MISCELLANEOUS INSPECTION ITEMS, INCLUDING BUT NOT LIMITED TO:
     
GRANITE SURFACE PLATES, HEIGHT GAGES, MICROMETERS, JO-BLOCK
     
SETS, CHAMFER GAGE, PIN SETS, CALIPERS, THICKNESS GAGES, ETC.
   
164
MISCELLANEOUS OFFICE ITEMS, INCLUDING BUT NOT LIMITED TO: QUANTITY
 
OF DESKS, CUBICLES WITH MODULAR DESKS, CHAIRS, CREDENZAS,
 
QUANTITY OF FILE CABINETS, PC'S, PRINTERS, SHELVING, COPY MACHINE,
 
FAX MACHINE, PAPER CUTTER, POSTAGE METER, BOOKSHELVES, STORAGE
 
CABINETS, ETC.
    165
MISCELLANEOUS SHOP & CRIB ITEMS THROUGHOUT FACILITY, INCLUDING  BUT NOT LIMITED
TO: PERISHABLE TOOLING, LARGE QUANTITY OF ANGLE PLATES, HOLDDOWNS, C-CLAMPS,
PORTABLE MATERIAL HANDLING CARTS, ASSORTED ELECTRICAL & MAINTENANCE SUPPLIES,
LARGE QUANTITY OF CNC TOOLING, BROOMS, SHOVELS, TOTE BINS, BENCHES, VISES,
VIDMAR CABINETS, HOISTS, ROTARY BINS, #3-1/2R FAMCO ARBOR PRESS, FACTORY OFFICE
FURNITURE & EQUIPMENT, FLOOR PLATES, LARGE QUANTITY OF TOOLING FOR VTL'S &
HBM'S, CHOP SAW, SLINGS, CHAINS, PORTABLE VACUUM PUMPS, 15HP AIR COMPRESSOR,
PORTABLE SCAFFOLDING, ASSORTED WELDING EQUIPMENT, STEEL BINS, SCRAP HOPPERS,
FANS, LARGE QUANTITY OF HOISTS WITH RAIL, ASSORTED HARDWARE, 165" DIAMETER
TABLE, OUST COLLECTORS, DOUBLE ENO GRINDERS, TOOL BOXES, CABINETS, WELDING WIRE,
2-WHEEL HAND TRUCKS, PALLET TRUCKS, BANDING MACHINES, DRY ROD STABILIZING OVENS,
ASSORTED AIR TOOLS, PNEUMATIC GRINDERS, PAINT PRESSURE TANKS, HOOKS, STRAPS, AIR
HOSE, WASH DOWN TABLE, NOTCHER, BENDING ROLLS, PORTABLE CRANE, SNOW BLOWER,
LADDERS, RACKING, [2J 10HP SPEEDAIRE AIR COMPRESSORS, HYDRAULIC JACKS, DAYTON
BATTERY CHARGER, FLAME RETARDENT CABINETS, WELDERS (OUT OF SERVICE}, BENCHES &
VISES, LAWN MOWER, PARTS CLEANER, ASSORTED TANK TURNING ROLLS, 5' WIDE X 50 HIGH
ANGLE PLATES, PAINT PRESSURE TANK, ETC.

 
 
*In addition to the Assets listed above, the Assets shall include any and all
patent or licensing agreements to utilize the foregoing Assets for
their·intended purpose and upon a sale' of any of the Assets, the right to
utilize the patent and license agreement shall run with the applicable Asset and
pass to the transferee of title to the Assets.

 

Koster Industries Inc.
 
 
 
 
 
 
Page 11 of 11

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EXHIBIT C
 

 
GUARANTY

 
 
 

 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit C to Term Loan and Security Agreement
 
 
GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT dated as of December      , 2014 (herein referred to as
the “Guaranty Agreement”) is from TECHPRECISION CORPORATION, a Delaware
corporation having an  address of 3477 Corporate Parkway, Suite 140, Center
Valley, Pennsylvania 18034 (herein, together with heirs, administrators,
representatives, executors, successors and assigns, referred to as “Guarantor”)
to REVERE HIGH YIELD FUND, LP, a Delaware limited partnership (herein, together
with its successors and assigns, referred to as “Lender”).
 

PRELIMINARY STATEMENT

 
 
A.
Ranor, Inc., a Delaware corporation (the “Borrower”) entered into that certain
Term Loan and Security Agreement dated the date hereof with the Lender (as
amended from time to time, the “Loan Agreement”), pursuant to which the Lender
has agreed to make a loan in the maximum principal amount of $1,500,000.00
affecting certain real estate and improvements held by Borrower located in
Westminster, Massachusetts (the “Premises”), and a loan in the maximum principal
amount of $750,000.00 (collectively, the “Loan”), which Loan is evidenced by a
Term Note of even date herewith from Borrower to Lender, in the face amount of
$1,500,000.00 and a Term Note of even date herewith  from Borrower to Lender in
the face amount of $750,000.00 (as may from time to time be amended, extended,
renewed and supplemented, collectively, the “Note”).

 
 
B.
The indebtedness evidenced by the Note is secured by, inter alia, the Loan
Agreement and a Mortgage Deed, Assignment of Leases  and Rents, Security
Agreement and Fixture Filing of even date herewith from Borrower to Lender (as
may be amended and supplemented, the “Mortgage”).

 
C.
As further security for the payment of the indebtedness evidenced by the Note
and in order to induce Lender to make the Loan, Guarantor is willing to enter
into and deliver this Guaranty Agreement. Guarantor acknowledges that Lender has
refused to make the Loan without this Guaranty Agreement.

 
 
D.
This Guaranty Agreement, the Note, the Mortgage, and any other documents or
instruments evidencing or securing the Note shall be herein referred to as the
“Loan Documents.”

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is  hereby
acknowledged, Guarantor does hereby, jointly and severally, covenant and agree
with Lender as follows:
 
 
 

 
 
1

--------------------------------------------------------------------------------

 
 

Exhibit C to Term Loan and Security Agreement
 
 
ARTICLE I
 
REPRESENTATIONS AND WARRANTIES OF GUARANTOR
 

SECTION 1.1. REPRESENTATIONS AND WARRANTIES.

 
Guarantor does hereby represent and warrant as follows:

 
(a)
This Guaranty Agreement has been duly authorized, executed and delivered by
Guarantor;

 
(b)
There are no undisclosed actions, suits, or proceedings pending or, to the best
of Guarantor’s knowledge, threatened against Guarantor in any court or before
any Federal, state, municipal or other governmental department or commission,
board, bureau, agency or instrumentality which if adversely determined will
affect the transactions contemplated by this Guaranty Agreement or materially
adversely affect Guarantor’s ability to perform Guarantor’s obligations
hereunder;

 
 
(c)
The Loan will result in a direct financial benefit to Borrower and to Guarantor;

 
 
(d)
With regard to any and all balance sheets, net worth statements and other
financial statements and data which have heretofore been given to Lender with
respect to Guarantor, Guarantor affirms that such statement fairly and
accurately represents the financial condition of Guarantor as of the date of
such statements, and, since such date, there has been no material adverse change
in the financial condition of Guarantor; and

 
 
(e)
(i) there are no undisclosed material claims or demands pending against, or to
the knowledge of Guarantor threatened against Guarantor or any of Guarantor’s
assets which, if adversely decided, would affect the Guarantor’s ability to
perform the obligations hereunder, (ii) Guarantor is not in breach or default of
any obligation to pay money that would affect the Guarantor's ability to perform
the obligations hereunder, and (iii) no event (including specifically
Guarantor’s execution and delivery of this Guaranty Agreement) has occurred that
would affect the Guarantor's ability to perform the obligations hereunder, and
which, with or without the lapse of time or action by a third party, constitutes
or could constitute a material breach or material default under any document
evidencing or securing any obligation to pay money or under any other contract
or agreement to which Guarantor is a party.

 

ARTICLE II
 
PAYMENT AND PERFORMANCE GUARANTY
 

 
SECTION 2.1.GUARANTY.
 

 
Guarantor hereby irrevocably, unconditionally and absolutely guarantees to
Lender, and Lender’s successors and assigns, the due and prompt payment, and not
just the collectability, of the principal of, and interest and late charges,
escrow payments and all other indebtedness and indemnification, if any, under
any of the Loan Documents when due, whether at  maturity, pursuant to mandatory
or optional prepayments, by acceleration, indemnification or otherwise all at
the times and places and at the rates described in, and otherwise according to
the terms of, the Note and the other Loan Documents.
 
 
 
 
 
2

--------------------------------------------------------------------------------

 
 
 
Exhibit C to Term Loan and Security Agreement

Guarantor further hereby irrevocably, unconditionally and absolutely guarantees
to Lender the due and prompt performance by Borrower of all duties, agreements
and obligations of Borrower contained in the Note and the other Loan Documents,
and the due and prompt payment of all costs incurred, including reasonable
attorneys’ and paralegals’ fees and costs (including, without limitation, fees
and costs incurred in litigation, mediation, arbitration, administrative and
bankruptcy proceedings, and appeals therefrom), in enforcing the payment and
performance of the Note and the other Loan Documents and this Guaranty
Agreement.
 
The payment and performance of the items set forth in this Section 2.1 are
hereinafter collectively referred to as the “Indebtedness Guaranteed”.
 
The liability of Guarantor under this Section 2.1 shall survive any release,
termination, satisfaction or foreclosure of the Mortgage or the Borrower
Collateral (as defined in the Loan Agreement) or the acceptance of title to the
Premises or the Borrower Collateral by a deed in lieu of foreclosure.

In case any covenant and agreement made by Borrower under any Loan Documents has
not been performed or any obligation under the Note or other Loan Document shall
not have been paid by Borrower when due, Guarantor will, not later than fifteen
(15) days after written notice by Lender, perform the same and pay the same, to
the amount and to the extent required hereunder. Overdue amounts hereunder shall
bear interest at the Default Rate as defined in the Note.
 

SECTION 2.2.ABSOLUTE OBLIGATIONS.
 
The obligations of Guarantor under this Guaranty Agreement shall be binding upon
Guarantor and Guarantor’s heirs, administrators, representatives, executors,
successors and assigns, and shall remain in full force and effect irrespective
of any obligations of Borrower on the Note or under the Mortgage or other Loan
Documents. The obligations of Guarantor shall not be discharged or impaired by
acts, failures or omissions on the part of any holder or holders of the Note
whether or not Guarantor has notice, or has agreed to such acts, failures or
omissions which might otherwise have the effect of releasing Guarantor,
including but not limited to the following acts, failures or omissions:
 
 
(a)
any failure to present the Note for payment or to demand payment thereof, or to
give Borrower notice of dishonor for nonpayment of the Note or the interest
thereon, when and as the same may become due and payable, or notice of any
failure on the part of Borrower and/or Guarantor to do any act or thing or to
perform or keep any covenant or agreement by it to be done, kept and performed
under the terms of the Note or the Mortgage or the other Loan Documents;

 
 
(b)
the voluntary or involuntary liquidation, dissolution, sale or other disposition
of all or substantially all the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors or readjustments of, or
other similar proceedings affecting Borrower and/or Guarantor or any of their
respective assets, or any contest of the validity of this Guaranty Agreement in
any such proceeding;

 
 
(c)
any release, limitation, discharge, or cessation of the liability of Borrower or
any other person for all or any portion of the obligations under any of the Loan
Documents or of Guarantor under this Guaranty Agreement due to any statute,
regulation or rule of law, or any invalidity or unenforceability in whole or in
part of this Guaranty Agreement or of any provision of any Loan Document or any
term or provision hereof or thereof;

 
 
(d)
any defense, setoff, counterclaim, or claim of recoupment, reduction,
diminution, discharge, or exoneration, or any other defense of any kind or
nature, other than that of prior performance, that Borrower or Guarantor may
have or assert, including, but not limited to, any defense of incapacity or lack
of authority to enter into  this Guaranty Agreement or any of the other Loan
Documents or to perform or pay the liabilities and obligations contained herein
or therein, or any defense based on any omission, statute of limitations,
failure of consideration, accord and satisfaction, delay or inadequacy, whether
entire or partial, respectively, under this Guaranty Agreement or any of the
other Loan Documents or the existence of any defense to the enforcement of the
Loan Documents;

 
 
(e)
any failure or delay in exercising Lender’s rights and/or remedies against
Borrower or Guarantor, hereunder or under any of the other Loan Documents.
Lender’s release of or refusal to enforce any provision of the Loan Documents,
or agreement not to sue Borrower, any suspension of the right to enforce against
Borrower its obligations under the Loan Documents or any security interest in or
lien upon any collateral granted to Lender under the Loan Documents or any
transfer, waiver, subordination, exchange, substitute, recovery, abandonment,
compromise, settlement, modification, surrender or release of any security
granted to Lender, or any agreement or undertaking of Borrower, Guarantor or any
other person; any compromise, extension, renewal of, or settlement of duration
or time for payment, discharge, or performance of all or any part of the
liabilities or the obligations hereunder, whether made with or without the
knowledge or consent of Borrower or Guarantor; any amendment to or modification
of, alteration, increase, reduction, compromise of, renewal, extension,
refinance of, any of the Loan Documents, any amendment or modification of any
documents or agreement relating thereto or any release, surrender, exchange,
realization, or compromise of Lender’s rights and remedies with respect to any
lien upon or security interest in the collateral granted to Lender under any of
the Loan Documents, whether or not any promise by Lender is for any cause void
or voidable by Lender at its option;

 
 
 

 
 
3

--------------------------------------------------------------------------------

 
 
 
Exhibit C to Term Loan and Security Agreement

 
 
(f)
the addition of, or release of, any and all other endorsers, guarantors,
obligors and other persons liable under the Loan Documents and/or release of the
security or any portion thereof or acceptance of additional security for the
performance of the obligations under the Loan Documents;

 
 
(g)
any agreement by Lender with Borrower or any other person to supplement, modify,
amend, extend, renew, accelerate or otherwise change the time for payment of
Borrower’s obligations under the Loan Documents or any part thereof, including
any increase or decrease of the rate(s) of interest thereon;

 
 
(h)
any agreement by Lender with Borrower or any other person to supplement, modify,
amend or waive, or enter into or give any agreement, approval or consent with
respect to the Loan Documents or any of Borrower’s other obligations under the
Loan Documents or any part thereof, or any of the Loan Documents, or any
additional security or guaranties, or any condition, covenant, default, remedy,
right, representation or term thereof or thereunder;

 
 
(i)
acceptance of new or additional instruments, documents or agreements in exchange
for or relative to any of the Loan Documents or any of Borrower’s other
obligations under the Loan Documents or any part thereof;

 
 
(j)
acceptance of partial payments on Borrower’s obligations under the Loan
Documents;

 
(k)
any agreement to settle, release on terms satisfactory to Lender or by operation
of applicable laws or otherwise to liquidate or enforce any obligations of
Borrower under the Loan Documents, or any security in any manner, or any consent
to the transfer of any security and bid and purchase at any sale;

 
 
(l)
to the extent permitted by law, any failure of Lender to give notice of sale or
other disposition of any collateral to Borrower or Guarantor or any other person
or any defect in any notice that may be given in connection with any sale or
disposition of collateral; and/or

 
(m)
to the extent permitted by law, any failure of Lender to comply with applicable
laws in connection with the sale or other disposition of any collateral or other
security granted to Lender under the Loan Documents, including,
without  limitation,  any failure of Lender to conduct a commercially reasonable
sale or other disposition of any collateral or other security.

 

Provided that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned above, it being the purpose and intent of this
paragraph that the obligations of Guarantor shall be absolute and unconditional
to the extent herein specified and shall not be discharged, impaired or varied
except by the payment of the principal of, prepayment fee (as defined in the
Note), if any, and interest on the Note and any other payments due under the
Note, the Mortgage and the Loan Documents in accordance with the terms thereof,
and then only to the extent of such payment. Without limiting any of the other
terms or provisions hereof, it is understood and agreed that in order to hold
Guarantor liable hereunder, there shall be no obligation on the part of Lender
or any other holder of the Note to resort in any manner or form for payment to
Borrower, to any other person, firm or corporation, their properties or estates.
All rights of Lender or any other holder of the Note hereunder may be
transferred or assigned at any time or from time to time and shall be considered
to be transferred or assigned at any time or from time to time upon the transfer
of the Note, whether with or without the consent of or notice to Guarantor or to
Borrower.
 
 
 
 
 
4

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Exhibit C to Term Loan and Security Agreement
 

Guarantor also agrees that to the extent Borrower makes any payment on the Note
or any of the other Loan Documents, which payment or any part thereof is
subsequently invalidated, voided, declared to be fraudulent or preferential, set
aside, or is required to be repaid to a trustee, receiver, or any other person
under any bankruptcy code, common law, or equitable cause, then and to the
extent of such payment, Borrower’s obligation or the part thereof intended to be
satisfied shall be revived and continued in full force and effect with respect
to Guarantor’s obligations hereunder, as if said payment had not been made. The
liability of  Guarantor hereunder shall not be reduced or discharged, in whole
or in part, by any payment to Lender from any source, that Lender thereafter
pays, returns or refunds in whole or in part by reason of the assertion of a
claim of any kind relating thereto, including, but not limited to, any claim for
breach of contract, breach of warranty, preference, illegality, invalidity, or
fraud asserted by any account debtor or by any other person.
 
To the extent permitted by law,  Lender may, at its election, exercise any right
or remedy it may have against Borrower, Guarantor or any other person or any
security held by Lender, including, without limitation, the right to foreclose
upon any such security by one or more foreclosure sales, whether or not every
aspect of any such sale is commercially reasonable, without affecting or
impairing in any way the liability of Guarantor hereunder, except to the extent
the indebtedness has been paid, and Guarantor hereby waives any defense arising
out of the absence, impairment or loss of any right of reimbursement,
contribution or subrogation or any other right or remedy of Guarantor against
Borrower or any other person or any such security whether resulting from such
election by Lender or otherwise. Guarantor hereby waives any defense arising by
reason of any disability or other defense of Borrower or any other person or by
reason of the cessation from any cause whatsoever (including without limitation
any intervention or omission by Lender) of any obligation or liability, either
in whole or in part, of Borrower to Lender. Guarantor understands and agrees
that if all or any part of any obligation or liability of Borrower to Lender is
secured by real property, Guarantor shall be obligated and liable for the full
amount of Guarantor’s obligations hereunder notwithstanding foreclosure of such
real property by trustee sale, judicial sale or any other reason impairing the
right of Guarantor to proceed against Borrower.

 
SECTION 2.3                     ADDITIONAL WAIVERS OF GUARANTOR.
 
 
(a)
Financial Condition of Borrower.   Guarantor acknowledges that this is a
continuing Guaranty Agreement and that Guarantor expressly promises to pay and
perform each and every one of Guarantor’s obligations hereunder. Guarantor is
fully aware of the operating history of the Premises and the status of the
Borrower Collateral. Guarantor delivers this Guaranty Agreement based solely
upon Guarantor’s independent investigation of Borrower’s financial condition,
and Guarantor assumes full responsibility for obtaining any further information
concerning Borrower’s financial condition. Guarantor agrees that Guarantor is
now and, during the term of this Guaranty Agreement, will be responsible for
being fully aware of the financial condition of Borrower, the Borrower
Collateral and the Premises. Guarantor knowingly accepts the full range of risk
encompassed in a contract of continuing guaranty, which risk includes, but is
not limited to, the possibility that Borrower’s financial condition or its
ability to pay its debts as they mature has deteriorated.

 
 
(b)
Waiver of Notice. Guarantor hereby waives: (i) presentment and protest, and
waives notice of presentment, protest, dishonor, non-payment, non-performance
and any similar notice, and waives any delay thereto, with respect to the Loan
Documents or any instruments or documents at any time held by Lender in
connection with this Guaranty Agreement or the other Loan Documents; (ii) notice
of extension, modification, refunding, amendment, addition or supplement to,
deletion or departure from, or breach of any of the terms of the Loan Documents
(other than this Guaranty Agreement) or the other Loan Documents or any other
agreement that may be made relating hereto or thereto; (iii) notice of the
occurrence of any default hereunder or the occurrence of any default or Event of
Default under any of the Loan Documents, any compromise, release, consent, or
other action or inaction with respect to the collateral granted to Lender under
any of the Loan Documents or any of the terms and provisions of the Loan
Documents; (iv) notice with respect to any exercise or non- exercise by Lender,
or any right, power, or remedy under or in respect of the Loan Documents or any
security, lien, deposit, pledge, or guaranty held in connection with the
liabilities of Borrower under the Loan Documents; (v) notice of acceptance of
this Guaranty Agreement and notice that credit has been extended by Lender  in
reliance on Guarantor’s guaranty of the obligations of Borrower; (vi) any
defense based upon an election of remedies by Lender whether or not the right of
Guarantor to proceed against Borrower for reimbursement is affected; (vii) to
the extent Guarantor may lawfully do so, any defense based upon any statute or
rule which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; and
(viii) all defenses which Borrower may now or hereafter have to the payment of
the obligations under the Loan Documents which could otherwise be asserted by
Guarantor in any defense (other than payment) of any kind which  Guarantor may
now or hereafter have with respect to any of the Loan Documents, any other
guaranty, or any other collateral securing the obligations under the Loan
Documents.

 
 
(c)
Waiver of Rights of Subrogation. Notwithstanding anything to the contrary
elsewhere contained herein or in any other Loan Document, Guarantor until one
year and one day from the payment and full satisfaction of all amounts due
Lender under the Loan Documents and the performance and payment of the
Indebtedness Guaranteed, hereby
expressly waives with respect to Borrower and any other person, any and all
rights at law or in equity to subrogation, to reimbursement, to exoneration, to
contribution, to indemnification, to setoff or to any other rights that could
accrue to a surety against a principal, to a guarantor against a maker or
obligor, to an accommodation party against the party accommodated, or to a
holder or transferee against a maker, and which Guarantor may have or hereafter
acquire against Borrower or any other person in connection with or as a result
of Guarantor’s execution, delivery and/or performance of this Guaranty Agreement
or any other Loan Document. Guarantor agrees that Guarantor shall not have or
assert any such rights against Borrower or its successors and assigns or any
other person (including any surety), either directly or as an attempted setoff
to any action commenced against Guarantor by Borrower (as borrower or in any
other capacity) or by Lender or by any other person.
 

Guarantor agrees that to the extent that such claims are not subordinated, by
operation of law or otherwise, such claims of Guarantor are hereby subordinated
as a claim against Borrower or any of its assets, whether such claim be in the
ordinary course of business or in the event of voluntary or involuntary
liquidation, dissolution, insolvency or bankruptcy, so that no payment with
respect to any such indebtedness, claim or liability will be made or received
while any portion of the obligations under the Loan Documents remains due and
unpaid, and if any such payment is received by Guarantor, it shall be held in
trust for the benefit of Lender and then promptly paid over to Lender for
application to the payment of the obligations under the Loan Documents.

 
 
 
 
 
5

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Exhibit C to Term Loan and Security Agreement
 
 
 

 
(d)
Independent Obligations, and Waivers. The obligations of Guarantor hereunder are
independent of and are not co-extensive with the obligations of Borrower under
the Loan Documents. A separate action or actions may be brought and prosecuted
by Lender against Guarantor whether or not an action is brought against Borrower
or Borrower is joined in any such action or actions and Guarantor’s liability
hereunder may be enforced regardless of the existence, validity,
enforcement  or  non- enforcement of any such other guaranties or other
obligations. Any cause of action that Lender may have against Guarantor shall
accrue upon the date Lender makes demand on Guarantor for payment of Guarantor’s
obligations hereunder. Without limiting the generality of the foregoing,
Guarantor expressly waives the benefit of any statute of limitations, any
moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension,
redemption, appraisement, exemption and homestead now provided, or which may
hereafter be provided, by the Constitution or laws of the United States of
America or the Commonwealth of Massachusetts, both as to itself and to all of
its property, real and personal, affecting the liabilities under the Loan
Documents or otherwise and expressly agrees that the running of a period of
limitation on, or any delay or omission in, Lender’s action against Borrower or
in Lender’s enforcement of remedies against Borrower, the collateral granted to
Lender under any of the Loan Documents, or any security interest or lien held
for  the liabilities under the Loan Documents shall not exonerate or affect
Guarantor’s absolute obligation to pay and perform in full Guarantor’s
obligations hereunder.

 
(e)
Bankruptcy and Related Waivers. Guarantor hereby waives to the fullest extent
permitted by law, (i) any defense arising as a result of Lender’s election, in
any proceeding instituted under the United States Bankruptcy Code, of the
application of Section 1111(b)(2) of the United States Bankruptcy Code, (ii) any
defense based on any borrowing or grant or a security interest under Section 364
of the United States Bankruptcy Code, (iii) any use of cash collateral under
Section 363 of the United States Bankruptcy Code, (iv) any agreement or
stipulation with respect to the provision of adequate protection in any
bankruptcy proceeding of any person, (v) the avoidance of any lien in favor of
Lender for any reason, and (vi) any objection to or defense arising as a result
of bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
liquidation or dissolution proceeding commenced by or against Borrower or any
other person, including any discharge of, or bar or stay against collecting, all
or any of the liabilities hereunder or under any of the Loan Documents.

 
 
(f)
Understandings With Respect to Waivers and Consents. Guarantor warrants and
agrees that each of the waivers and consents of Guarantor set forth in this
Guaranty Agreement are made after consultation with legal counsel and with full
knowledge of their significance and consequences, with the understanding that
events giving rise to any defense or right waived may diminish, destroy or
otherwise adversely affect rights which Guarantor otherwise may have against
Borrower, Lender or any other person or against the Premises or the Borrower
Collateral, and that, under the circumstances, the waivers and consents herein
given are reasonable and not contrary to public policy or law. If any of the
waivers or consents herein is determined to be contrary to any applicable law or
public policy, such waivers and consents shall be effective to the maximum
extent permitted by law.

 
 
 

 
 
6

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Exhibit C to Term Loan and Security Agreement
 
 
ARTICLE III
TERM OF GUARANTY

 
SECTION 3.1.                                GUARANTY TERM.

 
The obligations and liabilities of Guarantor under this Guaranty Agreement shall
remain in full force and effect, notwithstanding the release of the Note, the
Mortgage or the other Loan Documents, until such time as the Note has been paid
in full and the principal, prepayment fee (as defined in the Note), if any, and
interest on the Note and all other amounts due and owing Lender under the Loan
Documents have been paid in full  and all  obligations of Borrower have been
performed in full.
 

ARTICLE IV
MISCELLANEOUS
 

 
SECTION 4.1.                                NO TRANSFER.
 
Guarantor covenants that Guarantor will not transfer any of its assets for the
purpose of preventing Lender from satisfying any judgment rendered under this
Guaranty Agreement therefrom, either before or after the entry of any such
judgment.
 

SECTION 4.2.                                FINANCIAL STATEMENTS.
 
Guarantor shall submit such financial and other information as provided in
Section 5.06 of the Loan Agreement.
 

SECTION 4.3.                                UNCONDITIONAL OBLIGATIONS.

 
The obligations of Guarantor hereunder shall arise absolutely and
unconditionally when the Note shall have been delivered to Lender.

 
SECTION 4.4.                                AMENDMENTS.

 
This Guaranty Agreement may be amended and the observance of any term of this
Guaranty Agreement may be waived with (and only with) the written consent of
Guarantor and Lender (or the holder or holders of the Note).

SECTION 4.5.                                ENTIRE AGREEMENT.

 
This Guaranty Agreement constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof.

SECTION 4.6.                                SEVERABILITY.

 
In case any one or more of the provisions contained in this Guaranty Agreement
shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected or impaired thereby.

SECTION 4.7.                                SUCCESSORS AND ASSIGNS.

 
This Guaranty Agreement shall be binding upon Guarantor and Guarantor’s heirs,
administrators, representatives, executors, successors and assigns and shall
inure to the benefit of Lender and its successors and assigns as holder of the
Note.
 

SECTION 4.8.                                GOVERNING LAW.

 
This Guaranty Agreement shall be governed by and construed and interpreted in
accordance with the laws of the Commonwealth of Massachusetts, without regard to
principles of conflicts of laws.
 

SECTION 4.9.                                JURISDICTION AND NOTICES.
 
 
 

 
 
7

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Exhibit C to Term Loan and Security Agreement
 

 
The Guarantors submit and consent to personal jurisdiction in the Commonwealth
of Massachusetts for the enforcement of this Guaranty Agreement and waive any
and all personal rights under the laws of any state or the United States of
America to object to jurisdiction in the Commonwealth of Massachusetts for the
purposes of litigation to enforce this Guaranty Agreement. Litigation may be
commenced either in the court of general jurisdiction of such state or the
United States District Court for the district in that state, at the election of
the Lender. In the event that such litigation is commenced in lieu of personal
service, service of process may be made, and personal jurisdiction over the
Guarantors obtained, by the mailing of a copy of any summons and complaint, U.S.
Mail, Certified Mail, Return Receipt Requested, or any other method provided
under the laws of the jurisdiction for service of process in a civil action, to
the Guarantors at the addresses shown below, or the last address of which Lender
has received notice. Nothing contained herein shall prevent Lender from bringing
any action or exercising any rights against any security given to Lender by the
Guarantors, or against the Guarantors personally, or against any property of the
Guarantors, within any other state. Commencement of any such action or
proceeding in any other state shall not constitute a waiver of the agreement as
to the laws of the state which shall govern the rights and obligations of the
Guarantors and Lender hereunder or of the submission made by the Guarantors to
personal jurisdiction with the Commonwealth of Massachusetts. The aforesaid
means of obtaining personal jurisdiction and perfecting service of process are
not intended to be exclusive but are cumulative and in addition to all other
means of  obtaining personal jurisdiction and perfecting service of process  now
or hereafter provided by the laws  of the state where an action on this Guaranty
Agreement is commenced.
 
 

 

Address: TechPrecision Corporation  
Saucon Valley Plaza
  3477 Corporate Parkway, Suite 140   Center Valley, Pennsylvania 18034  
Attention: Richard F. Fitzgerald, CFO Telephone: 484.693.1702 Fax: 267.373.1640
Email: fitzgeraldr@techprecision.com    

             
SECTION 4.10.                                          ENFORCEMENT COSTS.
 

 
If (i) this Guaranty Agreement is delivered to an attorney for the purpose of
enforcing the obligations hereunder or any of them through any legal proceeding;
(ii) an attorney is retained to represent Lender in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors’ rights
and involving a claim under this Guaranty Agreement; or (iii) an attorney is
retained to represent Lender in any other proceedings whatsoever in connection
with this Guaranty Agreement, then Guarantor shall pay to Lender all reasonable
attorneys’ and paralegals’ fees and costs,  including without limitation fees
and costs incurred in litigation, mediation, arbitration, administrative, and
bankruptcy proceedings and appeals therefrom, court costs, filing fees,
recording costs, expenses for telephone calls and facsimile transmissions,
travel expenses, photocopies, expenses of sale of foreclosure, title insurance
premiums, accountant’s fees, appraisal fees, environmental investigation costs,
out of court settlement fees and expenses and all other costs and expenses
incurred in connection therewith, in addition  to  all  other amounts due
hereunder. Such costs shall be paid Lender whether or not an action is actually
commenced against Guarantor by reason of any breach of Guaranty Agreement.
 
 
 
 
 
8

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Exhibit C to Term Loan and Security Agreement
 

SECTION 4.11.  PREJUDGMENT REMEDY WAIVER .

 
GUARANTOR HEREBY REPRESENTS, COVENANTS AND AGREES THAT THE TRANSACTION TO WHICH
THE LOAN DOCUMENTS RELATE IS A "COMMERCIAL TRANSACTION" AS DEFINED BY THE
GENERAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. GUARANTOR HEREBY WAIVES ALL
RIGHTS TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER THE GENERAL LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS, AS AMENDED, OR UNDER ANY OTHER STATE OR
FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES BORROWER OR LENDER
MAY EMPLOY TO ENFORCE ITS  RIGHTS  AND  REMEDIES  HEREUNDER. GUARANTOR
ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE
ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY BY BORROWER’S OR LENDER’S ATTORNEY,
AND BORROWER AND LENDER ACKNOWLEDGE GUARANTOR’S RIGHT TO SAID HEARING SUBSEQUENT
TO THE ISSUANCE OF SAID WRIT. GUARANTOR FURTHER HEREBY WAIVES ANY REQUIREMENT OR
OBLIGATION OF BORROWER OR LENDER TO POST A BOND OR OTHER SECURITY IN CONNECTION
WITH ANY PREJUDGMENT REMEDY OBTAINED BY BORROWER OR LENDER AND WAIVES ANY
OBJECTIONS TO ANY PREJUDGMENT REMEDY OBTAINED BY BORROWER OR LENDER BASED ON ANY
OFFSETS, CLAIMS, DEFENSES OR COUNTERCLAIMS OF GUARANTOR OR ANY OTHER OBLIGATED
PARTY  TO ANY ACTION BROUGHT BY BORROWER OR LENDER.
 
SECTION 4.12.                                          JURY TRIAL.

 
NEITHER BORROWER, LENDER, GUARANTOR OR ANY OTHER PERSON OR ENTITY LIABLE FOR THE
INDEBTEDNESS EVIDENCED BY THE NOTE, OR ANY ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL
REPRESENTATIVE OF LENDER, BORROWER, GUARANTOR OR ANY OTHER PERSON OR ENTITY
SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER
LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF THIS GUARANTY AGREEMENT, THE
MORTGAGE, THE NOTE OR ANY INSTRUMENT SECURING THE NOTE, ANY COLLATERAL FOR THE
PAYMENT HEREOF OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG SUCH PERSONS
OR ENTITIES, OR ANY OF THEM. NEITHER LENDER, BORROWER, GUARANTOR OR ANY OTHER
PERSON OR ENTITY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL
HAS BEEN WAIVED, WITH ANY OTHER ACTION WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
PARTIES HERETO, AND THE PROVISIONS HEREOF SHALL BE SUBJECT TO NO EXCEPTIONS. NO
PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY LENDER THAT THE PROVISIONS
OF THIS PARAGRAPH CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH LENDER HAS
RELIED,  IS  RELYING AND WILL RELY IN MAKING THE LOAN. BORROWER ACKNOWLEDGES
THAT IT HAS CONSULTED WITH AN ATTORNEY AND FULLY UNDERSTANDS THE LEGAL EFFECT OF
THE PROVISIONS OF THIS PARAGRAPH.

 

 
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 
 
 

 
 
9

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Exhibit C to Term Loan and Security Agreement

 
IN  WITNESS  WHEREOF,  Guarantor  has  caused  this  Guaranty  Agreement  to  be
executed as of the day and year first above written.
 

     
TECHPRECISION CORPORATION
     
a Delaware corporation
           
By:
                                               
     
Name: Richard F. Fitzgerald
     
Title: Chief Financial Officer
       
THE COMMONWEALTH OF PENNSYLVANIA
§
 
 
 
§ss.
   
COUNTY OF                                      
§
 
 
       

On this                       day of December, 2014, personally appeared Richard
F. Fitzgerald, Chief Financial Officer of TECHPRECISION CORPORATION, signer and
sealer of the foregoing instrument, and acknowledged the same to be his free act
and deed in his capacity as such Chief Financial Officer, and the free act and
deed of TECHPRECISION CORPORATION before me.
 

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

[Signature Page to Guaranty Agreement]
 

 
 
 

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EXHIBIT D
 
 
MORTGAGE

(see attached)

 
 
 

 
 
 

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Exhibit D to Term Loan and Security Agreement

 
After recording return to:
 

MAYO CROWE LLC
CITY PLACE II
185 ASYLUM STREET
HARTFORD, CONNECTICUT 06103
ATTENTION: KATHERINE F. TROY, ESQ.

 

--------------------------------------------------------------------------------

 
RANOR, INC., AS BORROWER TO
 
REVERE HIGH YIELD FUND, LP, AS LENDER

 

 

--------------------------------------------------------------------------------

 
  MORTGAGE DEED, ASSIGNMENT OF LEASES AND RENT, SECURITY AGREEMENT AND FIXTURE
FILING
 

--------------------------------------------------------------------------------

 
 

 
Date:
As of December, 2014
   
Location:
48 Town Farm Road
Westminster, Massachusetts
     
County:
Worcester

 
 
 
 
 

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Exhibit D to Term Loan and Security Agreement

 
  MORTGAGE DEED, ASSIGNMENT OF LEASES AND RENT, SECURITY AGREEMENT AND FIXTURE
FILING
 

THIS MORTGAGE DEED, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (this “Security Instrument”), made this day of December, 2014 by
and between RANOR, INC., a Delaware corporation having an office and place of
business located at Bella Drive, Westminster, Massachusetts 01473, as party of
the first part (the “Borrower”), for the benefit of REVERE HIGH YIELD FUND, LP,
a Delaware limited partnership, with an address of 105 Rowayton Avenue, Suite
100, Rowayton, Connecticut 06853, together with its successors and assigns, as
party of the second part (“Lender”).
 

RECITALS:

WHEREAS, Borrower and Lender are parties to that certain Term Loan and Security
Agreement dated the date hereof (as such agreement is amended and in effect from
time to time, the “Loan Agreement”);

WHEREAS, the Loan Agreement provides for Lender to make a loan to Borrower in
the principal amount of
ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00) (the
“Loan”);

WHEREAS, the Loan is evidenced by a Term Note dated as of the date hereof (the
“Note”) in the maximum principal sum of
ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00), with
interest payable from the date thereof at the rates set forth in the Note, which
by this reference is incorporated herein. The Note matures on December 31, 2015;
provided, however, that Borrower may elect to extend the maturity date thereof
for a period of six (6) months to June 30, 2016 subject to and in accordance
with the terms and conditions of the Note and the Loan Agreement; and

WHEREAS, Borrower desires to secure the payment and performance of all of its
obligations under the Note and certain additional Obligations (as defined in
Section 1.1).

IN CONSIDERATION of the principal sum of the Note as advanced as described
above, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to secure the Obligations, Borrower
hereby:

(A)           Irrevocably, unconditionally, and absolutely grants, bargains,
sells, assigns, transfers, pledges, mortgages, warrants, and conveys to Lender
(WITH POWER OF SALE) for the purposes herein set forth and grants Lender (WITH
POWER OF SALE) a security interest in, all of Borrower’s right, title, and
interest in the following property (collectively, the “Collateral”), upon the
terms and conditions hereof:

 

 
 
 
 
 
 
-1-

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Exhibit D to Term Loan and Security Agreement

 
(i)           That certain tract or parcel of land of which Borrower is now
seized and in possession, situate in Worcester County, Massachusetts, having a
street address at 48 Town Farm Road, Westminster, Massachusetts 01473, and more
fully described in Exhibit A attached hereto and by this reference incorporated
herein (“Premises”);

(ii)           Any and all buildings, constructions, and improvements now or
hereafter erected or located in or on the Premises, including, but not limited
to, all fixtures, attachments, appliances, equipment, machinery, and other
articles now owned by Borrower or hereafter acquired by Borrower and attached or
affixed thereto or located thereon (except the personalty owned by lessees)
(collectively, the “Improvements”), together with all appurtenances and
additions thereto and betterments, renewals, substitutions, and replacements
thereof, all of which shall be deemed and construed to be part of the realty;

(iii)           All right, title, and interest of Borrower in and to all items
incorporated as part of or attributed or affixed to any of the Premises,
Improvements, or other real property included in the Collateral or any other
interest of Borrower, whether now owned or hereafter acquired, in, to or
relating to the Premises, Improvements, or such other real property, in such
manner that such items are no longer personal property under the laws of the
Commonwealth of Massachusetts;

(iv)           All easements, rights-of-way, and rights now owned or hereafter
acquired by Borrower and used or usable in connection with the Premises and the
Improvements, or as a means of access thereto, including, without limiting the
generality of the foregoing, all rights pursuant to any trackage agreement, all
rights to the non-exclusive use of common drive entries, all water and water
rights, and all mineral, mining, oil, and gas rights and rights to produce or
share in the production of anything related thereto, together with all
tenements, hereditaments, and appurtenances thereof and thereto;

(v)           All right, title, and interest now owned or hereafter acquired by
Borrower in and to any land lying within the right-of-way of any street, open or
proposed, adjoining the Premises, and any and all sidewalks, alleys, and strips
and gores of land adjacent to or used in connection with the Premises or the
Improvements;

(vi)           All of the fixtures described in Exhibit B attached hereto and by
this reference incorporated herein, now owned or hereafter acquired by Borrower,
and all appurtenances and additions thereto and betterments, renewals,
substitutions and replacements thereof; and, all right, title, and interest of
Borrower, now or hereafter arising, in and to any and all said property is
hereby assigned to Lender, together with the benefits of all deposits and
payments now or hereafter made thereon by or on behalf of Borrower;

(vii)           All interests, estates, or other claims or demands in law and in
equity which Borrower now has or may hereafter acquire in the Collateral;
 
 
 
 
 
-2-

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Exhibit D to Term Loan and Security Agreement

 
(viii)           All proceeds, products, substitutions and accessions of the
foregoing, of every type; and

 
(B)
Assigns, sets over, and transfers to Lender (WITH POWER OF SALE):

 
(i)           All right, title, and interest of Borrower in and to all leases,
whether written or oral, covering the Premises, the Improvements, or any portion
thereof, now or hereafter existing or entered into (collectively, “Leases”), and
all right, title, and interest of Borrower thereunder, including, without
limitation, all guaranties thereof, all cash or security deposits, advance
rentals, and all deposits or payments of similar nature; and

(ii)           All rents, issues, profits, royalties, income, and other benefits
derived from the Premises or the Improvements or any other portion of the
Collateral (collectively, the “Rents”).

TO HAVE AND TO HOLD the said bargained property with all and singular the
rights, members, and appurtenances thereto appertaining, to the only proper use,
benefit, and behoof of Lender and its successors and assigns, in fee simple, and
Borrower hereby covenants that Borrower is lawfully seized and possessed of said
property, and has a good right to convey it, and it is unencumbered, subject to
(a) Liens (as defined in the Loan Agreement) held by Lender,
(b) Liens for unpaid taxes that either (i) are not yet delinquent, or (ii) do
not constitute an Event of Default hereunder and are the subject of Permitted
Protests (as defined in the Loan Agreement), (c) Liens set forth on
Schedule P to the Loan Agreement, (d) warehousemen, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the  ordinary course
of business and not in connection with the borrowing of money, and which Liens
either
(i)     are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, (f) Liens on amounts deposited in connection with obtaining worker’s
compensation or other unemployment insurance, (g) Liens on amounts deposited in
connection with the making or entering into bids, tenders, or leases in the
ordinary course of business and not in connection with the borrowing of money,
(h) Liens on amounts deposited as security for surety or appeal bonds in
connection with obtaining such bonds in the ordinary course of business, (i)
Liens resulting from any judgment or award that is not an Event of Default
hereunder, (j) rights of setoff or bankers’ liens upon deposits of cash in favor
of banks or other depository institutions; and (k) with respect to any Real
Property (as defined in the Loan Agreement), easements, rights of way, and
zoning restrictions that do not materially interfere with or impair the use or
operation thereof as reasonably determined by Lender, including those matters
described in Schedule B of that certain lender’s title insurance policy from
Fidelity National Title Insurance Company provided to Lender in connection with
the recording of the Security Instrument (collectively, the “Permitted Liens”);
and Borrower does by these presents bind Borrower and Borrower’s heirs,
executors, administrators, successors and assigns, forever, to warrant and
defend the said bargained property, unto Lender and its successors and assigns,
against Borrower, and against all and every other person or persons shall and
will WARRANT AND FOREVER DEFEND.

 
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Exhibit D to Term Loan and Security Agreement

 
PROVIDED, that if Borrower shall pay or cause to be paid to Lender the
Obligations in full at the time and in the manner stated in the Note and in this
Security Instrument and other Loan Documents at any time before the sale
hereinafter provided for, and shall well and truly perform, comply with and
observe each and every covenant, agreement, term and condition of this Security
Instrument and of the other Loan Documents, then these presents and the estate
granted hereby shall cease, determine and become void, and Lender shall (at the
expense of Borrower), release and discharge the lien and terminate the security
interest of this Security Instrument.
 

IN FURTHERANCE OF THE FOREGOING, Borrower hereby warrants, represents,
covenants, and agrees as follows:
 

  ARTICLE I. OBLIGATIONS
 
Section 1.1     Obligations.   This Security Instrument is executed,
acknowledged, and
delivered  by  Borrower  to  secure  and  enforce  the  following  obligations  (collectively,  the
“Obligations”):

(a)           Payment and performance of all obligations of Borrower under the
Note;

(b)           Performance of every obligation, covenant, and agreement of
Borrower arising under or in connection with this Security Instrument, the Loan
Agreement and all other Loan Documents (as defined in Section 1.2 hereof);

(c)           Payment of all sums advanced pursuant to the terms of this
Security Instrument to protect and preserve the Collateral and the lien and
security interest hereby created therein;

(d)           Payment of all sums advanced and costs and expenses incurred by
Lender in connection with the Obligations, or any part thereof, any renewal,
extension or change of or substitution for the Obligations or any part thereof,
or the acquisition or perfection of the security therefor, whether made or
incurred at the request of Borrower or Lender;

(e)           Payment of all indebtedness and liabilities and performance of all
other obligations of Borrower to Lender arising pursuant to or in connection
with any interest rate swap agreement, interest rate cap agreement, hedging
agreement or other interest rate protection arrangements now or hereafter made
between Borrower and Lender to hedge the floating interest rate expenses of the
Note;

(f)           Payment of all other indebtedness and liabilities and performance
of all other obligations of Borrower to Lender arising pursuant to or in
connection with this Security Instrument, the Loan Agreement or any other Loan
Document; and
 
(g)           All renewals, extensions, amendments, modifications,
consolidations, and changes of, or substitutions or replacements for, all or any
part of the items described under clauses (a) through (f) above.
 
 
 
 
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Exhibit D to Term Loan and Security Agreement
 
 

Section 1.2 Loan Documents. This Security Instrument, the Loan Agreement, the
Note, the Assignment of Leases and Rents dated as of the date hereof from
Borrower in favor of Lender, the Guaranty Agreement dated as of the date hereof
from TechPrecision Corporation (the “Guarantor”) in favor of Lender (the
“Guaranty”), the Environmental Indemnity Agreement dated as of the date hereof
from Borrower and Guarantor in favor of Lender, the Assignment of Contracts,
Licenses, Permits, Agreements, Warranties and Approvals dated as of the date
hereof from Borrower in favor of Lender, the UCC-1 Financing Statements, the
Compliance Agreement dated as of the date hereof from Borrower in favor of
Lender, the Guarantor’s Certificate of No Adverse Change dated as of the date
hereof from Guarantor in favor of Lender, the Fee Representation Letter dated as
of the date hereof from Borrower and Guarantor, and any other mortgage, security
agreement, assignment of leases and rents, environmental indemnity agreement,
cash collateral agreement, guaranty, ISDA master agreement or other interest
rate hedging or protection agreement, or other agreement or mortgage now or
hereafter made to evidence or further secure the payment and performance of any
of the Obligations or otherwise made in connection with the Obligations, are
herein referred to collectively as the “Loan Documents.”

ARTICLE II.
 
REPRESENTATIONS AND WARRANTIES
 
Borrower hereby represents and warrants to Lender as follows:
 

Section 2.1 Title. Borrower owns the Premises and Improvements in  fee  simple
absolute, and has good and marketable title to the Collateral, free and clear of
all liens, charges, encumbrances, and security interests whatsoever, except the
Permitted Liens. Borrower will forever warrant and defend its title to the
Collateral, and the validity, enforceability, and priority of the lien and
security interest created hereby, against the claims of all persons except the
Permitted Liens.
 
Section 2.2 Legal Status and Authority. Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has all necessary approvals, governmental and otherwise, and full
power and authority to own its properties (including the Collateral) and carry
on its business as now conducted and proposed to be conducted.

Section 2.3 Validity of Loan Documents. The execution and delivery, and the
performance by Borrower of the terms of the Loan Documents (i) are within the
company power of Borrower; (ii) have been authorized by all requisite company
action; (iii) will not violate, conflict with, result in a breach of, or
constitute (with notice or lapse of time, or both) a default under any provision
of law, any order or judgment of any court or governmental authority, the
articles of organization, operating agreement, or other governing instrument of
Borrower, or any indenture, agreement, or other instrument to which Borrower is
a party or by which it or any of its property is or may be bound or affected,
and Borrower has received all necessary approvals and consents, company,
governmental, or otherwise; (iv) will not result in the creation or imposition
of any lien, charge, or encumbrance whatsoever upon any of its properties or
assets, except the lien and security interest created hereby; and (v) will not
require any authorization or license from, or any filing with, any governmental
or other body (except for the filing or recording of this Security Instrument
and the other applicable loan documents). The Loan Documents constitute legal,
valid, and binding obligations of Borrower.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

Section 2.4 Litigation. There is no action, suit, or  proceeding,  judicial,
administrative, or otherwise (including any condemnation or similar proceeding),
pending or, to the best knowledge of Borrower, threatened or contemplated
against, or affecting, Borrower or the Collateral.
 

Section 2.5Status of Collateral.

 
(a)           The Premises and Improvements are not located in an area
identified by the Secretary of Housing and Urban Development, or any successor
thereto, as an area having special flood, mudslide, and/or flood-related erosion
hazards pursuant to the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, as amended, or any successor law.

 
(b)           Borrower has all necessary certificates, permits, licenses, and
other approvals, governmental and otherwise (including all zoning, building
code, land use, environmental and similar approvals), necessary for the
operation of the Premises and Improvements, all of which are in full force and
effect as of the date hereof and all operations conducted thereon are in
substantial compliance with such approvals.

(c)           The Premises and Improvements, and the present and contemplated
use and occupancy thereof, are in full compliance with all applicable zoning
ordinances, building codes, land use, and other similar laws.

(d)           The Premises and Improvements are served by all utilities required
for the contemplated use thereof.

(e)           All public roads and streets necessary to serve the Premises and
Improvements for the contemplated use thereof have been completed, are
serviceable in all weather, and, where required by the appropriate governmental
entities, have been dedicated to and formally accepted by such governmental
entities.

(f)           All costs and expenses of any and all labor, materials, supplies,
and equipment used in the construction of the Improvements have been paid in
full.
 
(g)           Borrower has paid in full for, and is the owner of, all
furnishings, fixtures, and equipment (other than lessees’ property) used in
connection with the operation of the Premises, free and clear of any and all
security interests, liens, or encumbrances, except for the Permitted Liens.
 
(h)         There is no proceeding pending for the total or partial condemnation
of the Collateral.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement
 

(i)           All taxes and governmental assessments, water, sewer and municipal
charges, if any, that are due and owing as of the date hereof and which, if not
paid, would create a lien on or affect the ownership interest of Borrower with
respect to the Collateral, have been paid.

(j)           Borrower has not entered into any management agreement concerning
the Collateral, and Borrower does not have any obligation to pay any management
fees in connection with management of the Collateral.

(k)           Borrower has not accepted rent under the Leases or under any
rental or occupancy agreement more than thirty (30) days in advance of its due
date.
 

ARTICLE III.
 
COVENANTS AND AGREEMENTS
 
Borrower covenants and agrees with Lender as follows:

Section 3.1 Payment of Obligations.  Borrower shall pay when due and shall
perform the Obligations.

Section 3.2 Continuation of Existence. Borrower shall maintain in good standing
its existence under the laws of the Commonwealth of Massachusetts and shall not
(i) dissolve, terminate, or otherwise dispose of, directly or indirectly or by
operation of law, all or substantially all of its assets; (ii) reorganize,
convert or change its legal structure without the prior written consent of
Lender; or (iii) change its name, the address of its principal offices, or the
name under which Borrower conducts its business without promptly notifying
Lender of such change.

Section 3.3Taxes, Liens, and Other Charges.

 
(a)           Subject to Permitted Protests, Borrower shall provide for payments
when due of all taxes, liens, assessments, dues, fines, impositions and public
charges, general and special, ordinary and extraordinary, of every character
(including penalties and interest), now or hereafter levied or assessed upon or
against the Collateral (collectively, the “Assessments”). Borrower shall also
pay (i) all income, franchise, and other taxes and governmental charges levied,
assessed, or imposed by the United States of America, or any state, any
political subdivision thereof, or any other taxing authority upon Borrower or in
respect of any of the Collateral which, if unpaid, would become a lien or charge
upon the Collateral, or any part thereof; and (ii) all charges made by utility
companies, public or private, for services furnished or used in connection with
the Collateral (together with the Assessments, collectively, “Impositions”).

(b)           Borrower shall pay all taxes (excluding income, franchise, and
doing business taxes), assessments, charges, expenses, costs, and fees
(including registration and recording fees) levied on, or assessed against
Lender, to the extent same are incurred in connection with any of the Loan
Documents or the Loan. Borrower shall also pay all stamp and other similar taxes
required to be paid in connection with the Obligations.

Section 3.4 Defense of Title and Litigation.  Subject to the Permitted Liens, if
the lien or security interest created by this Security Instrument, or the
validity, enforceability, or priority thereof or of this Security Instrument, or
if title or any of the rights of Borrower or Lender in or to the Collateral,
shall be endangered or questioned, or shall be attacked directly or indirectly,
or if any action or proceeding is instituted against Borrower or Lender with
respect thereto, Borrower will promptly notify Lender thereof and will
diligently endeavor to cure any defect which may be claimed, and will take all
necessary and proper steps for the defense of such action or proceeding,
including the employment of counsel, the prosecution or defense of litigation,
and, subject to Lender’s approval, the compromise, release, or discharge of any
and all adverse claims. Lender (whether or not named as a party to such actions
or proceedings) is hereby authorized and empowered (but shall not be obligated)
to take such additional steps as it may deem necessary or proper for the defense
of any such action or proceeding or the protection of the lien, security
interest, validity, enforceability, or priority of this Security Instrument, or
of such title or rights, including the employment of counsel, the prosecution or
defense of litigation, the compromise, release, or discharge of such adverse
claims, the purchase of any tax title, and the removal of such prior liens and
security interests. Borrower shall, on demand, reimburse Lender for all expenses
(including reasonable attorneys’ fees and disbursements) incurred by it in
connection with the foregoing matters. All such costs and expenses of Lender,
until reimbursed by Borrower, shall be part of the Obligations and shall be
deemed to be secured by this Security Instrument.

Section 3.5Operation and Maintenance of Collateral.

 
(a)           Repair and Maintenance. Borrower will operate and maintain the
Premises, the Improvements, and the other Collateral in good order, repair, and
operating condition; will promptly make all necessary repairs, renewals,
replacements, additions, and improvements thereto, interior and exterior,
structural and nonstructural, foreseen  and unforeseen, or otherwise necessary
to ensure that the same as part of the security under this Security Instrument
shall not in any material way be diminished or impaired; and will not cause or
allow any of the Premises, the Improvements, or any other Collateral to be
misused or wasted or to materially deteriorate.   No part of the Improvements
shall be removed, demolished, or
structurally  or  materially  altered,  nor  shall  any  new  building,  structure,  facility,  or  other
improvement be constructed on the Premises without Lender’s prior written
consent.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

(b)           Replacement of Collateral. Except for Permitted Dispositions (as
defined in the Loan Agreement), Borrower will keep the Premises and the
Improvements fully equipped, and will replace all worn out or obsolete
Collateral with fixtures or personal property comparable thereto when new, and
will not, without Lender’s prior written consent, remove from the Premises or
the Improvements any fixtures or personalty covered by this Security Instrument
unless the same is replaced by Borrower with an article of equal suitability and
value when new, owned by Borrower free and clear of any lien or security
interest (other than Permitted Liens).

(c)           Compliance with Laws. Borrower will perform and comply promptly
with, and cause the Collateral to be maintained, used, and operated in
accordance with, any and all (i) present and future laws, ordinances, rules,
regulations, and requirements of every duly- constituted governmental or
quasi-governmental authority or agency applicable to Borrower or the Collateral;
(ii) similarly applicable orders, rules, and regulations of any regulatory,
licensing, accrediting, insurance underwriting or rating organization, or other
body exercising similar functions; (iii) similarly applicable duties or
obligations of any kind imposed under any Permitted Encumbrance or otherwise by
law, covenant, condition, agreement, or  easement, public or private; and (iv)
policies of insurance at any time in force with respect to the Collateral. If
Borrower receives any notice that Borrower or the Collateral is in default under
or is not in compliance with any of the foregoing, or notice of any proceeding
initiated under or with respect to any of the foregoing, Borrower will promptly
furnish a copy of such notice to Lender.

(d)           Zoning; Title Matters. Borrower will not, without the prior
written consent of Lender, (i) initiate or support any zoning reclassification
of the Premises or the Improvements, seek any variance under existing zoning
ordinances applicable to the Premises or the Improvements, or use or permit the
use of the Premises and Improvements in a manner which would require any
variance or special use permit under applicable zoning ordinances;  (ii) modify,
amend, or supplement any of the permitted title encumbrances; (iii) impose any
restrictive covenants or encumbrances upon the Collateral, execute or file any
subdivision plat affecting the Premises or the Improvements, or consent to the
annexation of the Premises or the Improvements to any municipality; or (iv)
permit or suffer the Premises and the Improvements to be used by the public or
any person in such manner as might make possible a claim of adverse usage or
possession, or of any implied dedication or easement.

(e)           No Cooperative or Condominium. Borrower shall not operate or
permit the Premises or the Improvements to be operated as a cooperative,
condominium, or other form of ownership in which the lessees or other occupants
thereof participate in the ownership, control, or management of the Premises,
Improvements, or any part thereof, as lessees, stockholders, or otherwise.

Section 3.6                      Insurance.
 
(a)           Type of Insurance Coverage. Borrower shall keep the Premises, the
Improvements, and the other Collateral insured for the benefit of Borrower and
Lender by procuring and maintaining the following types of insurance:

(i)           comprehensive, “All Risks” property insurance providing “special”
form coverage in form and content as the Lender may from time to time reasonably
require and against hazards as the Lender may from time to time reasonably
require on the Improvements and personal property contained therein and in each
case (A) in an amount equal to 100% of the “Full Replacement Cost,” which for
the purposes of this Security Instrument shall mean actual replacement value
(exclusive of costs of excavation, foundations, underground utilities and
footings) with a waiver of depreciation; (B) containing an agreed amount
endorsement and replacement cost endorsement with respect to the Improvements
and personal property contained therein waiving all co-insurance provisions; (C)
providing that the deductible not exceed Twenty-Five Thousand Dollars
($25,000.00); and (D) containing Demolition Costs, Increased Cost of
Construction and “Ordinance or Law Coverage” or “Enforcement” endorsements in
amounts satisfactory to Lender if any of the Improvements or the use of the
Collateral shall at any time constitute legal non-conforming structures or uses
or the ability to rebuild the Improvements is restricted or prohibited. The Full
Replacement Cost may be redetermined from time to time by an appraiser or
contractor designated and paid by Lender or by an engineer or appraiser in the
regular employ of the insurer. No omission on the part of Lender to request any
such appraisals shall relieve Borrower of any obligations under this subsection;
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

(ii)           if Borrower leases the Premises and upon Lender’s request, rent
or business interruption or use and occupancy insurance, on such basis and in
such amounts as shall be satisfactory to Lender, and in any event not less than
an amount equal to one (1) year’s total income from the Premises and the
Improvements, including, but not limited to, all rent and all other income such
as lessee reimbursement of operating expenses, with the amount to be determined
each year based on Borrower’s reasonable estimate of such income for the
succeeding twelve (12) month period;

 
(iii)           flood insurance if any portion of the Improvements is currently
or at any time in the future located in an area identified by the Secretary of
Housing and Urban Development, or any successor, as an area having special
flood, mudslide and flood-related erosion hazards and in which flood insurance
has been made available under the National Flood Insurance Act of 1968 or the
Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or
replaced from time to time;
 
(iv)           commercial general liability insurance on an [occurrence]1 basis
covering Borrower and Lender against claims for bodily injury, death, property
damage and personal injury occurring in, upon, or about or resulting from the
Premises, the Improvements, or any other Collateral, or any street, drive,
sidewalk, curb, or passageway adjacent thereto, in standard form and with such
coverages and in such minimum amounts and with such minimum limits as may be
reasonably acceptable to Lender;

 

 

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1 Note: Borrower confirming that such policy is on an occurrence basis and not a
claims basis.
 
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

 
(v)           worker’s compensation, subject to the statutory limits of the
state in which the Premises is located, and employer’s liability insurance with
a limit of at least $1,000,000 per accident and per disease per employee, and
$1,000,000 per disease policy limit in respect of any work or operations on or
about the Premises, or in connection with the Improvements or any other
Collateral or its operation (if applicable); and

(vi)           such other insurance in such form and in such amounts as may from
time to time be required by Lender against other insurable hazards and
casualties which at the time are commonly insured against in the case of
properties of similar character and location to the Premises and the
Improvements.

(b)           Form of Policy. All insurance required under this Section shall be
continuously maintained in full force and effect, and be nonassessable, and the
policies therefor shall contain such clauses and endorsements as Lender shall
from time to time request, in its reasonable discretion, including but not
limited to clauses or endorsements to the effect that such policies shall not be
canceled, terminated or coverage thereunder reduced without the insurer
thereunder giving at least thirty (30) days prior written notice to Lender, and
shall be in such form and amounts and be issued by such insurance companies
doing business in the jurisdiction in which the Premises are located as shall be
approved by Lender. All such policies shall have a minimum term of not less than
one year. All such policies shall be issued by insurance companies qualified
under the laws of the Commonwealth of Massachusetts and duly authorized and
licensed to transact business in such State and reflecting a claims paying
ability rating of “A” or better and a financial class of “IX” or better as
determined by A.M. Best Company, Inc. Without limiting the foregoing, the
insurance policies provided for in Sections 3.6(a)(i), (ii), and (iii) above
shall be first payable in case of loss to Lender, and shall contain standard
mortgagee clauses and lender’s loss payable endorsements in form and substance
acceptable to Lender, and shall also contain a waiver of subrogation clause. The
insurance policies provided for in Section 3.6(a) above shall name Lender as an
additional insured.

(c)           Original Policies. Borrower shall deliver to Lender original or
certified copies of policies evidencing the insurance required under Sections
3.6(a)(i), (ii), (iii), (iv) and (v) above. Borrower shall also deliver to
Lender originals or certified copies of any and all renewal policies at least
thirty (30) days prior to the expiration of each such policy. If original
policies and renewal policies are unavailable or if such coverage is under a
blanket policy, Borrower shall deliver to Lender duplicate originals of such
policies or, if unavailable, original certificates from the issuing insurance
companies evidencing that such policies are in full force and effect, together
with certified copies of the original policies.

(d)           Transfer of Title. In the event of foreclosure of this Security
Instrument or other transfer of title or assignment of the Premises and the
other Collateral in extinguishment, in whole or in part, of the Obligations, all
right, title, and interest of Borrower in and to all policies of insurance
required under this Section or otherwise then in force with respect thereto, and
all proceeds payable thereunder and unearned premiums thereon, shall immediately
vest in the purchaser or other transferee of the Premises and the other
Collateral.
 
(e)           Approval Not Warranty. No approval by Lender of any insurer shall
be construed to be a representation, certification, or warranty of its solvency,
and no approval by Lender as to the amount, type, and/or form of any insurance
shall be construed to be a representation, certification, or warranty of its
sufficiency.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

Section 3.7                      Damage and Destruction of Collateral.

 
(a)            Borro wer ’s Obligations . In the event of any damage to or loss
or destruction of the Collateral, (i) Borrower shall promptly notify Lender of
such event and take such steps as shall be necessary to preserve any undamaged
portion of the Collateral and (ii) if, pursuant to Section 3.7(b), the insurance
proceeds are applied to the restoration, replacement, or rebuilding of such
Collateral (but regardless whether such insurance proceeds, if any, shall be
sufficient for the purpose), Borrower shall promptly (and, in any event, prior
to the date on which any lessee under any Lease shall be entitled to cancel or
terminate said Lease because of any such damage, loss or destruction) commence
and diligently pursue to completion the restoration, replacement, and rebuilding
of the Collateral as nearly as possible to its value, condition, and character
immediately prior to such damage, loss, or destruction and in accordance with
plans and specifications approved, and with other provisions for the
preservation of the security hereunder established, by Lender.

(b)            Lend er’s Rights; Application of Proceeds . In the event that any
portion of the Collateral is so damaged, destroyed, or lost, and such damage,
destruction, or loss is covered, in whole or in part, by insurance described in
Section 3.6, then (i) Lender may, but shall not be obligated to, make proof of
loss if not made promptly by Borrower and is hereby authorized and empowered by
Borrower to settle, adjust, or compromise any claims for damage, destruction, or
loss thereunder; (ii) each insurance company concerned is hereby authorized and
directed to make payment therefor directly to Lender; and (iii) Lender shall
have the right to apply the insurance proceeds, first, to reimburse Lender for
all costs and expenses, including adjustors’ and attorneys’ fees and
disbursements, incurred in connection with the collection of such proceeds and,
second, the remainder of such proceeds shall be applied, at Lender’s option,
either (A) in payment of all or any part of the Obligations, whether or not then
due and payable, in the order and manner determined by Lender (provided that to
the extent that any Obligation shall remain outstanding after such application,
such unpaid Obligation shall continue in full force and effect and Borrower
shall not be excused in the payment thereof), or to the cure of any then current
default hereunder; or (B) to the restoration, replacement, or rebuilding, in
whole or in part, of the portion of the Collateral so damaged, destroyed, or
lost, provided that any insurance proceeds held by Lender to be applied to the
restoration, replacement, or rebuilding of the Premises shall be so held without
payment or allowance of interest thereon and shall be paid out from time to time
upon compliance by Borrower with such provisions and requirements as may be
imposed
by  Lender.    Notwithstanding  the  above,  after  reimbursement  of  Lender  for  all  costs  and
expenses, including adjustors’ and reasonable attorneys’ fees and disbursements,
incurred in connection with the collection of such proceeds, the Lender shall
allow Borrower to use the insurance proceeds for the restoration or replacement
of the Collateral provided that (i) the proceeds total less than $50,000 for any
single event of loss, or (ii) Lender shall reasonably determine that (a) the
restoration or replacement of the Collateral can be completed prior to the
Maturity Date (as defined in the Loan Agreement), (b) that the insurance
proceeds will be sufficient to complete the restoration or, if the amount of the
insurance proceeds is not sufficient to restore or replace the Collateral,
Borrower deposits with Lender an amount equal to the difference between Lender’s
estimated costs of such restoration or replacement and the amount of the
insurance proceeds, and (c) the Collateral will be restored or replaced such
that the fair market value (as reasonably determined by Lender) of the
Collateral shall be at least equal to the pre-casualty value. In the event that
Borrower shall have received all or any portion of such insurance proceeds, or
any other proceeds in respect of such damage or destruction, Borrower, upon
demand from Lender, shall pay to Lender an amount equal to the amount so
received by Borrower, to be applied pursuant to this section. Notwithstanding
anything herein or at law or in equity to the contrary, none of the insurance
proceeds or payments in lieu thereof paid to Lender as herein provided shall be
deemed trust funds, and Lender shall be entitled to dispose of such proceeds as
provided in this Section. Borrower expressly assumes all risk of loss, including
a decrease in the use, enjoyment, or value of the Collateral, from any casualty
whatsoever, whether or not insurable or insured against.

Section 3.8                      Condemnation.

 
(a)            Borro wer ’s Obligations ; Proceedings . Promptly upon obtaining
knowledge of any pending or threatened institution of any proceedings for the
condemnation of the Collateral, or any part or interest therein, or of any right
of eminent domain, or of any other proceedings arising out of injury or damage
to or decrease in the value of the Collateral (including any change in any
street, whether as to grade, access, or otherwise), or any part thereof or
interest therein, Borrower will notify Lender of the threat or pendency thereof.
Lender may participate in any such proceedings (but shall not be obligated to do
so), and Borrower from time to time will execute and deliver to Lender all
instruments requested by Lender or as may be required to permit such
participation. Borrower shall, at its expense, diligently prosecute any such
proceedings, shall deliver to Lender copies of all papers served in connection
therewith, and shall consult and cooperate with Lender, its attorneys and
agents, in the carrying on and defense of any such proceedings; provided that no
settlement of any such proceeding shall be made by Borrower without Lender’s
prior written consent.

(b)            Lend er’s Ri ghts to Proceeds . All proceeds of condemnation
awards or proceeds of sale in lieu of condemnation, and all judgments, decrees,
and awards for injury or damage to the Collateral are hereby assigned and shall
be paid to Lender. Borrower agrees to execute and deliver such further
assignments thereof as Lender may request, and authorizes Lender to collect and
receive the same, to give receipts and releases therefor, and to appeal from any
such judgment, decree, or award. Lender shall in no event be liable or
responsible for failure to collect, or exercise diligence in the collection of,
any of the same.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

(c)           Application of Proceeds. Lender shall have the right to apply any
proceeds, judgments, decrees, or awards referred to in subsection (b) of this
Section, first, to reimburse Lender for all costs and expenses, including
attorneys’ fees and disbursements, incurred in connection with the proceeding in
question, and any appeal therefrom, or in the collection of such amounts and,
second, the remainder of such proceeds, judgments, decrees, or awards shall be
applied or paid, at Lender’s option but subject to Section 3.8(d), either (A) in
payment of all or any part of the Obligations, whether or not then due and
payable, in the order and manner determined by Lender, or to the cure of any
then current default hereunder; or (B) first, to the repair and restoration of
the Collateral, if any is deemed necessary by Lender as a result of the
condemnation and, second, to Borrower for its own use. In the event that
Borrower shall have received all or any portion of such proceeds, judgments,
decrees, or awards, Borrower, upon demand from Lender, shall pay to Lender an
amount equal to the amount so received by Borrower, to be applied as Lender
shall have the right pursuant to this subsection. Notwithstanding the above,
after reimbursement of Lender for all costs and expenses, including attorneys’
fees and disbursements, incurred in connection with the proceeding in question,
and any appeal therefrom, or in the collection of such amounts, the Lender shall
allow Borrower to use any proceeds, judgments, decrees, or awards referred to in
subsection (b) of this Section for the restoration or replacement of the
Collateral provided that (i) the proceeds total less than $50,000 for any single
condemnation action, or (ii) Lender shall reasonably determine that (a) the
restoration or replacement of the Collateral can be completed prior to the
Maturity Date (as defined in the Loan Agreement), (b) that the proceeds will be
sufficient to complete the restoration or, if the amount of the proceeds is not
sufficient to restore or replace the Collateral, Borrower deposits with Lender
an amount equal to the difference between Lender’s estimated costs of such
restoration or replacement and the amount of the proceeds, and (c) the
Collateral will be restored or replaced such that the fair market value (as
reasonably determined by Lender) of the Collateral shall be at least equal to
the pre-condemnation value.
 
(d)           Effect on the Obligations. Notwithstanding any condemnation,
taking, or other proceeding referred to in this Section causing injury to or
decrease in value of the Collateral (including a change in any street, whether
as to grade, access, or otherwise), or any interest therein, Borrower shall
continue to pay and perform the Obligations as provided herein. Any reduction in
the Obligations resulting from such application shall be deemed to take effect
only on the date of receipt by Lender of such proceeds, judgments, decrees or
awards and application against the Obligations, provided that if prior to the
receipt by Lender of such proceeds, judgments, decrees, or awards, the
Collateral shall have been sold on foreclosure of this Security Instrument, or
shall have been transferred by deed-in-lieu of foreclosure, Lender shall have
the right to receive the same to the extent of any deficiency found to be due
upon such sale, with legal fees and disbursements incurred by Lender in
connection with the collection thereof.

 
Section 3.9                      Liens and Liabilities.

 
(a)           Discharge of Liens. Borrower shall pay, bond, or otherwise
discharge, from time to time when the same shall become due, all claims and
demands of mechanics, materialmen, laborers, and others which, if unpaid, might
result in, or permit the creation of, a lien or encumbrance on the Collateral,
or on the revenues, rents, issues, income, or profits arising therefrom and, in
general, Borrower shall do, or cause to be done, at Borrower’s sole cost and
expense, everything necessary to fully preserve the lien and security interest
created by this Security Instrument and the priority thereof.

(b)           Creation of Liens. Borrower shall not, without Lender’s prior
written consent, create, place, or permit to be created or placed, or through
any act or failure to act, acquiesce in the placing of, or allow to remain, any
deed of trust, mortgage, deed to secure debt, voluntary or involuntary lien,
whether statutory, constitutional, or contractual (except for Impositions which
are not yet due and payable), security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Collateral, prior to, on a parity with, or subordinate to the lien of this
Security Instrument, other than Permitted Lien.

Section 3.10 Transfer of Collateral/Due on Sale. Borrower acknowledges that
Lender has relied upon the principals of Borrower and their experience in
owning, constructing, developing and operating the Collateral and properties
similar to the Collateral in connection with the closing of the loan evidenced
by the Note. Accordingly, in the event that the Collateral or any part thereof
or direct or indirect therein or any membership interests, partnership interests
other interest in Borrower shall be sold, conveyed, disposed of, alienated,
hypothecated, leased (except to tenants of space in the Improvements under
Leases permitted by this Security Instrument), assigned, pledged, mortgaged,
further encumbered or otherwise transferred or Borrower shall be divested of its
title to the Collateral or any interest therein, in any manner or way, whether
voluntarily or involuntarily, without the prior written consent of Lender being
first obtained, which consent may be withheld in Lender’s sole discretion, then
the same shall constitute an Event of Default and Lender shall have the right,
at its option, to declare any or all of the Obligations, irrespective of any
maturity date specified in the Note, immediately due and payable and to
otherwise exercise any of its other rights and remedies contained in Article VI
hereof. For the purposes of this Section, each of the following shall be deemed
to be a transfer of an interest in the Collateral: (i) in the event Borrower or
any partner or member of Borrower is an individual or an entity other than a
corporation or trust or limited liability company, a direct or indirect change
in the ownership interests in Borrower or any partner, any joint venturer or any
member, either voluntarily, involuntarily or otherwise, or the direct or
indirect sale, conveyance, transfer, disposition, alienation, hypothecation or
encumbering of all or any portion of the interests of Borrower or of any such
partner, joint venturer or member in Borrower or of such partner or member
(whether in the form of a beneficial or partnership interest or in the form of a
power of direction, control or management, or otherwise); (ii) in the event
Borrower is a corporation or trust or limited liability company, the direct or
indirect sale, conveyance, transfer, disposition, alienation, hypothecation or
encumbering of the issued and outstanding capital stock of Borrower (or the
issuance of new shares of capital stock of Borrower (in one or a series of
transactions) such that, after giving effect to such issuance and any prior
issuance, more than forty-nine percent (49%) in the aggregate of the outstanding
capital stock of Borrower is owned by any person or entity and their affiliates
unless such person or entity and their affiliates owned more than forty-nine
percent (49%) of the outstanding capital stock of Borrower as of the date
hereof); and (iii) any change in the management or decision making control over
Borrower or the Collateral.
 
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

Section 3.11                      Tax and Insurance Deposits.

 
(a)           Monthly Deposits. Upon Lender’s request after and during the
continuance of a Material Adverse Effect or an Event of Default, Borrower shall
deposit with Lender in a non-interest bearing account, or at Lender’s request,
with its servicing agent, on the first day of each and every month, commencing
with the date the next payment of interest and/or principal and interest shall
become due under the Note, a deposit to pay the Assessments (as defined in
Section 3.3 hereof) and insurance premiums which will next become due on the
insurance policies required by this Security Instrument (hereinafter
collectively referred to as the “Charges”) in an amount equal to:
 
(i)           One-twelfth (1/12th) of the annual Assessments next to become due
upon the Collateral; provided that, with the first such deposit, there shall be
deposited in addition an amount as estimated by Lender which, when added to
monthly deposits to be made thereafter as provided for herein, shall assure to
Lender’s satisfaction that there will be sufficient funds on deposit to pay the
Impositions as they come due; plus

(ii)           One-twelfth (1/12th) of the annual premiums on each policy of
insurance required to be maintained by this Security Instrument; provided that
with the first such deposit there shall be deposited, in addition, an amount
equal to one-twelfth (1/12th) of such annual insurance premiums multiplied by
the number of months elapsed between the date premiums on each policy were last
paid to and including the date of deposit, provided that the amount of such
deposits shall be based upon Lender’s estimate as to the amount of Assessments
and insurance premiums next to be payable and may require that the full amount
of such payment will be available to Lender at least one month in advance of the
due date. Prior to the payment due dates, Borrower shall obtain the original
Assessments and insurance premiums bills and forward them immediately to Lender
upon Borrower’s receipt thereof.  Lender will, upon timely presentation to
Lender by the Borrower of the bills therefor, pay the Charges from such deposits
directly to the taxing authority or the insurance carrier as the case may be, or
return such amount to the Borrower so it can make such payments. In the event
the deposits on hand shall not be sufficient to pay all of the estimated Charges
when the same shall become due from time to time, or the prior deposits shall be
less than the currently estimated monthly amounts, then the Borrower shall
immediately pay to Lender on demand any amount necessary to make up the
deficiency. The excess of any such deposits shall be credited towards subsequent
Charges.
 
(b)           Use of Deposits. Except to the extent required by applicable law,
all funds so deposited shall, until so applied, constitute additional security
for the Obligations, shall be held by Lender in a separate escrow account, shall
not be commingled with other funds of Lender, and, provided that no Event of
Default (as defined in Section 6.1) shall have occurred and be continuing
hereunder, shall be applied in payment of the aforesaid amounts prior to their
becoming delinquent, but only to the extent that Lender shall have such funds on
hand, provided that Lender shall not have any obligation to use said funds to
pay (i) any installment of Assessments prior to the last day on which payment
thereof may be made without penalty or interest, or to pay any insurance premium
prior to the due date thereof; or (ii) any of the aforesaid amounts unless
Lender shall have been furnished with the bills or invoices therefor in
sufficient time to pay the same before any penalty or interest attaches and
before said policies of insurance lapse, as the case may be. If an Event of
Default shall have occurred  and  be continuing hereunder, or if the Obligations
shall be accelerated as herein provided, all funds so deposited may, at Lender’s
option, be applied to the Obligations in the order determined by Lender or to
cure said Event of Default or as provided in this Section. In no event shall
Borrower claim any credit against the principal and interest due hereunder for
any payment or deposit for taxes or insurance. Neither Lender nor its servicing
agent shall be liable for any act or omission made or taken in good faith. In
making any payments, Lender or its servicing agent may rely on any statement,
bill or estimate procured from or issued by the payee without inquiry into the
validity or accuracy of the same. If the taxes shown in the tax statement shall
be levied on property more extensive than the Collateral, Lender shall be under
no duty to seek a tax division or apportionment of the tax bill, and any payment
of taxes based on a larger parcel shall be paid by the Borrower, the deposits to
be made hereunder shall be based on the larger tax parcel and the Borrower shall
expeditiously cause a tax subdivision to be made.

(c)           Transfer of Security Instrument. Upon an assignment or other
transfer of this Security Instrument, Lender shall have the right to pay over
the balance of such deposits in its possession to the assignee or other
successor, and Lender shall thereupon be completely released from all liability
with respect to such deposits, and Borrower or the owner of the Collateral shall
look solely to the assignee or transferee with respect thereto.

Section 3.12 Inspection. Borrower shall allow Lender and its authorized
representatives, or agents, including third-party property appraisers,
environmental engineers, architects, engineers, and Lender’s employees, to enter
upon the Collateral and conduct tests and to enter upon and inspect the
Collateral, or any part thereof, at all reasonable times and upon reasonable
prior notice, except in the event of an emergency when no notice shall be
required and subject to the rights of tenants, and shall assist Lender and such
representatives or agents in effecting said inspection.

Section 3.13                      Records, Reports, and Audits.

 
(a)           Maintenance of Records. Borrower shall keep and maintain at all
times complete and accurate books of accounts and records in sufficient detail
to correctly reflect the results of the operation of the Premises and copies of
all written contracts, Leases and other instrument which affect the Premises
(including but not limited to all bills, invoices and contracts for electrical
service, gas service, water and sewer service, waste management service,
telephone service and management services). Borrower shall allow Lender or its
authorized representatives at all reasonable times upon prior notice, at
Borrower’s expense, to examine and make copies of all such books and records and
all supporting data therefor at Borrower’s principal place of business, at the
Premises or at such other place where such books, records, and data may be
located. Borrower shall assist Lender or such representative in effecting such
examination. Absent the occurrence and continuance of a Material Adverse Effect
or an Event of Default, Lender shall not conduct any such examination more than
twice during any twelve (12) month period.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

(b)           Financial Reports.      Borrower shall furnish or cause to be
furnished to Lender the financial statements and reports required by Section 5.6
of the Loan Agreement.

Section 3.14                      Intentionally Omitted.

 
Section 3.15                      Intentionally Omitted.

 
Section 3.16                      Intentionally Omitted.

 
Section 3.17 Subordination of Fees. The terms and conditions of all arrangements
whereby Borrower, any guarantor, or any person, partnership, corporation,
limited liability company or other entity related to or controlled by or under
common control with Borrower or any guarantor or in which Borrower, any
guarantor, or any member or manager of Borrower has a substantial interest, is
or may be entitled to fees or commissions with respect to the Collateral or
sales or leases of the Collateral shall be disclosed to Lender, and no payment
of any fees or compensation may be made by or on behalf of Borrower to any of
such persons or entities without Lender’s prior written consent, until the Loan
is fully satisfied.

Section 3.18 Leases of Space. Borrower will, at its own cost and expense,
perform, comply with and discharge all of the obligations of Borrower under any
leases and use its best efforts to enforce or secure the performance of each
obligation and undertaking of the respective tenants under any such leases and
will appear in and defend, at its own cost and expense, any action or proceeding
arising out of or in any manner connected with the Borrower’s interest in any
leases of the Premises. The Borrower will not borrow against, pledge or assign
any of Borrower’s rights under the leases or any rentals due thereunder or
consent to a subordination or assignment of the interest of the tenants
thereunder to any party other than Lender, nor anticipate the rents thereunder
for more than one (1) month in advance or reduce the amount of rents and other
payments thereunder, nor waive, excuse, condone or in any manner release or
discharge the tenants of or from their obligations, covenants, conditions and
agreements to be performed, nor to incur any indebtedness to the tenants, nor
enter into any additional leases of all or any part of the Premises without the
prior written consent of Lender.
 
Section 3.19 Alterations and Renovations. Borrower agrees that, without the
prior written consent of Lender, Borrower will not remove or expand any
improvements on the Premises, erect any new improvements or make any material
alterations in any improvements which will alter the basic structure, adversely
affect the market value or change the existing architectural character of the
Premises. Borrower agrees that buildings, structures and improvements now or
hereafter constructed on or in the Premises or repairs made to the Premises
shall be completed in a good and workmanlike manner, in accordance with all
applicable governmental laws, regulations, requirements and permits. Borrower
agrees not to acquiesce in any rezoning classification, modification or
restriction affecting the Premises without the written consent of Lender.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

Section 3.20                      Property Management.

 
(a)           Without the prior written consent of the Lender, Borrower shall
not (i) enter into a management agreement, (ii) surrender any management
agreement, (ii) consent to the assignment by any property manager of its rights,
duties or obligations under any management agreement, (iii) terminate or cancel
any management agreement, or (iv) modify, change, supplement, alter or amend any
management agreement, in any material respect, either orally or in writing.

(b)           Upon the occurrence and during the continuance of an Event of
Default, the Lender may require, upon ten (10) Business Days prior written
notice to Borrower, that Borrower retain a property manager, or select a new
property manager if a property manager then exists, not affiliated with Borrower
to manage the Collateral. If such a property manager is so required by the
Lender, Borrower shall immediately seek to appoint a property manager acceptable
to the Lender. Such newly appointed property manager shall enter into a property
management agreement with Borrower satisfactory to the Lender. Borrower shall
execute and deliver an Assignment of Management Agreement in form and substance
reasonably satisfactory to the Lender, which shall be consented to and
acknowledged by such newly appointed property manager.

Section 3.21 Further Acts. Borrower shall do and perform all acts necessary to
keep valid and effective the charges and lien hereof, to carry into effect its
objective and purposes, and to protect the lawful owner of the Note and the
other Obligations. Promptly upon request by Lender, and at Borrower’s expense,
Borrower shall execute, acknowledge, and deliver to Lender such other and
further instruments and do such other acts as in the reasonable opinion of
Lender may be necessary or desirable to (a) grant to Lender the highest
available perfected lien on all of the Collateral; (b) correct any defect,
error, or omission which may be discovered in the contents of this Security
Instrument or any other Loan Document; (c) identify more fully and subject to
the liens, encumbrances, and security interests and assignments created hereby
any property intended by the terms hereof to be covered hereby (including,
without limitation, any renewals, additions, substitutions, replacements, or
appurtenances to the Collateral); (d) assure the first priority hereof and
thereof subject to the Permitted Liens; and (e) otherwise effect the intent of
this Security Instrument.

 
 
 
 
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Exhibit D to Term Loan and Security Agreement

 
ARTICLE IV.

ADDITIONAL ADVANCES; EXPENSES; INDEMNITY
 

Section 4.1 Additional Advances and Disbursements. Borrower agrees that, if
Borrower shall default in any of its Obligations to pay any amount or to perform
any action, including its obligation under Section 3.3 to pay Impositions and
under Section 3.6 to procure, maintain, and pay premiums on the insurance
policies referred to therein, then Lender shall have the right, but not the
obligation, in Borrower’s name or in its own name, and without notice to
Borrower, to advance all or any part of such amounts or to perform any or all
such actions, and, for such purpose and to the extent permitted by applicable
law, Borrower expressly grants to Lender, in addition and without prejudice to
any other rights and remedies hereunder, the right to enter upon and take
possession of the Collateral to such extent and as often as it may deem
necessary or desirable to prevent or remedy any such default. No such advance or
performance shall be deemed to have cured such default by Borrower or any Event
of Default with respect thereto. All sums advanced, all Collection Expenses (as
hereinafter defined), and all expenses incurred by Lender in connection with
such advances or actions, and all other sums advanced or expenses incurred by
Lender hereunder or under applicable law (whether required or optional and
whether indemnified hereunder or not) shall be part of the Obligations, shall
bear interest at the rate stated in the Note for payments from and after
maturity (the “Default Rate”), and shall be secured by this Security Instrument.
Lender, upon making any such advance, shall be subrogated to all of the rights
of the person receiving such advance.

Section 4.2 Other Expenses.

 
(a)           Borrower shall pay or, on demand, reimburse Lender for the payment
of all appraisal fees, recording and filing fees, taxes, brokerage fees and
commissions, abstract fees, title insurance premiums and fees, Uniform
Commercial Code search fees, escrow fees, attorneys’ fees and disbursements, and
all other costs and expenses of every character incurred by Borrower or Lender
in connection with the granting, administration, enforcement, and closing
(including the preparation of the Loan Documents) of the transactions
contemplated hereunder or under the other Loan Documents, or otherwise
attributable or chargeable to Borrower as owner of the Collateral. Lender shall
have the right to obtain from time to time, at Borrower’s cost and expense,
appraisals of the Collateral, provided that so long as no Event of Default shall
have occurred which continues, Borrower shall only be obligated to pay for the
costs and expenses associated with one such appraisal during any twelve (12)
month period.

(b)           Borrower shall pay or, on demand, reimburse Lender for the payment
of any costs or expenses (hereinafter referred to collectively as
“Collection Expenses”), including third-party appraisal fees and expenses,
environmental engineers’ fees and expenses, the cost of environmental testing
and preparation of environmental reports, architects’ fees and expenses,
engineers’ fees and expenses, travel costs of Lender’s employees, agents, and
representatives, and reasonable attorneys’ fees and expenses incurred or
expended in connection with or incidental to (i) any default or Event of Default
by Borrower hereunder or (ii) the exercise or enforcement by or on behalf of
Lender of any of its rights or remedies or Borrower’s obligations under this
Security Instrument or under the other Loan Documents, including the
enforcement, compromise, or settlement of this Security Instrument or the
Obligations or the defense, assertion of the rights and claims of Lender
hereunder in respect thereof, by litigation or otherwise.

Section 4.3 Indemnity. Borrower agrees to indemnify and hold harmless  Lender
from and against any and all losses, liabilities, suits, obligations, fines,
damages, judgments, penalties, claims, charges, costs, and expenses (including
attorneys’ fees and disbursements) which may be imposed on, incurred or paid by
or asserted against Lender by reason or on account of, or in connection with,
(i) any default or Event of Default by Borrower hereunder or under the other
Loan Documents; (ii) Lender’s exercise of any of its rights and remedies, or the
performance of any of its duties, hereunder or under the other Loan Documents to
which Borrower is a party; (iii) the construction, reconstruction, restoration,
or alteration of the Collateral or any part thereof; (iv) any negligence or
willful misconduct of Borrower, any lessee of the Premises, or any of their
respective agents, contractors, subcontractors, servants, employees, licensees,
or invitees; (v) any accident, injury, death or damage to any person or property
occurring in, on, or about the Premises or the Improvements, or any street,
drive, sidewalk, curb, or passageway adjacent thereto; or (vi) any other
transaction arising out of or in any way connected with the Collateral (or any
part thereof) or the Loan Documents, provided, however, that any such indemnity
provided herein above shall not apply to any such losses, claims, damages,
liabilities or related expenses to the extent that they result solely from the
gross negligence or willful misconduct of the Lender. Any amount payable to
Lender under this Section shall be deemed a demand obligation, shall be part of
the Obligations, shall bear interest at the Default Rate, and shall be secured
by this Security Instrument.
 
 
 
 

 
 
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Exhibit D to Term Loan and Security Agreement

 
ARTICLE V.
 
UNIFORM COMMERCIAL CODE
 
 
This Security Instrument shall constitute a security agreement under Article 9
of the Uniform Commercial Code (the “Code”) in each applicable jurisdiction with
respect to any and all fixtures and personal property included in the
description of the Collateral, now owned or hereafter acquired by Borrower,
which might otherwise be deemed “personal property” and all accessions thereto
and the proceeds thereof (collectively, the “Personal Property”). Borrower has
granted and does hereby grant Lender a security interest in the Personal
Property subject to the Permitted Liens and in all additions and accessions
thereto, renewals and replacements thereof and all substitutions therefor and
proceeds thereof for the purpose of securing all Obligations now or hereafter
secured by this Security Instrument. The following provisions relate to such
security interest:

(a)           Borrower hereby irrevocably authorizes Lender at any time and from
time to time to file in any filing office in any Code jurisdiction any initial
financing statements and amendments thereto to perfect and preserve Lender’s
interest in the Collateral in a manner
consistent  with  the  term  as  defined,  in  this  Security  Instrument  and  including  information
relating to whether Borrower is an organization, the type of organization and
any organizational identification number issued to Borrower. Borrower agrees to
provide any such information to Lender promptly upon request. Borrower also
ratifies its authorization for Lender to have filed in any filing office in any
Code jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof. Borrower shall pay to Lender, from time to time,
upon demand, any and all costs and expenses incurred by Lender in connection
with the filing of any such initial financing statements and amendments,
including attorneys’ fees and all disbursements. Such costs and expenses shall
bear interest at the Default Rate from the date paid by Lender until the date
repaid by Borrower, and such costs and expenses, together with such interest,
shall be part of the Obligations and shall be secured by this Security
Instrument.

(b)           Subject to the rights of the holders of any Permitted Liens,
Borrower shall any time and from time to time take such steps as Lender may
reasonably request for Lender to obtain “control” of any Personal Property for
which control is a permitted or required method to perfect, or to insure
priority of, the security interest in such Personal Property granted herein.

(c)           Upon the occurrence and during the continuance of an Event of
Default, Lender shall have the rights and remedies of a secured party under the
Code as well as all other rights and remedies available at law or in equity or
under this Security Instrument.

(d)           Terms defined in the Code and not otherwise defined in this
Security Instrument shall have the same meanings in this Paragraph as are set
forth in the Code. In the event that a term is used in Article 9 of the Code and
also in another Article, the term used in this Paragraph is that used in Article
9. The term “control,” as used in this Paragraph, has the meaning given in
Section 9-104, 9-105, 9-106 or 9-107 of Article 9, as applicable.

(e)           It is intended by Borrower and Lender that this Security
Instrument be effective as a financing statement filed in the real estate
records of Worcester County, Massachusetts as a fixture filing covering the
Personal Property. A description of the Premises which relates to the Personal
Property is set forth in Exhibit B attached hereto.

 
(f)           The information in the subsections below this paragraph is
provided in connection with the filing of this Security Instrument as a
financing statement as referred to above, and the Borrower hereby represents and
warrants such information to be true and complete as of the date of this
Security Instrument.

(h)           The Borrower is the record owner of the real estate described in
this Security Instrument. The name and mailing address of the record owner of
the real estate described in this Security Instrument is set forth in the first
paragraph of this Security Instrument.

(i)           For purposes of the Code, Borrower is the Debtor. The name,
mailing address, type of organization and state of formation of the Debtor
(Borrower) is set forth in the first paragraph of this Security Instrument. The
Organizational Identification Number of the Borrower is in the State of Delaware
is 3528957.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

 

 
(j)           For purposes of the Uniform Commercial Code, the Lender is the
Secured Party. The name and mailing address of the Secured Party (Lender) is:

Revere High Yield Fund, LP
105 Rowayton Avenue
Rowayton, Connecticut 06853
Attn:  Clark Briner
 

ARTICLE VI. DEFAULTS AND REMEDIES
 
Section 6.1                      Events of Default.  The term
“Event of Default,” as used in this Security
Instrument, shall mean the occurrence of any of the following events:

(a)           if Borrower shall fail to pay when the same shall become due and
payable any sum required to be paid under the Note, hereunder or under any other
Loan Document, whether of principal, interest, premium, fees, or otherwise; or

(b)           if any representation made herein, in the Loan Agreement or in any
other Loan Document (including any certificate delivered in connection with any
of the foregoing), or otherwise made by or on behalf of Borrower or any
Guarantor in connection with the transactions contemplated under the Loan
Documents, shall be false or misleading in any material respect when made; or

(c)           the Collateral (or any part thereof), or any legal, beneficial, or
equitable interest therein, shall be sold, transferred, or encumbered in any way
in violation of this Security Instrument or any other Loan Document; or

(d)           if Borrower or any Guarantor shall fail to perform any other term,
covenant or agreement contained in any of the other Loan Documents after any
applicable grace period contained therein or any “Event of Default” as defined
or described in the Note, the Loan Agreement or any of the other Loan Documents
occurs and is then continuing; or
 
(e) if Borrower abandons the Premises or the Improvements; or

(f)           if Borrower shall fail at any time to obtain, provide, maintain,
keep in force, or deliver to Lender the insurance policies required by this
Security Instrument and such failure shall continue for two (2) days after
written notice from Lender; or

(g)           if any claim of priority (except a claim based upon a Permitted
Lien) to this Security Instrument or any other document or instrument securing
the Obligations by title, lien, or otherwise shall be upheld by any court of
competent jurisdiction and such claim is not
discharged,  satisfied,  vacated  or  bonded  within  twenty  (20)  days  after  entry,  or  shall  be
consented to by Borrower; or
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

(h)           if Borrower or any Guarantor or any member or partner of Borrower
or any Guarantor, or any maker, guarantor or surety of the Note shall make an
assignment for the benefit of its creditors, or shall admit in writing its
inability to pay its debts as they become due, or fail to pay its debts as they
become due; or shall file a petition in bankruptcy, or shall be adjudicated a
bankrupt or insolvent, or shall file a petition seeking any reorganization,
dissolution, liquidation, arrangement, composition, readjustment or similar
relief under any present or future bankruptcy or insolvency statute, law or
regulation or shall file an answer admitting to or not contesting the material
allegations of a petition filed against it in such proceedings, or shall not
within sixty (60) days after the filing of such a petition have the same
dismissed or vacated, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of a material part of its
properties, or shall not within sixty (60) days after the appointment of a
trustee, receiver or liquidator of any material part of its properties without
Lender's consent have such appointment vacated; or
 
(i)           if default shall be made in the performance or observance of any
provision contained in this Security Instrument other than those referred in (a)
through (i) above, beyond the applicable grace period therefor or, if no such
grace period is applicable, if the default has not been remedied within thirty
(30) days after the occurrence thereof; or

(j)           if any “Event of Default” as defined or described in any other
Loan Document occurs and is then continuing.
 

Section 6.2 Remedies. Upon the occurrence and during the continuance of any one
or more Events of Default, Lender may (but shall not be obligated to), by Lender
itself otherwise, in addition to any rights or remedies available to it
hereunder or under the other Loan Documents, take such action, personally or by
its agents or attorneys, with or without entry and without notice, demand,
presentment, or protest (each and all of which are hereby waived), as it deems
necessary or advisable to protect and enforce Lender’s rights and remedies
against Borrower and in and to the Collateral, including, without limitation,
the following actions, each of which may be pursued concurrently or otherwise,
at such time and in such order as Lender may determine, in its sole discretion,
without impairing or otherwise affecting its rights or remedies:
 

(a)           declare the entire balance of the Obligations (including the
entire principal balance thereof, all accrued and unpaid interest, and any
premium and late charges thereon, and all other such sums secured hereby) to be
immediately due and payable, and upon any such declaration the entire unpaid
balance of the Obligations shall become and be immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by Borrower, anything in the Loan Documents to the
contrary notwithstanding.
 
(b)           institute a proceeding or proceedings, judicial, or nonjudicial,
by advertisement or otherwise, for the complete or partial foreclosure of this
Security Instrument or the complete or partial sale of the Collateral under the
power or sale or under any applicable provision of law. Lender may sell the
Collateral, and all estate, right, title, interest, claim and demand of Borrower
therein, and all rights of redemption thereof, at one or more sales, as an
entirety or in parcels, with such elements of real and/or personal property, and
at such time or place and upon such terms as it may deem expedient, or as may be
required by applicable law, and in the event of a sale, by foreclosure or
otherwise, of less than all of the Collateral, this Security Instrument shall
continue as a lien and security interest on the remaining portion of the
Collateral.
 
(c) Intentionally Omitted.

(d)           to the extent permitted under applicable law, Lender may elect to
treat the fixtures included in the Collateral either as real property or as
personal property, or both, and proceed to exercise such rights as apply
thereto.

(e)           institute an action, suit, or proceeding in equity for the
specific performance of any of the provisions contained in the Loan Documents.

(f)           apply for the appointment of a receiver, custodian, trustee,
liquidator, or conservator of the Collateral, to be vested with the fullest
powers permitted under applicable law, as a matter of right and without regard
to or the necessity to disprove the adequacy of the security for the Obligations
or the solvency of Borrower or any other person liable for the payment of the
Obligations, and Borrower and each other person so liable waives or shall be
deemed to have waived such necessity, and consents or shall be deemed to have
consented to such appointment.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

(g)           subject to the provisions and restrictions of any applicable law,
enter upon the Premises and the Improvements, and exclude Borrower and its
agents and servants wholly therefrom, without liability for trespass, damages,
or otherwise, and take possession of all books, records, and accounts relating
thereto and all other Collateral, and Borrower agrees to surrender possession of
the Collateral and of such books, records, and accounts to Lender on demand
after the happening of any Event of Default; and having and holding the same may
use, operate, manage, preserve, control, and otherwise deal therewith and
conduct the business thereof, either personally or by its superintendents,
managers, agents, servants, attorneys or receivers, without interference from
Borrower; and upon each such entry and from time to time thereafter may, at the
expense of Borrower and the Collateral, without interference by Borrower and as
Lender may deem advisable, (i) either by purchase, repair, or construction,
maintain and restore the Collateral; (ii) insure or reinsure the same; (iii)
make all necessary or proper repairs, renewals, replacements, alterations,
additions, betterments, and improvements thereto and thereon; (iv) complete the
construction of the Improvements and, in the course of such completion, may make
such changes in the contemplated or completed Improvements as it may deem
advisable; and (v) in every such case in connection with the foregoing have the
right to exercise all rights and powers of Lender with respect to the
Collateral, either in Borrower’s name or otherwise, including the right to make,
terminate, cancel, enforce, or modify Leases, obtain and evict lessees and
sublessees on such terms as Lender shall deem advisable, and to take any actions
described in subsection (h) of this Section.

(h)           subject to the provisions and restrictions of any applicable law,
Lender may, with or without entrance upon or taking possession of the Premises,
collect, receive, sue for, and recover in its own name all Rents and cash
collateral derived from the Premises, and after deducting therefrom all costs,
expenses, and liabilities of every character incurred by Lender in collecting
the same and in using, operating, managing, preserving, and controlling the
Premises, and otherwise in exercising Lender’s rights under subsection (f) of
this Section, including all amounts necessary to pay Impositions, insurance
premiums, and other charges in connection with the Premises, as well as
compensation for the services of Lender and its attorneys, agents, and
employees, apply the remainder to the Obligations in the order and manner
determined by Lender.

(i)           release any portion of the Collateral for such consideration as
Lender may require without, as to the remainder of the Collateral, in any way
impairing or affecting the lien or priority of this Security Instrument, or
improving the position of any subordinate lienholder with respect thereto,
except to the extent that the Obligations shall have been reduced by the actual
monetary consideration, if any, received by Lender for such release, and may
accept by assignment, pledge, or otherwise any other property in place thereof
as Lender may require without being accountable for so doing to any other
lienholder.

(j)           Lender may take all actions permitted under the Uniform Commercial
Code of the jurisdiction in which the Collateral is located; or

(k)           Lender may take any other action, or pursue any other right or
remedy, as Lender may have under applicable law, and Borrower does hereby agree
that Lender may so act.

In the event that Lender shall exercise any of the rights or remedies set forth
in subsections (g) and (h) of this Section, Lender shall not be deemed to have
entered upon or taken possession of the Collateral except upon the exercise of
its option to do so, evidenced by its demand and overt act for such purpose, nor
shall it be deemed a beneficiary or mortgagee in possession by reason of such
entry or taking possession. Lender shall not be liable to account for any action
taken pursuant to any such exercise other than for rents actually received by
such party, nor liable for any loss sustained by Borrower resulting from any
failure to let any portion of the Collateral, or from any other act or omission
of Lender except to the extent such loss is caused by the willful misconduct,
negligence or bad faith of such party. Borrower hereby consents to, ratifies,
and confirms the exercise by Lender of said rights and remedies, and appoints
Lender as its attorney-in-fact, which appointment shall be deemed to be coupled
with an interest and irrevocable, for such purposes.

 
Section 6.3 Expenses. In any proceeding, judicial or otherwise, to foreclose
this Security Instrument or enforce any other remedy of Lender under the Loan
Documents, there shall be allowed and included as an addition to and a part of
the Obligations in the decree for sale or other judgment or decree all
Collection Expenses and all other expenditures and expenses, including
reasonable attorneys’ fees, which may be paid or incurred in connection with the
exercise by Lender of any of its rights and remedies provided or referred to in
Section 6.2, or any comparable provision of any other Loan Document, together
with interest thereon at the rate specified in the Note, and the same shall be
part of the Obligations and shall be secured by this Security Instrument.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement

Section 6.4                     Additional Provisions as to Remedies.

 
(a)           No right or remedy herein conferred upon or reserved to Lender is
intended to be exclusive of any other right or remedy, and each and every such
right or remedy shall be cumulative and continuing, shall be in addition to
every other right or remedy given hereunder, or under the other Loan Documents
or now or hereafter existing at law or in equity, and may be exercised from time
to time and as often as may be deemed expedient by Lender.

(b)           No delay or omission by Lender to exercise any right or remedy
hereunder upon any default or Event of Default shall impair such exercise, or be
construed to be a waiver of any such default or Event of Default, or an
acquiescence therein.

(c)           The failure, refusal, or waiver by Lender of its right to assert
any right or remedy hereunder upon any default or Event of Default or other
occurrence shall not be construed as waiving such right or remedy upon any other
or subsequent default or Event of Default or other occurrence.

(d)           Lender shall not have any obligation to pursue any rights or
remedies it may have under any other agreement prior to pursuing its rights or
remedies hereunder or under the other Loan Documents.

(e)           No recovery of any judgment by Lender and no levy of an execution
upon the Collateral (or any part thereof) or any other property of Borrower
shall affect, in any manner or to any extent, the lien and security interest
created by this Security Instrument upon and in the Collateral, or any liens,
security interests, rights, powers, or remedies of Lender hereunder, and such
liens, rights, powers, and remedies shall continue unimpaired as before.

(f)           Lender may resort to any security given by this Security
Instrument or any other security now given or hereafter existing to secure the
Obligations, in whole or in part, in such portions and in such order as Lender
may deem advisable, and no such action shall be construed as a waiver of any of
the liens, rights, or benefits granted hereunder.

(g)           Acceptance of any payment after the occurrence of any default or
Event of Default  shall  not  be deemed a waiver or a  cure of such default or
Event of Default, and acceptance of any payment less than any amount then due
shall be deemed an acceptance on account only.

(h)           In the event that Lender shall have proceeded to enforce any right
or remedy hereunder by foreclosure, sale, entry, or otherwise, and such
proceeding shall be discontinued, abandoned, or determined adversely for any
reason, then Borrower and Lender shall be restored to their former positions and
rights hereunder with respect to the Collateral, subject to the lien and
security interest hereof.

ARTICLE VII.
 
ADDITIONAL PROVISIONS
 
Section 7.1     Sales or Participations.  Lender may from time to time sell or
assign, in whole or in part, or grant participations in the Note, the other Loan
Documents, and/or the obligations evidenced thereby. The holder of any such
sale, assignment or participation, if the applicable agreement between Lender
and such holder so provides, shall be entitled to all of the rights, obligations
and benefits of Lender and deemed to hold and may exercise the rights of setoff
or banker’s lien with respect to any and all obligations of such holder to the
undersigned, in each case as fully as though the undersigned were directly
indebted to such holder. Lender shall endeavor to give notice to the undersigned
of such sale, assignment or participation; however, the failure to give such
notice shall not affect any of Lender’s or such holder’s rights hereunder.

Section 7.2 Disclosure of Financial Information. Lender is hereby authorized to
disclose any financial or other information about Borrower or any guarantors to
any regulatory body or agency having jurisdiction over Lender or to any present,
future or prospective participant or successor in interest in any loan or other
financial accommodation made by Lender to Borrower, provided that, prior to
receipt of any such information any participant or successor in interest shall
agree in writing to treat such information in a confidential manner. The
information provided may include, without limitation, amounts, terms, balances,
payment history, return item history and any financial or other information
about Borrower.

Section 7.3 Severability. If all or any portion of any provision of this
Security Instrument or the other Loan Documents shall be held to be invalid,
illegal, or unenforceable in any respect, then such invalidity, illegality, or
unenforceability shall not affect any other provision hereof or thereof, and
such provision shall be limited and construed in such jurisdiction as if such
invalid, illegal, or unenforceable provision, or portion thereof, were not
contained herein or therein.

Section 7.4 Notices. Any notice, demand, consent, approval, direction,
agreement, or other communication (any “Notice”) required or permitted hereunder
or under the other Loan Documents shall be in writing and shall be addressed as
follows to the person entitled to receive the same:
 

 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement
 

(a)    If to Borrower:      
Ranor, Inc.
 
1 Bella Drive
 
Westminster, Massachusetts 01473
     
with a copy to:
     
William A. Scari, Jr.
  Pepper Hamilton LLP    400 Berwyn Park  
899 Cassatt Road
 
Berwyn, PA 19312-1183
    (b)    If to Lender:      
Revere High Yield Fund, LP
 
105 Rowayton Avenue, Suite 100
 
Rowayton, Connecticut  06853
      with a copy to:      
Mayo Crowe LLC
 
CityPlace II
 
185 Asylum Street
 
Hartford, Connecticut 06103
  Attn: William R.

Any Notice required to be made under this Security Instrument shall comply with
the requirements of this Section. Each Notice shall be in writing and sent (a)
by certified mail, return receipt requested, or (b) sent by an overnight carrier
which provides for a return receipt. Each Notice shall be effective upon
receipt. Rejection or other refusal by the addressee to accept or receipt the
delivery, or the inability to deliver because of a changed address of which no
Notice was given, shall be deemed to be the receipt of the notice sent. Any
party shall have the right from time to time to change the address or
individual’s attention to which Notices to it shall be sent by giving the other
party at least ten (10) days’ prior notice thereof.

Section 7.5 Applicable Law. This Security Instrument shall be governed by and
construed in accordance with the law of the Commonwealth of Massachusetts
without regard to principles of conflict of laws.

Section
7.6 Sole Discretion of Lender. Except  as  otherwise  expressly  provided
herein, whenever Lender’s judgment, consent, or approval is required hereunder
for any matter, or Lender shall have an option or election hereunder, such
judgment, the decision as to whether or not to consent to or approve the same,
or the exercise of such option or election shall be in the sole discretion of
Lender.

Section 7.7 Matters to be in Writing. This Security Instrument cannot be
altered, amended, modified, terminated, or discharged except in a writing signed
by the party against whom enforcement of such alteration, amendment,
modification, termination, or discharge is sought. No waiver, release, or other
forbearance by Lender will be effective against Lender unless it is in a writing
signed by Lender, and then only to the extent expressly stated.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement
 
 

Section 7.8 Submission to Jurisdiction.  Without limiting the right of Lender to
bring any action or proceeding against the undersigned or its property arising
out of or relating to the Obligations (an “Action”) in the courts of other
jurisdictions, Borrower hereby irrevocably submits to the jurisdiction of any
state court or federal court sitting in the Commonwealth of Massachusetts, and
Borrower hereby irrevocably agrees that any Action may be heard and determined
in such state court or in such federal court. Borrower hereby irrevocably
waives, to the fullest extent that it may effectively do so, the defense of an
inconvenient forum to the maintenance of any Action in such jurisdiction.
Borrower hereby irrevocably agrees that the summons and complaint or any other
process in any Action in any jurisdiction may be served by mailing by certified
mail to any of the addresses set forth herein or by hand-delivery to a person of
suitable age and discretion at any such address. Such service will be complete
on the date such process is so mailed or delivered, and Borrower will have
thirty (30) days from such completion of service in which to respond in the
manner provided by law. Borrower may also be served in any other manner
permitted by law, in which event Borrower’s time to respond shall be as provided
by law.

Section 7.9 Construction of Provisions. The following rules of construction
shall be applicable for all purposes of this Security Instrument, and all
documents or instruments supplemental hereto, unless the context otherwise
requires:

 
(a)           All references herein to numbered Articles or Sections or to
lettered Exhibits are references to the Articles and Sections hereof and the
Exhibits annexed to this Security Instrument, unless expressly otherwise
designated in context.

(b)           The terms “include,” “including,” and similar terms shall be
construed as if followed by the phrase “without being limited to.”
 
(c)           The term “Collateral” and the term “Premises” shall be construed
as if followed by the phrase “or any part thereof.”

(d)           The term “Obligations” shall be construed as if followed by the
phrase “or any other sums secured hereby, or any part thereof.”
 
(e)           Words of masculine, feminine, or neuter gender shall mean and
include the correlative words of the other genders, and words importing the
singular number shall mean and include the plural number, and vice versa.

(f)           The term “person” shall include natural persons, firms,
partnerships, corporations, and any other public and private legal entities.

(g)           All Article, Section, and Exhibit captions herein are used for
convenience and reference only and in no way define, limit, or describe the
scope or intent of, or in any way affect, this Security Instrument.

Section 7.10 Successors and Assigns. The provisions hereof shall be binding upon
Borrower, and the heirs, devisees, representatives, successors, and assigns of
Borrower, including successors in interest of Borrower in and to all or any part
of the Collateral, and shall inure to the benefit of Lender and its heirs,
successors, substitutes, and assigns. All references in this Security Instrument
to Borrower or Lender shall be construed as including all of such other persons
with respect to the person referred to. Where two or more persons have executed
this Security Instrument, the obligations of such persons shall be joint and
several, except to the extent the context clearly indicates otherwise.
 
 
 
 
 
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Exhibit D to Term Loan and Security Agreement
 
 

Section 7.11 WAIVER OF TRIAL BY JURY AND CERTAIN DAMAGES. BORROWER HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM FILED BY EITHER PARTY, WHETHER IN
CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN
EVIDENCED BY THE NOTE, THIS SECURITY INSTRUMENT, THE LOAN DOCUMENTS, OR ANY ACTS
OR OMISSIONS OF LENDER IN CONNECTION THEREWITH. FURTHER, BORROWER WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING,
ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR
IN ADDITION TO, ACTUAL DAMAGES. BORROWER ACKNOWLEDGES AND AGREES THAT THIS
SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS SECURITY INSTRUMENT AND THAT
LENDER WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS SET FORTH IN THIS
SECTION WERE NOT A PART OF THIS SECURITY INSTRUMENT. THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY
OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
BORROWER.
 

Section 7.12 CROSS DEFAULT AND CROSS COLLATERAL. In furtherance of prior
provisions hereof, Borrower agrees and acknowledge that the occurrence of an
Event of Default under the terms of this Security Instrument shall constitute an
Event of Default under the Note, the Loan Agreement, and the other Loan
Documents and under the documents evidencing any other loan now existing or
hereafter made by Lender to Borrower which is secured by all or any portion of
the Premises or other Collateral. The security interests, liens and other rights
and interests in and relative to any of the Collateral now or hereafter granted
to Lender by Borrower by or in any instrument or agreement, including but not
limited to this Security Instrument and the other Loan Documents shall serve as
security for any and all liabilities of Borrower to Lender, including but not
limited to the liabilities described in this Security Instrument, the Note, the
Loan Agreement, and the other Loan Documents and, for the repayment thereof,
Lender may resort to any security held by it in such order and manner as it may
elect.

Section 7.13 Principles of Construction. In the event of any inconsistencies
between the terms and conditions of this Section 7 and the terms and conditions
of this Security Instrument, the terms and conditions of this Section 7 shall
control and be binding.

Section 7.14 Interest Rate. Notwithstanding anything in the Loan Documents to
the contrary, in case the interest rate provided for in the Loan Documents at
any time exceeds the maximum rate of interest allowed under applicable law,
during such time the rate of interest provided for in the Loan Documents shall
be reduced to the maximum rate allowed by such law, and the payments required
hereunder shall be reduced accordingly.

Section 7.15 Maximum Interest. The provisions of this Security Instrument and of
all agreements between Borrower and Lender, whether now existing or hereafter
arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of demand or acceleration of
the maturity of the Note or otherwise, shall the amount paid, or agreed to be
paid to Lender for the use, forbearance or retention of the money loaned under
the Note (“Interest”) exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, performance or fulfillment of any
provision hereof or of any agreement between Borrower and Lender shall, at the
time performance or fulfillment of such provision shall be due, exceed the limit
for Interest prescribed by law or otherwise transcend the limit of validity
prescribed by applicable law, then, ipso facto, the obligation to be performed
or fulfilled shall be reduced to such limit, and if, from any circumstance
whatsoever, Lender shall ever receive anything of value deemed Interest by
applicable law in excess of the maximum lawful amount, an amount equal to any
excessive Interest shall be applied to the reduction of the principal balance
owing under the Note in the inverse order of its maturity (whether or not then
due) or, at the option of Lender, be paid over to Borrower, and not to the
payment of Interest. All Interest (including any amounts or payments deemed to
be Interest) paid or agreed to be paid to Lender shall, to the extent permitted
by applicable law, be amortized, prorated, allocated and spread throughout the
full period until payment in full of the principal balance of the Note so that
the Interest thereon for such full period will not exceed the maximum amount
permitted by applicable law. This Section will control all agreements between
Borrower and Lender.
 
 
 

 
 
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Exhibit D to Term Loan and Security Agreement
 

 
Section 7.16 After-Acquired Property. All property acquired by Borrower after
the date of this Security Instrument which by the terms of this Security
Instrument shall be subject to the lien and the security interest created
hereby, shall immediately upon the acquisition thereof by Borrower and without
further mortgage, conveyance or assignment become subject to the lien and
security interest created by this Security Instrument. Nevertheless, Borrower
shall execute, acknowledge, deliver and record or file, as appropriate, all and
every such further mortgages, security agreements, financing statements,
assignments and assurances as Lender shall reasonably require for accomplishing
the purposes of this Security Instrument.

Section 7.17 Indemnity; Expenses.  The Borrower will pay or reimburse the Lender
for all reasonable attorneys’ fees, costs and expenses incurred by either of
them in any suit, action, legal proceeding or dispute of any kind in which
either of them is made a party or appears as party plaintiff or defendant,
affecting the Obligations, this Security Instrument or the interest created
herein, or the Collateral, or any appeal thereof, including, but not limited to,
activities related to enforcement of the remedies of Lender, activities related
to protection of Lender’s collateral, any foreclosure action or exercise of the
power of sale, any condemnation action involving the Collateral or any action to
protect the security hereof, any bankruptcy or other insolvency proceeding
commenced by or against the Borrower, and any such amounts paid or incurred by
Lender shall be added to the Obligations and shall be secured by this Security
Instrument. The agreements of this subsection shall expressly survive in
perpetuity satisfaction of this Security Instrument and repayment of the
Obligations, any release, reconveyance, discharge of foreclosure of this
Security Instrument, conveyance by deed in lieu of foreclosure, sale, and any
subsequent transfer by Lender’s conveyance of the Collateral.

Section 7.18 Release of and Resort to Collateral. Lender may release, regardless
of consideration and without the necessity for any notice to a consent by the
holder of any subordinate lien on the Collateral, any part of the Collateral
without, as to the remainder, in any way impairing, affecting, subordinating or
releasing the lien or security interests created in or evidenced by the Loan
Documents or their stature as a first and prior lien and security interest in
and to the Collateral. For payment of the Obligations, Lender may resort to any
other security in such order and manner as Lender may elect.

Section 7.19 Waiver of Redemption, Notice and Marshalling of Assets. To the
fullest extent permitted by law, Borrower hereby irrevocably and unconditionally
waives and releases (i) all benefit that might accrue to Borrower by virtue of
any present or future statute of limitations or law or judicial decision
exempting the Collateral from attachment, levy or sale on execution or providing
for any appraisement, valuation, stay of execution, exemption from civil
process, redemption or extension of time for payment, (ii) all notices of any
Event of Default or of Lender’s election to exercise or its actual exercise of
any right, remedy or recourse provided for under the Loan Documents, except as
specifically required by the terms of this Security Instrument or the other Loan
Documents, and (iii) any right to a marshalling of assets or a sale in inverse
order of alienation.
 
Section 7.20 Discontinuance of Proceedings. If Lender shall  have  proceeded  to
invoke any right, remedy or recourse permitted under the Loan Documents and
shall thereafter elect to discontinue or abandon it for any reason, Lender shall
have the unqualified right to do so and, in such an event, Borrower and Lender
shall be restored to their former positions with respect to the Obligations, the
Loan Documents, the Collateral and otherwise, and the rights, remedies,
recourses and powers of Lender shall continue as if the right, remedy or
recourse had never been invoked, but no such discontinuance or abandonment shall
waive any Event of Default which may then exist or the right of Lender
thereafter to exercise any right, remedy or recourse under the Loan Documents
for such Event of Default.

Section 7.21 No Mortgagee in Possession. Neither the enforcement of any of the
remedies under this Security Instrument nor any other remedies afforded to
Lender under the Loan Documents, at law or in equity, shall cause Lender to be
deemed or construed to be a mortgagee in possession of the Collateral, to
obligate Lender to lease the Collateral or attempt to do so, or to take any
action, incur any expense, or perform or discharge any obligation, duty or
liability whatsoever under any of the Leases or otherwise.

Section 7.22 Massachusetts Statutory References. This Security Instrument is
intended to constitute: (i) a mortgage deed under Massachusetts General Laws c.
183, §18, (ii) a security agreement and financing statement under the Uniform
Commercial Code as enacted in the Commonwealth of Massachusetts, and (iii) a
notice of assignment of rents or profits under Massachusetts General Laws C. 183
§4. This Security Instrument is also intended to operate and be construed as an
absolute present assignment of the rents, issues and profits of the Premises,
Lender hereby agreeing, as provided for in Massachusetts General Laws C. 183,
§26, that Borrower is entitled to receive the rents, issues and profits of the
Premises prior to an Event of Default and without entering upon or taking
possession of the Premises.

Section 7.23 Statutory Condition. This Security Instrument is granted by
Borrower WITH MORTGAGE COVENANTS, and upon the STATUTORY CONDITION, and upon the
further condition that all covenants and agreements of, and conditions imposed
upon, the Borrower contained herein and in the Note and the other obligations
secured hereby shall be kept and fully performed, for any breach of which that
is not cured within the applicable cure period following the giving of notice
thereof if required, Lender shall have the STATUTORY POWER of sale.
 
 
 
 
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Exhibit D to Term Loan and Security Agreement
 
 
 
Section 7.24                      Security Agreement.

 
(a)           Insofar as any item of property included in the Collateral which
is or might be deemed to be “personal property” is concerned, this Security
Instrument is hereby made and declared to be a security agreement, granting a
security interest in and to each and every item of Collateral in compliance with
the provisions of the Uniform Commercial Code as enacted in the Commonwealth of
Massachusetts. A financing statement or statements reciting this Security
Instrument to be a security agreement, covering all of the Collateral, shall be
executed by Borrower and Lender and appropriately filed.  Borrower further
covenants and agrees that from time to time upon the request of Lender, Borrower
shall (i) provide Lender with a precise inventory of the same, as and when
acquired, (ii) execute and deliver to Lender, in form appropriate for recording
and filing, a more comprehensive security agreement, and financing statements,
on all such Collateral, (iii) provide to Lender such other assurances as may
reasonably be required by Lender to establish Lender’s security interest in such
Collateral subject to the Permitted Liens, and (iv) execute, deliver and cause
to be recorded and filed from time to time and at Borrower’s sole cost and
expense, continuances and such other instruments as will maintain Lender’s
priority of security in the Collateral. The remedies for any violation of the
covenants, terms and condition of the security agreement herein contained (which
violation is not cured within the applicable cure period(s) provided herein)
shall be (i) as prescribed herein, or (ii) as prescribed by general law, or
(iii) as prescribed by the specific statutory consequences now or hereafter
enacted and specified in said Uniform Commercial Code, all at Lender’s sole
election. Borrower and Lender agree that the filing of such financing
statement(s) in the records normally having to do with personal property shall
never be construed as in any way derogating from or impairing this declaration
and hereby stated intention of Borrower and Lender that everything used in
connection with the product of income from the Collateral and/or adapted for use
therein and/or which is described or reflected in this Security Instrument, is,
and at all times and for all purposes and in all proceedings both legal or
equitable shall be, regarded as part of the real estate irrespective of whether
(i) any such item is physically attached to the Premises or the Improvements,
(ii) serial numbers are used for the better identification of certain items
capable of being thus identified in a recital contained herein, or (iii) any
such financing statement(s) so filed at any time. Similarly, the mention in any
such financing statement(s) of the rights in and to the proceeds of any hazard
insurance policy, or any award in eminent domain proceedings for a taking or for
the loss of value, or interest as lessor in any present or future lease or
rights to income growing out of the use and/or occupancy of the Premises,
whether pursuant to lease or otherwise, shall never be construed as in any way
altering any of the rights of Lender as determined by this instrument or
impugning the priority of Lender’s lien granted hereby or by any other recorded
document, but such mention in such financing statement(s) is declared to be for
the protection of Lender in the event any court shall at any time hold, with
respect to any such matter, that notice of Lender’s priority of interest, to be
effective against a particular class of persons, must be filed in the Uniform
Commercial Code records. Borrower warrants that (i) Borrower’s (that is,
“Debtor’s”) name, identity or organizational structure and residence or
principal place of business are as set forth in Exhibit C attached hereto and by
this reference made a party hereof; (ii) Borrower (that is, “Debtor”) has been
using or operating under said name, identity or organizational structure without
change for the time period set forth in Exhibit C attached hereto and by this
reference made a part hereof; and (iii) the location of all Collateral
constituting fixtures is upon the Premises. Borrower covenants and agrees that
Borrower will furnish Lender with notice of any change in name, identity,
organizational structure, residence or principal place of business within (30)
days of the effective date of any such change and Borrower will promptly execute
any financing statements or other instruments deemed necessary by Lender to
prevent any filed financing statement from becoming misleading or losing its
perfected status. The information contained in this Section is provided in order
that this Security Instrument shall comply with the requirements of the Uniform
Commercial Code, as enacted in the Commonwealth of Massachusetts, for
instruments to be filed as financing statements. The names of the “Debtor” and
the “Secured Party” and the identity of the organizational structure of each
such party, are as set forth in Exhibit C attached hereto and by this reference
made a part hereof; the mailing address of the “Secured Party” from which
information concerning the security interest may be obtained, and the mailing
address of “Debtor”, are as set forth in said  Exhibit C attached hereto; and a
statement indicating the types, or describing the items, of Collateral is set
forth in the Security Instrument.

(b)           Any sale or other disposition of the Collateral may be at public
or private sale, to the extent such private sale is authorized under the
provisions of the Uniform Commercial Code as enacted in the Commonwealth of
Massachusetts, upon such terms and in such manner as Lender deems advisable.
Lender may conduct any such sale or other disposition of the Collateral upon the
Premises in which event Lender shall not be liable for any rent or charge for
such use of the Premises. Lender may purchase the Collateral, or any portion of
it, at any sale held under this Section. With respect to any Collateral to be
sold pursuant to the Uniform Commercial Code, Lender shall give Borrower at
least seven (7) days’ prior written notice of the date, time and place of any
proposed public sale, or such additional notice as may be required under the
laws of the Commonwealth of Massachusetts, and of the date after which any
private sale or other disposition may be made. Lender may sell any of the
Collateral as part of the real estate comprising the Collateral, or any portion
or unit thereof, at the foreclosure sale or sales conducted pursuant hereto. If
the provisions of the Uniformed Commercial Code are applicable to any part of
the Collateral which is to be sold in combination with or as part of the real
estate comprising the Collateral, or any part thereof, at one or more
foreclosure sales, any notice required under such provisions shall be fully
satisfied by the notice given in execution of the STATUTORY POWER OF SALE with
respect to the real estate or any part thereof. In the event all or part of the
Collateral is included at any foreclosure sale conducted pursuant hereto, a
single total price for the Collateral, or such part thereof as is sold, may be
accepted by Lender with no obligation to distinguish between the application of
such proceeds among the property comprising the Collateral.
 

Section 7.25                      SEAL.  This Security Instrument is executed
under “SEAL”.

 
NOW, THEREFORE, if Borrower shall pay all sums secured by this Security
Instrument and fully comply with the conditions of this Security Instrument,
then this Security Instrument shall be null and void, otherwise to remain in
full force and effect.
 
 

[Remainder of this page intentionally left blank; signature page follows]
 
 
 
 
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Exhibit D to Term Loan and Security Agreement
 

 
IN WITNESS WHEREOF, Borrower has duly executed and delivered this Security
Instrument under seal the day first set forth above.
 

 
BORROWER:
   
Signed, Sealed and Delivered in
the presence of:
RANOR, INC.,
 
a Delaware corporation
                                                            
By:                                            
Unofficial Witness
    Name:  Alexander Shen
 
    Title:           President
   

 
THE COMMONWEALTH OF MASSACHUSETTS
§
 
§ ss.
COUNTY OF
§
   

On this                     day of December, 2014, personally appeared Alexander
Shen, President of RANOR, INC., signer and sealer of the foregoing instrument,
and acknowledged the same to be his free act and deed in his capacity as such
President, and the free act and deed of RANOR, INC., before me.

 

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

 

  [Signature Page to Mortgage Deed, Assignment of Leases and Rents, Security
Agreement and Fixture Filing]
 
 
 
 
 

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Exhibit D to Term Loan and Security Agreement

 

 
EXHIBIT A

 
LEGAL DESCRIPTION OF PREMISES

Exhibit A
 

 
 

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Exhibit D to Term Loan and Security Agreement

 
EXHIBIT B

 
DESCRIPTION OF PERSONAL PROPERTY SECURITY
 

 
1.           All machinery, apparatus, goods, equipment, materials, fittings,
fixtures, and chattels, and all appurtenances and additions thereto and
betterments, renewals, substitutions, and replacements thereof, now owned or
hereafter acquired by Borrower, wherever situate, and now or hereafter located
on, attached to, contained in, or used or usable in connection with the real
property described in Exhibit A attached hereto and incorporated herein (the
“Premises”), and all improvements located thereon (the “Improvements”) or placed
on any part thereof, though not attached thereto, including all screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and
furnishings, heating, electrical, lighting, plumbing, ventilating, air-
conditioning, refrigerating, incinerating and/or compacting plants, systems,
fixtures, elevators, hoists, stoves, ranges, vacuum and other cleaning systems,
call systems, sprinkler systems and other fire prevention and extinguishing
apparatus and materials, motors, machinery, pipes, ducts, conduits, dynamos,
engines, compressors, generators, boilers, stokers, furnaces, pumps, tanks,
appliances, equipment, fittings, and fixtures.

2.           All funds, accounts, deposits, instruments, documents, contract
rights, general intangibles, notes, and chattel paper arising from or by virtue
of any transaction related to the Premises, or the Improvements, described in
this Exhibit B.

 
3.           All permits, licenses, franchises, certificates, and other rights
and privileges now held or hereafter acquired by Borrower in connection with the
Premises, the Improvements, or any of the personal property described in this
Exhibit B.

 
4.           All right, title, and interest of Borrower in and to the name and
style by which the Premises and/or the Improvements is known, including
trademarks, copyrights, service marks, logos, designs and trade names relating
thereto.

5.           All right, title, and interest of Borrower in, to, and under all
plans, specifications, maps, surveys, reports, permits, licenses, architectural,
engineering and construction contracts, service or maintenance contracts,
management agreements, equipment leases, books of account, insurance policies,
and other documents of whatever kind or character, relating to the use,
construction upon, occupancy, leasing, sale, or operation of the Premises and/or
the Improvements.

6.           All interests, estates, or other claims or demands, in law and in
equity, which Borrower now has or may hereafter acquire in the Premises, or the
Improvements, described in this Exhibit B.

 
7.           All right, title, and interest now owned or hereafter acquired by
Borrower in and to all options to purchase or lease the Premises, or the
Improvements, described in this Exhibit B, or any portion thereof or interest
therein, and in and to any greater estate in the Premises, or the Improvements
described in this Exhibit B.

 
8.           All of the estate, interest, right, title, other claim or demand,
both in law and in equity, including claims or demands with respect to the
proceeds of insurance relating thereto, which Borrower now has or may hereafter
acquire in the Premises, the Improvements, or any portion thereof or interest
therein, and any and all awards made for the taking by eminent domain, or by any
proceeding or purchase in lieu thereof, of the whole or any part of such
property, including without limitation, any award resulting from a change of any
streets (whether as to grade, access, or otherwise) and any award for severance
damages.

9.           All right, title, and interest of Borrower in and to all contracts,
permits, certificates, licenses, approvals, utility deposits, utility capacity,
and utility rights issued, granted, agreed upon, or otherwise provided by any
governmental or private authority, person or entity relating to the ownership,
development, construction, operation, maintenance, marketing, sale, or use of
the Premises and/or the Improvements, including all of Borrower’s rights and
privileges hereto or hereafter otherwise arising in connection with or
pertaining to the Premises and/or the Improvements, including, without limiting
the generality of the foregoing, all water and/or sewer capacity, all water,
sewer and/or other utility deposits or prepaid fees, and/or all water and/or
sewer and/or other utility tap rights or other utility rights, any right or
privilege of Borrower under any loan commitment, lease, contract, Declaration of
Covenants, Restrictions and Easements or like instrument, Developer’s Agreement,
or other agreement with any third party pertaining to the ownership,
development, construction, operation, maintenance, marketing, sale, or use of
the Premises and/or the Improvements.

AND ALL PROCEEDS AND PRODUCTS OF THE FOREGOING PROPERTY DESCRIBED IN THIS
EXHIBIT B.

 
A PORTION OF THE ABOVE DESCRIBED PROPERTY ARE OR ARE TO BE AFFIXED TO THE REAL
PROPERTY DESCRIBED IN EXHIBIT A.
 
Exhibit B
 
 
 

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Exhibit D to Term Loan and Security Agreement
 
 
EXHIBIT C

 
 
Debtor’s Name and Address:
 

RANOR, INC.
1 Bella Drive
Westminster, Massachusetts 01473
 
Secured Party’s Name and address:
 
Revere High Yield Fund, LP
105 Rowayton Avenue, Suite 100
Rowayton, Connecticut  06853
 
 
 
 
 
 
Exhibit C

 
 

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EXHIBIT E
 
 
  Utica Intercreditor and Subordination Agreement and Mortgagee’s Disclaimer and
Consent
 
 
 

 
 
 

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Exhibit E to Term Loan and Security Agreement
 

 
INTERCREDITOR AND SUBORDINATION AGREEMENT
 

THIS  INTERCREDITOR  AND  SUBORDINATION  AGREEMENT  (this “Agreement”) made as
of this day of December, 2014, between and among UTICA
LEASECO, LLC, a Florida limited liability company (the “Senior Creditor”),
REVERE HIGH YIELD FUND, LP, a Delaware limited partnership (the
“Subordinated Creditor”), and RANOR, INC., a Delaware corporation (the “Debtor”)
agree as follows:
 
BACKGROUND

A.           On or about May 28, 2014, the Senior Creditor extended a commercial
loan to Debtor in the original principal amount of Four Million One Hundred
Fifty Thousand Dollars ($4,150,000.00) pursuant to the terms of a Loan and
Security Agreement and other loan documents executed and delivered by Debtor to
and for the benefit of the Senior Creditor (including all extensions,
modifications and renewals thereto and collectively referred to herein as the
“Senior Debt Documents”). The loan made by the Senior Creditor to the Debtor is
referred to herein as the “Senior Debt”.

B.           Subordinated Creditor has agreed to extend two commercial loans to
Debtor in the aggregate amount of $2,250,000.00, which debt will be secured by,
among other things, various security agreements in the Debtor’s personal
property executed and delivered by Debtor to and for the benefit of the
Subordinated Creditor (including all extensions, modifications and renewals
thereto and referred to herein as the “Subordinated Debt Documentation”).

C.           As security for the Senior Debt, the Debtor granted to the Senior
Creditor a security interest in certain personal property of Debtor set forth on
Exhibit A attached hereto (the “Collateral”).

D.           The loans by Subordinated Creditor to the  Debtor (the
“Revere Debt”) are secured by, among other things, a security interest in
certain business assets of Debtor, which security interest will be perfected by
the filing of a UCC-1 Financing Statement with the State of Delaware, and State
of Massachusetts (collectively the “UCC Filings”) with respect to the
Collateral.

E.           Subordinated Creditor, Senior Credit and Debtor wish to enter into
this Intercreditor and Subordination Agreement for the purposes of setting forth
the rights and obligations of the parties with respect to the Collateral.

NOW THEREFORE, the Senior Creditor, the Subordinated Creditor and Debtor agree
as follows:

1.           The Subordinated Creditor acknowledges and agrees that its lien in
the Collateral, and any proceeds thereof, evidenced by the Subordinated Debt
Documentation is subordinate to the lien of the Senior Debt evidenced by the
Senior Debt Documents. Upon the execution of this Agreement, Subordinated
Creditor will file UCC-1 Financing Statements with the Secretary of State of
Delaware and Massachusetts, at Debtor’s expense, evidencing the subordination of
its lien against the Collateral to the lien of the Senior Creditor in the
Collateral, and Senior Creditor recognizes Subordinated Creditor’s subordinate
lien in the Collateral.
 
 
 
 
 
 
 
 

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Exhibit E to Term Loan and Security Agreement

 
2. The Subordinated Creditor agrees that, so long as any Senior Debt remains
outstanding:
 
a.           In the event Subordinated Creditor receives proceeds from the
Collateral, Subordinated Creditor shall hold such proceeds in trust for the
benefit of Senior Creditor, and shall pay such proceeds over to Senior Creditor
upon the earlier to occur of (i) demand from Senior Creditor, or (ii) actual
notice that the payment received represents proceeds of the Collateral; and
 
b.           Subordinated Creditor shall provide the Senior Creditor written
notice of the occurrence of an event of default under the Subordinated Creditor
Documents; however, Subordinated Creditor agrees that so long as the Senior Debt
remains outstanding, the Subordinated Creditor shall not exercise for any
reason, any right or remedy it maintains against the Collateral under the
Subordinated Debt Documents for the collection of the Revere Debt.

3.           To the extent all or some of the Collateral is located on property
that Subordinated Creditor has a mortgage upon (the “Mortgaged Property”), upon
receiving notice of an event of default under the Senior Creditor Documents,
Subordinated Creditor agrees that it will not interpose  any objection or
hindrance to  Senior Creditor  entering upon  the Mortgaged Property for the
purpose of taking possession of the Collateral pursuant to the terms of that
certain Mortgagee Disclaimer and Consent Agreement executed by  Subordinated
Creditor and Senior Creditor, a copy of which is attached hereto as
Exhibit B (the “Mortgagee Waiver”). Nothing contained in this Agreement shall in
any way affect Subordinated Creditor’s right to commence any action against the
Mortgaged Property, including foreclosure or accepting a deed in lieu of
foreclosure and following which to enforce all of its rights of ownership with
respect to the Mortgaged Property, subject to the Senior Creditor’s right to
occupancy as set forth in the Mortgagee Waiver.

4.           Upon the occurrence of an Event of Default as defined in the Senior
Debt Documents and after prior written notice to the Subordinated Creditor, the
Senior Creditor may exercise any right or remedy it maintains against the Debtor
and/or the Collateral including, but not limited to, the commencement of any
legal proceeding or other proceedings  for  the collection of the Senior Debt.
In the event the Collateral is sold by Senior Creditor:

a.           Subordinated Creditor (i) will not assert any claim for marshaling
of Debtor’s assets, (ii) consents to the collection or sale of the Collateral by
Senior Creditor free and clear of Subordinating Creditor’s security interest or
lien, and (iii) waives any claims contesting the commercial reasonableness of
any sales of the Collateral that are not raised within ten (10) days of its
receipt of written notice of the terms and conditions of any agreement or
proposal for the disposition of the Collateral (provided that any such proposal
subsequently is substantially embodied within an agreement).

b.           The Senior Creditor agrees that the proceeds of such sale in excess
of the Senior Debt shall be held in trust for the benefit of Subordinated
Creditor and Senior Creditor shall pay such proceeds over to Subordinated
Creditor within five (5) business days from Senior Creditor’s receipt of written
documentation that (i) Subordinated Creditor’s debt equals or exceeds such
proceeds, and (ii) there has not been any tax lien filed by any
governmental  authority  after  the  date  of  this  Agreement.
In  the  event  that  Subordinated Creditor’s debt is less than such proceeds,
then upon satisfaction of subparagraph (ii), Senior Creditor shall pay such
proceeds to Subordinated Creditor only to the extent of Subordinated Creditors
debt.

5.           Notice to Subordinated Creditor. The Senior Creditor shall promptly
notify the Subordinated Creditor as provided herein of each of the following
events:

a.           Any notice which the Senior Creditor may give to the Debtor
regarding any breach of Senior Credit Documents, or any termination of the
Debtor’s right to use, lease or possess the Collateral;

b.           Any legal action which the Senior Creditor may commence to collect
on the Senior Debt;

c.           Any agreement or proposal for the Debtor to voluntarily convey to
the Senior Creditor title to all or any portion of the Collateral; and
 
d. Any agreement or proposal for the disposition of the Collateral.
 
 
 
 
 
 

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Exhibit E to Term Loan and Security Agreement

6.           No action which the Senior Creditor may take or refrain from taking
with respect to the Senior Debt, or the Senior Debt Documents or the Collateral,
including a waiver or release thereof, or any agreement or agreements in
connection therewith, shall affect this Agreement or the obligations of the
Subordinated Creditor provided for herein.

7.           The Senior Creditor understands and acknowledges that an Event of
Default under the Senior Debt Documents constitutes a Default under the
Subordinated Debt Documentation. The Subordinated Creditor understands and
acknowledges that an Event of Default under the Subordinated Debt Documentation
constitutes a Default under the Senior Debt Documents.

8.           This Agreement and its terms shall in no way be affected or
impaired by, and Subordinating Creditor hereby irrevocably consents to, without
notice: (a) additional credit being extended from Senior Creditor to Debtor
during the term of this Agreement, provided the total outstanding principal
obligations from Debtor to Senior Creditor shall not exceed Four Million One
Hundred Fifty Thousand Dollars ($4,150,000.00) plus accrued interest, late
charges, legal fees and costs and any protective advances made by Senior
Creditor; (b) any amendment, alteration, extension, renewal, waiver, indulgence
or other modification of the Senior Debt Documents; (c) any settlement or
compromise in connection with the Senior Debt Documents or the Senior Debt; (d)
any substitution, exchange, release or other disposition of all or any part of
the Senior Debt Documents or the Senior Debt; (e) any failure, delay, neglect,
act or omission by Senior Creditor to act in connection with the Senior Debt
Documents or the Senior Debt; (f) any advances for the purpose of performing or
curing any term or covenant contained in the Senior Debt Documents or with
respect to the Senior Debt to which Debtor shall be or would otherwise be in
default; and (g) any other matter similar to the foregoing. The obligations and
agreements of Subordinated Creditor shall be unconditional, notwithstanding any
defect in the genuineness, validity, regularity or enforceability of the Senior
Debt or the Senior Debt Documents or any other circumstances unless specifically
referred to herein, which might otherwise constitute a legal or equitable
discharge or a defense to Subordinating Creditor. With regard to subsection (c),
pursuant to any settlement or compromise in connection with the Senior Debt
Documents under which Senior Creditor takes possession of the Collateral, Senior
Creditor agrees to enter into an auction agreement providing for: (i) a
guaranteed purchase price with a sharing of excess auction proceeds or (ii) a
public (including internet) sale of the Collateral, in a commercially reasonable
manner.

9.           No waiver shall be deemed to be made by Senior Creditor or
Subordinated Creditor of any of their rights under this Agreement unless the
same shall be in writing and then only with respect to the specific instance
involved.

10.           The Subordinated Creditor shall not transfer, sell or otherwise
dispose of any of the Revere Debt except to a transferee who agrees to become a
party to this Agreement. Likewise, Senior Creditor shall not transfer sell or
otherwise dispose of any of the Senior Debt except to a transferee who agrees to
become a party to this Agreement.

11.           Any notices required to be sent pursuant to this Agreement to
either the Senior Creditor or the Subordinated Creditor shall be sent by
overnight courier, hand delivery, or certified mail, return requested to the
following:
 
 
 
If to the Senior Creditor:
Utica Leaseco, LLC  
44225 Utica Road
  Utica, Michigan 48317  
Attn. David K. Levy
    If to the Subordinated Creditor:  Revere High Yield Fund, LP   105 Rowayton
Avenue, Suite 100   Rowayton, CT 06853 Attn: Clark Briner    
With Copy to:
Mayo Crowe LLC CityPlace II
 
185 Asylum Street
  Hartford, CT 06103 Attn: Katherine F. Troy                                

 
 
 
 
 
 
 

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Exhibit E to Term Loan and Security Agreement

12.           The purpose of this Agreement is to define and memorialize the
rights of the Senior Creditor and the Subordinated Creditor with respect to the
collection and enforcement of the Senior Debt and the Revere Debt from the
Collateral. This Agreement shall in no way impair or offset Debtor’s duty or
obligation to repay the Senior Debt or the Revere Debt in its entirety in
accordance with the terms and provisions of the Senior Debt Documents and the
Subordinated Debt Documents.

13.           This Agreement shall be binding upon and inure to the benefit of
the Senior Creditor and the Subordinated Creditor and their respective
successors and assigns.

14.           This Agreement may not be amended, supplemented or modified except
by an instrument in writing signed by the Senior Creditor and the Subordinated
Creditor.

15.           All parties hereto have the authority to enter into this Agreement
and the execution of this Agreement has been duly authorized.  This Agreement
shall be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns. This Agreement shall be construed
according to the Uniform Commercial Code.

16.           This Agreement sets forth the entire understanding of the Senior
Creditor and the Subordinated Creditor and supersedes any and all prior
agreements, representations, arrangements and understandings relating to the
subject matter hereof.

17.           This Agreement may be executed in any number of counterparts by
the different parties on separate counterparts, each of which when so executed
and delivered shall be an original, but all of the counterparts shall together
constitute one and the same instrument.
 

[Intentionally left blank]
 
 
 
 
 
 

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Exhibit E to Term Loan and Security Agreement

 
Executed as a sealed document as of the day of December, 2014.

 

  “Senior Creditor”       UTICA LEASECO, LLC,   a Florida limited liability
company        By:                                                   Its:      
 “Subordinated Creditor”       REVERE HIGH YIELD FUND, LP,   a Delaware limited
partnership       By: Revere GP, LLC, its General Partner      
    By: Revere Capital, LLC, its sole member
      By:                                                       Its: Manager 

 
 
The undersigned Debtor acknowledges notice of the attached Intercreditor and
Subordination Agreement and agrees to be bound by all of terms, provisions and
conditions thereof.
 
 

   
“Debtor”
   RANOR, INC., a Delaware corporation      
By:                                                   Name: Alexander Shen  
Title: President

 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit E to Term Loan and Security Agreement

 
 
MORTGAGEE’S DISCLAIMER AND CONSENT
 

To induce Utica Leaseco, LLC, a Florida limited liability company (the
“Lender”), to continue to extend credit to or for the benefit of Ranor, Inc., a
Delaware corporation (the “Borrower”), secured by certain machinery, vehicles,
equipment and other personal property of the Borrower’s (collectively,
“Collateral”), as more fully described on the attached Exhibit A, and for other
good and valuable consideration, Revere High Yield Fund, LP, a Delaware limited
partnership (the “Mortgagee”), hereby certifies and agrees for the benefit of
the Lender, its participants, successors and assigns, as follows:

1.           Premises; Mortgage; Security Interest. The Mortgagee holds a
mortgage lien on certain premises (the “Premises”) located in Worcester County,
Massachusetts, and described in Exhibit B hereto, pursuant to a mortgage (the
“Mortgage”), a true, correct and complete copy of which is attached hereto as
Exhibit B. Mortgagee has a security interest in the Accounts and certain other
collateral including the Collateral pursuant to a certain loan and security
agreement (the “Agreement”) that is subordinated to the Lender’s security
interest in the Collateral pursuant to the terms and conditions of that certain
Intercreditor and Subordination Agreement dated December        , 2014 between
Mortgagee and Lender.  The Mortgage and the Security Agreement are in full force
and effect. The Mortgagee acknowledges that the Collateral does not consist of
real estate fixtures secured by the Mortgage.

2.           Notices to Lender. The Mortgagee shall promptly notify the Lender
as provided herein of each of the following events:

a.           Any notice which the Mortgagee may give to the Borrower regarding
any breach of the Mortgage, or any termination of the Borrower’s rights to use,
lease or possess the Premises;

 
b.           Any legal action which the Mortgagee may commence to foreclose the
Borrower’s interests in the Premises or to appoint a receiver for the Premises;
and

c.           Any agreement or proposal for the Borrower to voluntarily convey to
the Mortgagee title to all or any portion of the Premises.

All notices to the Lender shall be deemed given when delivered to the Lender by
overnight UPS, Federal Express or other national express or delivery service at
4425 Utica Road, Utica, Michigan 48317 with a copy via email on the same date to
david.levy@uticaleaseco.com.

 
3.           Notice of Default; Right to Cure. The Mortgagee shall give notice
to the Lender of any default(s) by the Borrower in its obligations under the
Mortgage, and with respect to a monetary default only which is curable by the
payment of money (a “Monetary Default”), the Mortgagee shall allow the Lender,
at the Lender’s option and without obligation, a period of fifteen (15) days
from the date the Lender receives notice of such Monetary Default(s) in which to
cure or cause the Borrower to cure such Monetary Default(s). Any payments made
by Lender to cure a Monetary Default shall not obligate Lender to cure any other
Monetary Defaults of Borrower or cause this Agreement to be amended.

4.           Lender’s Right to Occupy Premises and Disposition of the Collateral.
The Mortgagee hereby agrees that notwithstanding any default under the Mortgage
by the Borrower, Lender has the right to enter into and remain in possession of
the Premises for a period not to exceed ninety (90) days, commencing the day
after Mortgagee provides Lender with written notice (i) via US mail at 44225
Utica Road, Utica, Michigan 48317; and (ii) via email at
david.levy@uticaleaseco.com, that it has obtained possession of the Premises
(through judicial foreclosure, foreclosure by advertisement, a deed in lieu of
foreclosure or otherwise and the passing of the mortgagor’s period of
redemption), for the purpose of reclaiming the Collateral, including detaching,
selling (by entering into an auction agreement providing for: (x) a guaranteed
purchase price with a sharing of excess auction proceeds or (y) a public
(including internet) sale of the Collateral, in a commercially reasonable manner
on the Premises), and removing the Collateral from the Premises (the
“Occupation Period”).

a.           During the Occupation Period and until the Lender has ceased its
occupation of the Premises, the Lender will pay the Mortgagee a fee of Fifty
Three Thousand Five Hundred ($53,500.00) Dollars per month or portion thereof.
Lender and Mortgagee acknowledge that said fee includes premiums for liability
and casualty insurance with respect to the Collateral and the Premises, real
estate taxes, utilities and all other charges payable by Lender for its
occupancy of the Premises. Mortgagee shall also maintain insurance on the
Collateral and Premises during the Occupation Period consistent with the
Borrower’s insurance.

b.           No payments by the Lender to the Mortgagee provided for herein
shall cure any defaults of the Borrower under the Mortgage or the Security
Agreement, nor shall such payments reinstate the Borrower’s rights to use or
occupy the Premises.

c.           Lender has no liability for any obligations that arose or arise
under the Mortgage or the Security Agreement between the Mortgagee and Borrower;
provided, that the Lender shall reimburse the Mortgagee for any physical damage
to the Premises caused by Lender, its agents or invitees, its Auctioneer or
agents or invitees of its Auctioneer during the Occupation Period.

d.           The Mortgagee acknowledges that the Lender shall not be liable for
any diminution in value of the Premises during the Occupation Period.
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit E to Term Loan and Security Agreement

5.           Notices. Any notice or communication required or permitted to be
given by any provision of this Agreement will be deemed to have been given when
delivered personally to the party designated to receive such notice or on the
business day on which the same is delivered to such party by overnight UPS,
Federal Express or other nationally recognized delivery service that provides
delivery receipts, directed to the following addresses or to such other or
additional addresses as any party might designate by written notice to the other
party with a copy sent via email on the same date:
 
 

To the Mortgagee: To the Lender:    
Revere High Yield Fund, LP
105 Rowayton Avenue, Suite 100
Rowayton, CT 06853 Attention: Clark Briner
Email address: cbriner@reverecapital.com
Utica Leaseco, LLC 44225 Utica Road
Utica, MI 48317
Attention: David K. Levy
Email address: david.levy@uticaleaseco.com

 
 
6.           No Third Party Beneficiaries. It is the intention of the Lender and
the Mortgagee that this agreement impose obligations and confer benefits only
upon the Lender and the Mortgagee, and that it will not confer any rights,
remedies or benefits upon the Borrower or any person other than the Lender and
the Mortgagee, and their respective heirs, executors, successors and assigns.

7.           Counterparts. This Disclaimer and Consent may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument. This Disclaimer and Consent may be
transmitted  by  facsimile machine or by electronic mail in portable document
format (“pdf’) and signatures appearing on faxed instruments and/or electronic
mail instruments shall be treated as original signatures.

8.           Modification. No modification, rescission, waiver, release, or
amendment of any provision of this Disclaimer and Consent shall be made, except
by a written agreement signed by the Lender and the Mortgagee.

9.           Successors and Assigns. This Disclaimer and Consent binds the
Mortgagee and its respective successors and assigns. The Mortgagee will notify
any successor or assign of the terms of this Disclaimer and Consent.

10.           Jury Trial Waiver.
THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING TO THIS
DISCLAIMER AND CONSENT.
 
11.           Applicable Law. This Disclaimer and Consent shall be governed by
and construed under the internal laws of the state where the Premises are
located, without reference to principles of conflicts of laws, as the same may
from time to time be in effect, including, without limitation, the Uniform
Commercial Code as in effect in such state.
 

[Intentionally left blank]
 
 
 
 
 
 

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Exhibit E to Term Loan and Security Agreement
 
 
IN WITNESS WHEREOF, this Disclaimer and Consent is signed on December, 2014.
 
 

   
UTICA LEASECO, LLC,
a Florida limited liability company
      By:                                                          
Title:
          REVERE HIGH YIELD FUND, LP,   a Delaware limited partnership   By:
Revere GP, LLC, its General Partner       By: Revere Capital, LLC, its sole
member      
By:                                                 
 
Clark Briner
      Title: Manager 

 
STATE OF MICHIGAN
)
 
)
COUNTY OF MACOMB
)
   

 
Before me, a Notary Public in and for said County, on this                   day
of December, 2014, personally appeared                             , of Utica
Leaseco, LLC who executed the foregoing agreement on behald of said limited
liability company
       
 

                                                          Notary Public   My
Commission Expires:

 
STATE OF CONNECTICUT
)
 
) ss: Westport
COUNTY OF FAIRFIELD
)
   

 
On this the                     day of December, 2014, before me, the
undersigned officer, personally appearedwho acknowledged himself to be theof
Revere Capital, LLC, the sole member of Revere GP, LLC, the General Partner of
REVERE HIGH YIELD FUND, LP, and that he, in such capacity, being authorized so
to do, executed the foregoing instrument for the purposes therein contained on
behalf of such entity, as his and its free act and deed.
 
 

IN WITNESS WHEREOF, I hereunto set my hand.
 

                                                                      
Commissioner of the Superior Court
 
Notary Public
 
My Commission Expires:
       

 
 
 

 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit E to Term Loan and Security Agreement

 
 
EXHIBIT A TO
MORTGAGEE’S DISCLAIMER AND CONSENT

 

[The Collateral described on the Schedule attached hereto]

 
 
 

 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit E to Term Loan and Security Agreement

 
EXHIBIT B TO
MORTGAGEE’S DISCLAIMER AND CONSENT

 
The Premises and equipment referred to in the referenced instrument are located
in Worcester County, Massachusetts, and are described as follows:
 
 
 

 
 
 

--------------------------------------------------------------------------------

 
 
 
Exhibit E to Term Loan and Security Agreement

 
EXHIBIT C
TO MORTGAGEE’S DISCLAIMER AND CONSENT

 
[Copy of Mortgage]
 
 
 

 
 
 

--------------------------------------------------------------------------------

 
 
 
 
SCHEDULE P
TO
TERM LOAN AND SECURITY AGREEMENT

 

Permitted Liens
 

 
Debtor
Secured Party
File Number
Filing Date
Jurisdiction
Collateral
1.
Ranor, Inc.
Standex International Corporation
Original 201307589100
 
Amendment 201308866930
 
Amendment 201308866390
 
Amendment 201411456170
 
Amendment 201411457410
 
Amendment 201412535180
 
Amendment 201412535720
 
Amendment 201412542070
 
Amendment 201412542250
 
Amendment 201413185850
 
Amendment 201413106370
 
Amendment 201413994850
 
Amendment 201413995000
 
Amendment 201414417240
10/25/2013
 
 
12/23/2013
 
 
12/23/2013
 
 
4/24/2014
 
 
4/24/2014
 
 
6/11/2014
 
 
6/11/2014
 
 
6/11/2014
 
 
6/11/2014
 
 
7/08/2014
 
 
7/08/2014
 
 
8/19/2014
 
 
8/19/2014
 
 
9/09/2014
MA Secretary of Commonwealth
Certain specified equipment

 
 

 
 
 

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Debtor
Secured Party
File Number
Filing Date
Jurisdiction
Collateral
     
Amendment 201415840830
 
Amendment 2014158540920
11/12/2014
 
 
11/12/2014
   
2.
Ranor, Inc.
Electric Boat Corporation
Original 201409278010
 
Amendment 201412177380
1/13/2014
 
 
5/27/2014
MA Secretary of Commonwealth
Personal Property related to specified purchase order
3.
Ranor, Inc.
Electric Boat Corporation
Original 201409278290
 
Amendment 201412177010
1/13/2014
 
 
5/27/2014
MA Secretary of Commonwealth
Personal Property related to specified purchase order
4.
Ranor, Inc.
Electric Boat Corporation
Original 201409278380
 
Amendment 201412176950
1/13/2014
 
 
5/27/2014
MA Secretary of Commonwealth
Personal Property related to specified purchase order
5.
Ranor, Inc.
Electric Boat Corporation
Original 201409278470
 
Amendment 201412176680
1/13/2014
 
 
5/27/2014
MA Secretary of Commonwealth
Personal Property related to specified purchase order
6.
Ranor, Inc.
Electric Boat Corporation
Original 201409278650
 
Amendment 20141276770
1/13/2014
 
 
5/27/2014
MA Secretary of Commonwealth
Personal Property related to specified purchase order
7.
Ranor, Inc.
Electronic Boat Corporation
Original 201416042530
11/20/2014
MA Secretary of Commonwealth
Certain specified equipment
8.
Ranor, Inc.
Utica Leaseco, LLC
Original 41551407
4/21/2014
DE SOS
Certain specified equipment
9.
Ranor, Inc.
Utica Leaseco, LLC
Original 201411369100
4/22/2014
MA Secretary of Commonwealth
Certain specified equipment
10.
Ranor, Inc.
Utica Leaseco, LLC
Original 2014042304966
4/22/2014
PA SOS
Certain specified equipment
11.
Techprecision Corporation
Utica Leaseco, LLC
Original 41551068
4/21/2014
DE SOS
Certain specified equipment
12.
Techprecision Corporation
Utica Leaseco, LLC
Original 2014042304942
4/22/2014
PA SOS
Certain specified equipment

 
 
 
 
 

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SCHEDULE 5.05
 

 
Cash Covenant

 

Period Ending
Minimum Cash Level
12/31/2014
$750,000.00
1/31/2015
$400,000.00
2/28/2014
$425,000.00
3/31/2015
$500,000.00
4/30/2015
$820,000.00
5/31/2015
$765,000.00
6/30/2015
$775,000.00
7/31/2015
$690,000.00
8/31/2015
$700,000.00
9/30/2015
$510,000.00
10/31/2015
$450,000.00
11/30/2014
$560,000.00

 
 
 
 

 
 
 

--------------------------------------------------------------------------------

 
 
 
SCHEDULE 5.08(a)
 
Location of Borrower Collateral
 

1 Bella Drive
Westminster, Massachusetts 01473
 
 
 
 

 
 
 

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SCHEDULE 5.08(b)
 
Location of Chief Executive Offices

1 Bella Drive
Westminster, Massachusetts 01473
 
 
 
 
 
 

 
 
 

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SCHEDULE 6.01(b)
TO
TERM LOAN AND SECURITY AGREEMENT

Existing Indebtedness

 

Utica Loan
Capitalized Lease with Toshiba for copiers (balance owed on Closing Date
approximately $41,730.32)
 
 
 
 

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