exv10w6




 

	 	 	 	 	 




Exhibit 10.6





This document prepared by and

after Recording Return to:




Updike, Kelly & Spellacy, P.C.

One State Street

P.O. Box 231277

Hartford, CT 06123-1277

Attn: Robert J. Martino, Esq.




Space Above for Recorder’s Use




OPEN-END

MORTGAGE DEED AND SECURITY AGREEMENT




FROM




EDAC TECHNOLOGIES CORPORATION




TO




TD BANK, N.A.




May 27, 2009











 



 




OPEN-END MORTGAGE DEED AND SECURITY AGREEMENT





     TO ALL PEOPLE TO WHOM THESE PRESENTS SHALL COME, GREETINGS:



     KNOW YE, that EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation, with a place of business
at 1806 Farmington Avenue, Farmington, Connecticut 06032 (hereinafter called the “Borrower”), for
the consideration of ONE DOLLAR ($1.00) and other good and valuable consideration received to the
Borrower’s full satisfaction from TD BANK, N.A., a national banking association with an office
located at 102 West Main Street, New Britain, Connecticut 06050-0174 (hereinafter called the
“Bank”), does hereby give, grant, bargain, sell and confirm, with MORTGAGE COVENANTS (hereinafter
referred to as the “Mortgage”), unto the Bank, its successors and assigns forever the real property
and improvements thereon known as 275 Richard Street, Newington, Connecticut and described in more
detail on Exhibit A attached hereto and made a part hereof (the “Property”).



     TO HAVE AND TO HOLD the above granted and bargained Property, with the privileges and
appurtenances thereof unto it, the said Bank, its successors and assigns forever, to its and their
own proper use and behoof.



     THE CONDITION OF THIS DEED IS SUCH THAT:



     WHEREAS, pursuant to a Credit Agreement of even date herewith by and among Borrower, GROS-ITE
INDUSTRIES, INC., a Connecticut corporation, with a place of business at 1806 Farmington Avenue,
Farmington, Connecticut 06032, APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation, with a
place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032 (collectively with
Borrower, the “Credit Parties”) and Bank (the “Credit Agreement”), the Bank has made, inter alia,
(i) a Mortgage Loan in the amount of TWO MILLION SIX HUNDRED FORTY THOUSAND AND 00/100 DOLLARS
($2,640,000.00) (the “Mortgage Loan”), which Mortgage Loan is evidenced by a certain Mortgage Note
of even date herewith in the original amount of TWO MILLION SIX HUNDRED FORTY THOUSAND AND 00/100
DOLLARS ($2,640,000.00) (the “Mortgage Note”), a copy of which is attached hereto as Exhibit
B and made a part hereof, (ii) a Term Loan in the amount of FOUR MILLION THREE HUNDRED SIXTY
THOUSAND AND 00/100 DOLLARS ($4,360,000.00) (the “Term Loan”), which Term Loan is evidenced by a
certain Term Note of even date herewith in the original amount of FOUR MILLION THREE HUNDRED SIXTY
THOUSAND AND 00/100 DOLLARS ($4,360,000.00) (the “Term Note”), a copy of which is attached hereto
as Exhibit C and made a part hereof, and (iii) a Revolving Loan in the amount of SEVEN
MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($7,500,000.00) (the “Revolving Loan”, together
with the Mortgage Loan and the Term Loan, collectively, the “Loan”), which Revolving Loan is
evidenced by a certain Revolving Credit Note of even date herewith in the original amount of SEVEN
MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($7,500,000.00) (the “Revolving Credit Note”,
together with the Mortgage Note and the Term Note, collectively, the “Note”), a copy of which is
attached hereto as Exhibit D and made a part hereof; and









 



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     WHEREAS, a glossary of terms related to each Note is attached hereto as Exhibit E; and



     WHEREAS, Credit Parties have entered into certain ISDA Master Agreements (together with the
confirmation thereof and all schedules thereto, and as may be amended or substituted from time to
time, the “Interest Rate Protection Agreement”) dated as of the date hereof with the Bank in order
to eliminate the risk with respect to fluctuation of the interest rate in connection with the
Mortgage Loan and Term Loan, a copy of the confirmation forming a part of the Interest Rate
Protection Agreement related to the Mortgage Loan is attached hereto as Exhibit F, and a
copy of the confirmation forming a part of the Interest Rate Protection Agreement related to the
Term Loan is attached hereto as Exhibit G; and



     WHEREAS, the amount and nature of the obligations of Borrower under the Interest Rate
Protection Agreement are set forth in and are determined pursuant to the Interest Rate Protection
Agreement, which has a final maturity date of May 27,2014; and



     WHEREAS, the maximum amount of the obligations of Borrower, if any, under the Interest Rate
Protection Agreement secured hereby shall be ONE MILLION AND NO/100 DOLLARS ($1,000,000.00); and



     WHEREAS, advances to be made by the Bank to or for the benefit of the Credit Parties in
respect of the Revolving Loan shall be made pursuant to the terms of the Credit Agreement which
shall constitute a commercial revolving loan agreement within the meaning of 

Section 49-2 of the
Connecticut General Statutes, as amended; and



     WHEREAS, advances made by the Bank in respect of the Loan are payable in the manner set forth
in the Note; and



     WHEREAS, the Credit Parties are justly indebted to the Bank pursuant to the terms of the Note
and the Credit Agreement subject to the following additional terms and conditions:



SECTION 1

DEFINITIONS




     The following terms as used herein shall have the following meanings:



     “Building Service Equipment” shall mean all apparatus, fixtures and articles of
personal property owned by the Borrower now or hereafter attached to or used or procured for use in
connection with the operation or maintenance of any building, structure or other improvement
located on or included in the Property, including, but without limiting the generality of the
foregoing, all engines, furnaces, boilers, stokers, pumps, heaters, tanks, dynamos, motors,
generators, switchboards, electrical equipment, heating, plumbing, lifting and ventilating
apparatus, air-cooling and air-conditioning apparatus, gas and electrical fixtures, elevators,
escalators, fittings, and machinery and all other equipment of every kind and description, used or
procured for use in the operation of the building standing on the Property (except apparatus,
fixtures or articles of personal property belonging to lessees or other occupants of such building









 



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or to persons other than the Borrower, unless the same be abandoned by any such lessee or other
occupant or person), together with any and all replacements thereof and additions thereto.



     “Disposal” shall have the meaning assigned to it in Section 3.6 hereof.



     “Event of Default” shall mean (a) any Event of Default under the Note or the other
Loan Documents, (b) any default in the payment or performance of the obligations of the Borrower
hereunder, or (c) any representation or warranty of the Borrower hereunder proving to be untrue in
any material respect.



     “Hazardous Materials” shall have the meaning assigned to it in Section 2.6(b) hereof.



     “Hedging Contracts” means interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements, or any other agreements or arrangements entered into between
Credit Parties and Bank and designed to protect Credit Parties against fluctuations in interest
rates or currency exchange rates, including without limitation, the Interest Rate Protection
Agreement.



     “Hedging Obligations” means, with respect to Credit Parties, all liabilities of Credit
Parties to Bank under Hedging Contracts.



     “Loan Documents” shall mean the Credit Agreement, the Note, the Hedging Contracts and
all other documents, agreements or instruments executed in connection therewith.



     “Note” shall have the meaning assigned to it in the recitals to this Mortgage.



     “Obligations” shall mean all indebtedness, liabilities, obligations, covenants and
agreements of the Credit Parties to the Bank now existing or hereafter arising or incurred under
the Credit Agreement, the Note, this Mortgage, the Hedging Contracts or the other Loan Documents,
whether individually or collectively, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising thereunder or
hereunder by contract, operation of law or otherwise and whether before or after any judgment
relating to any of the foregoing.



     “Permitted Encumbrances” shall mean the encumbrances listed on Exhibit H
attached hereto and incorporated herein by reference as if fully set out herein.



     “Property” shall mean the property described in Exhibit A attached hereto and
incorporated herein by reference as if fully set out herein.



     “Property Income” shall mean all rents, income, profits, security deposits and other
benefits to which the Borrower may now or hereafter be entitled from any lease, tenancy or rights
of use of all or any part of the Property and/or the income generated from the business operations
conducted at or from the Property.



     “Release” shall have the meaning assigned to it in Section 3.6 hereof.









 



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     “Spill” shall have the meaning assigned to it in Section 3.6 hereof.



SECTION 2

REPRESENTATIONS AND WARRANTIES




     The Borrower hereby represents, covenants and warrants to the Bank as follows:



     Section 2.1. Title to Property. The Borrower warrants it has good, fee simple title
to the Property (as described in Exhibit A annexed hereto) subject only to the Permitted
Encumbrances and that it shall warrant, defend and preserve such title and the rights granted by
this Mortgage with respect thereto against all claims of all persons or entities.



     Section 2.2. Authority; No Encumbrances. The Property is now free and clear
of all encumbrances whatsoever except Permitted Encumbrances, and the Borrower has good right and
lawful authority to mortgage and convey the same in the manner and form hereby mortgaged and
conveyed.



     Section 2.3. No Conflicts. The execution and delivery of this Mortgage does not, and
the performance and observance of the terms hereof will not, contravene any provision of existing
law, ordinance, rule, regulation or order of any Federal, state or local governmental body,
instrumentality or agency, and will not conflict with or result in any breach of the terms,
conditions or provisions of, or constitute a default under or result in or permit the creation or
imposition of any charge or encumbrance upon any of the properties or assets of the Borrower
pursuant to, any indenture, mortgage or other agreement or instrument to which the Borrower is a
party or by which its properties or assets are bound.



     Section 2.4. Governmental Filings. Other than the recording of this Mortgage and the
filing of uniform commercial code financing statements with the appropriate recording and filing
offices in the State of Connecticut, no approval, authorization or other action by, or filing with,
any Federal, state, or local body, instrumentality or agency, is required under existing law in
connection with the execution and delivery by the Borrower of this Mortgage.



     Section 2.5. No Leases. Except as set forth in Exhibit C attached hereto and
made a part hereof Schedule B to the Collateral Assignment of Leases, Rentals, and Property
Income executed by Borrower on the date hereof in connection with the Loan (the “Collateral
Assignment”), there are presently in effect no leases of the Property or any part thereof.



     Section 2.6. Environmental Compliance. The Borrower has taken all necessary steps to
investigate the past and present condition and usage of the Property and the operations conducted
thereon and, based upon such diligent investigation, makes the following representations and
warranties.




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










 



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










 



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





     Section 2.7. Absence of Litigation. There are no actions, suits, proceedings or
investigations, including, without limitation, condemnation and eminent domain proceedings, pending
or, to the best of the Borrower’s knowledge, threatened, against or affecting the Property, or
which may involve or affect the validity of this Mortgage, and the Borrower is not in default with
respect to any order, writ, injunction, decree or demand of any Federal, state or local
governmental body, instrumentality or agency affecting the Property or the use and occupancy
thereof.



     Section 2.8. Execution, Delivery and Enforceability. The Borrower is duly authorized
to make and enter into this Mortgage and to carry out the transactions contemplated by the Credit
Agreement, the Note and the other Loan Documents. This Mortgage has been duly executed and
delivered by the Borrower and is the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject only to the effect of any applicable Bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally
and the discretionary nature of specific performance and other equitable remedies.









 



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     Section 2.9. Compliance with Law. The Property is in compliance with all applicable
Federal, state and local laws, rules, ordinances and regulations, including but not limited to
those governing zoning, land use, subdivision control, health, safety, fire protection and
protection of the environment.



     Section 2.10. Condition of the Property. The Property is in good order and repair
and is free of all defects other than such defects as have been previously disclosed to and are
acceptable to the Bank.



SECTION 3

CERTAIN COVENANTS AND CONDITIONS




     The Borrower covenants and agrees as follows:



     Section 3.1. Governmental Charges. The Borrower shall pay before the same become
delinquent all taxes, charges, sewer use fees, water rates and assessments of every name and
nature, whether or not assessed against the Borrower, if applicable or related to the Property, or
any interest therein, or applicable or related to any of the Obligations, which, if unpaid, might
by law become a lien or charge upon all or any part of the Property; provided,
however, that so long as no distraint, foreclosure sale or other levy upon or transfer with
respect to the Property or any part thereof shall have been effected or threatened, the Borrower
shall not be required to pay any such taxes, charges, fees, rates and assessments by reason of this
Section 3.1 if (a) the amount, applicability or validity thereof is currently being contested by
the Borrower in good faith by appropriate legal proceedings, (b) the Borrower shall have set aside
on its books reserves (segregated to the extent required by sound accounting principles and
practices) reasonably deemed by the Bank to be adequate with respect thereto, and (c) the Borrower
shall have provided to the Bank a bond or other security of such nature and in such amount as the
Bank deems sufficient as security for payment thereof.



     Section 3.2. Provision For Payment of Governmental Charges and Other Obligations. To
assure the payment of all taxes, charges, sewer use fees, water rates, ground rents and assessments
of every name and nature, or any other obligations which may have or acquire priority over this
Mortgage, and which are assessed or payable with reference to the Property, the Borrower, if so
requested by the Bank, shall deposit with the Bank, on the first day of each month, a sum
determined by the Bank to be sufficient to provide, in the aggregate, a fund adequate to pay any
such amounts at least ten (10) days before the same become delinquent; and
whenever the Bank determines sums accumulated under the provisions of this Section 3.2 to be
insufficient to meet the obligation for which such deposits were made, the Borrower shall pay, on
the demand of the Bank, any amount required to cover the deficiency therein. Every such deposit
may, at the option of the Bank, be applied directly against the obligation with reference to which
it was made, or, to the fullest extent permissible according to law, any other obligation of the
Borrower secured hereby. Such deposits may, to the fullest extent permitted by law, be commingled
with other assets of the Bank and, in the discretion of the Bank, invested by the Bank for its own
account, without any obligation to pay income from such investment, or interest on such deposits,
to the Borrower, or to account to the Borrower for such income in any manner.









 



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



     Section 3.4. Insurance. The Borrower agrees, at the Borrower’s sole cost and
expense, to keep the Property insured at all times throughout the term of this Mortgage with
policies of insurance as follows:




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





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









 



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least thirty (30) days before such expiration. All such insurance policies (other than liability policies)
shall be first payable in case of loss to the Bank by means of a standard non-contributory
mortgagee clause, shall be written by such companies, on such terms, in such form and for such
periods and amounts as the Bank shall from time to time approve, shall be primary and without right
of contribution from other insurance which may be available, shall waive any right of setoff,
counterclaim, subrogation, or any deduction in respect of any liability of the Borrower and the
Bank, shall provide that with respect to the Bank, the insurance shall not be invalidated by any
action or inaction by the Borrower including without limitation any representations made by the
Borrower in the procurement of such insurance, and shall provide that such policies shall not be
canceled or amended without at least thirty (30) days prior written notice to the Bank. All public
liability insurance policies shall include the Bank as an additional named insured. All such
insurance policies shall provide that all losses thereunder shall be adjusted by the Borrower, so
long as no Event of Default has occurred and is continuing; provided, however, that
in no event shall the Borrower approve or consent to any final adjustment in an amount exceeding
ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000) without obtaining the Bank’s prior written
approval of the amount of such adjustment, and after an Event of Default has occurred and so long
as any such Event of Default continues, the Borrower shall not consent to a final adjustment in any
amount without obtaining the Bank’s prior written approval. After an Event of Default, the
Borrower hereby grants the Bank full power and authority as irrevocable attorney-in-fact of the
Borrower to cancel or transfer such insurance, to collect and endorse any checks issued in the name
of the Borrower and to retain any premium and to apply the same to the Obligations secured hereby.



     Section 3.5. Casualties and Takings. All proceeds of any property or casualty
insurance or awards of damages on account of any taking or condemnation for public use of or injury
to the Property shall be paid to the Bank. In the case of a casualty loss or taking, the Bank may,
in its discretion, apply such proceeds to or toward the Obligations (in which event the Borrower
shall be relieved of the obligation in Section 3.3 of this Mortgage to repair the part of the
Property damaged by the loss or taking with respect to which such proceeds are paid), or if the
Bank shall require repair of that part of the Property so damaged or remaining after such loss or
taking, the Bank shall release to the Borrower proceeds paid to it in accordance with the Bank’s
usual procedures for funding construction advances, and subject to any conditions on future
advances contained in the Credit Agreement, to be applied against the cost of repairing and
restoring the Property or the remaining portion thereof, with any balance remaining to be applied
to or toward
the Obligations. Notwithstanding anything in this Section 3.5 to the contrary, however, if
there are no insurance proceeds available with respect to a casualty loss for any reason,
e.g., if a casualty loss is not covered by any insurance applicable to the Property
(whether or not required by this Mortgage), or if any insurer shall deny a casualty loss is covered
by its policy, or if any insurer shall fail to pay a claim as a result of the insurer’s insolvency,
the Borrower shall not be relieved of any obligations under Section 3.3 of this Mortgage.



     Section 3.6. Hazardous Materials; Asbestos. Borrower further covenants and agrees
that it will:









 



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






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






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





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




 











 





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     Section 3.7. Environmental Assessments. At any time after an Event of Default shall
have occurred hereunder, or, whether or not an Event of Default shall have occurred, at any time
after the Bank shall receive notice of a Spill, Release or threatened Release of Hazardous
Materials from the Borrower, or shall have received notice from any other source deemed reliable by
the Bank that a Spill or Release of Hazardous Materials may have occurred, the Bank may at its
election after five (5) days prior notice to the Borrower obtain one or more environmental
assessments of the Property prepared by a geohydrologist, an independent engineer or other
qualified consultant or expert approved by the Bank evaluating or confirming (i) whether any
Hazardous Materials are present in the soil or water at or adjacent to the Property, and (ii)
whether the use and operation of the Property comply with all applicable Environmental Laws
relating to air quality, environmental control, release of oil, hazardous materials, hazardous
wastes and hazardous substances, and any and all other applicable environmental laws.
Environmental assessments may include detailed visual inspections of the Property including,
without limitation, any and all storage areas, storage tanks, drains, dry wells and leaching areas,
and the taking of soil samples, surface water samples and ground water samples, as well as such
other investigations or analyses as are necessary or appropriate for a complete determination of
the compliance of the Property and the use and operation thereof with all applicable Environmental
Laws. All such environmental assessments shall be at the sole cost and expense of the Borrower.



     Section 3.8. Notice of Condemnation. The Borrower, immediately upon obtaining
knowledge of the institution of any proceeding for the condemnation or requisition of the Property
or any portion thereof, shall notify the Bank of the pendency of such proceeding. The Bank may
participate in such proceeding, and the Borrower from time to time shall deliver to the Bank all
instruments requested by the Bank to permit such participation.



     Section 3.9. Leases; Assignments; Subordination. The Borrower shall not lease the
Property or any part thereof without the prior written consent of the Bank. If the Bank shall
consent and the Borrower shall enter into a lease, the Borrower shall faithfully keep, observe and
satisfy all the obligations on the part of the lessor to be kept, performed and satisfied under
every lease from time to time in force with reference to the Property, and shall not alter or
terminate any such lease, or any guarantee of such lease, except in the ordinary course of
business, or accept any rentals for more than one (1) month in advance. The Borrower shall submit
to the Bank for its review and prior written approval all draft agreements, related materials and
all other information relating to all proposed leases of the Property or any portion thereof, all
proposed lease modifications relating to the leases described in Schedule B of the
Collateral Assignment, and all proposed renewals of such leases. The Borrower hereby assigns to
the Bank all rents and profits under any and all leases of the Property; provided,
however, that the Borrower shall be entitled to retain such rents and profits until an
Event of Default shall have occurred. At any time on notice from the Bank, the Borrower shall
submit to the Bank for examination all such leases and on the demand of the Bank, shall execute and
deliver a separate instrument collaterally assigning any or all such leases, or the rents and
profits thereof, in form satisfactory to the Bank. The Bank shall have the right, by the execution
of suitable written instruments from time to time, to subordinate this Mortgage, and the rights of
the Bank hereunder, to any lease or leases from time to time in force with reference to the
Property, and, on the execution of any such instrument, this Mortgage shall be subordinate to the
lease for which such subordination is









 



12



applicable with the same force and effect as if such lease had been executed and delivered, and a
notice thereof recorded to the extent required to give notice to third persons, prior to the
execution, delivery and recording of this Mortgage. Nothing contained in this Section 3.9 is
intended, nor shall it be deemed, to constitute consent by the Bank to a subordination of the lien
of this Mortgage.



     Section 3.10. Prior Mortgages. If this Mortgage, by its terms, is now, or at any
time hereafter, becomes subject or subordinate to a prior mortgage, the Borrower shall fully
perform its obligations under such prior mortgage and shall not, without the consent of the Bank,
agree to the modification, amendment or extension of the terms or conditions of such prior
mortgage. Nothing contained in this Section 3.10 is intended, nor shall it be deemed, to
constitute consent by the Bank to a subordination of the lien of this Mortgage.



     Section 3.11. Encumbrances. The Borrower shall not create or permit to be created or
permit to exist any encumbrance on the Property (other than a lien for property taxes not yet due
and payable and the Permitted Encumbrances) even if such encumbrance is inferior to this Mortgage,
without the prior express written consent of the Bank. The Borrower shall not declare or otherwise
subject the Property to any form of common interest ownership including, but not limited to, a
condominium, cooperative, planned community, or planned unit development form of ownership, without
the prior express written consent of the Bank.



     Section 3.12. Transfers of Ownership. The Borrower shall not sell or permit any
transfer or other disposition, by operation of law or otherwise, of legal or equitable title to or
interest in the Property, or any part thereof (including, without limitation, any sale, transfer or
disposition of any corporate, partnership or other legal or beneficial interest in the Borrower),
without the prior express written consent of the Bank, which consent may be withheld in the Bank’s
sole discretion for any reason whatsoever.



     Section 3.13. Expenses. The Borrower shall pay when due all fees and charges
(including reasonable attorneys’ fees) incurred by the Bank in connection with the transactions
evidenced by the Obligations and secured by this Mortgage, the insurance of the security
represented by this Mortgage, protecting or sustaining the lien of this Mortgage and the
enforcement of the Obligations and this Mortgage, all either before or after obtaining judgment of
foreclosure of this Mortgage or judgment in or with respect to the Obligations, including, without
limitation, all filing, registration, recording, search, appraisal and information fees, all title
insurance premiums, all transfer taxes and expenses incident to the execution and acknowledgment of
this Mortgage and all other documents securing the Obligations, and all Federal, state and local
taxes, duties, stamps, imposts, assessments and charges arising out of or in connection with the
execution and delivery of this Mortgage and the instruments evidencing the Obligations. Such fees
and charges shall be secured by the lien of this Mortgage and shall accrue interest at the rate set
forth in the Credit Agreement and Note.



     Section 3.14. Priority of Lien; After-Acquired Property. This Mortgage is and will
be maintained as a valid mortgage lien on the Property subject only to the Permitted Encumbrances.
All property of every kind acquired by the Borrower after the date hereof which, by the terms
hereof, is required or intended to be subjected to the lien of this Mortgage shall, immediately









 



13



upon the acquisition thereof by the Borrower, and without any further mortgage, conveyance,
assignment or transfer, become subject to the lien of this Mortgage. Any real property or easement
across real property adjoining or adjacent to the Property which is used for access to, providing
utility service to or is granted in lieu of a cash award for a condemnation of any portion of the
Property now existing or hereafter acquired shall be subject to the lien of this Mortgage. The
Borrower will do, execute, acknowledge and deliver all and every such further conveyances,
mortgages, and assurances as the Bank shall reasonably require for accomplishing the purposes of
this Mortgage. If any action or proceeding shall be instituted to recover possession of the
Property or for the foreclosure of any other mortgage or for any other purpose affecting the
Property or this Mortgage, the Borrower will immediately, upon service thereof on or by the
Borrower, deliver to the Bank a true copy of each petition, summons, complaint, notice, motion,
order to show cause, and all other process, pleadings and papers, however designated, served in any
such action or proceeding.



     Section 3.15. Waiver and Modification. Whether or not for additional interest or
other consideration paid or payable to the Bank, no forbearance on the part of the Bank or
extension of the time for the payment of the whole or any part of the Obligations secured hereby,
or any other indulgence given by the Bank to the Borrower or to any other party claiming any
interest in or to the Property, shall operate to release or in any manner affect the original
liability of the Borrower, or the priority of this Mortgage or to limit, prejudice or impair any
right of the Bank, including, without limitation, the right to realize upon the security, or any
part thereof, for the Obligations secured hereby or any of them, notice of any such extension,
forbearance or indulgence being hereby waived by the Borrower and all those claiming by, through or
under the Borrower. No consent or waiver, express or implied, by the Bank to or of any default by
the Borrower shall be construed as a consent or waiver to or of any further default in the same or
any other term, condition, covenant or provision of this Mortgage or of the Obligations secured
hereby. Borrower waives presentment, demand, notice, protest, notice of acceptance of this
Mortgage, notice of loans made, credit extended or other collateral received or delivered or other
action taken in reliance hereon and all other demands and notices of any description. With respect
both to the Obligations and the Property, Borrower assents to any extension or postponement of the
time of payment or any other indulgence, to any substitution, exchange or release of the Property,
to the addition or release of any party or person primarily or secondarily liable, to the
acceptance of partial payments thereon and the settlement, compromising or adjusting of any
thereof, all in such manner and at such time or times as Bank may deem advisable. Bank shall have
no duty as to the collection or protection of the Property or any income thereon, nor as to the
preservation of rights against prior parties, nor as to the preservation of any rights pertaining
thereto beyond the safe custody thereof. Bank may exercise its rights with respect to the Property
without resorting or regard to other collateral or sources of reimbursement for liability. Bank
shall not be deemed to have waived any of its rights upon or under the Obligations or the Property
unless such waiver be in writing and signed by Bank.



     Section 3.16. Fixtures and Equipment; Financing Statement. This Mortgage constitutes
a security agreement under the Uniform Commercial Code as enacted in the State of Connecticut, and
the Borrower hereby grants to the Bank to secure the payment and performance of the Obligations and
also to secure the performance of all agreements and covenants herein contained, a security
interest in all fixtures, Building Service Equipment and any other property









 



14



(hereinafter referred to as the “Personalty”) included in the Property, now owned or hereafter
acquired by the Borrower, which might otherwise be deemed “personal property” (and all accessions
thereto and the proceeds thereof). The Borrower covenants and agrees that, upon the subsequent
acquisition of fixtures, Personalty or Building Service Equipment, it will provide to the Bank such
further assurances as may be required by the Bank to establish the Bank’s first and prior security
interest in such fixtures, Personalty and Building Service Equipment. IT IS INTENDED BY THE
GRANTOR AND THE GRANTEE THAT THIS MORTGAGE BE EFFECTIVE AS A FINANCING STATEMENT FILED WITH THE
REAL ESTATE RECORDS AS A FIXTURE FILING. The Borrower shall execute, deliver and cause to be
recorded and filed from time to time with all necessary public offices, at the Borrower’s sole cost
and expense, continuation statements and such other instruments as will maintain the Bank’s
priority of security in all fixtures, Personalty and Building Service Equipment. If Borrower shall
fail to furnish any such financing and continuation statements within ten (10) days after their
request by the Bank, then, pursuant to the provisions of the Uniform Commercial Code, Borrower
hereby authorizes the Bank, without signature of the Borrower, to execute and file any such
financing and continuation statements. The filing of any financing or continuation statements in
the office of the Secretary of the State shall not be construed as in any way impairing the right
of the Bank to proceed against fixtures, Personalty or Building Service Equipment as real property.



     Section 3.17. Zoning Changes. The Borrower shall submit to the Bank for its prior
written approval all applications and other information relating to any proposed zoning change,
variance or other action with respect to the use of the Property or any portion thereof.



     Section 3.18. Change in Management. The Borrower shall submit to the Bank for its
review and prior written approval all information relating to any proposed change in the management
of the Property or the business conducted thereon.



SECTION 4

DEFAULT AND REMEDIES




     Section 4.1. Default; Acceleration of Obligations. If an Event of Default shall
occur, then the Bank may exercise the remedies provided under this Mortgage, under the Credit
Agreement, under the Note, under the other Loan Documents or under the laws of the State of
Connecticut or any one or more of such remedies.



     Section 4.2. Remedies Cumulative. No remedy herein conferred on the Bank is intended
to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing.



     Section 4.3. Right of Mortgagee to Cure an Event of Default. If an Event of Default
shall occur, the Bank shall have the right, but without any obligation so to do, to cure such
default for the account of the Borrower and to make any payment or take any action necessary to
effect such cure. Without limiting the generality of the foregoing, the Borrower hereby authorizes
the Bank to pay all taxes, sewer use fees, water rates and assessments, with interest,









 



15



costs and charges accrued thereon, which may at any time be a lien upon the Property, or any part
thereof; to pay the premiums for any insurance required hereunder; to incur and pay reasonable
expenses in protecting its rights hereunder and the security hereby granted; and to pay any balance
due under any security agreement on any fixtures and equipment included as a part of the Property;
and the payment of all amounts so incurred shall be secured hereby as fully and effectually as any
other obligation of the Borrower secured hereby. If the Bank shall make any payment or take action
in accordance with this Section 4.3, the Bank will give to the Borrower written notice of the
making of any such payment or the taking of any such action. In any such event, the Bank and any
person designated by the Bank shall have, and is hereby granted, the right to enter upon the
Property at reasonable times and from any time and from time to time for the purpose of taking any
such action, and all monies expended by the Bank in connection therewith (including, but not
limited to, reasonable legal expenses and disbursements), together with interest thereon at the
Default Rate as specified in the Note (or the highest rate permitted by law, whichever shall be
less), from the date of each such expenditure, shall be paid by the Borrower to the Bank forthwith
upon demand by the Bank, and shall be secured by this Mortgage, and the Bank shall have, in
addition to any other right or remedy of the Bank, the same rights and remedies in the event of
non-payment of any such sums by the Borrower as in the case of a default by the Borrower in the
payment of any installment of principal or interest due and payable under the Note.



     Section 4.4. Foreclosure. Without limiting any of the Bank’s rights set forth in
Section 4.5 hereof, if an Event of Default shall occur, the Bank may foreclose this Mortgage and
exercise its rights as a secured party for all or any portion of the Obligations which is then due
and payable, subject to the continuing lien of this Mortgage for the balance not then due and
payable.



     Section 4.5. Possession of Property; Appointment of Receiver.



          (a) Without limiting any of the Bank’s rights set forth in Section 4.4 hereof, if an Event of
Default shall occur the Bank may, at its option: (i) enter upon and take possession and control of
the Property and the Property Income with those rights and powers more particularly set forth in
Section 4.5(b) hereof; (ii) make application to a court of competent jurisdiction for and obtain
the immediate ex parte appointment of a receiver authorized to immediately enter
upon and take possession and control of the Property and the Property Income with those rights and
powers more particularly set forth in Section 4.5 (b) hereof; and (iii) without taking possession
and control of the Property, immediately (with or without commencing any legal action or proceeding
in any court of competent jurisdiction) collect directly all Property Income in the place and stead
of the Borrower with full rights and powers to notify all parties liable to make payments of
Property Income to make said payments directly to the Bank or its agents, and the Bank or its
agents shall have the further power and authority to sue for or otherwise collect and receive all
Property Income.



          (b) In the event the Bank or a receiver enters upon and takes possession and control of the
Property and/or the Property Income pursuant to Section 4.5(a) hereof, said person or entity shall,
in addition to such other rights and powers as may subsequently be authorized, have the right and
power to (i) operate, manage and control the Property and exercise all the rights and powers of the
Borrower in its name or otherwise with respect to the same; (ii) make all necessary









 



16



and proper maintenance, repairs, replacements, and improvements to the Property; (iii) collect
and receive all Property Income; and (iv) enforce all terms of existing contracts pertaining to the
Property and enter into such new contracts as the Bank or the receiver may determine necessary in
their sole discretion.



          (c) All Property Income collected by the Bank, the Bank’s agent or a receiver, pursuant to
Section 4.5(a) hereof, shall be applied in such order of priority as the Bank may determine in its
sole discretion to (i) interest and principal due on the Obligations; (ii) taxes, assessments and
insurance premiums due with respect to the Property and/or the business operations conducted from
the Property; (iii) all costs and expenses of operating, maintaining, repairing and improving the
Property; and (iv) the compensation, salaries, expenses and disbursements of any agents, employees,
attorneys or other representatives of the Bank, the Bank’s agent or the receiver in connection with
the possession, control and/or operation of the Property and the business operations conducted
therefrom.



          (d) The Bank, its agents, or any receiver acting pursuant to Section 4.5(a) hereof shall in no
event be liable or accountable for more monies than actually are received from the Property during
the period which the Bank, its agent or any receiver actually is in possession and control of the
Property. Neither the Bank, its agents or any receiver shall be liable or accountable in any
manner for the failure to collect Property Income for any reason whatsoever.



          (e) All costs, expenses and liabilities of every character incurred by the Bank in managing,
operating and maintaining the Property, not paid from Property Income as herein above provided,
shall constitute advances by the Bank pursuant to Section 4.3.



          (f) In the event of foreclosure, the Bank, its agent or any receiver acting pursuant to
Section 4.5(a) hereof may, if a deficiency exists, remain in possession of the Property until (i)
the foreclosure sale; (ii) the redemption of the Property; or (iii) the expiration of any
redemption period of the United States of America extending subsequent to the foreclosure sale.
The Bank, its agents or the receiver shall incur no liability for, nor shall the Borrower assert
any claim or setoff as a result of, any action taken while the Bank, its agent or a receiver is in
possession of the Property.



     Section 4.6. Uniform Commercial Code. If the provisions of the Uniform Commercial
Code as enacted in the State of Connecticut are applicable to any property or security given to
secure the indebtedness secured hereby which is sold in combination with or as a part of the
Property, or any part thereof, at one or more foreclosure sales, any notice required under such
provisions shall be fully satisfied by any notice given in connection with such foreclosure sales
of the Property or any part thereof.



     Section 4.7. Rights Cumulative. Each right, power and remedy conferred upon the Bank
by this Mortgage, the Credit Agreement, the Note and the other Loan Documents, and conferred by law
or in equity, is cumulative and in addition to every other right, power and remedy herein or
therein set forth or otherwise so existing, may be exercised from time to time, as often, and in
such order, as may be deemed expedient by the Bank, and the exercise or the beginning of the
exercise of one right, power or remedy shall not be a waiver of the right to exercise at 

the same









 



17



time or thereafter any other right, power or remedy, and no delay or omission of, or discontinuance
by, the Bank in the exercise of any right, power or remedy accruing hereunder or arising otherwise
shall impair any such right, power or remedy, or be construed to be a waiver of any default or
acquiescence therein. To constitute a waiver, there must be a writing signed by an officer of the
Bank and directed to the Borrower, specifying the waiver.



     No delay or omission of the Bank to exercise any right, power or remedy accruing upon any
Event of Default shall exhaust or impair any such right, power or remedy nor shall it be construed
to be a waiver of any such default or an acquiescence therein, and every right, power and remedy
given by this Mortgage to the Bank may be exercised from time to time and as often as may be deemed
expedient by the Bank.



     In case the Bank shall have proceeded to enforce any right or remedy under this Mortgage, the
Credit Agreement, the Note or the other Loan Documents by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been determined
adversely to the Bank, then and in every such case the Borrower and the Bank shall be restored to
their former positions and rights hereunder, and all rights, powers and remedies of the Bank shall
continue as if no such proceeding had been taken. In the event of a breach or default or an Event
of Default under this Mortgage, the Credit Agreement, the Note or other Loan Documents, the
Borrower agrees to pay and to indemnify and hold harmless the Bank for all reasonable expenses,
attorneys’ fees, taxes and other court costs occasioned by such breach or default.



     Section 4.8. No Merger. In the event the Bank shall acquire title to the Property by
conveyance from the Borrower or as a result of the foreclosure of any other mortgage which the Bank
at any time holds with respect to the Property, this Mortgage shall not merge in the fee of the
Property but shall remain and continue as an existing and enforceable lien for the Obligations
secured hereby until the same shall be released of record by the Bank in writing.



SECTION 5

MISCELLANEOUS




     Section 5.1. Notices. All notices, requests and other communications hereunder shall
be made in writing (including telex and telecopy communications), shall be sent by first-class
mail, postage prepaid, or sent by commercial overnight courier delivery service, charges prepaid,
or sent by telex, telecopier or hand delivery, addressed as follows:



	 	 	 	 	 
	 

	 	(a)
	 	If to the Borrower, at:
	 
	 	 	 	 
	 

	 	 	 	EDAC Technologies Corporation
	 

	 	 	 	1806 New Britain Avenue
	 

	 	 	 	Farmington, CT 06032
	 

	 	 	 	Attn: Dominick Pagano, President












 



18


	 	 	 	 	 
	 

	 	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	 	 	Robinson & Cole LLP
	 

	 	 	 	280 Trumbull Street
	 

	 	 	 	Hartford, CT 06103-3597
	 

	 	 	 	Attn.:  Edward J. Samorajczyk, Esq.





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




	 	 	 	 	 
	 

	 	(b)
	 	If to the Bank, at:
	 
	 	 	 	 
	 

	 	 	 	TD Bank, N.A.
	 

	 	 	 	102 West Main Street
	 

	 	 	 	New Britain, CT 06050-0174
	 

	 	 	 	Attn: John E. Cookley, Senior Vice President
	 
	 	 	 	 
	 

	 	 	 	With a copy to:
	 
	 	 	 	 
	 

	 	 	 	Updike, Kelly, & Spellacy, P.C.
	 

	 	 	 	One State Street
	 

	 	 	 	P.O. Box 231277
	 

	 	 	 	Hartford, CT 06123-1277
	 

	 	 	 	Attn: Robert J. Martino, Esq.





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




     Section 5.2. COMMERCIAL WAIVER. THE BORROWER AND EACH AND EVERY ENDORSER, GUARANTOR
AND SURETY OF THE OBLIGATIONS SECURED BY THIS MORTGAGE, AND EACH OTHER PERSON WHO IS OR WHO SHALL
BECOME LIABLE FOR ALL OR ANY PART OF THE OBLIGATIONS SECURED BY THIS MORTGAGE, HEREBY ACKNOWLEDGE
THAT THE TRANSACTION OF WHICH THIS MORTGAGE IS A PART IS A COMMERCIAL TRANSACTION AND WAIVE THEIR
RIGHTS TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES AS AMENDED OR
BY OTHER APPLICABLE LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE BANK MAY DESIRE TO USE.



     SECTION 5.3. JURY TRIAL WAIVER. BORROWER AND BANK (BY ACCEPTANCE OF THIS MORTGAGE)
MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS MORTGAGE OR ANY
OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH









 



19



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



     Section 5.4. Open-End Mortgage. This is an “open-end” mortgage and the Bank and any
other holder hereof shall have all the rights, powers and protection to which the holder of any
open end mortgage is entitled under Section 49-2 of the Connecticut General Statutes, as amended.
Periodic advances in respect of the Revolving Loan are permitted under the Revolving Credit Note
(which shall constitute a commercial revolving loan agreement pursuant to Section 49-2 of the
Connecticut General Statutes, as amended) and hereunder and the Bank shall record such advancements
in its books and records. It is further agreed that, in addition to periodic advances contemplated
by the Revolving Credit Note, upon request of the Borrower, the Bank may hereafter, at its option,
at any time before full payment of the indebtedness secured by this Mortgage, make further
advances, to the Borrower, in amounts and at such rates of interest as the Bank shall determine,
and every such further advance, with interest, shall be secured by this Mortgage and evidenced by
an additional instrument given by the Borrower provided, that the amount of the aggregate principal
secured by this Mortgage and remaining unpaid shall at no time exceed the original aggregate
principal sum secured hereby and provided that the time of repayment of such advances shall not
extend the time of repayment beyond the maturity of the original debt hereby secured.



     Section 5.5. Cross Default and Cross Collateral. In addition to the terms and
conditions set forth in the Cross Collateralization and Cross Default Agreement executed on even
date herewith between the Borrower and the Bank, the Borrower acknowledges and agrees that the
occurrence of an Event of Default under the terms of this Mortgage shall constitute a default under
the other Loan Documents in effect at the time of any such default and under the documents
evidencing any other loan now existing or hereafter made by the Bank to the Borrower, and a default
under the other Loan Documents or any of them or any of said existing or future loans shall
constitute an Event of Default under this Mortgage.



     Section 5.6. Expenses. The Borrower will pay all expenses arising out of the
preparation, administration, amendment, protection, collection and/or other enforcement of this









 



20



Mortgage (including, without limitation, the reasonable fees and expenses of the Bank’s legal
counsel, accountants and appraisers).



     Section 5.7. Stamp Tax. The Borrower will pay any stamp or other tax which becomes
payable in respect of this Mortgage.



     Section 5.8. Schedules and Exhibits. The Schedules and Exhibits which are attached
hereto are and shall constitute a part of this Mortgage.



     Section 5.9. This Mortgage and the rights and obligations of the parties hereunder shall be
construed and interpreted in accordance with the laws of the State of Connecticut (the “Governing
State”) (excluding the laws applicable to conflicts or choice of law).




BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS MORTGAGE OR ANY OF THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF CONNECTICUT OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON BORROWER BY MAIL AT THE ADDRESS SET FORTH IN
SECTION 5.1 OF THIS MORTGAGE. BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT
IN AN INCONVENIENT FORUM.



     Section 5.10. Survival of Representations. All representations, warranties,
covenants and agreements contained in this Mortgage shall continue in full force and effect until
all of the Obligations shall have been paid in full.



     Section 5.11. Amendments. No modification or amendment of this Mortgage shall be
effective unless same shall be in writing and signed by the parties hereto.



     Section 5.12. Successors and Assigns. This Mortgage shall be binding upon and shall
inure to the benefit of the Borrower, the Bank and their respective permitted [heirs, executors,
administrators] successors and assigns.



     Section 5.13. Severability. Any provision of this Mortgage which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other jurisdiction.



     Section 5.14. Headings. All article and section headings in this Mortgage are
included for convenience of reference only and shall not constitute a part of this Mortgage for any
other purpose.



     Section 5.15. Interpretation and Construction. The following rules shall apply to
the interpretation and construction of this Mortgage unless the context requires otherwise: (a) the









 



21



singular includes the plural and the plural, the singular; (b) words importing any gender include
the other genders; (c) references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute to which reference is made and all
regulations promulgated pursuant to such statutes; (d) references to “writing” includes printing,
photocopying, typing, lithography and other means of reproducing words in a tangible visible form;
(e) the words “including”, “includes” and “include” shall be deemed to be followed by the words
“without limitation”; (f) references to the introductory paragraph, preliminary statements,
articles, sections (or subdivisions of sections), exhibits or schedules are to those of this
Mortgage unless otherwise indicated; (g) references to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other modifications to such instruments,
but only to the extent that such amendments and other modifications are permitted or not prohibited
by the terms of this Mortgage; (h) references to persons include their respective permitted
successors and assigns; and (i) “or” is not exclusive.



     Section 5.16. Replacement of Promissory Note. Upon receipt of an affidavit of an
officer of Bank as to the loss, theft, destruction or mutilation of the Note or any other security
document which is not of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon cancellation of such Note or other security document, Borrower will issue, in lieu
thereof, a replacement note or other security document in the same principal amount thereof and
otherwise of like tenor.



     This Mortgage is made upon the Statutory Condition.



[remainder of page intentionally left blank; signature page follows]










 



22




[signature page 1 of 1 to Open-End Mortgage Deed]




     NOW THEREFORE, if the indebtedness which in accordance with the provisions hereof shall be
secured hereby, and any extensions or renewals thereof and any and all other amounts due hereunder,
under the Credit Agreement, the Note shall be well and truly paid according to their tenor, and if
all agreements and provisions contained in the Credit Agreement, the Note and herein are fully kept
and performed, then this Mortgage shall become null and void; otherwise to remain in full force and
effect.



     IN WITNESS WHEREOF, the Borrower has executed and delivered this Mortgage as of this 27th day
of May, 2009.



	 	 	 	 	 
	Signed, sealed and delivered
in the presence of:	 	BORROWER
	 
	 	 	 	 
	 	 	EDAC TECHNOLOGIES CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dominick A. Pagano
	 


	 
		 	Name: Dominick A. Pagano
	 

	 	 	 	Its President
	 

	 	 	 	Duly Authorized
	 


	 	 	 	 






	 	 	 	 	 	 	 	 	 	 
	STATE OF CONNECTICUT 

	 	)	 	 	 	 	 	 	 
	 

	 	)	 	 	at	 	 	 	 
	COUNTY OF                    

	 	)	 	 	 	 	 

	 	 






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



     In Witness Whereof I hereunto set my hand.



	 	 	 	 	 
	 

	 	 

Notary Public/My Commission Expires:
	 	 
	 

	 	Commissioner of the Superior Court