Hazardous Substance Cert. & Indemnification Agreement

HAZARDOUS SUBSTANCE CERTIFICATE
AND
INDEMNIFICATION AGREEMENT


This Hazardous Substance Certificate and Indemnification Agreement (the "Indemnity") is made as of the 5th day of March, 2004 by and between APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation AND EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation (collectively "Borrower") and Banknorth, N.A. ("Lender").


W I T N E S S E T H:


WHEREAS, On March 5, 2004, the Lender entered into a financing transaction (the "Loan") with the Borrower, evidenced by a certain note of even date herewith (the "Note"), executed and delivered by the Borrower, as maker, to the order of the Lender, as payee, in the principal amount of One Million Six Hundred Fifty Nine Thousand and No/100 Dollars ($1,659,000.00) and secured by a certain Mortgage Deed ("Mortgage") encumbering certain real property located at 21 Spring Lane, Farmington, Connecticut and 1790, 1798 and 1806 New Britain Avenue, Farmington, Connecticut as more fully described in Exhibit A attached hereto and incorporated herein; and


WHEREAS, no present environmental pollution or contamination of the real property securing said loan has been disclosed to the Lender, except as may be disclosed in certain environmental reports provided to the Lender including a Phase I environmental report dated July, 1998, a Phase II environmental report dated July, 1998 and a Phase I update dated January, 2004 issued by Environmental Resources Management (the "Environmental Reports"); and


WHEREAS, the Lender has requested this Indemnity as a condition of the Lender's entering into the Loan; and


WHEREAS, to induce the Lender to make the Loan to the Borrower, the Borrower has executed and delivered this Indemnity;


NOW THEREFORE, in consideration of the Loan and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower hereby certifies to the Lender and agrees as follows:


1. Except as disclosed in the Environmental Reports, the individual executing this document on behalf of the Borrower has no actual knowledge of (a) any spills, releases, discharges or disposal of Hazardous Substances that have occurred or are presently occurring on or onto the Premises, including the surface or subsurface waters thereof, or any adjacent properties, or (b) any spills or disposal of Hazardous Substances that have occurred or are presently occurring off the Premise as a result of any operation of or use of the Premises.


2. In connection with the operation of and use of the Premises, the individual executing this document on behalf of the Borrower represents that, as of the date of this Indemnity, it has no


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knowledge of any failure to comply with all applicable local, state and federal environmental laws, regulations, ordinances and administrative and judicial orders relating to the generation, use, recycling, reuse, sale, storage, handling, transport or disposal of any Hazardous Substances.


3. The Borrower agrees to immediately notify the Lender if the Borrower becomes aware of any lien, action or notice of the nature described in paragraph 2 above. This provision specifically includes the creation of any lien pursuant to Section 22a-452a of the Connecticut General Statutes or any similar federal laws or regulations. At its own cost, the Borrower will take all actions which are necessary to clean up any Hazardous Substances affecting the Premises, including removal, containment or any other remedial action required by applicable governmental authorities.


4. The Borrower hereby agrees, unconditionally, absolutely and irrevocably, to indemnify, defend and hold harmless the Lender, its affiliates, successors, assigns and the officers, directors, employees and agents of the Lender against and in respect of:


(a) any loss, liability, cost, injury, expense or damage of any and every kind whatsoever (including, without limitation, court costs and attorneys' fees and expenses) which at any time or from time to time may be suffered or incurred in connection with any inquiry, charge, claim, cause of action, demand or lien made or arising directly or indirectly or in connection with, with respect to, or as a direct or indirect result of the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release from, the Premises into or upon any land, the atmosphere, or any watercourse, body of water or wetland, of any Hazardous Substances including, without limitation, any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under the "Statutes" (as hereinafter defined), whether now known or unknown, including without limitation:


(i) any costs, fees or expenses incurred in connection with the removal, encapsulation, containment or other treatment of Hazardous Substances from or on the Premises;


(ii) any loss or damage resulting from a loss of priority of the Mortgage due to the imposition of a lien against the Premises;


(iii) any attorneys' fees, engineer's fees, and/or charges of any contractor or professional retained or consulted in connection with any inquiry, claim or demand, including without limitation, any costs incurred in connection with compliance with such inquiry, claim or demand;


(b) any loss, liability, cost, expense or damage (including, without limitation, attorneys' fees) suffered or incurred as a result of, arising out of or in connection with any failure of the Premises to comply with all applicable environmental protection laws, ordinances, rules and regulations, including, but not limited to, any violation of or any liability arising under any provision of Title 22a of the Connecticut ...