MORTGAGE (9-29-97) M&T REAL ESTATE

EXHIBIT 10.13











- -------------------------------------------------------------------------------- [LOGO] M&T Real Estate, Inc. MORTGAGE - --------------------------------------------------------------------------------



This Mortgage is made as of the 29th day of September, 1997, between County of Monroe Industrial Development Agency, a public benefit corporation organized and existing under the laws of the State of New York, having its principal office at 2 State Street, Suite 500, Rochester, NY 14614 ("Agency") and CVC Products, Inc., a Delaware corporation authorized to do business in the State of New York, having an office at 525 Lee Road, Rochester, NY 14604 ("Borrower") (the Agency and the Borrower are herein collectively described as the "Mortgagor") (individually and collectively "Mortgagor") and M&T REAL ESTATE, INC., a New York corporation having its chief executive office at One Fountain Plaza, Buffalo, New York 142O3-2399, Attention: Office of General Counsel (the "Mortgagee").



WITNESSETH, to secure (a) the payment of an indebtedness in the principal sum of Two Million and 00/100 Dollars ($2,000,000.00), lawful money of the United States, together with interest thereon and other charges with respect thereto, to be paid according to a certain bond, note or other obligation dated on or about September 29, 1997, (i) made and delivered by each Mortgagor to the Mortgagee or (ii) made and delivered by CVC Products, Inc. XXXXXXXXXXX ("Debtor") to the Mortgagee (the "Note") and (b) if the Note is guaranteed by each Mortgagor, to the extent of such principal sum and such interest and other charges, such guaranty (the "Guaranty"), each Mortgagor hereby mortgages to the Mortgagee, as continuing and collateral security for the payment of any and all indebtedness, liabilities and obligations now existing or which may hereafter arise by reason of the Note, the Guaranty, this Mortgage or any amendments, renewals, extensions, modifications or substitutions of the Note, the Guaranty or this Mortgage (collectively the "Indebtedness"), the premises described on the attached Schedule A.



TOGETHER with all buildings, structures and other improvements now or hereafter erected, constructed or situated upon said premises, and all fixtures and equipment and other personal property now or hereafter affixed to, or used in connection with, said premises and any and all replacements thereof and additions thereto, all of which shall be deemed to be and remain and form a part of said premises and are covered by the lien of this Mortgage (said premises, buildings, structures, other improvements, fixtures and equipment and other personal property being collectively referred to in this Mortgage as the "Premises"),



TOGETHER with all strips and gores of land adjoining or abutting the Premises,



TOGETHER with all right, title and interest of each Mortgagor in and to all streets, alleys, highways, waterways and public places open or proposed in front of, running through or adjoining the Premises, and all easements and rights of way, public and private, now or hereafter used in connection with the Premises,



TOGETHER with all tenements, hereditaments and appurtenances and all the estate and rights of each Mortgagor in and to the Premises,



TOGETHER with all awards heretofore or hereafter made by any federal, state, county, municipal or other governmental authority, or by whomever made in any condemnation or eminent domain proceedings whatsoever, to the present or subsequent owners of the Premises or any potion thereof, for the acquisition for public purposes of the Premises or any portion thereof or any interest therein or any use thereof, or for consequential damages on account thereof, including, but not limited to, any award for any change of grade of streets affecting the Premises or any portion thereof and any award for any damage to the Premises or any portion thereof or any interest therein or any use thereof.



EACH MORTGAGOR COVENANTS WITH THE MORTGAGEE SO LONG AS THIS MORTGAGE IS IN EFFECT AS FOLLOWS:



1. PAY INDEBTEDNESS. The Indebtedness shall be paid as provided in the Note or Guaranty, as the case maybe, and as provided herein.



2. INSURANCE. Each Mortgagor shall keep the Premises insured against each risk to which the Premises may from time to time be subject (including, but not limited to, fire, vandalism and other risks covered by all risk insurance; if requested by the Mortgagee, earthquake; if the Premises or any portion thereof are located in an area identified as an area having special flood hazards and in which flood insurance has been made available, flood; and loss of rents by reason of such risks) for the benefit of the Mortgagee. Such insurance shall be provided in such amounts, for such periods, in such form, with such special endorsements, on such terms and by such companies and against such risks as shall be satisfactory to the Mortgagee. Without limiting the generality of the preceding two sentences, each policy pursuant to which such insurance is provided shall contain a mortgagee clause, in form and substance satisfactory to the Mortgagee, (a) naming the Mortgagee as mortgagee and (b) providing that (i) all moneys payable pursuant to such insurance shall be payable to the Mortgagee, (ii) such insurance shall not be affected by any act or neglect of any Mortgagor or the Mortgagee, any occupancy, operation or use of the Premises or any portion thereof for purposes more hazardous than permitted by the terms of such policy, any foreclosure or other proceeding or notice of sale relating to the Premises or any portion thereof or any change in the title to or ownership of the Premises or any portion thereof and (iii) such policy and such mortgagee clause may not be cancelled or amended except upon thirty (30) days' prior written notice to the Mortgagee. Each Mortgagor hereby assigns and shall deliver each policy pursuant to which any such insurance is provided to the Mortgagee. The acceptance by the Mortgagee of such policies from any Mortgagor shall not be deemed or construed as an approval by the Mortgagee of the form, sufficiency or amount of such insurance. The Mortgagee does not in any way represent that such insurance, whether in scope or coverage or limits of coverage, is adequate or sufficient to protect the business or interest of any Mortgagor. In the event of the foreclosure of this Mortgage, or a transfer of title to the Premises in extinguishment of the Indebtedness, all right, title and interest of each Mortgagor in and to any such policies then in force shall pass to the purchaser or grantee of the Premises. All the provisions of this Section 2 and any other provisions of this Mortgage pertaining to insurance which may be required under this Mortgage shall be construed with Section 254, Subdivision 4 of the New York Real Property Law, but, said Section 254 to the contrary notwithstanding, each Mortgagor consents that the Mortgagee may, without qualification or limitation by virtue of said Section 254, retain and apply the proceeds of any such insurance in satisfaction or reduction of the Indebtedness, whether or not then due and payable, or it may pay the same, wholly or in part, to any Mortgagor for the repair or replacement of the Premises or for any other purpose satisfactory to the Mortgagee, without affecting the lien of this Mortgage for the full amount of the Indebtedness before the making of such payment.



3. ALTERATIONS, DEMOLITION OR REMOVAL. No building, structure, other improvement, fixture or equipment or other personal property constituting any portion of the Premises shall be removed, demolished or substantially altered without the prior written consent of the Mortgagee.



4. WASTE AND CHANGE IN USE. No Mortgagor shall commit any waste on the Premises or make any change in the use of the Premises which may in any way increase any ordinary fire, environmental or other risk arising out of construction or operation.



5. MAINTENANCE AND REPAIRS. Each Mortgagor shall keep and maintain all buildings, structures, other improvements, fixtures and equipment and other personal property constituting any portion of the Premises and the sidewalks and curbs abutting the Premises in good order and rentable and tenantable condition and state of repair. In the event that the Premises or any portion thereof shall be damaged or destroyed by fire or any other casualty, or in the event of the condemnation or taking of any portion of the Premises as a result of any exercise of the power of eminent domain, each Mortgagor shall promptly restore, replace, rebuild or alter the same as nearly as possible to the condition immediately prior to such fire, other casualty, condemnation or taking without regard to the adequacy of any proceeds of any insurance or award received. Each Mortgagor shall give prompt written notice to the Mortgagee of any such damage or destruction or of the commencement of any condemnation or eminent domain proceeding affecting the Premises or any portion thereof.



6. EXISTENCE AND AUTHORITY. If Mortgagor is a corporation, partnership or a limited liability company (i) so long as this Mortgage remains in effect, Mortgagor will do all things necessary to preserve and keep in full force and effect the existence, franchises, rights and privileges of Mortgagor as a business or stock corporation, a partnership (limited or general) or as a limited liability company, under the laws of the state of its organization and (ii) if a corporation, warrants that neither its certificate of incorporation, nor any amendment thereto, nor its by-laws, requires the consent of shareholders to the execution and delivery of this Mortgage, and that the execution and delivery of this Mortgage have been duly authorized by its Board of Directors; (iii) if a limited liability company, warrants that the execution and delivery of this Mortgage has been duly authorized by the members of the limited liability company and no other action is required under its articles of organization or the operating agreement and (iv) if a partnership, warrants that the execution and delivery of this Mortgage has been duly authorized by its partners and no other action is required under its partnership agreement. Mortgagor shall take all necessary steps to preserve its corporate, partnership or limited liability company existence (as the case maybe) and its right to conduct business in all states in which the nature of its business or ownership of its property requires such qualification. Mortgagor shall engage only in the business conducted by it on the date of this Agreement.



Tax Account No.: 104.34-1-1.001 Tax Mailing Address: 525 Lee Road, Rochester, New York 14603

7. TAXES AND ASSESSMENTS. Unless paid from an escrow established pursuant to Section 8 of this Mortgage, each Mortgagor shall pay all taxes, general and special assessments and other governmental impositions with respect to the Premises before the end of any applicable grace period. Upon request by the Mortgagee, each Mortgagor shall promptly deliver to the Mortgagee receipted bills showing payment of all such taxes, assessments and impositions within the applicable grace period.



8. ESCROW FOR TAXES, ASSESSMENTS AND INSURANCE. Upon request by the Mortgagee after any default under the Loan Documents, each Mortgagor shall pay (a) monthly to the Mortgagee on or before the first day of each and every calendar month, until the Indebtedness is fully paid, a sum equal to one-twelfth (1/12th) of the yearly taxes, general and special assessments, other governmental impositions and other liens and charges with respect to the Premises to be imposed for the ensuing year, as estimated by the Mortgagee in good faith, and annual premiums for insurance on the Premises and (b) an initial payment such that, when such monthly payments are added thereto, the total of such payments will be sufficient to pay such taxes, assessments, impositions and other liens and charges and such insurance premiums on or before the date when they become due. So long as no Event of Default (as hereinafter defined) shall have occurred or exists, the Mortgagee shall hold such payments in trust in an account maintained with Manufacturers and Traders Trust Company without obligation to pay interest thereon, except such interest as may be mandatory by any applicable statute, regulation or other law, to pay, to the extent funds are available, such taxes, assessments, impositions and other liens and charges and such insurance premiums within a reasonable time after they become due; provided, however, that upon the occurrence or existence of any Event of Default, the Mortgagee may apply the balance of any such payments held to the Indebtedness. If the total of such payments made by any Mortgagor shall exceed the amount of such payments made by the Mortgagee, such excess shall be held or credited by the Mortgagee for the benefit of each Mortgagor. If the total of such payments made by any Mortgagor shall be less than the amount of such taxes, assessments, impositions and other liens and charges and such insurance premiums, then each Mortgagor shall pay to the Mortgagee any amount necessary to make up the deficiency on or before the date when any such amount shall be due.



9. LEASES. Pursuant to the provisions of Section 291-f of the New York Real Property Law, no Mortgagor shall (a) amend, cancel, abridge, terminate, or otherwise modify any lease of the Premises or of any portion thereof or (b) accept any prepayment of installments of rent to become due thereunder for more than one month in advance, without the prior written consent of the Mortgagee or its agents. No Mortgagor shall make any new lease in place of or any lease renewal or extension of any lease of the Premises or any portion thereof (other than those such Mortgagor as landlord may be required to grant by the terms of an existing lease) without the prior written consent of the Mortgagee or its agents. Upon request by the Mortgagee or its agents, each Mortgagor shall promptly furnish to the Mortgagee a written statement containing the names and mailing addresses of all lessees of the Premises or of any portion thereof, the terms of their respective leases, the space occupied and the rentals payable thereunder and copies of their respective leases and shall cooperate in effecting delivery of notice of this covenant to each affected lessee.



10. ASSIGNMENT OF LEASES AND RENTS. Each Mortgagor hereby assigns to the Mortgagee all existing and future leases of the Premises or any portion thereof (including, but not limited to, any amendments, renewals, extensions or modifications thereof) and the rents, issues and profits of the Premises including without limitation accounts receivable for use of the Premises for hotel or lodging services ("Accounts"), as further security for the payment of the Indebtedness, and each Mortgagor grants to the Mortgagee the right to enter upon and to take possession of the Premises for the purpose of collecting the same and to let the Premises or any portion thereof, and, after payment of each cost and expense (including, but not limited to, each fee and disbursement of counsel to the Mortgagee) incurred by the Mortgagee in such entry and collection, to apply the remainder of the same to the Indebtedness, without affecting its right to maintain any action theretofore instituted, or to bring any action thereafter, to enforce the payment of the Indebtedness. In the event the Mortgagee exercises such rights, it shall not thereby be deemed a mortgagee in possession, and it shall not in any way be made liable for any act or omission. This assignment and grant shall continue in effect until the Indebtedness is fully paid. No Mortgagor shall assign such leases, rents, issues or profits or any interest therein or grant any similar rights to any other person without the Mortgagee's prior written consent. The Mortgagee hereby waives the right to enter upon and to take possession of the Premises for the purpose of collecting said rents, issues and profits, and each Mortgagor shall be entitled to collect the same, until the occurrence or existence of any Event of Default, but such right of each Mortgagor may be revoked by the Mortgagee upon the occurrence or existence of any Event of Default. Upon the occurrence or existence of any Event of Default, each Mortgagor shall pay monthly in advance to the Mortgagee, or to any receiver appointed to collect said rents, issues and profits, a fair and reasonable monthly rental value for the use and occupation of the Premises, and upon default in any such payment shall vacate and surrender the possession of the Premises to the Mortgagee or to such receiver, and in default thereof may be evicted by summary proceedings pursuant to Article 7 of the New York Real Property Actions and Proceedings Law. The rights and remedies under this section and any separately recorded assignment of rents and/or leases in favor of Mortgagee shall be cumulative. In the event of any irreconcilable inconsistencies between such agreements and this section, the separately recorded assignment of rents and/or leases shall control.



11. SECURITY AGREEMENT. This Mortgage constitutes a security agreement under the New York Uniform Commercial Code and each Mortgagor hereby grants to the Mortgagee a security interest in all fixtures, equipment and other personal property now or hereafter owned and affixed to, used in connection with any portion of or constituting any portion of the Premises and in the proceeds, rents, issues, profits and Accounts arising therefrom, to secure the Indebtedness. The Mortgagee shall have the right to file in any public office, without the signature of any Mortgagor, each financing statement relating to such fixtures and equipment and other personal property and proceeds, rents, issues, profits and Accounts arising therefrom that the Mortgagee shall deem necessary or desirable at the sole option of the Mortgagee. With respect to such fixtures and equipment and other personal property and proceeds, the Mortgagee shall have each applicable right and remedy of a secured party under the New York Uniform Commercial Code and each applicable right and remedy pursuant to any other statute, regulation or other law or pursuant to this Mortgage.



12. NO TRANSFER. No Mortgagor shall, without the Mortgagee's prior written consent, sell, convey or transfer the Premises or any portion thereof or any interest therein or contract to do so. If any Mortgagor, Debtor or any endorser or guarantor of the Note (a "Guarantor") is a corporation, or if any other person liable with respect to the Indebtedness or any portion thereof other than any Mortgagor or any general partner of any Mortgagor, Debtor or any Guarantor, is a corporation, any direct or indirect change in the beneficial ownership or number of issued and outstanding shares of any class of stock of such Mortgagor, such Debtor, such Guarantor or such general partner, whether by operation of law or otherwise, after which the percentage of such shares beneficially owned by any person or group of persons having beneficial ownership of any such shares has changed by at least ten percent (10%) more or less than it was on the date of this Mortgage shall be deemed a sale, conveyance or transfer of the Premises within the meaning of this Section 12. If any Mortgagor, Debtor or Guarantor is a partnership, including a limited liability partnership, any change in the partnership interests of the general partners of such Mortgagor, Debtor or Guarantor or in the composition of the general partners of such Mortgagor, Debtor or Guarantor, whether by operation of law or otherwise, shall be deemed a sale, conveyance or transfer of the Premises within the meaning of this Section 12. If any Mortgagor, Debtor or Guarantor is a limited liability company, any change in the direct or indirect membership interest of any member or class of members of such Mortgagor, Debtor or Guarantor, whether by operation of law or otherwise, after which the percentage of such membership interest owned by any such member or class has changed by at least ten percent (10%) more or less than it was on the date of this Mortgage shall be deemed a sale, conveyance or transfer of the Premises within the meaning of this Section 12.



13. NO SECONDARY FINANCING OR OTHER LIENS. No Mortgagor shall, without the Mortgagee's prior written consent, mortgage, pledge, assign, grant a security interest in or cause any other lien or encumbrance to be made or permit any other lien or encumbrance to exist upon the Premises or any portion thereof except for (a) taxes and assessments not yet delinquent and (b) any mortgage, pledge, security interest, assignment or other lien or encumbrance to the Mortgagee.



14. COMPLIANCE WITH LAWS. Each Mortgagor represents and warrants to the Mortgagee, and continues to represent and warrant as long as this Mortgage is in effect, as follows: (a) the buildings, structures and other improvements now constituting any portion of the Premises are in full compliance with all applicable statutes, regulations and other laws (including, without limitation, all applicable zoning, building, fire and health codes and ordinances and the Americans With Disabilities Act of 1990) and all applicable deed restrictions, if any and is not and shall not be used for any illegal purpose; (b) such compliance is based solely upon each Mortgagor's ownership of the Premises and not upon title to or interest in any other property. Each Mortgagor shall comply with or cause compliance with all statutes, regulations and other laws (including, without limitation, all applicable zoning, building, fire and health codes and ordinances and the Americans With Disabilities Acts of 1990), all other requirements of all governmental authorities whatsoever having jurisdiction over or with respect to the Premises or any portion thereof or the use or occupation thereof and with all applicable deed restrictions, if any; provided, however, that any Mortgagor may postpone such compliance if and so long as the validity or legality of any such requirement or restriction shall be contested by such Mortgagor, with diligence and in good faith, by appropriate legal proceedings and the Mortgagee is satisfied that such non-compliance will not impair or adversely affect the value of its security.



15. WARRANTY OF TITLE; TITLE INSURANCE. Each Mortgagor represents and warrants to the Mortgagee, and continues to represent and warrant as long as this Mortgage is in effect, good and marketable title in fee simple absolute to the Premises. Upon request by the Mortgagee, each Mortgagor shall furnish to the Mortgagee at such Mortgagor's own cost and expense a title insurance policy in the then amount of the Indebtedness, (a) naming the Mortgagee as mortgagee, (b) covering the lien on the Premises granted pursuant to this Mortgage, (c) containing no exception not approved by the Mortgagee, (d) issued by a title insurance company qualified to do business in the State of New York and satisfactory to the Mortgagee and (e) otherwise in form and substance satisfactory to the Mortgagee.



16. CERTAIN RIGHTS AND OBLIGATIONS.



(a) Mortgagee or its agents may take such action as Mortgagee or its agents deem appropriate to protect the Premises or the status or priority of the lien of this Mortgage, including, but not limited to: entry upon the Premises to protect the Premises from deterioration or damage, or to cause the Premises to be put in compliance with any governmental, insurance rating or contract requirements; payment of amounts due on liens having priority over this Mortgage; payment of any tax or charge for purposes of assuring the priority or enforceability of this Mortgage; obtaining insurance on the Premises; or commencement or defense of any legal action or proceeding to asset or protect the validity or priority of the lien of this Mortgage. On demand, Mortgagor shall reimburse Mortgagee or its agents for all expenses in taking any such action, with interest, and the amount thereof shall be secured by this Mortgage and shall, to the extent permitted by law, be in addition top the maximum amount of the indebtedness evidenced by the Note.



(b) Mortgagor authorizes Mortgagee, without notice, demand or any reservation of rights and without affecting this Mortgage, from time to time: (i) to renew, extend, increase, accelerate or otherwise change the time for payment of, the terms of or the interest on the Indebtedness





or any part thereof; (ii) to accept from any person or entity and hold additional collateral for the payment of the Indebtedness or any part thereof, and to exchange, enforce or refrain from enforcing, or release such collateral or any part thereof; (iii) to accept and hold any indorsement or guaranty of payment of the Indebtedness or any part thereof, and to release or substitute any such obligation of any such indorser or guarantor or any person or entity who has given any collateral as security for the payment of the Indebtedness or any part thereof, or any other person or entity in any way obligated to pay the ...