Mortgage, Security Agreement - Massachusetts

EXHIBIT 10.4(G)


MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT
OF RENTS AND FIXTURE FILING
(Massachusetts)


FOR PURPOSES OF THE SECURITY AGREEMENT CONTAINED
IN THIS INSTRUMENT THE "SECURED PARTY" AND THE
"DEBTOR" AND THEIR RESPECTIVE ADDRESSES ARE AS FOLLOWS:


SECURED PARTY: BANK ONE, ARIZONA, NA, a national banking association
POST OFFICE BOX 71
PHOENIX, ARIZONA 85001
ATTENTION: COMMERCIAL BANKING A593


DEBTOR: BOWMAR/ALI, INC., a Massachusetts corporation
5080 NORTH 40TH STREET, SUITE 475
PHOENIX, ARIZONA 85018
ATTENTION: JOSEPH G. WARREN, JR.


THIS INSTRUMENT WHEN RECORDED SHALL CONSTITUTE A "FIXTURE FILING" FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE. THE ADDRESS OF THE SECURED PARTY SHOWN ABOVE IS THE ADDRESS AT WHICH INFORMATION CONCERNING THE SECURED PARTY'S SECURITY INTEREST MAY BE OBTAINED.


BOWMAR/ALI, INC., a Massachusetts corporation (the "Mortgagor"), MORTGAGES, WARRANTS AND GRANTS WITH MORTGAGE COVENANTS to BANK ONE, ARIZONA, NA, a national banking association with its principal office in Phoenix, Arizona (the "Bank") and the Mortgagor GRANTS A SECURITY INTEREST to the Bank in the following property, to-wit:


all that real estate located in Middlesex County, Massachusetts, described
in Schedule "A" which is attached to this Mortgage, Security Agreement,
Assignment of Rents and Fixture Filing (this "Mortgage") and incorporated
herein by this reference (the "Real Estate"); and


any items of furniture, machinery, equipment or other tangible personal
property owned by Mortgagor which are now or hereafter become attached to
the Real Estate or any improvement thereon so as to constitute a fixture,
whether now owned or hereinafter acquired by Mortgagor (the "Personal
Property").


TOGETHER WITH all present and future improvements, rights, privileges, interests, easements, hereditaments, and appurtenances thereunto belonging or in any manner pertaining thereto, and the proceeds therefrom (all of such Real Estate, Personal Property and other rights being hereafter referred to as the "Mortgaged Premises").


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This Mortgage is given to secure all of the Obligations of Bowmar Instrument Corporation, an Indiana corporation ("Borrower") to the Bank. The term "Obligations" as used in this Mortgage means all obligations of the Borrower in favor of the Bank of every type and description, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including but not limited to all Obligations of the Borrower in favor of the Bank arising under a Loan Agreement between the Borrower and the Bank dated the date of this Mortgage (the "Loan Agreement"), which Obligations include the obligation of the Borrower to repay all advances made by the Bank to the Borrower under a revolving line of credit in the principal amount of $4,000,000.00, to repay a term loan in the principal amount of $4,200,000.00, and to repay all advances made by the Bank to Borrower under a non-revolving acquisition line of credit in the principal sum of $1,000,000.00. The final maturity date of the revolving line of credit is July 31, 1997, the final maturity date of the term loan is July 31, 2000, and the final maturity date of the non-revolving acquisition line of credit is July 31, 2001. All of the Obligations, including those arising under the Loan Agreement, are secured as they now exist and as they may be increased or otherwise changed by any amendment to any instrument or agreement which now or hereafter evidences, secures or expresses terms applicable to any of the Obligations, including amendments to the Loan Agreement and any "Security Documents" as that term is defined in the Loan Agreement.


As additional security for the Obligations, the Mortgagor assigns to the Bank the rents, issues and profits of the Mortgaged Premises, including any rents and all other amounts (collectively "Lease Payments") which are due or shall become due to the Mortgagor under the terms of any present or future lease (a "Lease"), oral or written, of all or any portion of the Mortgaged Premises (all such rents, issues, profits and Lease Payments are hereafter collectively referred to as the "Rents"). This Assignment of Rents is an absolute assignment, and is intended to vest in the Bank the right to collect all Rents subject only to the conditional license to collect Rents granted by the Bank to the Mortgagor under the terms of numbered Paragraph 7 of this Mortgage.


The Mortgagor further covenants and agrees as follows:


1. This Mortgage shall secure payment and performance of the Obligations, with reasonable attorneys' fees and costs of collection, without relief from valuation and appraisement laws.


2. The Mortgagor shall keep the Mortgaged Premises in good repair and shall not commit or permit waste thereon or do or permit to be done anything that may impair the value of the Mortgaged Premises. The Mortgagor shall promptly restore any part of the Mortgaged Premises which may be damaged or destroyed, in a good and workmanlike manner and in conformity with the Americans With Disabilities Act of 1990 and corresponding rules and regulations (the "ADA") and with plans and specifications approved by Bank. The Mortgagor shall pay when due all taxes and assessments levied or assessed against the Mortgaged Premises or any part thereof.


3. The Mortgagor shall comply with all statutes, ordinances, rules, regulations, orders, and directions of any legislative, executive, administrative, or judicial body or official applicable to the Mortgaged


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Premises, or any part thereof, or to the Mortgagor, or to the operation of any business of Mortgagor which directly affects the Mortgaged Premises; provided, however, that the Mortgagor may contest any of the matters referred to in this paragraph as provided in the Loan Agreement or otherwise in any reasonable manner which in the judgment of the Bank will not adversely affect the rights of the Bank, its successors or assigns.


4. The Mortgagor will procure and maintain in effect at all times insurance written by insurance companies acceptable to the Bank which insures against loss or destruction of the Mortgaged Premises by fire, wind storm, lightning, vandalism and malicious mischief and such other perils as are generally covered by "extended coverage" insurance for the full replacement value of the Mortgaged Premises. All policies providing such insurance shall provide that any loss thereunder shall be payable to the Bank under a standard form of secured lender's loss payable endorsement. The Mortgagor shall also procure business interruption insurance in such amounts as the Bank may reasonably require. The Mortgagor authorizes the Bank to endorse on Mortgagor's behalf and to negotiate drafts representing proceeds of such insurance, provided that the Bank shall remit to the Mortgagor such surplus, if any, as remains after the proceeds have been applied at the Bank's option: (a) to the satisfaction of the Obligations, whether or not then due and payable, or to the establishment of a cash collateral account securing the Obligations, or (b) to the restoration of the Mortgaged Premises. Certificates evidencing the existence of all of the insurance required under the terms of this Mortgage shall be furnished to the Bank and the original policies providing such insurance shall be delivered to the Bank at the Bank's request. If the insurance proceeds are to be used for the restoration and repair of the Mortgaged Premises, they shall be held by Bank in an interest bearing account selected by Bank in its sole and absolute discretion (the "Restoration Account"). Mortgagor, at its expense, shall promptly prepare and submit to Bank all plans and specifications necessary for the restoration and repair of the damaged Mortgaged Premises, together with evidence acceptable to Bank setting forth the total expenditure needed for the restoration and repair based upon a fixed price contract with a reputable builder and covered by performance and labor and material payment bonds. The plans and specifications and all other aspects of the proposed restoration and repair shall be subject to Bank's approval. In the event the insurance proceeds held in the Restoration Account are insufficient to complete the restoration and repair, Mortgagor shall deposit in the Restoration Account an amount equal to the difference between the amount then held in the Restoration Account and the total contract price for the restoration and repair. Mortgagor may commence restoration and repair of the damaged Mortgaged Premises only when authorized in writing by Bank to do so and thereafter shall proceed diligently with the restoration and repair until completed. Disbursements shall be made from the Restoration Account for the restoration and repair in accordance with a disbursement schedule, and subject to other terms and conditions, acceptable to Bank. Disbursements from the Restoration Account shall be charged first against funds deposited by Mortgagor and, after such funds are exhausted, against the insurance proceeds deposited therein. In the event the amounts held in the Restoration Account exceed the cost of the restoration and repair of the damaged Mortgaged Premises, the excess funds shall be disbursed to Mortgagor to the extent of any amounts deposited therein by Mortgagor. Any funds remaining after such disbursement, at Bank's option, may be applied by Bank to the payment of the Obligation, whether or not


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then due, or may be disbursed to Mortgagor. All funds held in the Restoration Account are hereby assigned to Bank as further security for the Obligation. Bank, at any time, may apply all or any part of the funds held in the Restoration Account to the curing of any Default.


5. Upon demand and failure of the Mortgagor so to do, the Bank may, in its discretion upon thirty (30) days notice to Mortgagor (unless Bank determines an emergency exists in which case no notice shall be required), advance and pay all sums necessary to protect and preserve the Mortgaged Premises, and all sums so advanced and paid by the Bank shall become a part of the indebtedness secured hereby, shall bear interest from date of payment at a rate equal to the Prime Rate plus five and one half percent (5.5%) per annum, and shall be payable to the Bank upon demand. Such sums shall include, but not by way of limitation: (a) taxes, assessments and other charges which may be or become senior to this Mortgage as liens on the Mortgaged Premises, or any part thereof; (b) the cost of any title insurance, surveys, or other evidence which in the discretion of the Bank may be required in order to evidence, insure or preserve the lien of this Mortgage; (c) all costs, expenses, and reasonable attorneys' fees incurred by the Bank in respect of any and all legal and equitable actions which relate to this Mortgage or to the Mortgaged Premises, and (d) the cost of any repairs respecting the Mortgaged Premises which are reasonably deemed necessary by the Bank. As used in this Mortgage, the term "Prime Rate" means a variable per annum rate of interest equal at all times to the rate of interest established and quoted by the Bank as its Prime Rate, such rate to change contemporaneously with each change in such established and quoted rate; provided that it is understood the Prime Rate shall not necessarily be representative of the rate of interest actually charged by the Bank on any loan or class of loans. The Bank shall be subrogated to the rights of the holder of each lien or claim paid with moneys secured hereby. Upon written request by Bank, Mortgagor shall appear in and prosecute or defend any action or proceeding that may affect the lien or the priority of the lien of this Mortgage or the rights of Bank hereunder and shall pay all costs, expenses (including the cost of searching title) and attorneys' fees incurred in such action or proceeding. Bank may appear in and defend any action or proceeding purporting to affect the lien or the priority of the lien of this Mortgage or the rights of Bank.


6. If all or any part of the Mortgaged Premises is damaged, taken, or acquired, either temporarily or permanently, in any condemnation proceeding, or by exercise of the right of eminent domain, or by the alteration of the grade of any street affecting the Mortgaged Premises, the amount of any award or other payment for such taking or damages made in consideration thereof, to the extent of the full amount of the then remaining unpaid Obligations, is hereby assigned to the Bank, which is empowered to collect and receive the same and to give proper receipts therefor in the name of the Mortgagor, and all such sums shall be paid forthwith directly to the Bank. Any award or payment so received by the Bank may, at the option of the Bank: (a) be applied to the satisfaction of the Obligations, whether or not then due and payable, or to the establishment of a cash collateral account for the Obligations, or (b) be released, in whole or in part, to the Mortgagor for the purpose of altering, restoring, or rebuilding any part of the Mortgaged Premises which may have been altered, damaged or destroyed as a result of such taking, alteration, or proceeding.


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7. At any time a Default (as hereafter defined) has occurred and is continuing, the Bank may enter upon and take possession of the Real Estate or any part thereof, and at any such time, or if the Bank in the reasonable exercise of its discretion determines that payment or performance of any of the Obligations is insecure, the Bank may demand, sue for, receive and give receipts, releases and satisfactions for all Rents. At any time that the Bank has not exercised its right to take possession of the Real Estate and there is not in effect any demand by the Bank for the direct payment of Lease Payments to the Bank given pursuant to the immediately preceding sentence, the Mortgagor may collect Lease Payments provided that no Rents shall be collected by ...