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NYSCEF DOC. NO. 4 RECEIVED NYSCEF: 03/18/2019

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF SUFFOLK
_________________________________________________________.........

HEXCEL CORPORATION, Index No. -2019

Plaintiff,
AFFIDAVIT OF BRETT
-against- SCHNEIDER IN SUPPORT OF
MOTION FOR ORDER
LUMINATI AEROSPACE LLC and 400 DAVID OF SEIZURE
COURT LLC,

Defendants.
.......___________________________________________________________.

STATE OF CONNECTICUT )
) SS.:
COUNTY OF FAIRFIELD )

BRETT SCHNEIDER, being duly sworn, deposes and says:

1. I am President - Global a business unit of plaintiff Hexcel Corporation

Fibers,

("Hexcel").

2. Hexcel has commenced this action to obtain possession of certain collateral,

including equipment, pledged as security in connection with a loan made by Hexcel to defendant

Luminati Aerospace LLC ("Luminati"). I submit.this affidavit in support of Hexcel's motion for

an order of seizure of this chattel.

3. Based on the clear terms of a Convertible Secured Promissory Note dated May

12, 2016, entered into between Hexcel and Luminati (the "Note"), the Guaranty and Security

Agreement, dated May 12, 2016, between and among Hexcel, Luminati, and Luminati's wholly

owned subsidiary, defendant 400 David Court LLC ("400 David Court") (the "Guaranty and

Security Agreement"), and the Mortgage, Assignment of Leases and Rents, and Security

Agreement between 400 David Court and Hexcel, dated June 17, 2016 (the "Mortgage"), and the

facts set forth in this Affidavit, Hexcel is entitled to an order of seizure and possession of the

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the equipment. (Defendants Luminati and 400 David Court are referred to
collateral, including

together as "Defendants"). (The Note, Guaranty and Security Agreement, and the Mortgage are

referred to collectively as the "Loan Documents").

The Note

4. On or about May 12, 2016, Hexcel loaned Luminati $10,000,000 pursuant to a

Convertible Secured Promissory Note, dated May 12, 2016, and executed by Imminati (the

"Note"). (A true and accurate copy of the Note is annexed hereto as Exhibit "A").

5. Pursuant to the Note, Luminati agreed to "use the proceeds of the loan hereunder

to repay all liabilities under the mortgage loan secured by the Calverton Property (such

liabilities, the "Calverton Loan"); the amounts remaining after such repayment may be used by

the Compey (i) to purchase certain equipment as set forth on Exhibit A hereto (which purchase

shall not be subject to Section 11.10.1 hereunder); (ii) for working capital purposes; and (iii) to

facilities."
upgrade and expand the Company's facilities or acquire additional (Note, § 7).

6. Pursuant to the Note, the Maturity Date to repay the Outstanding Balance, as

defined in the Note, and all unpaid accrued interest, is May 12, 2023. (Note, § 2).

Defendants'
7. Pursuant to the Note, "material breach of any term, covenant or

Note"
agreement in (a) the Guaranty and Security Agreement, (b) the Mortgage or (c) this

constitutes an event of default entitling Plaintiff to, among other things, accelerate the entire

knlanne due, togcther with interest, and foreclose on the pledged collateral, the
including

Equipment, as defined below. (Note, §§ 10.3.1 and 10.2).

8. Specifically, the Note provides that upon a default, "Hexcel may, at its election,

(i) accelerate repayment of the Outstanding Balance in which case the Outstanding Balance and

all interest accracd thereon shall be due and payable immediately; (ii) exercise all remedies

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available to Hexcel under the Guaranty and Security Agreement and the Uniform Commercial

it."
Code and the Mortgage; and (iii) pursue any legal or equitable remedies available to (Note, §

10.2).

9. In sum, Defendants agreed that in the event of default, Plaintiff had, in addition to

any rights and remedies available at law or in equity, the clear and unequivocal contractual rights

to: (i) accelerate all payments due and owing from Defendants; (ii) immediately take possession

and control of all collateral; and (iii) foreclose upon the collateral to collect all sums due,

attorneys'
including the principal balance, default interest, and all of Plaintiff's reasonable fees

and costs.

The Guaranty and Security Agreement

10. In order to secure the payment and performance of Luminati's obligations under

the Note, Luminati and its wholly owned subsidiary, 400 David Court, entered into the Guaranty

and Security Agreement. (A true and accurate copy of the Guaranty and Security Agreement is

annexed hereto as Exhibit "B"). (See also Note, § 5).

11. Pursuant to the Guaranty and Security Agreement, Lmninati and 400 David Court

granted Hexcel a security interest in all equipment listed on Schedule 2 of the Guaranty and

Security Agreemeñt (the "Equipment"), all Intellectual Property related to Hexcel Core

Technology (excluding Intellectual Property listed on Schedule 3 to the Guaranty and Security

Agreement), autoclaves, all books and records, and all proceeds and products of any of those (the

"Collateral"). (Guaranty and Security Agreement, § 2).

12. Plaintiff duly perfected its security interest in the Collateral, including the

Equipment, on or about May 13, 2016, when it recorded two UCC-1 Financing Statements.

(True and accurate copies of the Delaware UCC-1 Finañeing Statements are annered hereto as

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Exhibit "C"). Specifically, Plaintiff filed UCC-1 Financing Statements with the Delaware

Department of State with respect to 400 David Court and Luminati.

13. To protect the Collateral for the benefit of Hexcel, Defendants also agreed to

maintain insurance policies insuring the Collateral against loss or damage. (Cüarâñty and

Security Agreement, § 4.6).

14. Pursuant to the Note, any failure by Defendants to maintain insurance constitutes

a material breach of the Guaranty and Security Agreement and a Default, which, if uncured

within (30) days, entitles Plaintiff to, other things, acccicrate the entire balance due,
thirty among

together with interest, and foreclose on the Collateral. (Note, §§ 10.3.1 and 10.2).

15. In the event of a Default, Defendants also agreed, in addition to all other rights

and remedies provided to Hexcel, to assemble the Collateral and make it available to Hexcel.

(Guaranty and Security Agreement, § 5.2).

16. The Guaranty and Security Agreement obligates Defendants to pay all reasonable

expenses incurred by Plaintiff in enforcing the obligations due under the Note and the Guaranty

attorneys'
and Security Agreement, including reasonable fees. (Guaranty and Security

Agreement, § 5.2).

17. Pursuant to the Guaranty and Security Agreement, 400 David Court promised to

unconditionally guarantee the payment of all of Luminati's obligations to Hexcel. The Guaranty

and Security Agreement provides, in pertinent part, as follows:

Each Guarantor hereby absolutely and unconditionally and

irrevocably guarantees to the Secured Party and each of its

respective successors, transferees and assigns, the full and prompt

payment, when and as the same become due, whether at stated

maturity, upon acceleration or otherwise, and at all times

thereafter, of the Obligations of the Borrower, including amounts

that would become due but for the automatic stay under Section

362(a) of the Bankruptcy Code, 11 U.S.C. §362(a) together with

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any and all expenses which may be incurred by the Secured Party
in collecting any of the Obligations. In addition, if any or all of the
Obligations become due and payable hereunder, each Guarantor,

unconditionally and irrevocably, promises to promptly pay the full

amount of such Obligations to the Secured Party, on demand. This
Agreement is a continuing one and shall remain in full force and
effect until all of the obligations of any Guarantor hereunder have
been satisfied by indefeasible payment in full in immediately
available funds. All liabilities to which this guaranty applies or

may apply under the terms hereof shall be conclusively presumed

to have been created in reliance hereon and all dealings between
the Secured Party and any of the Guarantors shall be conclusively
presumed to have been had or consummated in reliance upon the

guaranty of each Guarantor hereunder.

(Guaranty and Security Agreement, § 6.1).

The Mortgage

18. In order to further secure the payment and performance of Luminati's and 400

David Court's obligations under the Note and the Guaranty and Security Agreement, 400 David

Court entered into the Mortgage. (A true and accurate copy of the Mortgage is annexad hereto as

Exhibit "D"). (Mortgage, §§ 2.1, 2.2).

19. The Mortgage encumbers and grants a security interest in certain commercial real

property owned by 400 David Court and located at 400 David Court, Calverton in the Town of

Riverhead, County of Suffolk, and State of New York, which property is more particularly

described in Exhibit A to the Mortgage (the "Mortgaged Property"). (Mortgage, § 1.1).

20. The Mortgage was duly recorded in the Office of the Clerk of Suffolk County,

State of New York on September 20, 2016, in Liber 22738, Page 332.

21. Pursuant to the Mortgage, 400 David Court is required to obtain and maintain, or

cause to be maintained, insurance for property defined in the Mortgage, including, but not

limited to, the land, building, improvements, eascriiciits, fixtures and personal property, leases

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and rents, insurance proceeds, condemnation awards, agreements and other rights pertaining to

the use of the land and its improvements, as specified in the Mortgage. (Mortgage, §§1.1, 3.3).

22. The Mortgage also requires 400 David Court to pay all taxes levied, assessed or

imposed against the Mortgaged Property or any part, and all federal, state, county, municipal,

and city income and other taxes and liabilities which are due or have been assessed. (Mortgage,

§§ 3.4, 5.11, 5.21).

agreement"
23. The Mortgage also serves as a "security within the meaning of the

Uniform Commercial Code and grants Hexcel a security interest not only in the land,

improvements, and easements, but in Personal Property, as defiñêd by the Mortgage, owned by

or in which 400 David Court has an interest. (Mortgage, §§ 1.1, 1.3.)

24. Pursuant to the Mortgage, 400 David Court pledged all of their right, title, estate,

claim and interest to:

All machinery, equipment fixtures, furnishings, goods, tools,

supplies, appliances, general intangibles, contract rights, accounts,
accounts receivable, letters of credit, licenses, certificates, permits
and other property of every kind and nature whatsoever (whether
tangible or intangible) owned by Grantor, or in which Grantor has

or shall have interest, now or hereafter located upon the Land and

the Improvements or appurtenant thereto, and useable in

connection with the present or future operation and occupancy.of

the Land and the hnprovements (but in the case of general

intangibles, contract rights, certificates and permits to the extent

assignable) and all building equipment, materials and supplies of

any nature whatsoever owned by Grantor, or in which Grantor has

or shall have an interest, now or hereafter located upon the Land

and the Improvements, or appurtenant thereto, or usable in

connection with the present or future operation and occupancy of

the Land and the hnprovements (together with all replacements,

substitutions and proceeds thereof, collectively, the "Personal

Property"), and the right, title and interest of Grantor in and to any
of the Personal Property which may be subject to any security
interests, as defined in the Uniform Commercial Code, as adopted

and enacted by the state, states, commonwealth or commonwealths

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where any of the Property is located (the "Uniform Commercial

Code"), and all proceeds and products of the above.

(Mortgage, § 1.1(e)). (The Collateral as defined in the Guaranty and Security Agreement and the

Personal Property as defined in the Mortgage shall be together defined herein as the

"Collateral").

25. Certain of the Collateral, including, but not limited to, certain of the Equipment,

is, upon information and belief, located at the Mortgaged Property.

26. In addition to the UCC-1 Financing Statement filed in Delaware pursuant to the

Guaranty and Security Agreement, on or about October 4, 2016, Plaintiff also filed a UCC-1

Financing Statest with the New York Department of State in which Plaintiff duly perfected its

security interests as described in the Mortgage. (A true and accurate copy of the UCC-1

Financing Statement is annexed hereto as Exhibit "E").

The Defaults

27. 400 David Court has failed to pay property taxes on the Mortgaged Property as

required by the Mortgage, § 3.4, which is a material breach of the Mortgage and constitutes a

Default pursuant to Sections 10.2.1 and 10.3.1 of the Note and an Event of Default pursuant to

Section 10.1 of the Mortgage.

28. Luminati has failed to pay rent to Laoudis of Calverton, LLC, the k=&.rd of

certain real property (the "Landlord") located at 350 Burman Boulevard, Calverton, New York

11933, leased by Luminati and in which certain of the Collateral is located.

29. Daniel Preston, the Chief Executive Officer of both Defendants, has expressly

told Plaintiff that Luminati has failed to pay rent to the Landlord and that certain of the Collateral

"scrapped"
will be as a result of this failure to pay rent, thereby placing in jeopardy the Collateral

in violation of the Loan Documents, including, but not limited to, Sections 4.4 and 4.5of the

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Guaranty and Security Agreement, which prohibit Luminati from disposing of any of the

Collateral and require it to defend against any lien, claim, or demand against the Collateral.

30. The T anMnrd has filed a petition in the Riverhead Justice of

Court, County

Suffolk, of the State of New York District Court, seeking to evict Luminati from its property.

31. In addition, it is believed that Defendants have failed to maintain insurance

policies insuring the Collateral against loss or damage, which failure constitutes a material

breach of the Guaranty and Security Agreset and a Default pursuant to the Note. (Guaranty

and Security Agreement, § 4.6; Note, §10.3.1), and that 400 David Court has failed to maiñtaiñ

insurance for the Mortgaged Property as required by the Mortgage, which is a material breach of

the Mortgage, § 3.3, and constitutes a Default pursuant to the Note, §10.3.1, and an Event of

Default under the Mortgage, §10.1.

32. As a result of these Defaults, on January 24, 2019, Plaintiff issued a Notice of

Event of Default (the "Default Notice") to Defendants pursuant to Section 10.2 of the Note and

provided Defendants with thirty (30) days to cure the Defaults. (A true and accurate copy of the

. Default Notice is annexed hereto as Exhibit "F").

33. Despite acknowledging receipt of the Default Notice, Defêñdants have failed to

cure the Defaults.

PLAINTIFF IS ENTITLED TO POSSESSION OF THE _EQUIPMER

34. Pursuant to Section 10.2 of the Note, Section 5.2 of the Guaranty and Security

Agramet, Section 11.1(i) of the Mortgage, and Sections 9-604(c) and 9-609(a)(1) & (c) of the

Uniform Commercial Code, as a result of the Events of Default, Hexcel is entitled to

immediately take possession of the Collateral.

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35. On February 26, 2019, Plaintiff sent a letter to Defendants advising them that

because of their failure to cure the Defaults, it was accelerating the payment of the Outstanding

Balance due under the Note and exercising all rights and remedies available to it under Note, the

Guaranty and Security Agreement, and the Mortgage and demalided Defedalits ass-ibic the

Equipment identified on Schedule 2 to the Guarañty and Security Agreement and make it

available to Hexcel. (A true and accurate copy of the Demand Letter is annexed hereto as Exhibit

"G").

36. As of the filing of this Complaint, Defendants have refused to deliver the

Equipment or make it available to Plaintiff.

37. The aforesaid Collateral is being wrongfully held by Luminati and 400 David

Court.

38. Upon information and belief, the value of the Collateral Plaintiff seeks to seize is

approximately $7,400,000.

39. The value of the Collateral is based upon the descriptions of the Equipment

identified on Schedule 2 of the Guaranty and Security Agreement, the list price of the Equipment

from the mauüfacturers when new (which was approximately 2.5 years ago), the amount

Luminati paid to obtain the Equipment from a prior owner (which was 60% of the list price), and

the estimated amount the Collateral will garner at auction.

40. Based upon statements made by Daniel Preston, the Collateral is located at 400

David Court, Calverton, New York 11933 and 350 Burman Boulevard, Calverton, New York

11933. The Equipscat is not easily moved and will need to be secured where it is located so

that Plaintiff can inspect the Equipmcat and any other Collateral found at those sites prior to a

sale under the Uniform Commercial Code.

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41. No defense to Hexcel's claim to the aforesaid Collateral is known to Hexcel.

42. Simultaneous with the filing of its application, Hexcel has submitted an

undertaking in the amount of $14,800,000.00, which is not less than twice the value of the chattel

at issue.

43. A denial of Hexcel's application may result in the transfer or dissipation of the

Collateral and substantially impair Hexcel's ability to enforce its rights against Luminati and 400

David Court.

44. Simultãüeously, with the filing of this application, Plaintiff has filed a summons

and complaint to recover the possession of the Collateral. (A true and accurate copy of Hexcel's

Complaint dated March 18, 2019, in this action, without exhibits, is anna ed hereto as Exhibit

"H").

"I"
45. A form Order of Seizure is annexed hereto as Exhibit for the Court's

consideration.

46. No previous application has been made for the relief requested to this or any other

Court.

Based on the foregoing, Hexcel respectfully requests the Court grant an order of seizure,

pursuant to CPLR § 7102, directing the sheriff of any county where the aforesaid

Collateral is found to seize the same, and further directing that if the Collateral is not

delivered to the sheriff, he/she may break open, enter, and search for the Collateral at 400

David Court, Calverton, New York, 11933, and 350 Burman Boulevard, Calverton, New

York 11933, and grant such other and further relief as to the Court shall seem just and

proper.

Brett Schneider

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State of Connecticut

ss. Stamford

County of Fairfield

1.8d'
On this the day of March, 2019, before me, Joyce R. Kanto_r the undersigned officer,

personally appeared Brett Schneider, who acknowledged himself to be the President-Global

Fibers of Hexcel Corporation, a corporation, and that he as such President-Global Fibers, being
authorized so to do executed the foregoing instrument for the purposes therein contained, by

signing the name of the corporation by Mmself as President-Global Fibers.

In witness whereof I hereunto set my hand.

S(gflature of Notary Public

Date Commission Expires: 8 /

J/,

Printed Name of Notary: ee

Joyce R. Kantor
Notary Publio-Connecticut

My Commission Expires
August 31, 2021
. ___ . .. .._ ........ _

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