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TENTH AMENDMENT TO REVOLVING LOAN,
TERM LOAN, EQUIPMENT LOAN AND SECURITY
AGREEMENT AND REAFFIRMATION OF GUARANTIES
This TENTH AMENDMENT TO REVOLVING LOAN, TERM LOAN, EQUIPMENT LOAN,
SECURITY AGREEMENT AND REAFFIRMATION OF GUARANTIES, dated as of May 22, 1998
(this "AMENDMENT") is by and between FLEET NATIONAL BANK F/K/A FLEET NATIONAL
BANK OF CONNECTICUT F/K/A SHAWMUT BANK CONNECTICUT, N.A., a national banking
association with a place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("LENDER") and EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation with
a principal place of business at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BORROWER").
On October 3, 1985, Lender and Borrower entered into a certain
Revolving Loan and Security Agreement which has been amended and restated in its
entirety by a certain Fifth Amended and Restated Revolving Loan, Term Loan,
Equipment Loan and Security Agreement dated February 28, 1995, as amended by a
certain Sixth Amendment to Revolving Loan, Term Loan, Equipment Loan and
Security Agreement dated July 31, 1995, as further amended by a certain Seventh
Amendment to Revolving Loan, Term Loan, Equipment Loan and Security Agreement
and Reaffirmation of Guaranties dated as of January 26, 1996, as further amended
by a certain Eighth Amendment to Revolving Loan, Term Loan, Equipment Loan and
Security Agreement and Reaffirmation of Guaranties dated as of April 10, 1996,
as further amended by a certain Ninth Amendment to Revolving Loan, Term Loan,
Equipment Loan, Security Agreement, Modification of Notes and Reaffirmation of
Guaranties dated as of March 27, 1997 and as further amended by this Amendment
(as amended and in effect from time to time, the "LOAN AGREEMENT"). Capitalized
terms used herein and not defined herein shall have the meanings given to them
in the Loan Agreement.
Pursuant to the Loan Agreement, the Lender has made: (i) a
$9,000,000.00 revolving loan (the "REVOLVING LOAN") as evidenced by a certain
Amended and Restated Revolving Promissory Note dated as of ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇▇
"▇▇▇▇▇▇▇▇▇ ▇▇▇▇"), (▇▇) a $541,153.34 term loan (the "CONSOLIDATED EQUIPMENT
LOAN") as evidenced by a certain Amended and Restated Promissory Note dated
March 27, 1997 (the "CONSOLIDATED EQUIPMENT NOTE"), (iii) a $4,000,000.00 term
loan (the "TERM LOAN") as evidenced by a certain Term Promissory Note dated
March 22, 1993 (THE "TERM NOTE"), (iv) a $1,000,000.00 construction to permanent
loan (the "CONSTRUCTION LOAN") as evidenced by a certain Construction to
Permanent Loan Promissory Note dated July 31, 1995 (the "CONSTRUCTION NOTE"),
and (v) a $1,000,000.00 equipment loan (the "THIRD EQUIPMENT LOAN") as provided
by a certain Equipment Promissory Note III dated as of March 27, 1997 (the
"THIRD EQUIPMENT NOTE").
On July 30, 1992, Gros-Ite Industries, Inc. (the "GUARANTOR") executed
a guaranty of the obligations of the Borrower to the Lender, which guaranty has
been reaffirmed from time to time (the "GUARANTY"). The Loan Agreement,
Revolving Note, the Consolidated Note, the Third Equipment Note, the
Construction Note, the Term Note, the Guaranty and the related documents are
collectively referred to as the "LOAN DOCUMENTS".
Borrower has requested that Lender amend the Loan Agreement and the
Loan Documents in order to, among other things, (i) make a new $3,000,000
Equipment Line of Credit available to the Borrower ("EQUIPMENT LOAN IV"), and
(ii) make other amendments as set forth herein. Lender has advised Borrower that
Lender is prepared to make the loans and amendments requested on the condition
that Borrower join with Lender in this Amendment upon the terms and conditions
set forth herein.
In consideration of this Amendment and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Lender, Borrower and Guarantor hereby agree as follows.
I. Acknowledgments, Affirmations and Representations and Warranties.
A. The Borrower and Guarantor acknowledge and affirm that:
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1. All of the statements contained herein are true and
correct and that they understand that the Lender is relying on the truth and
completeness of such statements to enter into this Amendment.
2. As of May 20, 1998 and without regard to the financial
accommodations contemplated herein, the Borrower is legally and validly indebted
to the Lender in the principal amount of $4,874,887.23 with respect to the
Revolving Loan, $423,893.34 with respect to the Consolidated Loan, $2,900,000.00
with respect to the Third Equipment Loan, $3,089,220.07 with respect to the Term
Loan and $838,888.76 with respect to the Construction Loan, plus interest and
fees accrued and accruing thereon and costs and expenses of collection,
including without limitation, attorneys' fees, and there is no defense, offset
or counterclaim with respect to any of the foregoing or independent claim or
action against the Lender.
3. The Guarantor is legally and validly indebted to the
Lender by virtue of the Guaranty and there is no defense, offset or counterclaim
with respect thereto or claim or independent against the Lender.
B. The Borrower and the Guarantor represent and warrant to the
Lender that:
1. The resolutions previously adopted by the Board of
Directors of the Borrower and the Guarantor and provided to the Lender have not
in any way been rescinded or modified and have been in full force and effect
since their adoption to and including the date hereof and are now in full force
and effect, except to the extent that they have been modified or supplemented to
authorize this Amendment and the documents and transactions described herein.
2. The Borrower and the Guarantor have the corporate power
and authority to enter into, and have taken all necessary corporate action to
authorize, this Amendment and the transactions contemplated hereby.
3. All representations, warranties and covenants contained
in, and schedules and exhibits attached to, the Loan Documents are true and
correct on and as of the date hereof, are incorporated herein by reference and
are hereby remade.
4. The Borrower and the Guarantor are not currently in
default under any of the Loan Documents, and no condition exists which would
constitute an event of default under any of the Loan Documents but for the
giving of notice or passage of time, or both.
5. The consummation of the transactions contemplated
hereby is not prevented or limited by, nor does it conflict with or result in a
breach of terms, conditions or provisions of the Borrower's or Guarantor's
respective Certificates of Incorporation or Bylaws or any evidence of
indebtedness, agreement or instrument of whatever nature to which the Borrower
or any of the Guarantor is a party or by which any of them is bound, does not
constitute a default under any of the foregoing and does not violate any
federal, state or local law, regulation or order or any order of any court or
agency which is binding upon the Borrower or the Guarantor.
II. Amendments to Loan Documents.
A. Amendments to the Loan Agreement.
1. Amendment to Section 1. The following are hereby
inserted after Section 1.34 of the Loan Agreement:
1.35 "CONVERSION DATE II" means April 30, 1999.
1.36 "EQUIPMENT ADVANCE IV" means that term as
defined in Section 2.20.
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1.37 "EQUIPMENT LOAN IV" means all Equipment
Advances IV made pursuant to Section 2.20
and evidenced by the Equipment Note IV.
1.38 "EQUIPMENT NOTE IV" means that term as defined
in Section 2.20.
2. Sections 1.21, 1.22, 1.28, 1.30, 1.32 and 1.33
are hereby deleted in their entirety and replaced with the following:
1.21 "COST OF FUNDS ADVANCE" means any Advance,
Equipment Advance or Equipment Advance IV
that bears interest with reference to the
Cost of Funds.
1.22 "COST OF FUNDS LOANS" or "COST OF FUNDS
LOAN" means any Revolving Loan, Equipment
Loan, Equipment Loan IV or Second Term Loan
or any portion thereof which bears interest
with reference to the Cost of Funds.
1.28 "LIBOR ADVANCE" means any Advance, Equipment
Advance or Equipment Advance IV that bears
interest with reference to LIBOR.
1.30 "LIBOR LOANS" or "LIBOR LOAN" means the
Revolving Loan, Equipment Loan, Equipment
Loan IV or the Second Term Loan or any
portion thereof that bears interest with
reference to LIBOR.
1.32 "PRIME RATE ADVANCE" means any Advance,
Equipment Advance or Equipment Advance IV
that bears interest with reference to the
Prime Rate.
1.33 "PRIME RATE LOAN" or "PRIME RATE LOANS"
means the Revolving Loan, Equipment Loan,
Equipment Loan IV or Second Term Loan or any
portion thereof which bears interest with
reference to the Prime Rate.
3. The following is hereby inserted after Section 2.19 of
the Loan Agreement:
2.20 Equipment Line of Credit IV.
Equipment Advances. Subject to the terms and
conditions set forth in this Agreement,
Lender agrees to make advances (each an
"EQUIPMENT ADVANCE IV" and collectively
"EQUIPMENT ADVANCES IV") to Borrower from
time to time during the period from May ___,
1998 up to, but not including, April 30,
1999 (the "CONVERSION DATE II"); provided,
however, that at no time shall the aggregate
outstanding principal balance of all
Equipment Advances IV plus the aggregate
outstanding principal amount of any leases
entered into by the Borrower with Fleet
Credit Corporation exceed $3,000,000.00.
Equipment Note IV. All Equipment Advances IV
shall be evidenced by, and repaid with
interest in accordance with, a single
promissory note of Borrower in substantially
the form of EXHIBIT C-2 attached hereto,
duly completed, executed, and delivered to
Lender, in the principal amount of up to
$3,000,000.00 and dated May ____, 1998,
payable to Lender, (the "EQUIPMENT NOTE
IV"). Borrower hereby authorizes Lender to
record on the Equipment Note IV or in its
internal computerized records the amount of
each Equipment Advance IV and of each
payment of principal received by Lender on
account of the Equipment Loan IV, which
recordation shall, in the absence of
manifest error, be conclusive as to the
outstanding principal balance of the
Equipment Loan IV and shall be considered
correct and binding on Borrower provided,
however, that the failure to make such
recordation with respect to any Equipment
Advance IV or
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payment shall not limit or otherwise affect the
obligations of Borrower under this Agreement or
the Equipment Note IV.
Invoices. In the case of each Equipment
Advance IV, Borrower shall deliver to Lender
the following: (1) an invoice for the
equipment to be purchased certified by the
chief financial officer of Borrower as being
true, complete and correct, and showing that
the requested Equipment Advance IV does not
exceed eighty (80%) percent of the hard
costs thereof excluding registration fees,
taxes, shipping charges, delivery charges,
set-up charges, maintenance costs and any
and all other "soft costs", (2) if requested
by Lender, a UCC-1 financing statement or
UCC-3 amendment with respect to such
equipment and (3) any other additional
approvals, opinions, reports, and other
documents as may be required hereunder or as
Lender may reasonably request.
4. Sections 2.13 and 2.14 of the Loan Agreement are
hereby deleted and replaced with the following:
2.13 Non-Default Interest. The Borrower shall pay
interest to Lender monthly in arrears on the
first day of each month commencing on the
outstanding and unpaid principal balance of
the Revolving Loan, Second Term Loan,
Equipment Loan and Equipment Loan IV at a
rate per annum equal to, at Borrower's
election pursuant to Section 2.14 below, (i)
the Prime Rate, (ii) LIBOR plus two hundred
(200) basis points, or (iii) the Cost of
Funds plus two hundred (200) basis points.
Notwithstanding anything contained herein to
the contrary, if the Borrower achieves a
Debt Service Ratio (as defined in Section 10
of Exhibit A hereto) of greater than or
equal to 1.5 to 1.0 for the year to date
period tested, the portion of the Revolving
Loan which bears interest with respect to
the LIBOR Rate or the Cost of Funds Rate
will be reduced by twenty-five (25) basis
points for the quarter in which the Debt
Service Ratio was tested. Any change in the
interest rate resulting from a change in the
Prime Rate shall become effective as of the
opening of business on the day on which such
change in the Prime Rate shall become
effective.
2.14 Notice and Manner of Borrowing. Borrower shall
give Lender irrevocable notice by telecopy or
otherwise in writing of its request that Lender
make an Advance or Equipment Advance IV
hereunder, not later than 2:00 p.m. Hartford
time two (2) Business Days prior to the
proposed drawdown date thereof ("DRAWDOWN
Date"). Notice received by Lender after 2:00
p.m. Hartford, Connecticut time shall be
loaned against by Lender three (3) Business
Days after the proposed Drawdown Date.
Notwithstanding anything contained herein to
the contrary, for Prime Rate Advances, the
Borrower shall only be required to give such
notice not later than 2:00 p.m. on the Drawdown
Date. Each notice, in the case of a LIBOR
Advance or Cost of Funds Advance, shall
specify the duration of the Interest Period
therefor. Subject to the fulfillment of
the applicable conditions set forth in this
Agreement, Lender will make the Advance or
Equipment Advance IV in immediately
available funds by crediting the amount
thereof to Borrower's account with
Lender. Notwithstanding anything contained
herein to the contrary, the Borrower may only
elect LIBOR Loans or Cost of Funds Loans in
original principal amounts of not less
than $1,000,000.00.
5. EXHIBIT C-2 attached hereto is hereby attached to the Loan
Agreement as EXHIBIT C-2.
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B. Amendment to the Loan Documents. The Loan Documents, are
hereby amended to be made consistent with this Amendment.
III. Reaffirmation of Guaranty.
To induce the Lender to enter into this Amendment, the Guarantor hereby
(a) consents to this Amendment and (b) affirms and ratifies the Guaranty and
confirms that (i) the Guarantor does irrevocably and unconditionally guarantee
to the Lender the payment and performance from the Borrower of the Obligations
(as defined in the Guaranty) from the Borrower to the Lender, upon the terms and
conditions set forth in the Guaranty, (ii) the term Obligations includes,
without limitation, this Amendment, the Term Loan, the Construction Loan, the
Consolidated Equipment Loan, the Third Equipment Loan, the Revolving Loan, and
Equipment Loan IV, and (iii) the Guaranty remains in full force and effect.
IV. Miscellaneous.
A. Ratifications, Etc. Except as otherwise expressly set forth
herein, all terms and conditions of the Loan Agreement, the Revolving Note, the
Term Note, the Consolidated Equipment Note, the Third Equipment Note, the
Guaranty and the Loan Documents are ratified and shall remain in full force and
effect. Nothing herein shall be construed to be a waiver of any requirements of
the Loan Agreement and the Loan Documents except as expressly set forth herein.
B. Conditions Precedent. The effectiveness of this Amendment
shall be subject to the Lender's prior receipt of each of the following in form
and substance satisfactory to Lender and its counsel:
1. This Amendment, duly executed and delivered by the
Borrower and Guarantor and the Equipment Note IV,
duly executed and delivered by the Borrower;
2. Copies of all corporate action taken by the Borrower
and Guarantor, including resolutions of its Board of
Directors, authorizing the execution, delivery, and
performance of the Loan Documents to which it is a
party and each other document to be delivered
pursuant to this Amendment, certified as of the date
of this Amendment by the Secretary of the Borrower
and Guarantor;
3. A certificate or certificates, dated as of the date
of this Amendment, of the Secretary of the Borrower
and/or Guarantor certifying the names and true
signatures of the officers of the Borrower and
Guarantor authorized to sign the Loan Documents to
which the Borrower or Guarantor are a party and the
other documents to be delivered by the Borrower and
Guarantors under this Amendment and an opinion of
Borrower's counsel in form and substance satisfactory
to the Lender;
4. All fees and expenses, including legal fees and
related disbursements incurred by Lender in
connection with the structuring, negotiation,
preparation and closing of this Amendment and the
transactions related hereto;
C. Counterparts. This Amendment may be executed in any number of
counterparts, which together shall constitute one instrument.
D. Governing Law. This Amendment shall be construed and
interpreted in accordance with the laws of the State of Connecticut.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
an instrument under seal.
LENDER:
FLEET NATIONAL BANK f/k/a FLEET
NATIONAL BANK OF
CONNECTICUT f/k/a SHAWMUT BANK
CONNECTICUT, N.A.
By /s/▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇
Its Vice President
Duly Authorized
BORROWER:
EDAC TECHNOLOGIES CORPORATION
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its Vice President
Duly Authorized
GUARANTOR:
GROS-ITE INDUSTRIES, INC.
By /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Its V.P. CFO