SECOND MODIFICATION OF CONSTRUCTION TO
PERMANENT LOAN PROMISSORY NOTE AND
OPEN-END CONSTRUCTION TO PERMANENT MORTGAGE DEED
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THIS SECOND MODIFICATION OF CONSTRUCTION TO PERMANENT LOAN PROMISSORY NOTE AND
OPEN-END CONSTRUCTION TO PERMANENT MORTGAGE DEED (the "AGREEMENT"), entered into
as of the ____ day of April, 1996, by and between EDAC TECHNOLOGIES CORPORATION,
a Wisconsin corporation having a place of business at 1790 New Britain Avenue,
Farmington, Connecticut 06032 (the "BORROWER"), and FLEET NATIONAL BANK F/K/A
FLEET NATIONAL BANK OF CONNECTICUT F/K/A SHAWMUT BANK CONNECTICUT, N.A. a
national banking association, having an office at 777 Main Street, Hartford,
Connecticut 06115 (the "LENDER").
W I T N E S S E T H:
1. On October 3, 1985, the Lender and the Borrower entered into a certain
Revolving Loan and Security Agreement which has been (a) 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, (b) amended by a
certain Sixth Amendment to Revolving Loan, Term Loan, Equipment Loan and
Security Agreement dated July 31, 1995 and (c) 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 amended and in
effect from time to time, collectively, the "LOAN AGREEMENT"). Capitalized
terms used herein and not defined herein shall have the meanings given to them
in the Loan Agreement.
2. Pursuant to the Loan Agreement, the Borrower executed a certain
Construction to Permanent Loan Promissory Note dated July 31, 1995 in the
original principal amount of up to $1,000,000 in favor of the Lender, which was
amended pursuant to a certain Modification of Construction to Permanent Loan
Promissory Note and Open-End Construction to Permanent Mortgage Deed (the
"MODIFICATION") (as modified, the "NOTE"). The Note is secured by, among other
things, an Open-End Construction to Permanent Mortgage Deed from the Borrower in
favor of Lender dated August 3, 1995 and recorded in Volume 502 at Page 1024 of
the Farmington Land Records, which was modified pursuant to the Modification (as
modified, the "MORTGAGE"), encumbering certain real property located in the Town
of Farmington as more particularly described in Schedule A to the Mortgage. The
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Loan Agreement, Note, Mortgage and related documents are collectively referred
to as the "LOAN DOCUMENTS".
3. The Borrower has requested that the Lender extend certain other loans
from the Lender to the Borrower.
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4. As a condition to the extension, the Lender requires the Borrower to
enter into this Agreement.
5. In consideration of the foregoing, and for One ($1.00) Dollar and
other valuable consideration received to its satisfaction, the Borrower agrees
to modify the terms and conditions of the Note and Mortgage as more specifically
set forth in this Agreement.
TERMS OF AGREEMENT
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A. Acknowledgments, Affirmations and Representations and Warranties.
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1. The Borrower acknowledges and affirms that:
a. 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 Agreement.
b. As of the date hereof and without regard to the financial
accommodations contemplated herein, the Borrower is legally and validly indebted
to the Lender in the principal amount of $977,777.76 with respect to the Note,
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.
2. The Borrower represents and warrants to the Lender that:
a. The resolutions previously adopted by the Board of Directors
of the Borrower 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 Agreement
and the documents and transactions described herein.
b. The Borrower has the corporate power and authority to enter
into, and have taken all necessary corporate action to authorize, this Agreement
and the transactions contemplated hereby.
c. 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.
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d. Other than the defaults previously waived in writing by the
Lender, the Borrower is 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.
e. 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 Certificate of Incorporation
or Bylaws or any evidence of indebtedness, agreement or instrument of whatever
nature to which the Borrower is a party or by which it 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.
B. Modification of Note.
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The Borrower and the Lender agree that the terms of the Note are
hereby modified in accordance with the following:
1. Paragraph (1) entitled "Adjustment Date" on page two of the Note
is hereby deleted in its entirety.
2. Paragraph (15) entitled "Permanent Interest Rate" on page four of
the Note is hereby deleted in its entirety and the following is substituted in
lieu thereof:
(15) "PERMANENT INTEREST RATE" shall mean a variable rate equal
to the Base Rate plus one (1%) percent.
The Lender may, in its sole and absolute discretion, reduce the
interest rate payable under this Note to a per annum rate equal
to the Base Rate plus one-half of one (0.5%) percent. Nothing
contained herein shall be deemed to be an express or implied
commitment or intention by or on the part of the Lender to so
reduce the interest rate.
3. Section D entitled "D. PERMANENT LOAN TERMS." on page six of the
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Note is hereby deleted and replaced with the following:
From the Conversion Date, the Permanent Interest Rate shall be
payable upon the principal amount of the Permanent Loan at the
Permanent Interest Rate. The Permanent Interest Rate shall
continue to be payable until the imposition of the Permanent
Default Rate (hereinafter defined), or until the Permanent Loan
is paid in full, whichever is applicable.
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Commencing on the first day of the month following the Conversion
Date, (a) payments of principal in the amount of $5,555.56 and
(b) payments of accrued interest at the Permanent Interest Rate
shall be paid on the first day of each month. Each installment
shall be applied first to the payment of late charges, then to
accrued and unpaid interest and the balance on account of the
principal of the Permanent Loan. If not sooner paid, the entire
unpaid principal balance of the Permanent Loan, with interest,
shall be due and payable on the Maturity Date.
Upon the occurrence of an Event of Default, or after the Maturity
Date, interest shall accrue at four percent (4%) per annum above
the Permanent Interest Rate in effect (the "PERMANENT DEFAULT
RATE"). The Permanent Default Rate shall be adjusted whenever a
change in the Base Rate occurs, so that the Permanent Default
Rate shall remain at all times four (4%) percent per annum above
the Permanent Interest Rate. Any such adjustment in the
Permanent Default Rate shall be effective simultaneously with a
change in the Base Rate.
4. Section G. entitled "G. PREPAYMENT OF LOAN." on page eight of the
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Note is hereby deleted in its entirety and the following is substituted in lieu
thereof:
The Borrower may prepay this Note in whole or in part at any time
without penalty. All such prepayments shall be applied on
account of principal remaining unpaid and shall be accompanied by
payment of unpaid late charges and accrued and unpaid interest,
if any, thereon. All partial prepayments of principal shall be
credited to the unpaid principal of this Note in the inverse
order of maturity and shall not affect the Borrower's obligation
to make the regular installments required hereunder until this
Note is fully paid.
C. Modification of Mortgage.
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The Borrower and Lender hereby agree that the terms of the Mortgage
are hereby modified in accordance with the following:
1. Any and all references in the Mortgage to the term "Note" or
words of similar import shall be deemed to mean and refer to the Note as
modified by this Agreement.
2. The form of the Note attached as Schedule D to the Mortgage is
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hereby modified in accordance with Section B. above.
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D. Miscellaneous
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1. Except as specifically modified hereby, all of the terms and
conditions of the Note and Mortgage shall remain in full force and effect, and
Borrower hereby ratifies and affirms each of its respect obligations, terms,
conditions, covenants, representations and warranties contained therein, except
to the extent expressly modified hereby. Borrower agrees to be bound by the
terms and conditions of said instruments, as modified by this Agreement.
2. The rights and duties of the parties under this Agreement shall
be governed by the laws of the State of Connecticut.
3. This Agreement shall be binding upon the Borrower, the Lender and
each of their respective successors and assigns.
4. Nothing contained in this Agreement shall constitute a repayment
of the Note, or affect the priority of the lien of the Mortgage.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as a sealed instrument by their duly authorized representatives as of the date
first above written.
Witnesses: EDAC TECHNOLOGIES CORPORATION
________________________________
________________________________ By:____________________________
Glenn L. Purple
Its: Vice President
________________________________ FLEET NATIONAL BANK f/k/a
FLEET NATIONAL BANK OF
CONNECTICUT f/k/a SHAWMUT
BANK CONNECTICUT, N.A.
________________________________ By:____________________________
Edgar Ezerins
Its: Vice President
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STATE OF CONNECTICUT )
) ss.:
COUNTY OF HARTFORD )
On this ____ day of April, 1996, before me, personally appeared Glenn L.
Purple, known to me to be the Vice President of EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation, signer and sealer of the foregoing instrument and
acknowledged the same to be his free act and deed and the free act and deed of
said corporation.
______________________________________
Commissioner of the Superior Court
Notary Public
My Commission Expires: ________________
STATE OF CONNECTICUT )
) ss.:
COUNTY OF HARTFORD )
On this ____ day of April, 1996, before me, personally appeared Edgar
Ezerins, known to me to be the Vice President of FLEET NATIONAL BANK f/k/a FLEET
NATIONAL BANK OF CONNECTICUT f/k/a SHAWMUT BANK CONNECTICUT, N.A., a national
banking association, signer and sealer of the foregoing instrument and
acknowledged the same to be his free act and deed and the free act and deed of
said banking association.
_____________________________________
Commissioner of the Superior Court
Notary Public
My Commission Expires:
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