AMENDED & RESTATED TERM NOTE

 

$1,947,603.50 December 20, 2013

New York, New York 

This Amended and Restated Term Note (this “Note”) is executed and delivered
under and pursuant to the terms of that certain Amended and Restated Revolving
Credit, Term Loan and Security Agreement dated June 27, 2013 (as amended,
restated, supplemented or modified from time to time, the “Loan Agreement”) by
and among AIR INDUSTRIES MACHINING, CORP. (“Air”), a corporation organized under
the laws of the State of New York, WELDING METALLURGY, INC. (as successor by
merger with WMS Merger Corp.)(“WM”), a corporation organized under the laws of
the State of New York, NASSAU TOOL WORKS, INC.  (formerly known as NTW Operating
Inc.) (“Nassau”), a corporation organized under the laws of the State of New
York, MILLER STUART INC. (“MS” and collectively with Air, WM and Nassau, the
“Borrower”), a corporation organized under the laws of the State of New
York,  AIR INDUSTRIES GROUP (as successor by merger with Air Industries Group,
Inc. f/k/a Gales Industries Incorporated, a Delaware corporation), a corporation
organized under the laws of the State of Nevada (“Air Group” and collectively
with the Borrower, the “Obligor”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”),
the various financial institutions named therein or which hereafter become a
party thereto, (together with PNC, collectively, “Lenders”) and PNC as agent for
Lenders (in such capacity, “Agent”).  Capitalized terms not otherwise defined
herein shall have the meanings provided in the Loan Agreement.

FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of PNC, at the
office of Agent located at PNC Bank Center, Two Tower Center, 8th Floor, East
Brunswick, New Jersey 08816, or at such other place as Agent may from time to
time designate to Borrower in writing:

(i)           the principal sum of ONE MILLION NINE HUNDRED FORTY-SEVEN THOUSAND
SIX HUNDRED THREE AND 50/100 DOLLARS ($1,947,603.50), payable in accordance with
the provisions of the Loan Agreement and subject to acceleration upon the
occurrence of an Event of Default under the Loan Agreement or earlier
termination of the Loan Agreement pursuant to the terms thereof;

(ii)           interest on the principal amount of this Note from time to time
outstanding, payable at the Term Loan Rate in accordance with the provisions of
the Loan Agreement.  In no event, however, shall interest exceed the maximum
interest rate permitted by law.  Upon and after the occurrence of an Event of
Default, and during the continuation thereof, interest shall be payable at the
Default Rate; and

(iii)           notwithstanding anything to the contrary herein, in the Loan
Agreement and/or in any Other Document, all outstanding principal and interest
hereunder is due and payable on the Termination Date.
 
 
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This Note is one of the Term Notes referred to in the Loan Agreement and is
secured, inter alia, by the liens granted pursuant to the Loan Agreement and the
Other Documents, is entitled to the benefits of the Loan Agreement and the Other
Documents and is subject to all of the agreements, terms and conditions therein
contained.

This Note is subject to mandatory prepayment and may be voluntarily prepaid, in
whole or in part, on the terms and conditions set forth in the Loan Agreement.

If an Event of Default under Section 10.7 or 10.8 of the Loan Agreement shall
occur, then this Note shall immediately become due and payable, without notice,
together with reasonable attorneys’ fees if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof.  If any other
Event of Default shall occur under the Loan Agreement or any of the Loan
Documents, which is not cured within any applicable grace period, then this Note
may, as provided in the Loan Agreement, be declared to be immediately due and
payable, without notice, together with reasonable attorneys’ fees, if the
collection hereof is placed in the hands of an attorney to obtain or enforce
payment hereof.

This Note is intended to amend, restate and replace a certain Term Note issued
by the Borrower (excluding MS) in favor of the Lenders dated June 27, 2013 in
the original principal amount of $2,847,603.50.  This Note is not a novation.

This Note shall be construed and enforced in accordance with the laws of the
State of New York.

Borrower expressly waives any presentment, demand, protest, notice of protest,
or notice of any kind except as expressly provided in the Loan Agreement.
 
ATTEST:
 
By: /s/ Scott Glassman   
Name:  SCOTT GLASSMAN
Title:     Secretary
AIR INDUSTRIES MACHINING, CORP.
 
By: /s/ Dario Peragallo
Name:  DARIO PERAGALLO
Title:     President
        ATTEST:
WELDING METALLURGY, INC.  (as successor
by merger with WMS Merger Corp.)
 
 
By: /s/ Scott Glassman
Name:  SCOTT GLASSMAN
Title:    Secretary
 
 
By: /s/ Gary Settoducato
Name:  GARY SETTODUCATO
Title:    President
       
ATTEST:
 
 
By: /s/ Scott Glassman
Name:  SCOTT GLASSMAN
Title:    Secretary
NASSAU TOOL WORKS, INC.
(formerly known as NTW Operating Inc.)
 
By: /s/ Peter Rettaliata
Name:  PETER RETTALIATA
Title:    President
       
ATTEST:
 
By: /s/ Kristie Ciaccio
Name:  KRISTIE CIACCIO
Title:     Secretary
MILLER STUART INC.
 
By: /s/ Peter Rettaliata
Name:  PETER RETTALIATA
Title:     President

 
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