exv10w1






EXHIBIT 10.1




SECOND AMENDMENT TO CREDIT AGREEMENT

AND MODIFICATION OF MORTGAGE




     This SECOND AMENDMENT TO CREDIT AGREEMENT AND MODIFICATION OF MORTGAGE (the “Amendment”) is
executed on November 24, 2010, by and among EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation,
with a place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032, GROS-ITE
INDUSTRIES, INC., a Connecticut corporation, with a place of business at 1806 Farmington Avenue,
Farmington, Connecticut 06032, and APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation, with
a place of business at 1806 Farmington Avenue, Farmington, Connecticut 06032 (collectively, the
“Borrower”), and TD BANK, N.A., a national banking association with an office located at 102 West
Main Street, New Britain, Connecticut 06050-0174 (“Bank”).



WITNESSETH:




     WHEREAS, Borrower and Bank entered into a Credit Agreement dated as of May 27, 2009, as
amended by that certain First Amendment to Credit Agreement and Modification of Mortgage (the
“First Amendment”) by and between Borrower and Bank and dated July 21, 2010 (as further amended and
in effect from time to time, the “Credit Agreement”), pursuant to which the Bank may make advances
and extend other financial accommodations to the Borrower; and



     WHEREAS, the obligations of Borrower to Bank under the Credit Agreement are secured by, inter
alia, that certain Open-End Mortgage Deed and Security Agreement dated May 27, 2009 and executed by
EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation (the “Mortgagor”), with a place of business
at 1806 Farmington Avenue, Farmington, Connecticut 06032 to and for the benefit of Bank (as amended
and in effect from time to time, the “Mortgage), encumbering certain real property located in
Newington, Connecticut more particularly described in Exhibit A of the Mortgage (the
“Property”), which Mortgage was recorded on the Newington, Connecticut land records on May 29, 2009
in Book 2002, at Page 405; and



     WHEREAS, the Mortgage was modified pursuant to the First Amendment, which First Amendment was
recorded on the Newington, Connecticut Land Records in Book 2037, at Page 719; and



     WHEREAS, Bank and Borrower desire to amend the Credit Agreement and Mortgage in certain
respects; and



     WHEREAS, Section 13.10. of the Credit Agreement provides that no modification or amendment of
the Credit Agreement shall be effective unless the same shall be in writing and signed by the
parties thereto; and



     NOW, THEREFORE, in consideration of one dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, Bank and Borrower agree
as follows:









 



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     1. Defined Terms. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.



     2. Amendment of Credit Agreement. Bank and Borrower hereby agree to amend the Credit
Agreement as follows:



          (a) Section 1 of the Credit Agreement, entitled “Definitions” is hereby amended by
adding or amending and restating, as applicable, the following terms:





“Revolving Credit Commitment Amount” means TEN MILLION FIVE HUNDRED THOUSAND
AND NO/100 DOLLARS ($10,500,000.00) or any lesser amount, including zero (0),
resulting from a reduction or termination of such amount in accordance with
Section 2.1.7. or Section 12.1.




“Security Value of Inventory” means, as of any date as of which the amount
thereof shall be determined, the lesser of (i) fifty percent (50%) (or such lesser
percentage as Bank may determine from time to time in its reasonable credit
judgment) of Borrower’s Eligible Inventory as of the date of determination valued on
a first in first out basis at the lower of cost or market value into, or (ii) FOUR
MILLION AND 00/100 DOLLARS ($4,000,000.00).



          (b) The Credit Agreement is hereby amended by adding a new Section 7.1.9 thereto, as follows:





Section 7.1.9. No later than fifteen (15) days after the end of each calendar
month, (i) a backlog report, and (ii) an executive inventory summary report, each to
be prepared in form and substance acceptable to Bank.



          (c) Exhibit B of the Credit Agreement, entitled “Revolving Credit Note” is hereby
deleted in its entirety and replaced with Exhibit B, attached hereto.




     3. Amendment of Mortgage. Bank and Mortgagor hereby agree to amend the Mortgage as
follows:



          (a) The first (1st) “WHEREAS” clause on the first (1st) page of the
Mortgage is hereby deleted in its entirety and replaced with the following:





WHEREAS, pursuant to a Credit Agreement of even date herewith by and among Borrower,
EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation, with a place of business at
1806 Farmington Avenue, Farmington, Connecticut 06032, GROS-ITE INDUSTRIES, INC., a
Connecticut corporation, with a place of business at 1806 Farmington Avenue,
Farmington, Connecticut 06032, APEX MACHINE TOOL COMPANY, INC., a Connecticut
corporation, with a place of business at 1806 Farmington Avenue, Farmington,
Connecticut 06032 (collectively
with Borrower, the “Credit Parties”) and Bank (the “Credit Agreement”), the Bank has
made, inter alia, (i) a Mortgage Loan in the amount of









 



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TWO MILLION SIX HUNDRED FORTY THOUSAND AND 00/100 DOLLARS ($2,640,000.00) (the “Mortgage Loan”), which Mortgage
Loan is evidenced by a certain Mortgage Note of even date herewith in the original
amount of TWO MILLION SIX HUNDRED FORTY THOUSAND AND 00/100 DOLLARS ($2,640,000.00)
(the “Mortgage Note”), a copy of which is attached hereto as Exhibit B and
made a part hereof, (ii) a Term Loan in the amount of FOUR MILLION THREE HUNDRED
SIXTY THOUSAND AND 00/100 DOLLARS ($4,360,000.00) (the “Term Loan”), which Term Loan
is evidenced by a certain Term Note of even date herewith in the original amount of
FOUR MILLION THREE HUNDRED SIXTY THOUSAND AND 00/100 DOLLARS ($4,360,000.00) (the
“Term Note”), a copy of which is attached hereto as Exhibit C and made a
part hereof, (iii) a Revolving Loan in the amount of TEN MILLION FIVE HUNDRED
THOUSAND AND 00/100 DOLLARS ($10,500,000.00) (the “Revolving Loan”), which Revolving
Loan is evidenced by a certain Amended and Restated Revolving Credit Note dated
November 24, 2010 in the original amount of TEN MILLION FIVE HUNDRED THOUSAND AND
00/100 DOLLARS ($10,500,000.00) (the “Revolving Credit Note”), a copy of which is
attached hereto as Exhibit D and made a part hereof, and (iv) a Second Term
Loan in the amount of TWO MILLION TWO HUNDRED FORTY THREE THOUSAND FOUR HUNDRED
FOURTEEN AND 00/100 DOLLARS ($2,243,414.00) (the “Second Term Loan”, together with
the Revolving Credit Loan, the Mortgage Loan and the Term Loan, collectively, the
“Loan”), which Second Term Loan is evidenced by a certain Second Term Note dated
July 21, 2010 in the original amount of TWO MILLION TWO HUNDRED FORTY THREE THOUSAND
FOUR HUNDRED FOURTEEN AND 00/100 DOLLARS ($2,243,414.00) (the “Second Term Note”,
together with the Revolving Credit Note, the Mortgage Note and the Term Note,
collectively, the “Note”), a copy of which is attached hereto as Exhibit I
and made a part hereof; and



          (b) Exhibit D of the Mortgage, entitled “Revolving Credit Note” is hereby deleted in
its entirety and replaced with Exhibit D, attached hereto.




     4. Effect of Amendment. Bank and Borrower hereby agree and acknowledge that the
Credit Agreement and the Mortgage each remains in full force and effect and, except as provided in
this Amendment, each such document has not been modified or amended in any respect, it being the
intention of Bank and Borrower that this Amendment and, as applicable, the Credit Agreement and the
Mortgage be read, construed and interpreted as one and the same instrument.



     5. Ratification of Other Documents. This Amendment is hereby incorporated into and
made a part of the Credit Agreement, Mortgage and all Other Documents respectively, the terms and
provisions of which, except to the extent modified by this Amendment are each ratified and
confirmed and continue unchanged in full force and effect. Any reference to the Credit Agreement
and all Other Documents respectively in this or any other instrument, document or
agreement related thereto or executed in connection therewith shall mean the Credit Agreement and
all Other Documents respectively as amended by this Amendment. As security for the payment of the
Obligations, and satisfaction by Borrower of all covenants and









 



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undertakings contained in the Credit Agreement, Borrower hereby confirms its prior grant to Bank of a continuing first lien on and
security interest in, upon and to all of Borrower’s now owned or hereafter acquired, created or
arising Collateral as described in the Credit Agreement.



     6. Ratification of Mortgage. In confirmation of the hereinabove, Mortgagor hereby
grants and conveys to the Bank, with MORTGAGE COVENANTS, the Property; to have and to hold the
Property unto the Bank, its successors and assigns, forever in accordance with the Mortgage and
Other Documents, such that if such sums due thereunder shall be paid and all other obligations of
Borrower under the Other Documents shall be fully kept and performed, then the Mortgage, as
modified herein, shall be null and void; otherwise to remain in full force and effect.



     7. Representations and Warranties. Borrower warrants and represents to Bank that:



          (a) Prior Representations. By execution of this Amendment, Borrower reconfirms all
warranties and representations made to Bank under the Credit Agreement and the Other Documents
respectively and restate such warranties and representations as of the date hereof, all of which
shall be deemed continuing until all of the obligations due to Bank are indefeasibly paid and
satisfied in full.




          (b) Authorization. The execution and delivery by Borrower of this Amendment and the
performance by Borrower of the transactions herein contemplated (i) are and will be within its
powers, (ii) have been duly authorized by all necessary action on behalf of Borrower and (iii) are
not and will not be in contravention of any order of court or other agency of government, of law or
of any indenture, agreement or undertaking to which Borrower is a party or by which the property of
Borrower is bound, or be in conflict with, result in a breach of or constitute (with due notice
and/or lapse of time) a default under any such indenture, agreement or undertaking, or result in
the imposition of any lien, charge or encumbrance of any nature on any of the properties of the
Borrower.




          (c) Valid, Binding and Enforceable. This Amendment and any assignment or other
instrument, document or agreement executed and delivered in connection herewith, will be valid,
binding and enforceable in accordance with their respective terms.




          (d) No Default. No Default or Event of Default exists after giving effect to this
Amendment.




     8. Confirmation of Other Documents. Borrower hereby agrees, notwithstanding the
amendment of the Credit Agreement and the Mortgage, that the Other Documents and its agreements,
covenants, obligations, representations and warranties thereunder and therein are hereby expressly
ratified, confirmed, and restated.



     9. Effectiveness Conditions. This Amendment shall become effective upon the
following:




(a) Execution and delivery by Borrower of this Amendment to Bank;









 



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(b) Payment by Borrower of all of Bank’s reasonable legal and other fees,
commissions, costs, charges, taxes and other expenses incurred by Bank in connection
with the preparation, execution and delivery of this Amendment and the fees and
disbursements of Bank’s counsel and all recording fees;




(c) Delivery of authorizing resolutions on behalf of Borrower; and




(d) Delivery other items as Bank shall request.



     10. Releases.



          (a) Borrower hereby knowingly and, after receiving advice of counsel, acknowledge and agree
that each does not now have or know of any basis for any claim in tort, contract or otherwise
against Bank, its officers, directors, agents or employees (collectively, “Bank Affiliates”) for
breach of the Credit Agreement, the Other Documents or any other document which may arise out of
the relationship between Borrower, Borrower and Bank or any of the Bank Affiliates.




          (b) Borrower does hereby absolutely and unconditionally release and discharge the Bank
Affiliates from any and all claims, causes of action, losses, damages or expenses related to the
Credit Agreement, the Other Documents or any of the documents or instruments executed and delivered
in connection with the same or otherwise arising out of the debtor-creditor relationship between
Borrower and Bank or any of the Bank Affiliates or which Borrower may have against the Bank
Affiliates under the Credit Agreement, the Other Documents or any of the documents or instruments
executed and delivered in connection with the same or otherwise arising out of the debtor-creditor
relationship between Borrower and Bank or any of the Bank Affiliates, which includes the execution
and delivery of this Amendment and the documents and instruments executed and delivered in
connection herewith.




     11. Governing Law. THIS AMENDMENT, AND ALL RELATED AGREEMENTS AND DOCUMENTS, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS SET FORTH IN SECTION 13.8 OF THE
AGREEMENT. THE PROVISIONS OF THIS AMENDMENT AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO
HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION SHALL
NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.



     12. Modification. No modification hereof or any agreement referred to herein shall
be binding or enforceable unless in writing and signed by Borrower and Bank.



     13. Duplicate Originals: Two or more duplicate originals of this Amendment may be
signed by the parties, each of which shall be an original but all of which together shall
constitute one and the same instrument.









 



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     14. Waiver of Jury Trial: BORROWER AND BANK EACH HEREBY WAIVE ANY AND ALL RIGHTS IT
MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION, PROCEEDING OR COUNTERCLAIM ARISING WITH
RESPECT TO RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE OTHER DOCUMENTS OR WITH
RESPECT TO ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR COMMUNICATIONS INVOLVING OR
RELATED TO ANY PROPOSED RENEWAL, EXTENSION, AMENDMENT, MODIFICATION, RESTRUCTURE, FORBEARANCE,
WORKOUT, OR ENFORCEMENT OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.



     15. Benefit. This Amendment shall inure to the benefit of and bind the parties hereto
and their respective successors and assigns.



     16. Counterparts. This Amendment may be signed in any number of counterparts with the
same effect as if the signatures hereto and thereto were upon one and the same instrument.



     17. Field Audit. Notwithstanding any provision of the Credit Agreement to the
contrary, including, without limitation, Section 7.6 thereof, no later that the date which is three
(3) calendar months from the date hereof, Bank may, in its sole discretion, conduct a field audit
(the “Audit”) of Borrower’s assets. The Audit shall be conducted at Borrower’s expense at Bank’s
then current rate, plus expenses. Any charges and expenses relating to the Audit shall be directly
debited by Bank from the Loan Account. The Audit shall not in any way affect the number of
inspections that Bank is permitted to conduct pursuant to Section 7.6 of the Credit Agreement.



[remainder of page intentionally left blank; signature page follows]














 








[signature page to Second Amendment to Credit Agreement and Modification of Mortgage]




     IN WITNESS WHEREOF, Bank and Borrower have executed this Amendment as of the date first above
written.



	 	 	 	 	 	 
	WITNESSETH:	 	TD BANK, N.A.

 	 
	/s/ Kathy Puskarz 	 	By:  	/s/ John E. Cookley
 	 
	 	 	 	John E. Cookley 	 
	 	 	 	Its Senior Vice President	 
	/s/ Donna Gagnon	 	 	Duly Authorized 	 
	 	 
	 	 	EDAC TECHNOLOGIES CORPORATION

 	 
	/s/ Kathy Puskarz	 	By:  	/s/ Glenn L. Purple
 	 
	 	 	 	Name:  	Glenn L. Purple 	 
	 	 	 	Its  V.P. — Finance	 
	/s/ Donna Gagnon	 	 	Duly Authorized 	 
	 	 
	 	 	GROS-ITE INDUSTRIES, INC.

 	 
	/s/ Kathy Puskarz	 	By:  	/s/ Glenn L. Purple
 	 
	 	 	 	Name:  	Glenn L. Purple 	 
	 	 	 	Its Secretary	 
	/s/ Donna Gagnon	 	 	Duly Authorized 
	 
	 	 
	 	 	APEX MACHINE TOOL COMPANY, INC.

 	 
	/s/ Kathy Puskarz	 	By:  	/s/ Glenn L. Purple
 	 
	 	 	 	Name:  	Glenn L. Purple 	 
	 	 	 	Its  Secretary	 
	/s/ Donna Gagnon	 	 	Duly Authorized