Document:

<PAGE>   1
                                 EXHIBIT 10.12A

<PAGE>   2

                        ESCROW AND FORBEARANCE AGREEMENT

         THIS ESCROW AND FORBEARANCE AGREEMENT ("Agreement") is made as of the
29th day of September, 2000 by and among FLEET NATIONAL BANK, with an office and
place of business at 777 Main Street, Hartford, Connecticut 06115 ("Fleet") and
EDAC TECHNOLOGIES CORPORATION, a Wisconsin corporation, with its chief executive
office located at 1806 New Britain Avenue, Farmington, Connecticut 06032 (the
"EDAC"), APEX MACHINE TOOL COMPANY, INC., a Connecticut corporation, with its
chief executive office located at 1806 New Britain Avenue, Farmington,
Connecticut 06032 ("Apex"), GROS-ITE, INC., a Connecticut corporation with its
chief executive office located at 1806 New Britain Avenue, Farmington,
Connecticut 06032 ("Gros-Ite") (Gros-Ite together with Apex collectively, the
"Guarantor") and UPDIKE, KELLY & SPELLACY, P.C., with an office at One State
Street, Hartford, Connecticut 06123-1277 ("UKS").

                                   WITNESSETH:

         WHEREAS, Fleet has made certain loans and advances to EDAC as described
in the Original Loan Documents ("Fleet Loans"), which Fleet Loans are in
default; and

         WHEREAS, Fleet and EDAC have agreed to resolve such issues that relate
to the Fleet Loans in accordance with this Agreement; and

         WHEREAS, as part of the resolution with Fleet, EDAC and Guarantors are
entering into a financing arrangement with General Electric Capital Corporation;
and

         WHEREAS, in connection with such resolution of issues between Fleet and
EDAC, certain documents have been executed but will not be released or effective
until such time as the conditions in paragraph 3 of this Agreement have been
satisfied;

         NOW, THEREFORE, for One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties to this Agreement agree as follows:

         1.     Recitals. The recitals set forth above are true and correct.

         2.     Custody of Documents. The following documents (collectively,
"Documents") shall be executed by the necessary parties and shall be held in
escrow by UKS:

                  (a)      One (1) original Amended and Restated Term Note made
                           by EDAC to the order of Fleet in the original
                           principal amount of $7,000,000;

                  (b)      Four (4) Security Agreements executed by EDAC in
                           favor of Fleet;

                  (c)      Four (4) Security Agreements executed by APEX in
                           favor of Fleet;

<PAGE>   3
                                      -2-

                  (d)      Four (4) Security Agreements executed by Gros-Ite in
                           favor of Fleet;

                  (e)      Four (4) Guaranty Agreements executed by Apex in
                           favor of Fleet;

                  (f)      Four (4) Guaranty Agreements executed by Gros-Ite in
                           favor of Fleet; and

                  (g)      Four (4) Mortgage Modification Agreements executed by
                           and between Fleet and EDAC.

         3.       Conditions To Release Document.

                  (a) Within forty-five (45) days of the date of this Agreement
("Forbearance Period"), EDAC shall pay to Fleet $2,000,000, together with
accrued interest on such sum at the rate per annum equal to the Prime Rate plus
one percentage point (1%) ("Interest Rate") ("Mortgage Payoff"). At such time as
Fleet shall have received the Mortgage Payoff, in immediately available funds,
Fleet shall notify UKS in writing that (x) it has received the Mortgage Payoff
and (y) it has accepted the Documents ("Acceptance Notice") and UKS shall
thereafter automatically release the Documents held in escrow to Fleet. In
connection with the Mortgage Payoff, Fleet agrees to execute a subordination
agreement whereby Fleet subordinates its first mortgage position on the
Mortgaged Property to any mortgagee designated by EDAC.

         At such time as Fleet delivers the Acceptance Notice, the Documents
shall to the extent and in the manner provided therein, replace and supercede
the Original Loan Documents and any forgiveness of debt as described in the
Documents shall become effective. As of this date and at all times prior to
Fleet delivering the Acceptance Notice, subject to the terms and conditions of
this Agreement during the Forbearance Period, the Original Loan Documents shall
be and remain in full force and effect.

                  (b) In the event Borrower fails to deliver the Mortgage Payoff
as provided in 3(a) above, EDAC may extend the Forbearance Period in thirty day
(30) increments up to a maximum of ninety (90) days by paying to Fleet on
November 14, 2000 and on each 30th day thereafter a payment in the amount of
$33,333.33, together with accrued interest at the Interest Rate (individually an
"Interim Payment" and collectively, the "Interim Payments").

                  (c) In the event Borrower tenders the Mortgage Payoff on or
prior to the expiration of the Forbearance Period (as same may be extended as
provided in 3(b) above) $33,333.33 of each Interim Payment shall be applied to
reduce the principal amount of the Mortgage Payoff. In the event EDAC fails to
tender the Mortgage Payoff at the time and in the manner required herein, the
Interim Payments shall be applied to the Fleet Loans in accordance with the
terms of the Original Loan Documents.

                  (d) The failure to make any payment at the time and in the
manner provided herein (time is of the essence with respect to all payments due
hereunder) shall constitute a default of this Agreement and Fleet may
immediately exercise any and all of the rights and
<PAGE>   4

                                      -3-

remedies available to it under the Original Loan Documents, without further
notice or demand, all of which is expressly waived by EDAC, Apex and Gros-Ite.

                  (e) Definitions. All capitalized terms used in this Agreement
shall have the meaning ascribed to such terms below:

         "Loan Agreement" means the Revolving Loan and Security Agreement dated
October 3, 1985, between Bank and Borrower which has been amended and restated
from time to time, and 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 May 27, 1997 between Borrower and Bank, as
further amended by a certain Tenth Amendment to Revolving Loan, Term Loan,
Equipment Loan and Security Agreement and Reaffirmation of Guaranties dated May
22, 1998, as further amended by a certain Eleventh Amendment to Loan and
Security Agreement, Modification of Notes and Reaffirmation of Guaranties dated
as of June 30, 1998 and as further amended by a certain Twelfth Amendment to
Loans and Security Agreement Modification of Notes and Reaffirmation of
Guaranties dated as of November 25, 1998, as the same may be amended, modified
or otherwise supplemented from time to time.

         "Mortgage" means the Mortgage dated May 12, 1989 executed by EDAC in
favor of Fleet covering the Mortgaged Property, as amended and modified from
time to time.

         "Mortgaged Property" means the real property of EDAC located at 1790
New Britain Avenue, Farmington, Connecticut, 1798 New Britain Avenue,
Farmington, Connecticut and 1806 New Britain Avenue, Farmington, Connecticut.

         "Original Loan Documents" means the Loan Agreement and the Original
Notes.

         "Original Notes" means the Second Amended and Restated Revolving
Promissory Note in the original principal amount of $13,000,000 dated as of June
30, 1998, the Term Promissory Note in the original principal amount of
$14,000,000 dated June 30, 1998, the Amended and Restated Promissory Note in the
principal amount of $541,153.34 dated March 27, 1997, the Term Promissory Note
in the principal amount of $4,000,000 dated March 22, 1993, the Construction to
Permanent Loan Promissory in the original principal amount of $1,000,000 dated
July 31, 1995, the Equipment Promissory Note III in the original principal
amount of $3,000,000 dated as of March 27, 1997, the Equipment Promissory Note
IV in the original principal amount of $3,000,000 dated as of May 22, 1998, each
executed by EDAC in favor of Fleet and all other promissory notes of EDAC
outstanding from time to time pursuant to the Loan Agreement.

<PAGE>   5

                                      -4-

         "Prime Rate" means the variable per annum rate of interest so
designated from time to time by Fleet National Bank as its Prime Rate. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate being charged to any customer. Changes in the rate of interest resulting
from changes in the Prime Rate shall take place immediately without notice or
demand of any kind.

         4.     Termination of Escrow. If the Mortgage Payoff shall not have
occurred by February 14, 2001, then UKS shall automatically destroy the
Documents escrowed by them hereunder, unless otherwise instructed in a writing
joined in by all of the parties hereto.

         5.     Duties of Escrow Agent. UKS shall have no duties hereunder
except to release or hold the Documents in accordance with this agreement and
shall have no liability to any party except for its willful misconduct or gross
negligence. By agreeing to act as Escrow Agent, UKS has not entered into any
attorney-client relationship with EDAC, Apex and/or Gros-Ite, will not be
precluded from representing Fleet with regard to any of the transactions or
matters referenced herein nor be preclude from representing Fleet in any other
matter or from representing any client with interests adverse to EDAC, Apex
and/or Gros-Ite. Fleet acknowledges that it has been advised by UKS to seek the
advice of other counsel with respect to the limitation of UKS's liability
contained in this section.

         6.     Notices. All notices, requests and other communications
hereunder shall be made in writing (including telex and telecopy
communications), shall be sent by first-class mail, postage prepaid, or sent by
commercial overnight courier delivery service, charges prepaid, or sent by
telex, telecopier or hand delivery, addressed as follows:

                  (a)      If to EDAC, Apex and Gros-Ite, at:
                           EDAC Technologies Corporation
                           1806 New Britain Avenue
                           Farmington, CT  06032
                           Attention:  Ronald G. Popolizio
                           Telecopier:860-674-2718

                           with a copy to:

                           Reinhart Boerner Van Duren Norris & Rieselbach S.C.
                           1000 North Water Street
                           P.O. Box 514000
                           Milwaukee, WI  53203-3400
                           Attention:  David Schultz
                           Telecopier: 414-298-8097

<PAGE>   6

                                      -5-

                  (b)      If to the Bank, at:

                           Fleet National Bank
                           777 Main Street
                           MS: CT EH 40223B
                           Hartford, Connecticut 06115
                           Attn: Asset Manager - Managed Asset Division
                           Telecopier: (860) 986-2435

                           with a copy to:

                           Updike, Kelly & Spellacy, P.C.
                           One State Street
                           P.O. Box 231277
                           Hartford, CT  06123-1277
                           Attn:  Thomas A. Gugliotti, Esq.
                           Telecopier: (860) 548-2680

                  (c)      If to the UKS, at:

                           Updike, Kelly & Spellacy, P.C.
                           One State Street
                           P.O. Box 231277
                           Hartford, CT 06123-1277
                           Attn: Thomas A. Gugliotti, Esq.
                           Telecopier: (860) 548-2680

         7.       Further Assurances. The parties agree that they will execute
and deliver such further instruments and documents necessary to consummate the
transaction contemplated herein.

         8.       Fees and Expenses. EDAC, Apex and Gros-Ite will reimburse and
indemnify Fleet for all reasonable out-of-pocket expenses incurred after
September 29, 2000, either before or after obtaining judgment on or with respect
to any amounts payable hereunder, including but not limited to reasonable
attorneys' fees and disbursements, incurred or expended in connection with the
preparation, negotiation, interpretation or delivery of this Agreement or any
amendment hereof or thereof or with the enforcement or collection of any
obligations or the satisfaction of any indebtedness of EDAC, Apex and Gros-Ite
hereunder or thereunder, whether or not proceedings are instituted in any court
of competent jurisdiction, or in connection with any litigation, proceeding or
dispute hereunder or thereunder.

         9.       Governing Law. This Agreement shall be governed by, and shall
be construed and enforced in accordance with, the laws of the State of
Connecticut, without reference to Connecticut's choice of law rules.
<PAGE>   7

                                      -6-

         10.      PREJUDGMENT REMEDIES. EDAC, APEX AND GROS-ITE HEREBY
ACKNOWLEDGE THAT THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART IS A
COMMERCIAL TRANSACTION AND WAIVE THEIR RIGHTS TO NOTICE AND HEARING UNDER
CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES OR BY OTHER APPLICABLE LAW WITH
RESPECT TO ANY PREJUDGMENT REMEDY WHICH FLEET MAY DESIRE TO USE.

         11.      JURY TRIAL. EDAC, APEX AND GROS-ITE HEREBY WAIVES TRIAL BY
JURY IN ANY COURT IN ANY SUIT, ACTION, OR PROCEEDING OR ANY MATTER ARISING IN
CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTION OF WHICH THIS AGREEMENT
IS A PART AND/OR IN THE ENFORCEMENT BY FLEET OF ANY OF ITS RIGHTS AND REMEDIES
HEREUNDER OR UNDER APPLICABLE LAW. EDAC, APEX AND GROS-ITE ACKNOWLEDGE THAT THEY
MAKE THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER CONSIDERATION OF THE
RAMIFICATIONS OF THIS WAIVER BY THEIR ATTORNEY.

         IN WITNESS WHEREOF, the Borrower has hereunder set its hand by its duly
authorized officers on the date first above written.

                                              BORROWER:

                                              EDAC TECHNOLOGIES CORPORATION

                                              By: /s/ Ronald G. Popolizio
                                                  ------------------------------

                                                  Its EVP and CFO
                                                  Duly Authorized

                                              GUARANTORS:

                                              APEX MACHINE TOOL COMPANY, INC.

                                              By:  /s/ Ronald G. Popolizio
                                                   -----------------------------
                                                   Name: Ronald G. Popolizio
                                                   Title: Secretary
                                                   Duly Authorized
<PAGE>   8

                                      -7-

                                              GROS-ITE, INC.

                                              By: /s/ Ronald G. Popolizio
                                                  ------------------------------
                                                  Name: Ronald G. Popolizio
                                                  Title:  Secretary
                                                  Duly Authorized

                                              FLEET NATIONAL BANK

                                              By: /s/ G. Christopher Miller
                                                  ------------------------------
                                                  G. Christopher Miller
                                                  Its Vice President
                                                  Duly Authorized

Accepted:

UPDIKE, KELLY & SPELLACY, P.C.

By: /s/ Thomas A. Gugliotti
    -------------------------
    Thomas A. Gugliotti, Esq.
    Title:  Vice President<PAGE>   1

                                 EXHIBIT 10.12B

<PAGE>   2

                         AMENDED AND RESTATED TERM NOTE

                                   Various notes originally dated June 30, 1998,
                 March 27, 1997, March 22, 1993, July 31, 1995, and May 22, 1998

$7,000,000.00                        Replaced and Substituted September 29, 2000
                                                           Hartford, Connecticut

         FOR VALUE RECEIVED, the undersigned, EDAC TECHNOLOGIES CORPORATION, a
Wisconsin corporation with a principal place of business at 1806 New Britain
Avenue, Farmington, Connecticut 06032 ("Maker" or "Borrower") hereby
unconditionally promises to pay to the order of FLEET NATIONAL BANK, a national
banking association with a place of business at 777 Main Street, Hartford,
Connecticut 06115 ("Payee" or "Bank"), or any subsequent assignee or holder
(Payee and any subsequent assignor or holder being sometimes referred to as
"Holder"), the principal amount of SEVEN MILLION AND 00/100 DOLLARS
($7,000,000.00), together with interest thereon as provided herein and all other
sums due to Holder under this Note and the Other Documents, and agrees with
Holder as follows:

         WHEREAS, on October 3, 1985, Bank and Borrower entered into a certain
Revolving Loan and Security Agreement which has been amended and restated from
time to time, and 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 May 27, 1997 between Borrower and Bank, as
further amended by a certain Tenth Amendment to Revolving Loan, Term Loan,
Equipment Loan and Security Agreement and Reaffirmation of Guaranties dated May
22, 1998, as further amended by a certain Eleventh Amendment to Loan and
Security Agreement, Modification of Notes and Reaffirmation of Guaranties dated
as of June 30, 1998 and as further amended by a certain Twelfth Amendment to
Loans and Security Agreement Modification of Notes and Reaffirmation of
Guaranties dated as of November 25, 1998 (as amended and in effect from time to
time, the "Loan Agreement"); and

         WHEREAS, pursuant to the Loan Agreement, the Bank has made: (i) a
$13,000,000 revolving loan (the "Revolving Loan"), as evidenced by a certain
Second Amended and Restated Revolving Promissory Note dated as of June 30, 1998
(the "Revolving Note"), (ii) a $14,000,000 term loan (the "Acquisition Term
Loan"), as evidenced by a certain Term Promissory Note dated June 30, 1998 (the
"Acquisition Term Note"), (iii) a $541,153.34 term loan (the "Consolidated
Equipment Loan"), as evidenced by a certain Amended and Restated Promissory Note
dated

<PAGE>   3

                                      -2-

March 27, 1997 (the "Consolidated Equipment Note"), (iv) a $4,000,000 term loan
(the "Term Loan"), as evidenced by a certain Term Promissory Note dated March
22, 1993 (the "Term Note"), (v) a $1,000,000 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"), (vi) a $3,000,000
equipment loan (the "Third Equipment Loan"), as evidenced by a certain Equipment
Promissory Note III dated as of March 27, 1997 (the "Third Equipment Note") and
(vii) a $3,000,000 equipment loan (the "Fourth Equipment Loan"), as evidenced by
a certain Equipment Promissory Note IV dated as of May 22, 1998 (the "Fourth
Equipment Note" and collectively with the Revolving Note, Acquisition Term Note,
Consolidation Equipment Note, Term Note, Construction Note and Third Equipment
Note, as amended and in effect from time to time, collectively, the "Original
Notes"); and

                                   SECTION 1.
                                  DEFINITIONS

         All capitalized terms used in this Note or the Other Documents, or in
any certificate, report or other document, instrument or agreement executed or
delivered pursuant hereto and thereto (unless otherwise indicated therein) shall
have the meanings ascribed to such terms below.

         Section 1.1. "Bank" has the meaning set forth in the first paragraph
hereof.

         Section 1.2. "Borrower" has the meaning set forth in the Preamble
hereof.

         Section 1.3. "Business Day" means any day other than a Saturday,
Sunday, legal holiday or other day on which banks in the State of Connecticut
are required or permitted by law to close.

         Section 1.4. "Closing Date" means the date hereof.

         Section 1.5. "Encumbrance" means any security interest, mortgage,
pledge, lien, claim, charge, encumbrance, title retention agreement, lessor's
interest under a financing lease or any analogous arrangements in any of
Borrower's properties or assets, intended as, or having the effect of, security.

         Section 1.6. "Financial Statement" or "Financial Statements" means as
of any date, or with respect to any period, as applicable, a financial report or
reports consisting of (i) a balance sheet, (ii) an income statement; (iii) a
statement of cash flow; and (iv) a statement of changes in stockholder's equity.

         Section 1.7. "First Interest Payment Date" means September 29, 2002.

         Section 1.8. "Floating Rate" means the Prime Rate plus one percent
(1%).

<PAGE>   4

                                      -3-

         Section 1.9. "Guarantor" means collectively, Apex Machine Tool Company,
Inc. and Gros-Ite Industries, Inc.

         Section 1.10. "Guaranty Agreements" means collectively, those certain
Guaranty Agreements of even date herewith by Guarantors in favor of Bank.

         Section 1.11. "Maker" has the meaning set forth in the first paragraph
hereof.

         Section 1.12. "Maturity Date" means September 29, 2004.

         Section 1.13. "Mortgage" means that certain Mortgage from Borrower to
Bank dated May 12, 1989, and recorded on May 15, 1989 in Volume 394 at Page 521
of the Farmington land records, covering real estate located at 1790 New Britain
Avenue, Farmington, Connecticut, as amended and modified and in effect from time
to time.

         Section 1.14. "Other Documents" means this Note, the Security
Agreements, Guaranty Agreements, Mortgage and any other documents, instruments
or agreements executed by Borrower in connection with the Term Loan.

         Section 1.15. "Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture or other entity of whatever nature, whether public or private.

         Section 1.16. "Prime Rate" means the variable per annum rate of
interest so designated from time to time by Fleet National Bank as its prime
rate. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer. Changes in the rate of
interest resulting from changes in the Prime Rate shall take place immediately
without notice or demand of any kind.

         Section 1.17. "Security Agreement" means that certain Security
Agreement dated the date hereof by Borrower in favor of Bank as well as those
certain Security Agreements dated the date hereof by Guarantor in favor of Bank.

         Section 1.18. "Term Loan" means the loan made by Bank to Borrower
pursuant to this Note.

                                   SECTION 2.
                                TERMS OF THE LOAN

         This Note has been issued by Maker to amend and restate the Original
Notes in their entirety and evidences the same indebtedness that has been
evidenced by the Original Notes but reduces the principal amount due under such
Original Notes to SEVEN MILLION AND 00/100 DOLLARS ($7,000,000.00). The Original
Notes from Maker and Guarantors are hereby replaced and superseded in their
entirety by this Note. This Note is not a novation of the Original Notes. The
Holder of this Note is entitled to the benefit of the Other Documents.

<PAGE>   5
                                      -4-

         The Maker agrees that this Note, together with the Other Documents,
replaces any and all agreements between the Borrower and Bank, except for the
Mortgage.

         Section 2.1. Interest Rate and Payment of Interest. Commencing on the
date hereof and continuing until the Maturity Date, the outstanding principal
amount of this Note shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time, which rate shall change
contemporaneously with any change in the Floating Rate.

         On the First Interest Payment Date, Borrower shall pay all interest
then outstanding. Commencing on November 2, 2002 and continuing on the first
(1st) day of each month thereafter until this Note is due (whether at maturity
or by reason of acceleration, prepayment or otherwise), interest shall be
payable monthly in arrears.

         Interest shall be computed daily on the basis of a year of three
hundred sixty (360) days and paid for the actual number of days elapsed during
each accrual period. If the due date for any payment of principal is extended by
operation of law, interest shall be payable for such extended time. If any
payment required by this Note becomes due on a day that is not a Business Day
such payment may be made on the next succeeding Business Day, and such extension
shall be included in computing interest in connection with such payment.

         Section 2.2 Payment of Principal and Interest. The outstanding
principal amount of the Note, together with all interest accrued thereon and all
other amounts due and payable by the Borrower hereunder and under the Other
Documents, shall be due and payable in full on the Maturity Date.

         Section 2.3. Prepayment. This Note may be prepaid in whole or in part
at any time, without premium or penalty. If the Maker prepays the aggregate
principal sum of $5,000,000.00 ("Discounted Payment Amount") at any time prior
to October 1, 2003, and provided that no Event of Default shall have occurred
and be continuing and all payments under this Note and the Other Documents as of
the date of such payment have been made, this Note shall be deemed paid in full
and the Maker and the Guarantors under this Note and the Other Documents (except
any indemnities that survive the repayment of this Note) shall not have any
further obligations or liabilities under this Note or the Other Documents. All
principal payments made prior to October 1, 2003, shall be aggregated and shall
be included in the calculation of the Discounted Payment Amount.

         Section 2.4. Overdue Payments. In the event of an Event of Default and
during the continuance thereof, overdue principal and, to the extent permitted
by applicable law, overdue interest and fees or any other amounts payable under
this Note shall bear interest from and including the due date thereof until
paid, compounded daily and payable on demand, at a rate per annum equal to the
Floating Rate plus five percentage points (5%). In addition, if a payment of
interest due under this Note is not made within fifteen (15) days of its due
date, Borrower shall pay upon demand a late payment charge equal to five percent
(5%) of the amount then due.

<PAGE>   6
                                      -5-

         Section 2.5. Increased Costs and Capital Adequacy.

         (a) If Bank determines that any change in any law or regulation or
directive or bulletin or in the interpretation thereof after the Closing Date by
any court or administrative or governmental authority charged with the
administration thereof shall either (i) impose, modify or deem applicable any
reserve, special deposit or similar requirement against any credit extended by
Bank under this Note, or (ii) impose on Bank or its parent bank holding company
any other condition regarding this Note and the result of any event referred to
in the preceding clause (i) or (ii) above shall be to increase the cost to Bank
or such holding company of issuing, funding or maintaining the Loan (which
increase in cost shall be determined by Bank's reasonable allocation of the
aggregate of such cost increases resulting from such event), then, upon written
demand by Bank, Borrower shall pay to Bank from time to time as specified by
Bank, additional amounts which shall be sufficient to compensate Bank for such
increased cost from the date of such change. A certificate as to such increased
cost incurred by Bank as a result of any event mentioned in clause (i) or (ii)
above prepared in reasonable detail (which shall include the method employed by
Bank in determining the allocation of such costs to Borrower) and otherwise in
accordance with this subsection (a), submitted by Bank to Borrower, shall be
conclusive evidence, absent manifest error, as to the amount thereof.

         (b) If Bank shall determine that the adoption after the Closing Date of
any applicable law, rule or regulation, guideline, directive or request (whether
or not having force of law) regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof, or compliance by
Bank or its parent bank holding company with any requirement or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, except any such adoption or change
or any such compliance with a request or directive which applies or has been
applied solely to Bank or its parent bank holding company by reason of events or
conditions relating solely to Bank, has the effect of reducing the rate of
return on Bank's or its parent bank holding company's capital as a consequence
of its commitment hereunder or to a level below that which Bank or such holding
company could have achieved but for such adoption, change or compliance by an
amount deemed by Bank to be material (for which reduction of the rate of return
shall be determined by Bank's or such holding company's reasonable allocation of
such reduction of the rate of return resulting from such event) then, upon
written demand by Bank, Borrower shall pay to Bank, from time to time as
specified by Bank, such additional amount or amounts which shall be sufficient
to compensate Bank for such reduction. A certificate as to such increased cost
incurred by Bank as a result of any event mentioned in this subsection (b),
prepared in reasonable detail (which shall include the method employed by Bank
in determining the allocation of such costs to Borrower) and otherwise in
accordance with this subsection (b) submitted by the Bank to Borrower, shall be
conclusive evidence, absent manifest error, as to the amount thereof.

         (c) Amount payable by Borrower pursuant to this Section 2.5. shall be
payable within fifteen (15) Business Days of receipt by Borrower of a
certificate described in subsection (a) or (b) of this Section 2.5.

<PAGE>   7
                                      -6-

         Section 2.6. Method of Payment. All payments and prepayments of
principal and all payments of interest shall be made by Borrower to Bank at its
office located at 777 Main Street, Hartford, Connecticut 06115, on or before
12:00 noon on the due date thereof, free and clear of, and without any deduction
or withholding for, any taxes or other payments. All payments shall be applied
first to any fees, expenses and charges due to Bank under this Note, then to
interest accrued on this Note and finally to outstanding principal. Following
acceleration, payments shall be applied in Bank's sole and absolute discretion.

                                   SECTION 3.
                          SECURITY FOR THE OBLIGATIONS

         Section 3.1. Security. The obligations shall be secured by:

         (a) A second lien and security interest in all properties and assets of
Borrower, including goods, accounts receivable, inventory, contract rights,
accounts, documents, instruments and chattel paper, business and financial
records and general intangible assets of Borrower as more particularly defined
in the Security Agreement.

         (b) A mortgage on the property located at 1790 New Britain Avenue,
Farmington, Connecticut.

         (c) The unconditional guaranty of Guarantor pursuant to a certain
Unlimited Guaranty Agreements executed by Guarantor on the Closing Date, which
Guaranty Agreements shall be secured by all properties and assets of Guarantor,
including goods, accounts receivable, inventory, contract rights, accounts,
documents, instruments and chattel paper, business and financial records and
general intangible assets of Guarantor as more particularly defined in the
security agreement executed by Guarantor.

                                   SECTION 4.
                         REPRESENTATIONS AND WARRANTIES

         In order to induce Bank to enter into this Note and to make this Loan,
Borrower makes the following representations and warranties to Bank, which shall
be deemed made as of the date hereof. Any knowledge acquired by Bank shall not
diminish its rights to rely upon such representations and warranties.

         Section 4.1.  Legal Existence.

         (a) Borrower is a corporation legally existing and in good standing
under the laws of the State of Wisconsin and has the power and authority to own
its property and conduct its business substantially as presently conducted by
Borrower; and

<PAGE>   8
                                      -7-

         (b) Borrower has the power and authority to enter into and to perform
its obligations under this Note and the Other Documents, and to carry out the
transactions contemplated hereby and thereby.

         Section 4.2. Authority, Consents; Absence of Conflict with Other
Agreement, Etc. The execution, delivery and performance of this Note and the
Other Documents, by Borrower, and the transactions contemplated hereby,

         (a) are within the powers of, and have been duly authorized by,
    Borrower;

         (b) do not require any approval or consent of, or filing with, any
    governmental agency or authority bearing on the validity of such instruments
    and transactions which is required by law or the regulations of any agency
    or authority and which has not been obtained or made, and are not in
    contravention of law, of Borrower;

         (c) will not conflict with or result in any breach or contravention of
    or the creation of any lien under, any indenture, agreement, promissory
    note, lease, contract, instrument or undertaking to which Borrower is a
    party or by which it or any of its properties is bound, except as set forth
    on Schedule A hereof; and

         (d) are and will be the valid and legally binding obligations of
    Borrower and enforceable in accordance with their respective terms, except
    as enforceability may be limited by bankruptcy, insolvency, reorganization,
    moratorium or similar laws relating to or affecting generally the
    enforcement of creditors' rights, and except that the availability of
    specific performance, injunctive relief or any other equitable remedy may be
    subject to the discretion of the court before which any proceedings for such
    remedy may be brought.

         Section 4.3. Use of Proceeds. The proceeds of this Note are to be used
for general commercial purposes and that no part of such proceeds will be used,
in whole or in part, for the purpose of purchasing or carrying any "margin
security" as such term is defined in Regulation U of the Board of Governors of
the Federal Reserve System.

         Section 4.4. Changes; None Adverse; Disclosure. No changes have
occurred in the financial condition of Borrower, since August 31, 2000 which
individually or in the aggregate have been materially adverse and have not been
disclosed to Bank.

         Section 4.5. Litigation. There is no pending or threatened action,
suit, proceeding or investigation before any court, governmental or regulatory
body, agency, commission or official, board of arbitration or arbitrator against
or affecting Borrower, the outcome of which could materially adversely affect
the financial position, business, operations or prospects of Borrower or which
could significantly impair the ability of Borrower to perform its obligations
under this Note and the Other Documents.

<PAGE>   9
                                      -8-

         Section 4.6. Binding Obligations. This Note and the Other Documents
constitute the legal, valid and binding obligations of Borrower, enforceable
against it in accordance with their respective terms.

         Section 4.7. Noncontravention. The execution, delivery and performance
by Borrower of this Note and the Other Documents will not violate any existing
law, ordinance, rule, regulation or order of any governmental authority or
result in a breach of any of the terms of, or constitute a default under, any
contractual obligation to which Borrower is a party or by which it or any of its
properties or assets are bound or result in or require the imposition of any
Encumbrances on any of Borrower's properties or assets, except as set forth on
Schedule A hereof.

         Section 4.8. Financial Information. All written data, reports and
information which Borrower has supplied to Bank or caused to be so supplied by a
third party on its behalf in connection with this Note are complete and accurate
and contain no material omission or misstatement except such as have been
corrected in a writing delivered to Bank.

         Section 4.9. Other Defaults. Borrower is not in default in the
performance, observance or fulfillment of any material contractual obligation
other than as set forth on Schedule A hereof.

         Section 4.10. Taxes. Borrower has filed all tax returns and reports
required to be filed by it with any governmental authority and has paid in full,
or made adequate provisions or established adequate reserves for, the payment of
all taxes, interest, penalties, assessments or deficiencies shown to be due or
claimed to be due on or in respect to such tax returns and reports.

                   SECTION 5. CONDITIONS TO OBLIGATION OF BANK

         Bank shall have no obligation under this Note until it is satisfied, in
its sole and absolute discretion, that all of the following conditions shall
have been satisfied prior to or on the Closing Date:

         Section 5.1. Representations and Warranties True. The representations
and warranties contained in Section 4 are true and correct, and Borrower shall
have so certified to Bank.

         Section 5.2. Delivery of Documents. Borrower shall have duly executed
and delivered to Bank, in form and substance satisfactory to Bank and its legal
counsel, this Note, the Other Documents and all further documents as Bank may
request to evidence the obligations or to create, perfect or continue any
security interest or lien contemplated by this Note and the Other Documents.

         Section 5.3. Validity of Liens. All Encumbrances in any collateral to
be provided by Borrower shall have been created in favor of Bank, which
Encumbrances shall constitute legal, valid and enforceable and, unless otherwise
consented to by Bank, second security interests in and liens upon such
collateral (except for liens disclosed to Bank and approved prior to Closing).
All filings, recordings, deliveries of instruments and other actions necessary
or desirable in the

<PAGE>   10
                                      -9-

sole and absolute discretion of Bank and its legal counsel to create said
Encumbrances shall have been made, taken and/or effected.

         Section 5.4. Payment of Fees. Borrower shall have paid $130,000.00
representing the fees and expenses due to Bank as of September 29, 2000,
including the fees and expenses of Bank's legal counsel.

         Section 5.5. Legal Matters. All legal matters incident to the
transactions hereby contemplated shall be satisfactory to Bank and its legal
counsel.

                              SECTION 6. COVENANTS

         Section 6.1. Taxes and Other Assessments. Borrower shall pay and
discharge, and maintain adequate reserves for the payment and discharge of, all
taxes, assessments, government charges or levies, or claims for labor, supplies,
rent or other obligations made against it or its properties and assets which, if
unpaid, might become an Encumbrance against Borrower or its properties and
assets, except liabilities which are being contested in good faith in
appropriate proceedings. Borrower shall file all Federal, state and local tax
returns and other reports that it is required by law to file. Borrower shall
promptly notify or cause notice to be given to Bank of any pending or future
audits of its income tax returns by the Internal Revenue Service or by any state
in which Borrower conducts business operations and the results of each such
audit.

         Section 6.2. Payment of Indebtedness. Borrower shall promptly pay and
discharge when due and payable (or within applicable grace periods) all
indebtedness due to any Person from Borrower, except when the amount thereof is
being contested in good faith by appropriate proceedings and with reserves
therefor being established as a current liability on the books of Borrower as
required by GAAP.

         Section 6.3. Encumbrances. Except as set forth on Schedule A hereof,
Borrower shall not create, incur, assume or suffer to exist any Encumbrance upon
its properties and assets, or assign or otherwise convey any right to receive
income, with or without recourse, except Encumbrances in favor of Bank.

         Section 6.4. Financial Information. Borrower shall furnish to Bank:

         (a) As soon as available, but in no event later than ninety (90) days
after the end of each fiscal year of the Borrower and Guarantor, Financial
Statements (including a reasonably detailed balance sheet and profit and loss
statement) for such year, audited and certified by an independent certified
public accountant acceptable to Bank.

         (b) As soon as available, but in no event later than forty five (45)
days after the end of each fiscal quarter of Borrower and Guarantor, an
internally prepared balance sheet and profit and loss statement as of the end
of, and income for, the period then ended, certified by the chief financial
officer of Borrower but subject, however, to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount.

<PAGE>   11
                                      -10-

         (c) With reasonable promptness, such further and additional financial
information as reasonably requested by Bank.

                                    SECTION 7
                         EVENTS OF DEFAULT; ACCELERATION

         If any of the following events (individually, an "Event of Default"
and, collectively, "Events of Default", or, if the giving of notice or the lapse
of time or both is required, then, prior to such notice and/or lapse of time,
individually, a "Default" and collectively, "Defaults") shall occur:

         (a) Any amount owing under this Note is not paid when due, or the
Borrower shall default in the performance of or compliance with any other term
or provision contained in this Note or any of the Other Documents;

         (b) if any material representation or warranty of the Borrower in any
of the Other Documents shall prove to have been false in any material respect
upon the date when made;

         (c) if the Borrower makes an assignment for the benefit of creditors,
or admits in writing its inability to pay or generally fails to pay its debts as
they mature or become due, or petitions or applies for the appointment of a
trustee or other custodian, liquidator or receiver of the Borrower or of any
substantial part of the assets of the Borrower or commences any case or other
proceeding relating to the Borrower under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or takes any action
to authorize or in furtherance of any of the foregoing; or if any such petition
or application is filed or any such case or other proceeding is commenced
against the Borrower;

         (d) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of the Borrower in an
involuntary case under Federal bankruptcy laws as now or hereafter constituted
and such decree or order shall remain in effect for more than sixty (60) days,
whether or not consecutive;

         (e) if there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any final
judgment not covered by insurance against the Borrower which, with other
outstanding final judgments, undischarged, against the Borrower exceeds in the
aggregate FIFTY THOUSAND AND 00/100 DOLLARS ($50,000.00);

<PAGE>   12
                                      -11-

         (f) if there shall have occurred after the date hereof, any changes in
the assets, liabilities, financial condition, business, operations or prospects
of the Borrower or which, individually or in the aggregate, are materially
adverse;

         (g) if there shall have occurred a default or an event of default under
any of the Other Documents after expiration of any applicable notice and cure
periods, if any;

         (h) if any Other Document shall be canceled, terminated, revoked or
rescinded otherwise than in accordance with the express prior written agreement,
consent or approval of the Bank; or any action at law, suit in equity or other
legal proceeding to cancel, revoke or rescind any Other Document shall be
commenced by or on behalf of any Person bound thereby, or by any governmental or
regulatory authority or agency of competent jurisdiction; or any court or any
other governmental or regulatory authority or agency of competent jurisdiction
shall make a determination that, or shall issue a judgment, order, decree or
ruling to the effect that any Other Document or any one or more of the material
covenants, agreements or obligations of any Person or Persons under any Other
Document are illegal, invalid or unenforceable in accordance with the terms
thereof; or

         (i) if at any time during the term of this Note, Borrower shall be
considered in default under any loan extended by General Electric Capital
Corporation and General Electric Capital Corporation does not waive any such
default;

then, and so long as any such Event of Default shall not have been remedied or
waived in writing by the Bank all amounts owing with respect to this Note shall,
at the option of the Bank, be forthwith matured and become immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrower and by all guarantors,
endorsers, and pledgors with respect hereto; provided, that in the case of any
Event of Default specified in Section 7(c) or Section 7(d) above, all such
amounts owing shall become immediately due and payable automatically and without
any requirement of notice from the Bank. In case any one or more of the Events
of Default shall have occurred and be continuing, and whether or not the Bank
shall have accelerated the maturity of the Note pursuant to the foregoing, the
Bank, if owed any amount with respect to the Note may proceed to protect and
enforce its rights by suit in equity, action at law and/or performance of any
covenant or agreement contained in this Note, including as permitted by
applicable law the obtaining of the ex parte appointment of a receiver, and, if
such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the Bank.
No remedy herein conferred upon the Bank or the holder of this Note is intended
to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.

<PAGE>   13

                                      -12-

                                    SECTION 8
                            MISCELLANEOUS PROVISIONS

         Section 8.1. Cross Collateral. The security interests, liens and other
rights and interests in and relative to any collateral now or hereafter granted
to Bank by Borrower by or in any instrument or agreement, including but not
limited to this Note and the Other Documents, shall serve as security for any
and all obligations of Borrower to Bank, and, for the repayment thereof, Bank
may resort to any security held by it in such order and manner as it may elect.

         Section 8.2. Set-Off. Borrower hereby grants to Bank a continuing lien
on and security interest in any and all deposits or other sums credited by or
due from Bank to Borrower and any securities or other property of Borrower in
the possession of Bank. Subject to any agreement between Borrower and General
Electric Capital Corporation, regardless of the adequacy of any collateral, any
deposits or other sums credited by or due from Bank to Borrower and any
securities or other property of Borrower in the possession of Bank may be
applied to or set off against the payment of obligations (whether matured or
unmatured) of Borrower under this Note and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of Borrower to Bank.

         Section 8.3. Fees and Expenses. Borrower will reimburse and indemnify
Bank for all reasonable out-of-pocket expenses incurred after September 29,
2000, all either before or after obtaining judgment on or with respect to any
amounts payable hereunder, including but not limited to reasonable attorneys'
fees and disbursements, incurred or expended in connection with the preparation,
negotiation, interpretation or delivery of this Note and the Other Documents or
any amendment hereof or thereof or with the enforcement or collection of any
obligations or the satisfaction of any indebtedness of Borrower hereunder or
thereunder, whether or not proceedings are instituted in any court of competent
jurisdiction, or in connection with any litigation, proceeding or dispute
hereunder or thereunder.

         Section 8.4. Notices. All notices, requests, demands or other
communications required by this Note shall be made in writing, and unless
otherwise specifically provided herein, shall be deemed to have been duly given
when delivered by hand or mailed certified mail, return receipt requested,
postage prepaid, or, in the case of telecopy or facsimile notice, when
transmitted, answer back received, addressed as follows, or to such other
address as either party may designate in writing:

If to Bank:

Fleet National Bank
MS: CT EH 40223B
777 Main Street
Hartford, CT 06115
Attention: Area Manager - Managed Asset Division

<PAGE>   14
                                      -13-

with a copy to:

Updike, Kelly & Spellacy, P.C.
One State Street
PO Box 231277
Hartford, CT  06123-1277
Attention: Thomas A. Gugliotti, Esq.

If to Borrower; to the address set forth in the preamble.

         Section 8.5. Governing Law. This Note shall be governed by, and shall
be construed and enforced in accordance with, the laws of the State of
Connecticut, without reference to Connecticut's choice of law rules.

         Section 8.6. Waivers. Maker and each endorser, guarantor and surety of
this Note, and each other person liable or who shall become liable for all or
any part of the indebtedness evidenced by this Note:

         (a) waive demand, presentment, protest, notice of protest, notice of
    dishonor, diligence in collection, notice of nonpayment and all notices of a
    like nature;

         (b) consent to (i) the release, surrender, exchange or substitution of
    all or any part of the security for the indebtedness evidenced by this Note,
    or the taking of any additional security; (ii) the release of any or all
    other persons from liability, whether primary or contingent, for the
    indebtedness evidenced by this Note or for any related obligations; and
    (iii) the granting of any other indulgences to any such person; and

         (c) consent to (i) all renewals, extensions or modifications of this
    Note (including any affecting the time of payment).

Any such renewal, extension, modification, release, surrender, exchange,
substitution, taking or indulgence may take place without notice to any such
person, and, whether or not any such notice is given, shall not impair the
liability of any such person.

         Section 8.7. Interpretation As used in this Note, words of any gender
shall be deemed to apply equally to any other gender, the plural shall include
the singular and the singular shall include the plural (as the context shall
require), and the word "person" shall refer to individuals, entities,
authorities and other natural and juridical persons of every type.

<PAGE>   15
                                      -14-

OR BY OTHER APPLICABLE LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH HOLDER
MAY DESIRE TO USE.

         Section 8.9. JURY TRIAL. MAKER AND EACH AND EVERY ENDORSER, GUARANTOR
AND SURETY OF THIS NOTE, AND EACH OTHER PERSON WHO IS OR WHO SHALL BECOME LIABLE
FOR ALL OR ANY PART OF THIS NOTE, HEREBY WAIVES TRIAL BY JURY IN ANY COURT IN
ANY SUIT, ACTION, OR PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN
ANY WAY RELATED TO THE TRANSACTION OF WHICH THIS NOTE IS A PART AND/OR IN THE
ENFORCEMENT BY BANK OF ANY OF ITS RIGHTS AND REMEDIES HEREUNDER OR UNDER
APPLICABLE LAW. MAKER ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY,
VOLUNTARILY AND ONLY AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER BY
ITS ATTORNEY.

         Section 8.10. Miscellaneous. The rights and remedies herein expressed
are cumulative and not exclusive of any other rights which Bank would have
otherwise. All of the terms and provisions of this Note shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of Borrower and Bank, provided that Borrower may not assign or transfer
its rights hereunder without prior written consent of Bank; without limitation
of the generality of the foregoing, Bank may assign or transfer its rights
hereunder in whole or in part, to other financing institutions, by way of sales
of undivided participations, or other similar means. The captions in this Note
are for convenience of reference only and shall not define or limit the
provisions hereof. This Note may be amended, and the performance or observance
by Borrower of any terms of this Note or any other instrument relating hereto
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of
Borrower and the written consent of Bank. No waiver shall extend to or affect
any obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission in the exercise of any right, remedy,
power or privilege hereunder on the part of Bank shall impair, prejudice or
constitute a waiver of any such right, remedy, power or privilege or otherwise
be prejudicial thereto. No notice to or demand upon Borrower shall entitle
Borrower to other or further notice or demand in similar or other circumstances.

         IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first set forth above.

                                 EDAC TECHNOLOGIES CORPORATION

                                 By: /s/Ronald G. Popolizio
                                     ----------------------------
                                      Name: Ronald G. Popolizio
                                      Its EVP and CFO
                                      Duly Authorized

<PAGE>   16

                                   SCHEDULE A

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