CONSENT AND AMENDMENT NO. 5
TO
LOAN AND SECURITY AGREEMENT
THIS CONSENT AND AMENDMENT NO. 5 (this "Amendment") is entered into as
of May 20, 2004, by and between EDAC TECHNOLOGIES CORPORATION, a Wisconsin
corporation ("Leading Borrower"), APEX MACHINE TOOL COMPANY, INC, a Connecticut
corporation ("Second Borrower") (Leading Borrower and Second Borrower being
collectively referred to as "Borrowers" and each a "Borrower") and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("Lender").
BACKGROUND
Borrowers, Gros-Ite and Lender are parties to a Loan and Security
Agreement, dated as of September 29, 2000 (as amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement") pursuant to which
Lender provides Borrowers with certain financial accommodations.
Borrowers have requested that Lender amend the Loan Agreement and
Lender is willing to do so on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrowers by
Lender, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 4 below, Schedule A of the Loan
Agreement is hereby amended as follows:
(a) Paragraphs (m), (n), (o) and (p) of the definition
"Eligible Accounts" are amended in their entirety to provide as follows:
"(m) that is an obligation for which the total unpaid
Accounts of the Account Debtor (other than *** and Xxxxx & Xxxxxxx) owing to
such Borrower exceed 30% of the aggregate of all Accounts of such Borrower, to
the extent of such excess;
(n) that is an obligation of which the total unpaid
Accounts of Xxxxx & Whitney or *** owing to such Borrower exceed 60% of the
aggregate of all Accounts of such Borrower, to the extent of such excess;
(o) that is an obligation for which the total unpaid
Accounts of the Account Debtor (other than *** and Xxxxx & Xxxxxxx) owing to all
Borrowers exceed 20% of the aggregate of all Accounts of Borrowers, to the
extent of such excess;
(p) that is an obligation of which the total unpaid
Accounts of (i) Xxxxx & Whitney owing to all Borrowers exceed 40% of the
aggregate of all Accounts of Borrowers and (ii) *** owing to all Borrowers
exceed 50% of the aggregate of all Accounts of Borrowers, to the extent of such
excess."
(b) The following defined terms are added in their
appropriate alphabetical order:
"Amendment No. 5" shall mean the Consent and
Amendment No. 5 to the Loan and Security Agreement
between Borrowers and Lender dated Amendment No. 5
Effective Date.
"Amendment No. 5 Effective Date" shall have the
meaning given to the term "Effective Date" in
Amendment No. 5.
"***" shall mean ***, a Delaware Corporation.
3. Reserve Reduction. Lender informed Borrowers pursuant to
letters from Lender to Borrowers dated June 4, 2002 and July 15, 2002, that in
addition to other reserves established by Lender in accordance with the terms of
the Loan Agreement, Lender was establishing reserves against Borrowing
Availability in an aggregate amount of $700,000 ("Reserve Amount"). Pursuant to
the Forbearance and Consent (the "Forbearance Agreement") dated as of November
26, 2002 by and among Borrowers and Lender, Lender agreed to reduce the Reserve
Amount to $550,000. Pursuant to Amendment No. 4, Lender agreed to reduce the
Reserve Amount to $150,000. Lender hereby agrees to reduce the Reserve Amount to
$0 provided that no Default shall have occurred and be continuing.
4. Conditions of Effectiveness. This Amendment shall become
effective (the "Effective Date") upon satisfaction of the following conditions
precedent, each in form and substance satisfactory to Lender: (i) Lender's
receipt of four (4) copies of this Amendment executed by Borrowers and Lender
and consented and agreed to by Guarantor and (ii) Lender shall have received a
fee in the amount of $5,000 and all attorney's fees of Lender in connection with
this Amendment, each of which shall be charged to Borrowers' loan account as a
Revolving Credit Loan on the date of this Amendment.
5. Representations and Warranties. Borrowers hereby represent
and warrant as follows:
(a) This Amendment and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrowers and are
enforceable against Borrowers in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, Borrowers
hereby reaffirm all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that all such
covenants, representations and warranties shall be deemed to have been remade as
of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment.
(d) Borrowers have no defense, counterclaim or offset
with respect to the Loan Agreement.
6. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each
reference in the Loan Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Loan
Agreement as amended hereby.
(b) Except as specifically amended herein, the Loan
Agreement, and all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect, and
are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except to the extent set forth herein, operate as a waiver
of any right, power or remedy of Lender, nor constitute a waiver of any
provision of the Loan Agreement, or any other documents, instruments or
agreements executed and/or delivered under or in connection therewith.
7. Governing Law. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State
of New York.
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8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
9. Counterparts; Facsimile. This Amendment may be executed by the
parties hereto in one or more counterparts, each of which shall be deemed an
original and all of which when taken together shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.
EDAC TECHNOLOGIES CORPORATION.
By: /s/Xxxxx X. Purple
----------------------------
Name: Xxxxx X. Purple
-------------------------
Title: V.P. Finance
---------------------------
APEX MACHINE TOOL COMPANY, INC.
By: /s/Xxxxx X. Purple
------------------------------
Name: Xxxxx X. Purple
-------------------------------
Title: Secretary
------------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION
By:/s/Xxxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxxx
---------------------------
Duly Authorized Signatory
*** Confidential treatment has been requested as to certain portions.
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CONSENT OF GUARANTOR
The undersigned as a guarantor of the Obligations of EDAC Technologies
Corporation and Apex Machine Tool Company, Inc. to Lender hereby consents to the
foregoing Amendment No. 5 and acknowledges that its guaranty agreement remains
in full force and effect.
GROS-ITE INDUSTRIES, INC.
By: /s/Xxxxx X. Purple
--------------------------
Name: Xxxxx X. Purple
Title: Secretary
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