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THIRD MODIFICATION OF CONSTRUCTION TO
PERMANENT LOAN PROMISSORY NOTE AND
OPEN-END CONSTRUCTION TO PERMANENT MORTGAGE DEED
THIS THIRD MODIFICATION OF CONSTRUCTION TO PERMANENT LOAN PROMISSORY NOTE AND
OPEN-END CONSTRUCTION TO PERMANENT MORTGAGE DEED (the "AGREEMENT"), entered into
as of the 27th day of March, 1997, by and between EDAC TECHNOLOGIES CORPORATION,
a Wisconsin corporation having a place of business at 0000 Xxx Xxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxx 00000 (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 000 Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000 (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, (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, and (d) amended by
a certain Eighth Amendment to Revolving Loan, Term Loan, Equipment Loan and
Security Agreement dated as of April 10, 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 (i) a certain Modification of Construction to Permanent Loan
Promissory Note and Open-End Construction to Permanent Mortgage Deed recorded in
Volume 513 at Page 462 of the Farmington Land Records (the "MODIFICATION") and
(ii) a certain Second Modification of Construction to Permanent Loan, Promissory
Note and Open End Construction to Permanent Mortgage dated as of April 10, 1996
and recorded in Volume 514 at Page 716 of the Farmington Land Records (the
"SECOND MODIFICATION") (collectively, 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 and the Second Modification (as modified, the
"MORTGAGE"), encumbering certain real property located in the Town of Farmington
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as more particularly described in Schedule A to the Mortgage. The 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 and to modify the interest rates set forth in
the Note.
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
A. Acknowledgments, Affirmations and Representations and Warranties.
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 $916,666.60 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.
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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.
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.
The Borrower and the Lender agree that the terms of the Note are
hereby modified in accordance with the following:
1. All references to the "Base Rate" shall mean "Prime Rate".
2. Paragraph (3) entitled "Cost of Funds Rate" is hereby deleted in
its entirety and the following substituted in lieu thereof:
"COST OF FUNDS RATE" shall mean the fixed per annum rate of
interest as of the date selected by Borrower in accordance with
the terms of this Agreement determined by Lender in good faith in
accordance with Lender's customary practices for loans in United
States currency and based on Lender's cost of obtaining funds
with a maturity approximately equal to the Interest Period from
sources as may be selected by Lender in its sole and absolute
discretion.
3. Paragraph (9) entitled "LIBOR Rate" is hereby deleted and the
following is substituted in lieu thereof:
(9) "LIBOR RATE" shall mean, with respect to the Interest Period
for
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which it is determined, the rate per annum calculated
pursuant to the following formula:
LIBOR = LIBOR Base Rate
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1-Reserve Percentage
4. 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, at
Borrower's election pursuant to Section I, below, equal to
(a) the Prime Rate, (b) the LIBOR Rate plus two hundred
(200) basis points or (c) Cost of Funds Rate plus two
hundred (200) basis points.
5. The following definitions are inserted after Paragraph (18):
(19) "INTEREST PERIOD" means the period selected by the Borrower
pursuant to this Agreement, to the extent such period is
available from Lender to other borrowers similarly situated
to Borrower on the date of such selection for the type of
interest rate selected by Borrower. Each Interest Period
shall commence on the date such interest rate election and
shall end on the date as the Borrower may select, if
available, provided that:
(i) any Interest Period for a LIBOR Rate elections
which would otherwise end on a day which is not a
Business Day shall end on the next or succeeding
Business Day as is Lender's custom in the
inter-bank Eurodollar market to which such advance
relates;
(ii) any Interest Period for Cost of Funds Date
elections which would otherwise end on a day which
is not a Business Day shall end on the next
preceding or succeeding Business Day of Lender;
(iii) Borrower may not select an Interest Period which
would end after the Maturity Date and any Interest
Period which commences before and would otherwise
end after the Maturity Date, shall end on the
Maturity Date; and
(iv) any Interest Period for LIBOR Rate elections which
begins on a day for which there is no numerically
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corresponding day in the calendar month during
which such Interest Period is to end, shall
(subject to clause (i) above) end on the last day
of such calendar month.
"LIBOR BASE RATE" means the rate quoted to Lender on or
prior to the commencement of an Interest Period for the
offering to Lender from prime commercial banks in the
interbank Eurodollar market of dollar deposits in
immediately available funds for a period equal to the
Interest Period and in an amount equal to the outstanding
principal balance of the Note.
(20) "RESERVE PERCENTAGE" means for any day with respect to
the principal amount of the Note bearing interest at
the LIBOR Rate, the maximum rate, (expressed as a
decimal) at which any lender subject thereto would be
required to maintain reserves under Regulation D of the
Board of Governors of the Federal Reserve System (or
any successor or similar regulations relating thereto)
against "Eurocurrency Requirements" (as that term is
used in Regulation D) if such liabilities were
outstanding
6. The following language in the third paragraph of Section C is
hereby deleted:
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.
and replaced with the following:
Upon the occurrence of an Event of Default after Conversion, or
after maturity, interest shall accrue from and after such event
at three percent (3%) per annum above the Permanent Interest Rate
as the same shall be in effect from and after such default (the
"PERMANENT DEFAULT RATE"). If the interest Rate shall be
adjusted whenever a change in the Prime Rate occurs, so that the
Permanent Default Rate shall remain at all times three percent
(3%) per annum above the Prime Rate. Any such adjustment in the
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Permanent Default Rate shall be effective simultaneously with a
change in the Prime Rate.
7. Section G. entitled "G. PREPAYMENT OF LOAN." on page eight of the
Note is hereby deleted in its entirety and the following is substituted in lieu
thereof:
If the interest rate in effect under this Note is based upon the
Prime Rate, 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.
If the interest rate in effect under this Note is based upon the
LIBOR Rate or Cost of Funds Rate, the Borrower may not prepay
this Note except as set forth in this paragraph. Under no
circumstances may there by a partial prepayment of this Note.
The Borrower may prepay only the entire unpaid balance of this
Note upon payment of such amounts, as determined by the Lender,
in its sole and absolute discretion, as may be necessary to
reimburse the Lender for any losses and expenses incurred by the
Lender as a result of prepayment of this Note, including without
limitation any losses (including loss of anticipated profits) and
expenses incurred by reason of the liquidation or re-employment
of deposits or other funds acquired by the Lender to fund or
maintain this Note. The Borrower hereby acknowledges that in
reliance upon this agreement, the Lender has made certain
commitments of funds upon the terms and conditions of this Note.
In the event that this Note is accelerated for any reason
whatsoever by the Lender, such payment of the Lender's losses and
expenses shall be paid by the Borrower.
In the event that the Loan shall be accelerated for any reason
whatsoever, the prepayment fee in effect as of the date of such
acceleration shall be paid.
8. The following is inserted after Section H to the Note:
Section I. Rate Elections. Conversion of Rate of Interest.
Provided that no Event of Default shall have occurred and be
continuing hereunder, the Borrower may, (i) at any time, if the
interest rate in effect under this Note is based upon the Prime
Rate and (ii) on the last
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Business Day of any Interest Period if the interest rate in
effect under this Note is based upon the LIBOR Rate or Cost of
Funds Rate, convert the interest rate hereunder to an interest
rate based upon the Prime Rate, Cost of Funds Rate or LIBOR Rate.
If the Borrower desires to so convert, it shall give Lender
written notice two (2) days prior to the conversion date by
written instructions, specifying the date of such conversion and,
if conversion is to a LIBOR Rate or Cost of Funds Rate, the
duration of the first Interest Period therefor.
Failure to Convert or Continue. If Borrower fails to notify
Lender of its election to convert or continue an expiring
interest rate based upon Cost of Funds Rate or LIBOR Rate on or
prior to the end of the expiring Interest Period, such expiring
interest rate shall, at the end of such Interest Period,
automatically be based upon the Prime Rate.
C. Modification of Mortgage.
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
hereby modified in accordance with Section B. above.
D. Miscellaneous
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.
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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:
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Xxxxxx X. Xxxxxxxxx
Its Vice President
FLEET NATIONAL BANK f/k/a
FLEET NATIONAL BANK OF
CONNECTICUT f/k/a SHAWMUT
BANK CONNECTICUT, N.A.
By:
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Xxxxx Xxxxxxx
Its Vice President
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STATE OF CONNECTICUT )
) ss.: Farmington
COUNTY OF HARTFORD )
On this 27th day of March, 1997, before me, personally appeared XXXXXX X.
XXXXXXXXX, 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.: Farmington
COUNTY OF HARTFORD )
On this 27th day of March, 1997, before me, personally appeared Xxxxx
Xxxxxxx, 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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