This Note is
issued pursuant to Section 2.6(b) the Asset Purchase Agreement
(the “ Purchase Agreement ”), dated as of
May 18, 2009, by and among EDAC TECHNOLOGIES CORPORATION, a
corporation organized and existing under the laws of Wisconsin (the
“ Maker ”), and MTU AERO ENGINES NORTH AMERICA,
INC., a corporation organized and existing under the laws of the
State of Connecticut (the “ Holder ”). All
capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to them in the Purchase
Agreement.
FOR VALUE
RECEIVED, the receipt of which is hereby acknowledged, the Maker
promises to pay to the Holder located at 100 Corporate Place, Rocky
Hill, CT 06067, U.S.A., or at such other place as the holder of
this Note may from time to time designate in writing to the Maker,
in immediately available funds in lawful money of the United States
of America, the principal sum of Two Million Five Hundred Thousand
Dollars ($2,500,000) together with interest on the outstanding
principal balance (computed on the daily outstanding principal
balance, for the actual number of days outstanding, on the basis of
a 365 day year), on the date and at the rate hereinafter set
forth, payable in connection with the consummation of the
transactions contemplated by the Purchase Agreement. The entire
outstanding principal amount, together with all accrued and unpaid
interest, shall be due and payable in full on the second
anniversary of the date of this Note (the “ Maturity
Date ”).
Interest shall
accrue and be payable on the outstanding principal balance of this
Note from the date hereof to but excluding the Maturity Date at a
rate per annum equal to five percent (5%) payable quarterly in
arrears commencing on June 30, 2009 and thereafter on each
September 30, December 31, March 31 and June 30
until the Maturity Date (each such date, an “ Interest
Payment Date ”) and on the Maturity Date; provided,
however, that whenever an Interest Payment Date would otherwise
occur on a day other than a Business Day, such Interest Payment
Date shall occur on the next preceding Business Day and such
reduction of time shall in such case be included in the computation
of interest hereunder. Interest shall be computed on the basis of a
365-day year and paid for the actual number of days elapsed. This
Note may be prepaid in whole at any time or in part from time to
time, without premium or penalty, but with interest accrued thereon
on the amount prepaid.
Buyer has
established for the benefit of Seller the Standby LC as security
for Buyer’s full and timely discharge of the Obligations in
accordance with the terms of the Purchase Agreement and this Note.
Seller shall be entitled to draw upon the Standby LC upon the terms
set forth in the Purchase Agreement.
The Maker
represents and warrants to the Holder that (i) it is
authorized to enter into, and has executed and delivered, this Note
and (ii) this
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