TECHPRECISION CORPORATION (NASDAQ:TPCS) Files An 8-K Entry into a Material Definitive Agreement

Commerce Bank Trust Company Loan Facility

On December 21, 2016 (the “Closing Date”), TechPrecision
Corporation (the “Company”), through its wholly owned
subsidiary Ranor, Inc. (“Ranor”), closed a Loan Agreement (the
“Commerce Loan Agreement”) with Commerce Bank Trust Company
(“Commerce”). to the Commerce Loan Agreement, on the Closing
Date, Commerce made a term loan to Ranor in the amount of
$2,850,000 (the “Term Loan”) and made available to Ranor a
revolving line of credit in the amount of $1,000,000 (the
“Revolver Loan,” and together with the Term Loan, collectively,
the “Commerce Loans”). The Commerce Loans are secured by a
first lien on all personal and real property of Ranor. Payments
on the Term Loan will be made in 60 monthly installments of
$19,260.46 each, inclusive of interest at a fixed rate of 5.21%
per annum. The first monthly installment payment on the Term Loan
will be due on January 20, 2017. A prepayment penalty will apply
during the loan term but will not apply if a prepayment is made
from either casualty loss insurance proceeds or a condemnation
award applicable to any collateral or if a full prepayment is
made during the 45-day period immediately preceding the maturity
date. Advances under the Revolver Loan will be subject to a
borrowing base equal to the lesser of (A) $1,000,000 and (B) the
sum of (i) 80% of eligible accounts receivable, and (ii) the
lesser of (a) 25% of eligible raw material inventory and (b)
$250,000. Advances made under the Revolver Loan bear interest at
a variable rate equal to the one-month LIBOR plus 275 basis
points. Interest-only payments on advances made under the
Revolver Loan will be payable monthly in arrears. The first
monthly payment on the Revolver Loan will be due and payable on
January 20, 2017. The Revolver Loan will mature on December 21,
2018. Ranor’s obligations under the Commerce Loan Agreement are
guaranteed by the Company.

The Commerce Loan Agreement contains a covenant whereby the
Company is required to maintain a debt service coverage ratio
(“DSCR”) of at least 1.2 to 1.0 during the term of the Commerce
Loans. The DSCR will be measured at the end of each fiscal
quarter of the Company. to the Commerce Loan Agreement, Ranor
covenants (a) to cause its balance sheet leverage to be less than
or equal to 3.50 to 1.00 for the fiscal year ending March 31,
2017, less than or equal to 3.00 to 1.00 for the fiscal year
ending March 31, 2018, and less than or equal to 2.50 to 1.00 for
the fiscal year ending March 31, 2019 and each fiscal year end
thereafter, and (b) that its annual capital expenditures shall
not exceed $1,000,000 for the fiscal year ending March 31, 2017,
$2,500,000 for the fiscal year ending March 31, 2018, $2,500,000
for the fiscal year ended March 31, 2019, and $1,500,000 for the
fiscal year ending March 31, 2020 and each fiscal year end
thereafter. Compliance with the foregoing covenants will be
tested annually commencing March 31, 2017. The Commerce Loan
Agreement contains an additional covenant whereby Ranor is
required to maintain a loan to value ratio of not greater than
0.75 to 1.00, to be measured by appraisal not more frequently
than one time during each 365-day period.

The Commerce Loans may be accelerated upon the occurrence of an
“Event of Default” (as defined in the Commerce Loan Agreement).
Events of Default include (i) the failure to pay any monthly
installment payment before the tenth day following the due date
of such payment; (ii) the failure of Ranor or the Company to
observe, perform or pay any obligations under the Commerce Loan
Agreement or any other obligation to Commerce; (iii) the failure
of Ranor or the Company to pay any indebtedness in excess of
$100,000 (other than the Commerce Loans) when due; (iv) any
representation or warranty of Ranor or the Company in the
Commerce Loan Agreement and related documents (the “Loan
Documents”) being proven to have been incorrect, in any material
respect, when made; (v) the failure of Ranor to discharge any
attachment, levy or distraint on its property; (vi) any default
by Ranor or the Company under any of the collateral security
documents executed in connection with the Commerce Loan Agreement
past any applicable grace period; (vii) the failure of Ranor or
the Company to file or pay taxes when due, unless such taxes are
being contested in a manner permitted under the Loan Documents;
(viii) a change in ownership or control of Ranor or change in
management of Ranor where either the chief executive officer or
chief financial officer as of the Closing Date is replaced
without Commerce’s prior consent; (ix) Ranor or the Company
ceasing to do business as a going concern, making an assignment
for the benefit of creditors, or commencing a bankruptcy or other
similar insolvency proceeding; and (x) the entry of a judgment
against Ranor or the Company in excess of $150,000. Some of the
Events of Default are subject to certain cure periods.

In connection with the Commerce Loan Agreement, $2,394,875 of the
proceeds from Term Loan were disbursed to Revere High Yield Fund,
LP (“Revere”) as payment in full of Ranor’s indebtedness owed
to Revere that certain Term Loan and Security Agreement, dated as
of December 22, 2014, by and between Ranor and Revere, as amended
(the “TLSA”). Ranor retained $426,466.55 of the proceeds from
the Term Loan for general corporate purposes. The balance of the
proceeds from the Term Loan were used to pay loan-related
expenses.

The description of the Commerce Loan Agreement is qualified in
its entirety by reference to the full text of the Commerce Loan
Agreement, a copy of which is attached hereto as Exhibit 10.1 and
is incorporated by reference herein.

Amendment of People’s Capital and Leasing Corp. Equipment Loan
Facility

On December 21, 2016, the Company and Ranor closed on an
Amendment to the Master Loan and Security Agreement No. 4180
dated March 31, 2016 (the “Amendment”) with People’s Capital
and Leasing Corp (“People’s”). The Amendment, dated as of
December 20, 2016, amends that certain Master Loan and Security
Agreement No. 4180, as supplemented by Schedule No. 001, as
amended, each dated as of March 31, 2016, and as further
supplemented by Schedule No. 002, dated as of September 6, 2016
(collectively, the “MLSA”), by and between Ranor and People’s.
The Amendment amends the definition of “Permitted Liens” under
the MLSA to include the liens held by Commerce to the terms of
the Commerce Loan Agreement and to delete the reference to the
liens held by Revere.

The description of the Amendment is qualified in its entirety by
reference to the full text of the Amendment, a copy of which is
attached hereto as Exhibit 10.2 and is incorporated by reference
herein.

Item 1.02

Termination of a Material Definitive Agreement.

As a result of the payment in full of Ranor’s indebtedness owed
to Revere to the TLSA, the following agreements were terminated:
(i) the TLSA; (ii) the Guaranty Agreement, dated December 22,
2014, by and between the Company and Revere; (iii) the Amended
and Restated Term Note in the original principal amount of
$1,500,000 in the name of Revere, dated January 22, 2016; and
(iv) the Amended and Restated Term Note in the original principal
amount of $750,000 in the name of Revere, dated January 22, 2016.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information presented above in Item 1.01 under the heading
“Commerce Bank Trust Company Loan Facility” is hereby
incorporated by reference into this Item 2.03.

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 27, 2016, in recognition of his performance for the
Company and to increase the alignment of his interests with those
of the Company’s stockholders, the Company granted to Alexander
Shen, the Company’s Chief Executive Officer, a non-qualified
stock option to purchase 1,000,000 shares of the Company’s
common stock at an exercise price of $0.50, the closing price of
the Company’s common stock on the date of the grant. The grant
was made under the TechPrecision Corporation 2016 Equity
Incentive Plan and a Non-Qualified Stock Option Award Agreement,
dated December 27, 2016, from the Company to Mr. Shen (the
“Award Agreement”).

The description of the Award Agreement is qualified in its
entirety by reference to the full text of the Award Agreement, a
copy of which is attached hereto as Exhibit 10.3 and is
incorporated by reference herein.