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<SEC-DOCUMENT>0000950152-06-001660.txt : 20060302
<SEC-HEADER>0000950152-06-001660.hdr.sgml : 20060302
<ACCEPTANCE-DATETIME>20060302163150
ACCESSION NUMBER:		0000950152-06-001660
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060224
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060302
DATE AS OF CHANGE:		20060302

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GRAHAM CORP
		CENTRAL INDEX KEY:			0000716314
		STANDARD INDUSTRIAL CLASSIFICATION:	GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560]
		IRS NUMBER:				161194720
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08462
		FILM NUMBER:		06660242

	BUSINESS ADDRESS:	
		STREET 1:		20 FLORENCE AVE
		STREET 2:		POST OFFICE BOX 719
		CITY:			BATAVIA
		STATE:			NY
		ZIP:			14020
		BUSINESS PHONE:		5853432216

	MAIL ADDRESS:	
		STREET 1:		20 FLORENCE AVENUE
		STREET 2:		POST OFFICE BOX 719
		CITY:			BATAVIA
		STATE:			NY
		ZIP:			14021-0719
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>l18859ae8vk.htm
<DESCRIPTION>GRAHAM CORPORATION       8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>Graham Corporation       8-K</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, DC 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date of
Report (Date of earliest event reported): <B><U>&nbsp;February&nbsp;24,
2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Graham Corporation</B>
</DIV>


<DIV align="center">
<DIV style="font-size: 3pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>




<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>1-8462</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>16-1194720</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other<BR>
jurisdiction of<BR>
incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Commission<BR>
File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(IRS Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>20 Florence Avenue, Batavia, New York</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>14020</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Registrant&#146;s
telephone number, including area code:
<B><U>&nbsp;(585)&nbsp;343-2216&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>N/A</B>
</DIV>


<DIV align="center">
<DIV style="font-size: 3pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>




<DIV align="center" style="font-size: 10pt">(Former name or former address, if changed since last report)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the Registrant under any of the following provisions:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT> Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">








<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1.01. Entry into a Material Definitive Agreement.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;24, 2006, Graham Corporation (the &#147;Company&#148;) entered into a First Amendment (the
&#147;Amendment&#148;) to that certain Amended and Restated Credit Facility Agreement (the &#147;Credit Facility
Agreement&#148;) with Bank of America, N.A. dated July&nbsp;12, 2005. The Amendment: (i)&nbsp;increases the
Company&#146;s letter of credit sub-limit from $8,000,000 to $10,000,000; (ii)&nbsp;increases the amount that
the Company may pay in dividends each year from $500,000 to $600,000; (iii)&nbsp;increases the amount of
Common Stock the Company may repurchase each year from $500,000 to $600,000; and (iv)&nbsp;permits the
Company to make up to $2,500,000 in loans to and investments in a wholly-owned Chinese subsidiary.
The Amendment does not effect any other terms, provisions or conditions of the Credit Facility
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company entered into the Amendment both to support increasing overseas orders for its
products and services and to assist it in capitalizing a wholly-owned Chinese subsidiary. A copy of
the Amendment is attached to this Current Report as Exhibit&nbsp;4.1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9.01. Financial Statements and Exhibits.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(c)&nbsp;Exhibits</I>. The following is attached as an exhibit to this Form 8-K:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="80%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV align="center" style="margin-left:0px; text-indent:-0px"><U>Exhibit&nbsp;No.</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>Description</U></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV align="center" style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment, dated as of February&nbsp;24, 2006, to Credit
Facility Agreement between Graham Corporation and Bank of
America, N.A. dated as of July&nbsp;12, 2005.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>Graham Corporation</B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: March&nbsp;2, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ J. Ronald Hansen</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" colspan="2" valign="top">J. Ronald Hansen<BR>
Vice President &#150; Finance &#038; Administration<BR>
and Chief Financial Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>l18859aexv4w1.htm
<DESCRIPTION>EXHIBIT 4.1 FIRST AMENDMENT TO CREDIT FACILITY AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>Exhibit 4.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;4.1
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>FIRST AMENDMENT TO CREDIT FACILITY AGREEMENT</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS FIRST AMENDMENT, dated as of the 24th day of February, 2006, to that certain Amended and
Restated Credit Facility Agreement dated as of July&nbsp;12, 2005 (the &#147;Agreement&#148;), between BANK OF
AMERICA, N.A., a national banking association and successor by merger to Fleet National Bank,
having an office at One East Avenue, Rochester, New York 14638 (the &#147;Bank&#148;), and GRAHAM
CORPORATION, a corporation formed under the laws of the State of Delaware with offices at 20
Florence Avenue, Batavia, New York 14020 (the &#147;Borrower&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The parties hereby agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Agreement Ratified.</U> Except as expressly amended hereby, the Agreement is in all
respects ratified and confirmed, and all of the terms, provisions and conditions thereof shall be
and remain in full force and effect, and this Amendment and all of its terms, provisions and
conditions shall be deemed to be a part of the Agreement. All capitalized terms used herein and
not defined shall have the meanings given them in the Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Section&nbsp;3.1.</U> Section&nbsp;3.1 of the Agreement shall be amended as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>3.1 Letters of Credit.</U> Subject to the terms and conditions of this Agreement,
the Bank will make Letters of Credit available for the account of the Borrower in an
aggregate stated face amount not exceeding the lesser of (a)&nbsp;Ten Million Dollars
($10,000,000), and (b)&nbsp;the availability under the Revolving Line. Letters of Credit will be
made promptly available for the Borrower&#146;s work in process (to support customer progress
payments) or as otherwise requested by Borrower for general business purposes. The stated
amount outstanding under all Letters of Credit at all times shall reduce, dollar for dollar,
the amount available for advances under the Revolving Line. The Letters of Credit shall be
in form satisfactory to the Bank and will be for a term of up to three (3)&nbsp;years from the
date of issuance, except that Letters of Credit in the aggregate face amount of
$5,000,000.00 may have maturities of up to five (5)&nbsp;years from the date of issuance.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Section&nbsp;10.4 (a).</U> Section&nbsp;10.4(a) of the Agreement shall be amended as
follows
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as permitted by Section&nbsp;10.4 (b), make any loan or advance to, or any
investment in, any person, firm, joint venture, corporation or other entity whatsoever
exceeding $150,000 in the aggregate at any one time outstanding, except (i)&nbsp;short-term
investments in certificates of deposit of financial institutions and similar investments
made in the ordinary course of business; and (ii)&nbsp;loans to and investments in a Wholly
Owned Foreign Enterprise (the &#147;WOFE&#148;) to be formed in China on or about April&nbsp;1, 2006 in
accordance with the letter dated February&nbsp;9, 2006 from the Borrower to the Bank, which loans
and investments shall not exceed $2,500,000.00 in the aggregate.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>Section&nbsp;10.4(b).</U> Section&nbsp;10.4(b) of the Agreement shall be amended as
follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower shall not make any loans, advances, or other distributions of any kind
except (i)&nbsp;loans and advances exceeding $500,000 in the aggregate at any one time</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>outstanding to any Affiliates of the Borrower, and (ii)&nbsp;additional loans and advances
to the WOFE permitted by Section&nbsp;10.4(a) above, without the prior consent of the Bank, which
may be withheld in its absolute discretion.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Section&nbsp;10.6.</U> Section&nbsp;10.6 of the Agreement shall be amended as
follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 <U>Distributions.</U> Make any Distributions or apply any of its property or
assets to Distributions or set apart any sum or asset for the purpose of Distribution;
provided, however, that Borrower may make dividends in the aggregate maximum amount of
$600,000 per year and may repurchase or redeem stock in the aggregate maximum amount of
$600,000 per year so long as after any such transactions no Event of Default exists and the
Borrower continues to comply with Article&nbsp;11 hereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Representations and Warranties.</U> The Borrower confirms the accuracy of and remakes
as of the date hereof all of its representations, warranties contained in the Agreement. The
Borrower further represents and warrants to the Bank that all necessary action on the part of the
Borrower relating to authorization of the execution and delivery of this Amendment, and the
performance of the Obligations of the Borrower thereunder has been taken. This Amendment
constitute legal, valid and binding obligations of the Borrower, enforceable in accordance with
their respective terms. The Borrower has no defenses, offsets, claims, or counterclaims with
respect to its obligations arising under the Amendment. The execution and delivery by the Borrower
of the Amendment, and the performance by the Borrower of the Amendment, will not violate any
provision of law or the Borrower&#146;s Certificate of Incorporation or By-laws or organizational or
other documents or agreements. The execution, delivery and performance of the Amendment, and the
consummation of the transactions contemplated thereby will not violate, be in conflict with, result
in a breach of, or constitute a default under any agreement to which the Borrower is a party or by
which any of its properties is bound, or any order, writ, injunction, or decree of any court or
governmental instrumentality, and will not result in the creation or imposition of any lien, charge
or encumbrance upon any of its properties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>No Events of Default.</U> The Borrower confirms that as of the date hereof, there
exists no condition or event that constitutes (or that would after expiration of applicable grace
or cure periods constitute) an Event of Default as described in Article&nbsp;14 of the Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>No Offsets</U>. As of the date hereof, the Borrower has no defenses, offsets, claims or
counterclaims with respect to its obligations arising under the Agreement or this Amendment and all
related documents and instruments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;<U>Governing Law.</U> This Amendment, together with all of the rights and obligations of
the parties hereto, shall be construed and interpreted in accordance with the laws of the State of
New York, excluding the laws applicable to conflicts or choice of law.
</DIV>

<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties have executed this Amendment on the date first above written.
</DIV>
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    <TD width="1%">&nbsp;</TD>
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    <TD width="25%">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
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    <TD width="21%">&nbsp;</TD>
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    <TD colspan="3" valign="top" align="left">BANK OF AMERICA, N.A.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">GRAHAM CORPORATION</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
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    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Colleen O&#146;Brien
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/&nbsp;Ron Hansen</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
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    <TD>&nbsp;</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Colleen O&#146;Brien
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ron Hansen</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President</TD>
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<P align="center" style="font-size: 10pt">3
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