Exhibit 10.1

 

OMNIBUS AMENDMENT AGREEMENT

 

THIS OMNIBUS AMENDMENT AGREEMENT, dated as of January 15, 2009 (this
“Amendment”), is by and among BRAD FOOTE GEAR WORKS, INC. (f/k/a BFG Acquisition
Corp.), an Illinois corporation (the “Borrower”), 1309 SOUTH CICERO AVENUE, LLC,
a Delaware limited liability company (“1309”), 5100 NEVILLE ROAD, LLC, a
Delaware limited liability company (“5100” and, together with 1309, the
“Subsidiaries”) and BANK OF AMERICA, N.A., (f/k/a LaSalle Bank National
Association, f/k/a LaSalle National Bank, f/k/a LaSalle Bank N.I.) (the
“Lender”).

 

WHEREAS, the Borrower is party to (i) that certain Loan and Security Agreement,
dated as of January 17, 1997 (as amended to date, the “Loan Agreement”;
capitalized terms used herein, but not otherwise defined herein, shall have the
meanings given them in (or by reference in) the Loan Agreement ), by and between
the Borrower and the Lender, (ii) that certain Amended and Restated Renewal
Revolving Note, dated as of December 9, 2008 (as amended or otherwise modified
from time to time, the “Revolving Note”) in favor of the Lender, (iii) that
certain Consolidated Term Note, dated as of February 1, 2006 (as amended or
otherwise modified from time to time, the “Term Note”) in favor of the Lender,
(iv) that certain Amended and Restated Equipment Line Note, dated as of
November 10, 2006 (as amended or otherwise modified from time to time, the
“Equipment Note”) in favor of the Lender and (v) that certain Equipment Line
Note, dated as of June 30, 2007 (as amended or otherwise modified from time to
time, the “Equipment Note No. 2”) in favor of the Lender;

 

WHEREAS, the Subsidiaries are party to that certain Term Note, dated as of
January 31, 2008 (as amended or otherwise modified from time to time, the
“Subsidiary Note”) and the Borrower has guaranteed the obligations of the
Subsidiary Note pursuant to that certain Unconditional Guaranty, dated as of
January 31, 2008 (as amended or otherwise modified from time to time, the
“Subsidiary Guaranty”);

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto agree to amend the above referenced documents as follows:

 

SECTION 1.                                AMENDMENTS TO LOAN AGREEMENT. 
Effective as of the Amendment Effective Date (as hereinafter defined), the Loan
Agreement shall be amended as follows:

 

1.1                                 Section 1.1 of the Loan Agreement shall be
amended as follows:

 

(a)                                  The following definitions shall be added in
the appropriate alphabetical order:

 

“1309” shall mean 1309 South Cicero Avenue, LLC, a Delaware limited liability
company.

 

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“1309/5100 Guaranty” shall mean that certain Unconditional Guaranty, dated
January 15, 2009, executed by each of 1309 and 5100 in favor of the Lender,
whereby each of 1309 and 5100 guarantees the payment of the Indebtedness.

 

“5100” shall mean 5100 Neville Road, LLC, a Delaware limited liability company.

 

“Business Plan” shall mean a written report setting forth the objectives and
assumptions with respect to any budget.

 

“Guarantor” shall mean each of 1309, 5100 and the Parent.

 

“Hofler Agreement” shall mean that certain Agreement, dated as of December 31,
2008, by and among the Borrower and Hofler Maschinenbau GmbH.

 

“Intercompany Debt” shall mean all indebtedness owed by the Borrower to
affiliates and/or from affiliates to Borrower.

 

“Mortgages” shall mean those certain mortgages, dated January 15, 2009, by each
of 1309, 5100 and the Borrower in favor of the Lender.

 

“Parent” shall mean Broadwind Energy, Inc., a Delaware corporation, and the
parent of the Borrower.

 

“Parent Guaranty” shall mean that certain Unconditional Guaranty, dated
January 15, 2009, executed by the Parent in favor of the Lender, whereby the
Parent guarantees the payment of the Indebtedness.

 

“Pledge Agreement” shall mean that certain Pledge Agreement dated January 15,
2009 pursuant to which the Parent grants the Lender a first priority security
interest in all shares of stock of the Borrower and indebtedness to the Parent
and any promissory notes and/or instruments representing such indebtedness.

 

“Subsidiary Loan Documents” shall mean the Subsidiary Note, the Subsidiary
Guaranty, and all other agreements, instruments and documents, including,
without limitation, the assignment of leases, the negative pledges and any other
security agreements, notes, guaranties, mortgages, assignments, financing
statements, and all other writings heretofore, now, or hereafter executed by the
Borrower or any other obligor, and delivered to Lender in connection with or
relating to the Subsidiary Loan, together with all agreements, instruments and
documents referred to therein or contemplated thereby.

 

“Subsidiary Note” shall mean the promissory note dated January 31, 2008
evidencing the Subsidiary Loan executed by 1309 and 5100, and any and all
extensions, renewals, amendments, refinancings, or modifications, conversions or
consolidations thereof or thereto.

 

(b)                                 The following definitions shall be amended
by deleting the current definitions and replacing the same in their entireties
as follows:

 

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“Collateral” shall mean all property and interests in property now owned or
hereafter acquired by the Borrower or any other Person in or upon which a
security interest, lien or mortgage is granted or in which a collateral
assignment is made under this Agreement, the other Collateral Documents or any
other Loan Document or which otherwise secures repayment of the Indebtedness.

 

“Commitment Amount” shall mean, as of any applicable date of determination, Four
Million and 00/100 ($4,000,000.00) Dollars.

 

“Loan Documents” shall mean this Agreement, the Notes, the Negative Pledge
Agreement, the Parent Guaranty, the 1309/5100 Guaranty and all other agreements,
instruments and documents, including, without limitation, the Collateral
Documents, and any other security agreements, notes, guaranties, mortgages,
assignments, financing statements, and all other writings heretofore, now, or
hereafter executed by the Borrower or any other obligor, and delivered to Lender
in connection with or relating to this Agreement, together with all agreements,
instruments and documents referred to therein or contemplated thereby.

 

“Pledged Stock” shall mean the stock of the Borrower pledged under the Pledge
Agreement.

 

“Termination Date” shall mean March 15, 2009, or such earlier date upon which
the Revolving Note becomes due and payable.

 

(c)                                  The definition of “Indebtedness” shall be
amended by deleting clause (5) thereof in its entirety and replacing it with the
following.

 

“all Rate Management Obligations and all treasury management obligations
heretofore, now or hereafter owed by the Borrower to the Lender”

 

(d)                                 The definitions of “Letter of Credit” and
“Letter of Credit Outstanding” and “Stock Pledge Agreement” shall be deleted in
their entireties.

 

(e)                                  The definition of “Permitted Liens” shall
be amended by deleting clause (e) thereof in its entirety and replacing it with
the following; provided, however, the Lender shall not release any lien or
security interest it has with respect to the Purchase Machines (as defined in
the Hofler Agreement):

 

“(e)                            The security interest in the Purchase Machines
(as defined in the Hofler Agreement) granted pursuant to the Hofler Agreement.”

 

(f)                                    The definition of “Rate Management
Agreement” shall be amended by adding the following sentence to the end of such
definition:

 

“For the avoidance of doubt, “Rate Management Agreement” shall include, without
limitation (i) that certain interest rate swap transaction, entered into on
October 24, 2006, between the Borrower and the Lender and (ii) that certain
interest rate swap transaction, entered into on February 7, 2006, between the
Borrower and the Lender.”

 

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(g)                                 The definition of “Subsidiary” shall be
amended by adding the following clause to the end of such definition:

 

“;provided, however, that notwithstanding the foregoing, each of 1309 and 5100
shall be deemed to be a Subsidiary of the Borrower”

 

1.2                                 Section 2.9 of the Loan Agreement shall be
deleted in its entirety and replaced with the following:

 

“[Intentionally Deleted]”.

 

1.3                                 Section 3A2 of the Loan Agreement shall be
deleted in its entirety and replaced with the following:

 

“[Intentionally Deleted]”.

 

1.4                                 Section 3B2 of the Loan Agreement shall be
deleted in its entirety and replaced with the following:

 

“[Intentionally Deleted]”.

 

1.5                                 Section 6 of the Loan Agreement shall be
amended by deleting clause (q) thereof and replacing it in its entirety with the
following:

 

“[Intentionally Deleted]”.

 

1.6                                 Section 10 of the Loan Agreement shall be
amended and restated in its entirety to read as follows:

 

“                                          As soon as available, but not later
than one hundred twenty (120) days after the end of each fiscal year of
Borrower, Borrower shall deliver to the Lender annual audited financial
statements of Borrower and its Subsidiaries, containing the balance sheet of the
Borrower and its Subsidiaries as of the close of each such fiscal year,
statements of income and retained earnings and a statement of cash flows for
each such fiscal year; and such other comments and financial details as are
usually included in similar reports.  Such financial statements shall (a) be in
form and reporting basis satisfactory to the Lender, (b) be prepared in
accordance with GAAP by an independent certified public accounting firm selected
by Borrower and acceptable to the Lender (“Borrower’s Accounting Firm”), and
(c) contain unqualified opinions as to the fairness of the statements therein
contained.  Borrower shall also provide to the Lender any management letters
that may accompany the statements.

 

As soon as available, but not later than one hundred twenty (120) days after the
end of each fiscal year of Parent and its Subsidiaries (hereafter, collectively
“Broadwind”), Borrower shall deliver to the Lender annual audited financial
statements of Broadwind, containing the balance sheet of Broadwind as of the
close of each such fiscal year, statements of income and retained earnings and a
statement of cash flows for each such fiscal year; and such other comments and
financial details as are usually

 

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included in similar reports.  Such financial statements shall (a) be prepared in
accordance with GAAP by Borrower’s Accounting Firm and (b) contain unqualified
opinions as to the fairness of the statements therein contained.  Borrower shall
also provide to the Lender any management letters that may accompany such
statements.

 

As soon as available, but not later than forty-five (45) days after the end of
each fiscal quarter, Borrower shall deliver to the Lender: (i) internally
prepared quarterly financial statements of Borrower, in form and content
satisfactory to Lender, and (ii) a quarterly covenant compliance certificate, in
form and content satisfactory to Lender (including a certificate by the chief
executive or financial officer of Borrower containing a computation of, and
showing compliance with, each of the financial covenants contained in
Section 14.1 hereof).  The validity and accuracy of said financial statements
shall be certified by the chief executive or financial officer of the Borrower,
in a form satisfactory to the Lender.

 

As soon as available, but not later than fifteen (15) days after the end of each
calendar month, Borrower shall deliver to the Lender: (i) a monthly Borrowing
Base Certificate, (ii) a monthly accounts receivable aging and a monthly
accounts payable aging, and (iii) internally prepared monthly financial
statements of Borrower and Parent, in form and content satisfactory to Lender,
which monthly statements shall include an income statement, balance sheet and
cash flow statement.  The validity and accuracy of said financial statements
shall be certified by the chief executive or financial officer of the Borrower,
in a form satisfactory to the Lender.

 

As soon as available, but not later than the second (2nd) Business Day of each
calendar week, Borrower shall deliver to the Lender a rolling 13-week cash flow
forecast beginning with such week, that shall detail all sources and uses of
cash on a weekly basis, shall report any variances from such report delivered in
the prior week and shall report a comparison of actual cash flow versus the
forecast in the prior week.

 

As soon as available, but not later than the second (2nd) Business Day after the
end of every calendar 2-week period, Borrower shall deliver to the Lender an
updated Schedule 10.1 setting forth the identified material accounting
weaknesses of the Borrower and the Parent, including necessary steps to correct
such issues, the timeframe to correct such issues and the Person responsible for
each corrective step to correct such issues indicating the current status of the
items listed thereon.  In the event that Borrower’s Accounting Firm has
completed a written report with respect to Schedule 10.1 on or prior to
March 15, 2009, Borrower shall deliver to the Lender a copy of such report
within three (3) Business Day of receipt thereof by the Borrower.

 

As soon as available, but not later than February 20, 2009, Borrower shall
deliver to the Lender a written review by High Ridge Partners (the “Consultant”)
consistent with the scope of the engagement letter executed by the Borrower and
the Consultant.

 

Borrower shall also promptly provide the Lender with such other information,
financial or otherwise, concerning the Borrower or Parent, as the Lender may
reasonably request from time to time.

 

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The Lender shall make any and all audits and investigations which it deems
reasonably necessary in connection with the Collateral.  For the purposes of
this Agreement, the Lender shall have free and ready access at all times during
normal business hours, upon reasonable advance oral or written notice (unless in
the Lender’s reasonable judgment a rapid deterioration or loss to any Collateral
is threatened, in which case no notice shall be given and access shall not be
limited to normal business hours), to the books of account, records, papers and
documents of Borrower.  Without limiting the generality of the foregoing, the
Lender shall be entitled to conduct an annual field audit of the Borrower or
more frequent audits if deemed reasonably necessary by the Lender under the
circumstances then existing, including, without limitation, at any time prior to
the Termination Date, and Borrower shall reimburse the Lender for all reasonable
costs and expenses incurred by Lender for such audits.

 

The Borrower shall deliver to the Lender all of the additional items set forth
on Schedule 10.2 on or prior to the date set forth opposite such item on
Schedule 10.2.”

 

1.7                                 Section 14.1 of the Loan Agreement shall be
amended and restated in its entirety (retroactive to December 31, 2008) to read
as follows:

 

“Borrower covenants to Lender and agrees that so long as any Indebtedness shall
remain unpaid:

 

(a)                                  No Distributions.  Borrower will make no
distributions or dividends of any kind, including without limitation, any loans
or advances to employees or officers, except as expressly permitted by
Section 14.3(i) hereof.

 

(b)                                 Limitation on Intercompany Debt.  All
Intercompany Debt as of the date hereof is set forth on Schedule
14.1(b) hereto.  Upon the incurrence of any additional Intercompany Debt, the
Borrower shall promptly, and in any event within five (5) Business Days provide
an updated Schedule 14.1(b).  All Intercompany Debt shall be (i) subordinated to
all present and future Indebtedness owed by the Borrower and/or the Guarantors
to Lender in a manner satisfactory to the Lender and (ii) evidenced by a
promissory note or other instrument; provided, however, that notwithstanding the
generality of the foregoing, with respect to any Intercompany Debt outstanding
as of January 15, 2009, the Borrower shall deliver the items set forth in
clauses (i) and (ii) of this sentence on or prior to February 6, 2009.

 

(c)                                  Subordinated Debt Payments.  Borrower will
not make any payments on Subordinated Debt or on Intercompany Debt, other than
non-cash payments of interest booked as capitalized interest by the Parent and
Borrower in respect of the Intercompany Debt owed to the Parent.

 

(d)                                 Senior Debt to EBITDA.  As of the end of
each of its fiscal quarters beginning with the quarter ended June 30, 2008, the
Borrower shall maintain a ratio of Senior Debt to annualized EBITDA of not
greater than 3.0 to 1.0.  This covenant will be tested quarterly beginning with
the fiscal quarter ended June 30, 2008.

 

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(e)                                  Cash Flow Coverage.  As of the end of each
of its fiscal quarters beginning with the quarter ended March 31, 2008, the
Borrower shall maintain a Cash Flow Coverage of not less than the following:
(i) 1.5 to 1.0 at March 31, 2008, (ii) 2.0 to 1.0 at June 30, 2008 and
September 30, 2008 and (iii) 1.25 to 1.0 at December 31, 2008 and thereafter (to
be tested quarterly by the Lender commencing with the quarter ended
March 31, 2008).

 

(f)                                    Minimum EBITDA.  The Borrower shall
maintain a minimum EBITDA of not less than $10,250,000 for the twelve months
ended December 31, 2008.  As of the end of each calendar month beginning with
the month ended January 31, 2009 and ending with the month ended February 28,
2009, the Borrower shall maintain a minimum monthly EBITDA of not less than the
following: (i) $417,180 for the month of January, and (ii) $455,430 for the
month of February; provided, however, that for the calendar year 2009, the
Borrower shall maintain a cumulative EBITDA of not less than $923,940 for the
two months ended February 28, 2009.

 

(g)                                 Cash on Hand.  Borrower shall at all times
maintain cash on hand of not less than $1,000,000; provided, however, that
Borrower shall have a two (2) Business Day cure period to correct any shortfall;
provided, further, that Borrower shall only be allowed such cure period a
maximum of two (2) occurrences.

 

(h)                                 Capital Expenditure.  Borrower shall not
make any Capital Expenditures, except with respect to (i) the Hofler Agreement,
(ii) those Capital Expenditures set forth on Schedule 14.1(h) hereto and
(iii) those made with equity contributions from the Parent.

 

For purposes of the foregoing financial covenants, the following definitions
shall have the following meaning:

 

“Affiliate” of any Person shall mean (a) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person (b) any officer or director of such Person, and (c) with respect to the
Lender, any entity administered or managed by the Lender, or an Affiliate or
investment advisor thereof and which is engaged in making, purchasing, holding
or otherwise investing in commercial loans.  A Person shall be deemed to be
“controlled by” any other Person if such Person possesses, directly or
indirectly, power to direct or cause the direction of the management and
policies of such Person whether by contract, ownership of voting securities,
membership interests or otherwise.  The term “Affiliate” shall include, without
limitation, the Borrower’s parent company.

 

“Capital Expenditures” shall mean all expenditures (including capitalized lease
obligations) which, in accordance with GAAP, would be required to be capitalized
and shown on the consolidated balance sheet of the Borrower, but excluding
expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed (i) from insurance proceeds (or
other similar recoveries) paid on account of the loss of or damage to the assets
being replaced or restored or (ii) with awards of

 

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compensation arising from the taking by eminent domain or condemnation of the
assets being replaced.

 

“Cash Flow Coverage” shall have the meaning set forth in Section 1.1 hereof.

 

“Debt” shall mean, as to any Person, without duplication, (a) all indebtedness
of such Person; (b) all borrowed money of such Person (including principal,
interest, fees and charges), whether or not evidenced by bonds, debentures,
notes or similar instruments; (c) all obligations to pay the deferred purchase
price of property or services; (d) all obligations, contingent or otherwise,
with respect to the maximum face amount of all letters of credit (whether or not
drawn), bankers’ acceptances and similar obligations issued for the account of
such Person, and all unpaid drawings in respect of such letters of credit,
bankers’ acceptances and similar obligations; (e) all indebtedness secured by
any lien on any property owned by such Person, whether or not such indebtedness
has been assumed by such Person (provided, however, if such Person has not
assumed or otherwise become liable in respect of such indebtedness, such
indebtedness shall be deemed to be in an amount equal to the fair market value
of the property subject to such lien at the time of determination); (f) the
aggregate amount of all capitalized lease obligations of such Person; (g) all
contingent liabilities of such Person, whether or not reflected on its balance
sheet; (h) all hedging obligations of such Person; (i) all Debt of any
partnership of which such Person is a general partner; and (j) all monetary
obligations of such Person under (i) a so-called synthetic, off-balance sheet or
tax retention lease, or (ii) an agreement for the use or possession of property
creating obligations that do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would be characterized
as the indebtedness of such Person (without regard to accounting treatment). 
Notwithstanding the foregoing, Debt shall not include trade payables and accrued
expenses incurred by such Person in accordance with customary practices and in
the ordinary course of business of such Person.

 

“Depreciation” shall mean the total amounts added to depreciation, amortization,
obsolescence, valuation and other proper reserves, as reflected on the
Borrower’s financial statements and determined in accordance with GAAP.

 

“EBITDA” shall mean, for any period, (a) the sum for such period of:  (i) Net
Income, plus (ii) Interest Charges, plus (iii) federal and state income taxes
(including the Illinois replacement tax), plus (iv) Depreciation and
amortization expense, plus (v) non-cash management compensation expense, plus
(vi) all other non-cash charges, minus (b) the sum for such period of
(i) Unfinanced Capital Expenditures and (ii) income or loss attributable to
equity in any Affiliate or Subsidiary, in each case to the extent included in
determining Net Income for such period.

 

“Interest Charges” shall mean, for any period, the sum of:  (a) all interest,
charges and related expenses payable with respect to that fiscal period to a
lender in connection with borrowed money or the deferred purchase price of
assets that are treated as interest in accordance with GAAP, plus (b) the
portion of capitalized lease obligations with

 

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respect to that fiscal period that should be treated as interest in accordance
with GAAP, plus (c) all charges paid or payable (without duplication) during
that period with respect to any hedging agreements.

 

“Net Income” shall mean, with respect to the Borrower for any period, the net
income (or loss) of the Borrower for such period as determined in accordance
with GAAP, excluding any extraordinary gains and any gains from discontinued
operations.

 

“Senior Debt” shall mean all Debt of the Borrower excluding Subordinated Debt.

 

“Unfinanced Capital Expenditures” shall mean all Capital Expenditures that are
financed solely from working capital of the Borrower and are not otherwise
financed in whole or in part by any third party; notwithstanding the generality
of the foregoing, for clarification, “Unfinanced Capital Expenditures” shall not
include any Capital Expenditures financed directly by the Parent or with the
proceeds of Intercompany Debt owed to the Parent or other equity contributions
from the Parent.”

 

The financial covenants set forth hereinabove shall be computed on a
consolidated basis in accordance with GAAP.”

 

1.8                                 Section 14.3 of the Loan Agreement shall be
amended as follows:

 

(a)                                  The reference to “$10,000.00” in clause
(f) thereto shall be deleted and replaced in its entirety with “$50,000.00”.

 

(b)                                 The last sentence of clause (i) thereto
shall be amended and restated in its entirety to read as follows:

 

Notwithstanding the foregoing, the Borrower may make non-cash payments of
interest booked as capitalized interest by the Parent and Borrower in respect of
the Intercompany Debt owed to the Parent.

 

1.9                                 Section 15 of the Loan Agreement shall be
amended and restated in its entirety to read as follows:

 

The Notes and any and all other Indebtedness shall, at the option of Lender and
notwithstanding any maturity to the contrary, become immediately due and
payable, without notice or demand, upon the occurrence of any of the following
events of default (each an “Event of Default”):

 

(a)                                  Borrower shall fail to pay when due, any
Indebtedness, including, without limitation, any principal of or interest on any
Note, or any other sum payable by the Borrower to the Lender; or

 

(b)                                 Borrower or any Guarantor shall fail duly
and punctually to perform or observe any other agreement, covenant or obligation
binding on the Borrower or such Guarantor under this Agreement or any of the
other Loan Documents; or

 

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(c)                                  Any warranty, representation, statement or
financial statement made by Borrower in this Agreement or by Borrower or any
Guarantor in any other Loan Document or in any other agreement, document,
instrument, request, report, schedule or certificate executed by Borrower or any
Guarantor and delivered to the Lender shall prove to have been incorrect or
misleading in any material respect when made; or

 

(d)                                 Any event occurs or condition exists (other
than those described in clauses (a) through (c) above) which is specified as an
event of default under any of the Loan Documents; or

 

(e)                                  Filing of a petition in bankruptcy by or
against Borrower or any Guarantor, or institution of any proceeding by Borrower
or any Guarantor for corporate reorganization, readjustment, or similar
arrangement under any insolvency statute (and with respect to any involuntary
petition or proceeding, such petition or proceeding is not dismissed within
sixty (60) days after filing), filing of any proceeding by or against Borrower
or any Guarantor for appointment of a receiver, trustee or liquidator of it, him
or her, or all or any substantial part of its, his or her assets or properties,
filing of a petition for dissolution or liquidation of Borrower or any
Guarantor, or making by Borrower or any Guarantor of an assignment for the
benefit of creditors, or filing or imposition of any tax lien against the
Collateral, or Borrower or any Guarantor admits in writing its, his or her
inability to pay its, his or her debts as they become due, or Borrower ceases
doing business as a going concern; or

 

(f)                                    The Lender, in good faith, deems itself
reasonably insecure for any reason due to any material adverse change in the
business, assets or liabilities, financial condition, results of operations or
business prospects of Borrower, or in the financial condition of any Guarantor;
or

 

(g)                                 There shall occur any uninsured damage to or
loss, theft, or destruction of any of the Collateral exceeding $50,000.00; or

 

(h)                                 All or any portion of the Collateral is
attached, seized, levied upon or subjected to a writ or distress warrant, or
comes within the possession of any receiver, trustee, custodian or assignee for
the benefit of creditors; or an application is made by Borrower or any other
Person for the appointment of a receiver, trustee, or custodian for such
Collateral; or

 

(i)                                     A notice of lien, levy or assessment is
filed of record with respect to all or any portion of the Collateral by the
United States, or any department, agency or instrumentality thereof, or by any
state, county, municipal or other governmental agency, including, without
limitation, the PBGC, or any taxes or debts owing to any of the foregoing
becomes a lien or encumbrance upon all or any portion of the Collateral; or

 

(j)                                     Creation by Borrower or any Guarantor of
a security interest in any Collateral now existing or hereafter acquired by
Borrower or any Guarantor in favor of any Person other than the Lender and the
Permitted Liens; or

 

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(k)                                  Borrower or any Guarantor is enjoined,
restrained, or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting all or any part of its
business affairs; or

 

(l)                                     Any judgment or order requiring the
payment of money exceeding $50,000.00 shall be rendered against Borrower and
such judgment or order shall remain unsatisfied or undischarged and in effect
for thirty (30) consecutive days without a stay of enforcement or execution,
provided, however, this subparagraph shall not apply to any judgment for which
Borrower is fully insured, and with respect to which the insurer has admitted
liability in writing; or

 

(m)                               This Agreement or any other Loan Document
shall at any time after its execution and delivery and for any reason cease
(i) to create a valid and perfected first priority security interest in such of
the Collateral owned by Borrower or any Guarantor or in which Borrower or any
Guarantor has rights therein; or (ii) to be in full force and effect or shall be
declared null and void, or the validity or enforceability hereof shall be
contested by the Borrower or Borrower shall deny it has any further liability or
obligation hereunder; or

 

(n)                                 Any event shall occur which results in the
acceleration of the maturity of any indebtedness of Borrower to any other lender
or creditor exceeding $50,000.00; or

 

(o)                                 Any proceeding shall be commenced or filing
made under applicable law by any stockholder, officer or director of Borrower or
any Guarantor to dissolve or liquidate the Borrower or any Guarantor, or any
order, judgment or decree shall be entered against Borrower or any Guarantor
decreeing its involuntary dissolution or split up; or Borrower or any Guarantor
shall otherwise dissolve or cease to exist; or

 

(p)                                 An event of default shall occur under the
Pledge Agreement, and shall not be cured within the applicable grace period, if
any; or

 

(q)                                 If the Lender receives a notice from any
other secured party of a proposed disposition of the Collateral or any portion
thereof or otherwise learns of any such proposed disposition (whether or not
such security interest is permitted by the terms of this Agreement; nothing in
this subsection shall be construed to constitute consent by Lender to the
creation of any security interest in the Collateral other than the Lender’s
security interest); or

 

(r)                                    Nonpayment by Borrower of any Rate
Management Obligation when due or the breach by Borrower of any term, provision
or condition contained in any Rate Management Agreement; or

 

(s)                                  An event of default shall occur under any
of the Subsidiary Loan Documents, and shall not be cured within the applicable
grace period, if any.

 

1.10                           Notwithstanding anything in the Loan Agreement to
the contrary, all notices and other communications intended for the Lender shall
be sent to the following address:

 

11

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Bank of America, N.A.

One Federal Street

Boston, MA 02110

Attention:  Sandra H. Bennett

 

1.11                           Schedule 10.1 to this Amendment shall be added to
the Loan Agreement as Schedule 10.1 thereto.

 

1.12                           Schedule 10.2 to this Amendment shall be added to
the Loan Agreement as Schedule 10.2 thereto.

 

1.13                           Schedule 14.1(b) to this Amendment shall be added
to the Loan Agreement as Schedule 14.1(b) thereto.

 

1.14                           Schedule 14.1(h) to this Amendment shall be added
to the Loan Agreement as Schedule 14.1(h) thereto.

 

1.15                           For clarification, the two (2) paragraphs added
to Section 2 of the Loan Agreement by the Thirty Second Amendment to Loan and
Security Agreement and Section 3A added to the Loan Agreement by the Thirty
First Amendment to Loan and Security Agreement shall continue to be in full
force and effect.

 

SECTION 2.   AMENDMENTS TO NOTES.

 

2.1                                 Notwithstanding any other provision of any
of the Notes to the contrary, the Borrower may not select to have the Notes bear
interest at a fixed rate.

 

2.2                                 Notwithstanding any other provision of any
of the Notes to the contrary, (i) as of the Amendment Effective Date, the Notes
shall bear interest at a rate equal to the greater of the (A) the interest rate
in effect with respect to such Loan plus two and one-half percent (2.5%) and
(B) six percent (6%) and (ii) with respect to Interest Periods commencing after
the Amendment Effective Date, the Notes shall bear interest at a rate equal to
the greater of (A) LIBOR plus five percent (5%) and (ii) six percent (6%);
provided, that for the purposes of clause (ii) above, “LIBOR” shall be defined
as the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Lender from time to time)
at approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period, for U.S. dollar deposits in an amount
comparable to the relevant Loan (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period.

 

2.3                                 Notwithstanding any other provision of any
of the Notes or the Loan Agreement to the contrary, the Borrower shall not incur
and the Lender shall not charge any prepayment penalty.

 

SECTION 3.   AMENDMENTS TO SUBSIDIARY NOTE.

 

3.1                                 Notwithstanding any other provision of the
Subsidiary Note to the contrary, (i) as of the Amendment Effective Date, the
Subsidiary Note shall bear interest at a rate equal to the

 

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greater of the (A) the interest rate in effect with respect to such Loan plus
two and one-half percent (2.5%) and (B) six percent (6%) and (ii) with respect
to Interest Periods commencing after the Amendment Effective Date, the
Subsidiary Note shall bear interest at a rate equal to the greater of (A) LIBOR
plus five percent (5%) and (ii) six percent (6%); provided, that for the
purposes of clause (ii) above, “LIBOR” shall be defined as the rate per annum
equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published
by Reuters (or other commercially available source providing quotations of BBA
LIBOR as designated by the Lender from time to time) at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period, for U.S. dollar deposits in an amount comparable to the
relevant Loan (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period.

 

3.2                                 Notwithstanding any other provision of the
Subsidiary Note to the contrary, the Subsidiary shall not be bound by or subject
to compliance with the financial covenant in such Subsidiary Note.

 

SECTION 4.   WAIVER.  The Lender hereby waives the Borrower’s violation of the
financial covenants set forth in Sections 14.1(e) and (f) solely for the period
from December 31, 2008 up to but not including the Amendment Effective Date and
only to the extent that the Borrower would not have been in violation of such
Sections as amended by this Amendment; provided, however, such waiver is limited
solely to such specific covenant violations for such periods and shall not
waive, suspend or effect any other default by Borrower under the Loan Agreement,
and the Lender expressly reserves all of its rights with respect to any such
other default(s).

 

SECTION 5.   CONSENT TO HOFLER AGREEMENT.  The Lender hereby consents to the
Borrower’s execution and delivery of the Hofler Agreement.

 

SECTION 6.   CONDITIONS PRECEDENT.  This Amendment shall become effective on the
date (the “Amendment Effective Date”) when the Lender shall have received the
following:

 

6.1                                 Amendment.  This Amendment, duly executed by
the parties hereto.

 

6.2                                 Parent Pledge.  The Parent Pledge, duly
executed by the Parent, and delivery to the Lender of (i) the Pledged Stock
along with signed stock powers, executed in blank and (ii) any promissory notes
or other instruments, if any, evidencing intercompany debt.

 

6.3                                 Parent Guaranty.  The Parent Guaranty, duly
executed by the Parent.

 

6.4                                 1309/5100 Guaranty.  The 1309/5100 Guaranty,
duly executed by 1309 and 5100.

 

6.5                                 Mortgages.  A duly executed mortgage, with
respect to each of the following properties:

 

(a)                                  1309 S. Cicero Avenue, Cicero, Illinois,
60804;

 

(b)                                 1310 S. 47th Avenue, Cicero, Illinois,
60804; and

 

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(c)                                  5100 Neville Road, Pittsburgh,
Pennsylvania, 15225.

 

6.6                                 Resolutions.  A copy of the resolutions, in
form and substance satisfactory to the Lender, of the Borrower and each
Guarantor, as applicable, authorizing (i) the execution, delivery and
performance of this Amendment, the Subsidiary Loan Documents and the other Loan
Documents to which it is a party, (ii) the transactions contemplated under this
Amendment, the Subsidiary Loan Documents and the other Loan Documents and
(iii) the granting of the security interest created pursuant to the Collateral
Documents.; all as certified by the secretary or assistant secretary of the
Borrower and each Guarantor, as applicable.

 

6.7                                 Organizational Documents.  Copies of the
organizational documents of the Borrower and each Guarantor, including certified
copies of any formation documents and a certificate of good standing,; all
certified by the secretary or assistant secretary of the Borrower and each
Guarantor, as applicable.

 

6.8                                 Incumbency.  A certificate of the secretary
or assistant secretary of the Borrower and each Guarantor, certifying the names
and true signatures of the officers authorized to sign this Amendment, the
Subsidiary Loan Documents and the other Loan Documents.

 

6.9                                 Opinion.  A favorable opinion of counsel to
the Borrower and each Guarantor, dated the Amendment Effective Date, in form and
substance satisfactory to the Lender.

 

6.10                           Consultant.  An executed engagement letter, duly
executed by the Borrower and the Consultant.

 

6.11                           Consent.  An executed copy of that certain letter
agreement dated as of January 15, 2009 by and between Hofler Maschinenbau GmbH
and the Borrower consenting to the Lender’s lien on the Purchase Machines (as
defined in the Hofler Agreement).

 

6.12                           Amendment and Waiver Fee; Expenses.  Payment by
the Borrower of a $25,000 amendment and waiver fee, as well as all reasonable
fees and expenses required to be reimbursed or paid by the Borrower pursuant to
Section 8.2 hereof, including, without limitation, the fees and expenses of
Mayer Brown LLP, counsel to the Lender, incurred in connection with the
drafting, negotiation, execution, delivery and effectiveness of this Amendment.

 

6.13                           Revised 2009 Projected Budget.  A copy of the
2009 projected budget for each of the Borrower and the Parent, it being agreed
that the Lender may share the 2009 projected budget with the Consultant.

 

6.14                           Parent’s Business Plan.  A copy of the Business
Plan for the Parent and its subsidiaries.

 

6.15                           13-Week Cash Flow.  A rolling 13-week cash flow
forecast for the Borrower beginning with the week of January 13, 2009, detailing
all sources and uses of cash on a weekly basis.

 

14

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SECTION 7.   REPRESENTATIONS AND WARRANTIES.  To induce the Lender to enter into
this Amendment, the Borrower and each Guarantor hereby represents and warrants
to the Lender as follows:

 

7.1                                 Due Authorization, Non-Contravention, etc. 
The execution, delivery and performance by the Borrower and each Guarantor of
this Amendment are within such party’s corporate or company powers, as
applicable, have been duly authorized by all necessary corporate or company
action, as applicable, and do not

 

(a)                                  contravene such party’s organizational
documents;

 

(b)                                 contravene any contractual restriction, law
or governmental regulation or court decree or order binding on or affecting such
party; or

 

(c)                                  result in, or require the creation or
imposition of, any Lien on any of the Borrower’s or any Guarantors’ properties,
other than the Permitted Liens.

 

7.2                                 Government Approval, Regulation, etc.  No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or other Person is required for
the due execution, delivery or performance by the Borrower of this Amendment.

 

7.3                                 Validity, etc.  This Amendment constitutes
the legal, valid and binding obligation of the Borrower and each Guarantor
enforceable in accordance with its terms.

 

7.4                                 Event of Default.  No Event of Default shall
occur as a result of, or after giving effect to, this Amendment.

 

7.5                                 Acknowledgements.  The Borrower and each of
the Guarantors acknowledge that the amount of principal owing with respect to
the Indebtedness arising under the Loan Agreement, the Subsidiary Loan Documents
or the other Loan Documents as of date of this Agreement is 24,457,002.89. 
Without in any manner limiting the generality of the release set forth in
Section 8.4 hereof, the Borrower and the Guarantors hereby represent, warrant,
covenant and agree that there exist no offsets, counterclaims or defenses to
payment or performance of the obligations set forth in the Loan Agreement, the
Subsidiary Loan Documents or the other Loan Documents and, in consideration
hereof, expressly waive any and all such offsets, counterclaims and defenses
arising out of any alleged acts, transactions or omissions on the part of the
Lender arising (or otherwise relating to the period) on or prior to the
Amendment Effective Date.

 

SECTION 8.   MISCELLANEOUS.

 

8.1                                 Continuing Effectiveness, etc.  This
Amendment shall be deemed to be an amendment to the Loan Agreement, the
Subsidiary Loan Documents and the other Loan Documents (including as such term
is amended herein), including as amended hereby, shall remain in full force and
effect and is hereby ratified, approved and confirmed in each and every
respect.  After the effectiveness of this Amendment in accordance with its
terms, all references to the Loan Agreement, the Subsidiary Loan Documents and
each Loan Document in the Loan Documents or the Subsidiary Loan Documents or in
any other document, instrument, agreement

 

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or writing shall be deemed to refer to the Loan Agreement or such other Loan
Document or Subsidiary Loan Document as amended hereby.

 

8.2                                 Payment of Costs and Expenses.  The Borrower
agrees to pay on demand all expenses of the Lender (including the fees and
out-of-pocket expenses of counsel to the Lender) in connection with the
drafting, negotiation, execution, delivery and effectiveness of this Amendment.

 

8.3                                 General Credit Agreement Compliance.  All
provisions of the Loan Agreement, the Subsidiary Loan Documents and the other
Loan Documents (as expressly amended in Sections 1, 2 and 3) shall continue in
full force and effect in accordance with the provisions thereof and the Borrower
and the Guarantors reaffirm all their agreements under the Loan Agreement, the
Subsidiary Loan Documents and the other Loan Documents.  The Borrower and the
Guarantors shall comply with the provisions of their respective Loan Documents
and Subsidiary Loan Documents, including, without limitation, the timely payment
of all scheduled principal and interest payments.

 

8.4                                 Release and Covenant Not to Sue.  In
consideration of the agreements and understandings in this Agreement, the
Borrower and each Guarantor jointly and severally, for itself and on behalf of
the Borrower’s Derivative/Successor Persons, hereby knowingly and voluntarily,
unconditionally and irrevocably, absolutely, finally and forever releases,
acquits and discharges each Lender Released Party from any Claim relating in any
manner whatsoever to any of the Loan Documents, including any transaction
contemplated thereby or undertaken in connection therewith, or otherwise to the
Borrower’s or Guarantors’ credit relationship with the Lender, which relates or
may relate in any manner whatsoever to any facts, known or unknown, in existence
on or at any time prior to the Amendment Effective Date (each a
“Borrower-Related Claim”).

 

The Borrower and each Guarantor hereby knowingly and voluntarily,
unconditionally and irrevocably, absolutely finally and forever covenants that
it shall refrain, and further shall direct any Derivative/Successor Person to
refrain, from commencing or otherwise prosecuting any action, suit or other
proceeding of any kind, nature, character, or description, including in law or
in equity, against any Lender Released Party on account of any Borrower-Related
Claim.  Each Lender Released Party shall be entitled to enforce this covenant
through specific performance.  In addition to any other liability which shall
accrue upon the breach of this covenant, the breaching party (including, any
Derivative/Successor Person of the Borrower or any Guarantor that commences or
prosecutes any such action, suit or other proceeding) shall be liable to such
Lender Released Party for all reasonable attorneys’ fees and costs incurred by
such party in the defense of any such action, suit or other proceeding.

 

The following terms shall have the following definitions when used in this
Section 8.4:

 

“Claims” shall mean, with respect to the Borrower and/or any Guarantor, any and
all claims, counterclaims, actions, causes of action (including, any relating in
any manner to any existing litigation or investigation), suits, obligations,
controversies, defenses, debts, liens, contracts, agreements, covenants,
promises, liabilities, damages, penalties, demands, threats, compensation,
losses, costs, judgments, orders, interest, fee, or expense

 

16

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(including attorneys’ fees and expenses) or other similar items of any kind,
type, nature, character or description, including, whether in law, equity or
otherwise, whether now known or unknown, whether in contract or in tort, whether
choate or inchoate, whether contingent or vested, whether liquidated or
unliquidated, whether fixed or unfixed, whether matured or unmatured, whether
suspected or unsuspected, and whether or not concealed, sealed or hidden, of any
of the Borrowers and/or which may be asserted by the Borrower and/or any
Guarantor, through the Borrower and/or any Guarantor or otherwise on the behalf
of the Borrower and/or any Guarantor (including those which may be asserted on
any derivative basis), which have existed at any time on or prior to the date
hereof.

 

“Derivative/Successor Person” shall mean, with respect to the Borrower or any
Guarantor, any person or other entity (including any former, current, or future
employee, officer, agent, attorney, board member, shareholder, parent,
subsidiary, partnership, joint venture, other affiliate, spouse, relative, heir,
beneficiary, legal representative, creditor, successor or assign) that may
assert or may attempt to assert any Claim by or otherwise belonging to the
Borrower or any such Guarantor, through the Borrower or such Guarantor or
otherwise on behalf of the Borrower or such Guarantor (including on any
derivative basis).

 

“Lender Released Parties” shall mean the Lender and each of its former, current,
and future subsidiaries, parents, partnerships, joint ventures, other
affiliates, officers, directors, employees, attorneys, agents (including
consultants), assigns, heirs, executors, administrators, predecessors,
successors and assigns.

 

8.5                                 Severability.  Any provision of this
Amendment which is prohibited or unenforceable in any jurisdiction shall, as to
such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Amendment or affecting the validity or enforceability of such provision in
any other jurisdiction.

 

8.6                                 Headings.  The various headings of this
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.

 

8.7                                 Execution in Counterparts.  This Amendment
may be executed by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall constitute together but
one and the same agreement.

 

8.8                                 Governing Law.  THIS AMENDMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF ILLINOIS (INCLUDING 735 ILCS SECTION 105/5-5), BUT OTHERWISE WITHOUT
GIVING EFFECT TO ANY OF SUCH STATE’S CONFLICTS-OF-LAW PROVISIONS.

 

8.9                                 Successors and Assigns.  This Amendment
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Omnibus Amendment
Agreement as of the date first set forth above.

 

 

 

BRAD FOOTE GEAR WORKS, INC.

 

 

 

 

 

 

 

 

By:

 /s/ Ralph Placzek

 

 

Name: Ralph Placzek

 

 

Title: Vice President – Finance and Treasurer

 

 

 

 

 

 

 

 

1309 SOUTH CICERO AVENUE, LLC

 

 

 

 

 

 

 

 

By:

 /s/ Ralph Placzek

 

 

Name: Ralph Placzek

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

 

5100 NEVILLE ROAD, LLC

 

 

 

 

 

 

 

 

By:

 /s/ Ralph Placzek

 

 

Name: Ralph Placzek

 

 

Title: Authorized Signatory

 

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BANK OF AMERICA, N.A., as Lender

 

 

 

 

 

 

 

 

By:

 /s/ Katherine M. Novey

 

 

Name: Katherine M. Novey

 

 

Title: Senior Vice President

 

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