**Exhibit 10.2**

 

THIRD OMNIBUS AMENDMENT AGREEMENT

 

THIS THIRD OMNIBUS AMENDMENT AGREEMENT, datedas of August 7, 2009 (this “Amendment”), is by and among BRAD FOOTEGEAR 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/aLaSalle Bank N.I.) (the “Lender”).

 

WHEREAS, the Borrower is party to (i) thatcertain Loan and Security Agreement, dated as of January 17, 1997 (asamended to date, the “Loan Agreement”; capitalized terms used herein, butnot otherwise defined herein, shall have the meanings given them in (or byreference in) the Loan Agreement ), by and between the Borrower and the Lender,(ii) that certain Amended and Restated Renewal Revolving Note, dated as ofDecember 9, 2008 (as amended or otherwise modified from time to time, the“Revolving Note”) in favor of the Lender, (iii) that certainConsolidated Term Note, dated as of February 1, 2006 (as amended orotherwise modified from time to time, the “Term Note”) in favor of theLender, (iv) that certain Amended and Restated Equipment Line Note, datedas of November 10, 2006 (as amended or otherwise modified from time totime, the “Equipment Note”) in favor of the Lender and (v) thatcertain Equipment Line Note, dated as of June 30, 2007 (as amended orotherwise modified from time to time, the “Equipment Note No. 2”)in favor of the Lender;

 

WHEREAS, the Subsidiaries are party to thatcertain Term Note, dated as of January 31, 2008 (as amended or otherwisemodified from time to time, the “Subsidiary Note”) and the Borrower hasguaranteed the obligations of the Subsidiary Note pursuant to that certainUnconditional Guaranty, dated as of January 31, 2008 (as amended orotherwise modified from time to time, the “Subsidiary Guaranty”);

 

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

 

SECTION 1.           AMENDMENTSTO LOAN AGREEMENT.  Effective as of theAmendment Effective Date (as hereinafter defined), the Loan Agreement shall beamended as follows:

 

1.1           Section 1.1 of the Loan Agreementshall be amended as follows:

 

(a)           The following definitions of“Intercompany Line of Credit” and “Total Revenue” shall be added in theappropriate alphabetical order:

 

“**IntercompanyLine of Credit**” shall mean that certain subordinated, non-interestbearing, line of credit pursuant to which the Borrower may borrow from Parent,on a revolving basis, up to a maximum principal amount of $3,000,000.00, whichshall be (i) subordinated to all present and future Indebtedness owed bythe Borrower and/or the Guarantors to Lender in a manner satisfactory to theLender and (ii) evidenced by a 

 

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promissory note or otherinstrument, which shall be delivered to the Lender on or prior to August 13,2009.

 

“**Total Revenue**” shall mean, for any period, the aggregate ofall amounts which would be included as total revenue on the income statementsof the Borrower for such period.

 

(b)           The definition of “Intercompany Debt”shall be amended by deleting the current definition and replacing the same inits entirety as follows”

 

“**IntercompanyDebt**” shall mean all indebtedness owed by the Borrower to Affiliates,other than the Intercompany Line of Credit and Intercompany Trade Payables.

 

1.2           The final paragraph of Section 12 ofthe Loan Agreement shall be amended and restated in its entirety to read asfollows:

 

“If Borrower shall at anytime or times hereafter fail to obtain and/or maintain any of the policies ofinsurance required herein, or fail to pay any premium in whole or in partrelating to such policies, after ten (10) days written notice to Borrower,the Lender may, but shall not be obligated to, obtain and/or cause to bemaintained insurance coverage(s) required herein, and pay all or any partof the premium therefor, without waiving any default by Borrower; and any sumsso disbursed shall be additional loans to Borrower by Lender payable on demandand such loans shall bear interest at ten percent (10%).  In the event of any loss or damage to anyCollateral exceeding, individually or in the aggregate, $100,000.00 in valuefor any calendar year, Borrower will give immediate notice to the Lender and,in the case of any insured loss or damage, the Lender may make proof of loss ifnot made by Borrower within twenty (20) days after such occurrence.  In addition, the Lender shall have the rightto settle and compromise any and all claims exceeding $100,000.00 under any ofthe policies required to be maintained by Borrower hereunder and Borrowerhereby appoints the Lender as its attorney-in-fact with power to demand,receive, and receipt for all monies payable thereunder, to execute in the nameof Borrower or the Lender or both any proof of loss, notice, draft or otherinstruments in connection with such policies or any loss thereunder andgenerally to do and perform any and all acts as Borrower, but for thisappointment might or could perform.  Ifon the date of a loss, no Event of Default shall have occurred and becontinuing, Borrower will be allowed to employ the insurance proceeds torestore any portion of the Collateral which has been damaged or destroyed.”

 

1.3           Section 13.1(f) of the LoanAgreement shall be amended and restated in its entirety to read as follows:

 

“(f)          The Borrower, 1309, 5100 or the Parent, as applicable,is the sole lawful owner of the Collateral. The Borrower has the sole right and lawful authority to deliver thisAgreement.  The Collateral and every partthereof is, and will hereafter remain, free and clear of all securityinterests, liens, attachments, levies, and encumbrances of every kind, natureand description, except the security interest of the Lender and PermittedLiens.  The Borrower and/or theapplicable Guarantor will warrant and defend the Collateral 

 

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against any claims anddemands of all Persons at any time claiming the same or any interest thereinadverse to the Lender; and”

 

1.4           Section 13.1(m) of the LoanAgreement shall be amended and restated in its entirety to read as follows”

 

“(m)        All federal, state and local tax returns (including,but not limited to, income and payroll tax returns) and other reports requiredto be filed by or on behalf of the Borrower have been filed and all Chargesthat are due and payable have been paid;”

 

1.5           Sections 14.1(b) through (g) ofthe Loan Agreement shall be amended and restated in their entirety to read asfollows:

 

“(b)         Limitation on IntercompanyDebt, Intercompany Trade Payables and Intercompany Line of Credit.

 

(i)            All Intercompany Debt as of March 13,2009 is set forth on Part 1 of Schedule 14.1(b) hereto.  Upon the incurrence of any additionalIntercompany Debt, the Borrower shall promptly, and in any event within five (5) BusinessDays provide an updated Schedule 14.1(b), updating Part 1hereof.  All Intercompany Debt shall be (A) subordinatedto all present and future Indebtedness owed by the Borrower and/or theGuarantors to Lender in a manner satisfactory to the Lender and (B) evidencedby a promissory note or other instrument.

 

(ii)          All Intercompany Trade Payables as of February 28,2009 are set forth on Part 2 of Schedule 14.1(b) hereto.  At no time shall the aggregate amount ofoutstanding Intercompany Trade Payables exceed $350,000 (without giving anyeffect to offset).

 

(iii)         The Borrower shall not permit indebtedness owingunder the Intercompany Line of Credit to exceed at any time $3,000,000.

 

(c)           SubordinatedDebt Payments.  Borrowerwill not make any payments on Subordinated Debt or on Intercompany Debt, otherthan non-cash payments of interest booked as capitalized interest by the Parentand Borrower in respect of the Intercompany Debt owed to the Parent.  So long as no Default or Event of Default hasoccurred, Borrower will be permitted to make payments of principal in respectto the Intercompany Line of Credit.

 

(d)           Senior Debt to EBITDA.  As of the end of each fiscal quarter setforth below, the Borrower shall maintain a ratio of Senior Debt to trailingtwelve (12) month EBITDA of not greater than the ratio set forth below acrossfrom such period:

 

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| **Period**                                                                      | ** ** | **Maximum  Ratio** |
|---------------------------------------------------------------------------------|------------|--------------------|
| ** **                                                                      | ** ** | ** **         |
| fiscal quarter ended March 31, 2009                                        |       | 3.4 to 1.0         |
|                                                                            |       |               |
| fiscal quarter ended June 30, 2009                                         |       | 8.4 to 1.0         |
|                                                                            |       |               |
| fiscal quarter ended September 30, 2009                                    |       | 7.25 to 1.0        |
|                                                                            |       |               |
| fiscal quarter ended December 31, 2009 and each fiscal quarter  thereafter |       | 3.0 to 1.0         |

 

(e)           Cash Flow Coverage.  As of the end of each fiscal quarter setforth below, the Borrower shall maintain a Cash Flow Coverage of not less thanthe ratio set forth below across from such period:

 

| **Period**                                                                   | ** ** | **Minimum  Ratio** |
|------------------------------------------------------------------------------|------------|--------------------|
| ** **                                                                   | ** ** | ** **         |
| fiscal quarter ended March 31, 2009                                     |       | 0.35 to 1.0        |
|                                                                         |       |               |
| fiscal quarter ended June 30, 2009                                      |       | N/A                |
|                                                                         |       |               |
| fiscal quarter ended September 30, 2009                                 |       | N/A                |
|                                                                         |       |               |
| fiscal quarter ended December 31, 2009                                  |       | N/A                |
|                                                                         |       |               |
| fiscal quarter ended March 31, 2010 and each fiscal quarter  thereafter |       | 1.25 to 1.0        |

 

(f)            Minimum EBITDA.  As of the end of each calendar month setforth below, the Borrower shall maintain a minimum cumulative EBITDA commencingJanuary 1 of the applicable calendar year and ending on the last day ofsuch calendar month of not less than the amount set forth below across fromsuch month in the applicable calendar year.

 

| **Period** | ** ** | **Minimum  EBITDA****2009** | ** ** | **Minimum  EBITDA  2010 and 2011** | ** ** |
|------------|------------|-----------------------------|------------|------------------------------------|------------|
| ** ** | ** ** | ** **                  | ** ** | ** **                         | ** ** |
| January    |       | N/A                         |       | $                                  | 1,046,000  |   |
|       |       |                        |       |                               |       |
| February   |       | N/A                         |       | $                                  | 1,838,000  |   |
|       |       |                        |       |                               |       |
| March      |       | N/A                         |       | $                                  | 2,571,000  |   |
|       |       |                        |       |                               |       |
| April      |       | N/A                         |       | $                                  | 2,340,000  |   |
|       |       |                        |       |                               |       |
| May        |       | N/A                         |       | $                                  | 3,312,000  |   |
|       |       |                        |       |                               |       |
| June       |       | N/A                         |       | $                                  | 4,099,000  |   |
|       |       |                        |       |                               |       |
| July       |       | N/A                         |       | $                                  | 4,940,000  |   |
|       |       |                        |       |                               |       |
| August     |       | N/A                         |       | $                                  | 5,878,000  |   |
|       |       |                        |       |                               |       |
| September  |       | N/A                         |       | $                                  | 6,982,000  |   |
|       |       |                        |       |                               |       |
| October    |       | N/A                         |       | $                                  | 8,044,000  |   |
|       |       |                        |       |                               |       |
| November   |       | N/A                         |       | $                                  | 8,835,000  |   |
|       |       |                        |       |                               |       |   |
| December   |       | N/A                         |       | $                                  | 9,919,000  |   |

 

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(g)             Minimum Cumulative TotalRevenue.  As of the end of each calendarmonth set forth below, the Borrower shall maintain a minimum cumulative TotalRevenue commencing July 1, 2009 and ending on the last day of such calendarmonth of not less than the amount set forth below across from such month:

 

| **Period**          | ** ** | **Minimum  Cumulative  Revenue** | ** **       |
|---------------------|------------|----------------------------------|------------------|
|                |       |                             |             |
| July 2009      |       | $                                |  5, 425,000 |   |
|                |       |                             |             |
| August 2009    |       | $                                |  9,850,000  |   |
|                |       |                             |             |
| September 2009 |       | $                                | 14,120,000       |   |
|                |       |                             |             |
| October 2009   |       | $                                | 19,400,000       |   |
|                |       |                             |             |
| November 2009  |       | $                                | 24,425,000       |   |
|                |       |                             |             |
| December 2009  |       | $                                | 29,600,000” |   |

 

1.6           Section 15(g) of the LoanAgreement shall be amended and restated in its entirety to read as follows:

 

“(g)         There shall occur any uninsured damage to or loss,theft or destruction of any of the Collateral exceeding, individually or in theaggregate, $100,000 in any calendar year, other than losses incurred in theordinary course as a result of defects caused in the manufacture or productionof such Collateral; or”

 

SECTION 2.           AMENDMENTTO NOTES.  Notwithstanding any otherprovision of any of the Notes to the contrary, the Notes shall bear interest ata rate equal to the greater of (i) LIBOR plus five percent (5.00%) and (ii) sevenpercent (7.00%); provided, that for the purposes of clause (i) above,“LIBOR” shall be defined as the rate per annum equal to the British BankersAssociation LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commerciallyavailable source providing quotations of BBA LIBOR as designated by the Lenderfrom time to time) at approximately 11:00 a.m., London time, two (2) BusinessDays prior to the commencement of such Interest Period, for U.S. dollardeposits in an amount comparable to the relevant Loan (for delivery on thefirst day of such Interest Period) with a term equivalent to such InterestPeriod.

 

SECTION 3.           AMENDMENTTO SUBSIDIARY NOTE.  Notwithstanding anyother provision of the Subsidiary Note to the contrary, the Subsidiary Noteshall bear interest at a rate equal to the greater of (i) LIBOR plus fivepercent (5.00%) and (ii) seven percent (7.00%); provided, that forthe purposes of clause (i) above, “LIBOR” shall be defined as the rate perannum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”),as published by Reuters (or other commercially available source providingquotations of BBA LIBOR as designated by the Lender from time to time) atapproximately 11:00 a.m., London time, two (2) Business Days

 

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prior to the commencement of such Interest Period, forU.S. dollar deposits in an amount comparable to the relevant Loan (for deliveryon the first day of such Interest Period) with a term equivalent to suchInterest Period.

 

SECTION 4.           WAIVER.

 

4.1           The Lender hereby waives:

 

(a)           Any breach, Default or Event of Defaultarising from the Borrower’s failure, prior to the date hereof, to keep correctand accurate daily records of Inventory as required pursuant to Section 9.3of the Loan Agreement;

 

(b)           Any breach, Default or Event of Defaultarising from the Borrower’s failure to timely deliver the updated Schedule 10.1as required pursuant to the seventh paragraph of Section 10 of the LoanAgreement solely for the quarter ended June 30, 2009, but solely to theextent that such updated Schedule 10.1 for such period was delivered to theLender on July 24, 2009;

 

(c)           Any breach, Default or Event of Defaultthat may have occurred under Sections 12 and 15(g) of the Loan Agreementto the extent related solely to losses incurred in the ordinary course ofbusiness as a result of defects caused in the manufacture or production of suchInventory, but solely to the extent such breach or default would not haveoccurred under such Sections as amended hereby;

 

(d)           Any breach, Default or Event of Defaultarising from the Borrower’s delivery of financial statements as of and for thenine (9) month period ended September 30, 2007, which containedmaterial misstatements, but solely to the extent that the restated financialsfor such period provided to the Lender prior to the date hereof are completeand correct in all material respects;

 

(e)           Any breach, Default or Event of Defaultthat may have occurred, including under Sections 14.2(l) and 14.3(a) ofthe Loan Agreement, caused by the recordation of mechanics liens by Norcon, Inc.,Cattaneo Electric Company, Soderlund Brothers, Inc., United Engineering, Inc.,F.E. Moran, Inc. Fire Protection and related affiliates, E.W. OlsonRoofing, Professionals Associated, Illinois Safety Fire Co., and Illinois FireExtinguisher Co., Inc. d/b/a Illinois Fire and Safety Company againstproperty of the Borrower or the failure of the Borrower to timely notify theLender of such circumstances but solely to the extent that such Liens have beenreleased and all related amounts have been paid in full by the Borrower; and

 

(f)            Any breach, Default or Event of Defaultarising from the Borrower’s failure to deliver the updated Schedule 14.1(b) asrequired pursuant to Section 14.1(b)(i) of the Loan Agreement inconnection with the incurrence of any additional intercompany indebtedness thatconsisted of Intercompany Trade Payables, but solely to the extent that suchincurred Intercompany Trade Payables were not otherwise in violation of Section 14.1(b)(ii).

 

(g)           Any breach, Default or Event of Defaultarising from the Borrower’s violation of the financial covenants set forth in (i) Section 14.1(d) ofthe Loan Agreement solely for the fiscal quarter ended June 30, 2009 and (ii) Section 14.1(f) ofthe Loan Agreement solely 

 

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for the calendar month of June 2009 (each of theforegoing clauses (a), (b), (c), (d), (e), (f) and(g) collectively, the “Known Defaults”).

 

4.2           Consistent with the foregoing, nothingcontained herein shall be deemed to be a waiver or abandonment of (i) anyother Event of Default (whether presently or subsequently existing) other thanthe Known Defaults, including any such other Event of Default or breach that isof the same nature or type (or arises under the same provision of the LoanAgreement, Loan Documents or Subsidiary Loan Documents) as any of the KnownDefaults, or (ii) any rights, powers and/or remedies presently orsubsequently available to the Lender against the Borrower or any Guarantor(including any of its property) and/or any other Person or entity (includingany of such Person’s or entity’s property) under the Loan Agreement, any of theSubsidiary Loan Documents or any of the other Loan Documents, applicable law orotherwise, relating to any matter other than solely with respect to the KnownDefaults, each of which rights, powers or remedies is hereby specifically andexpressly reserved.

 

SECTION 5.           CONDITIONSPRECEDENT.  This Amendment shall becomeeffective on the date (the “Amendment Effective Date”) when the Lendershall have received the following:

 

5.1           Amendment.  ThisAmendment, duly executed by the parties hereto.

 

5.2           Amendment and Waiver Fee; Expenses. Payment by the Borrower in immediately available funds of (i) a$35,000 amendment and waiver fee, (ii) all fees and expenses under theLoan Agreement accrued and unpaid through the date hereof and (iii) allreasonable fees and expenses required to be reimbursed or paid by the Borrowerpursuant to Section 7.2 hereof. For the avoidance of any doubt, the amendment and waiver fee payablepursuant to this Section 5.2 shall be in addition to, and shall notaffect the amount or payment dates of, the extension fee set forth in Section 14.4of the Loan Agreement.

 

5.3           Reaffirmation. A Reaffirmation, substantially in the form attached hereto as Exhibit A,executed by the Parent, 1309 and 5100.

 

SECTION 6.           REPRESENTATIONSAND WARRANTIES.  To induce the Lender toenter into this Amendment, the Borrower and each Guarantor hereby representsand warrants to the Lender as follows:

 

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

 

(a)           contravene such party’s organizationaldocuments;

 

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

 

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

 

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6.2           Government Approval, Regulation, etc. No authorization or approval or other action by, and no notice to orfiling with, any governmental authority or regulatory body or other Person isrequired for the due execution, delivery or performance by the Borrower of thisAmendment.

 

6.3           Validity, etc.  ThisAmendment constitutes the legal, valid and binding obligation of the Borrowerand each Guarantor enforceable in accordance with its terms.

 

6.4           Event of Default. No Event of Default shall occur as a result of, or after giving effectto, this Amendment.

 

6.5           Acknowledgements. The Borrower and each of the Guarantors acknowledge that the amount ofprincipal owing with respect to the Indebtedness arising under the LoanAgreement, the Subsidiary Loan Documents or the other Loan Documents as of dateof this Agreement is $19, 019,742.51.

 

Without in any manner limiting the generality of therelease set forth in Section 7.5 hereof, the Borrower and theGuarantors hereby represent, warrant, covenant and agree that there exist nooffsets, counterclaims or defenses to payment or performance of the obligationsset forth in the Loan Agreement, the Subsidiary Loan Documents or the otherLoan Documents and, in consideration hereof, expressly waive any and all suchoffsets, counterclaims and defenses arising out of any alleged acts,transactions or omissions on the part of the Lender arising (or otherwiserelating to the period) on or prior to the Amendment Effective Date.

 

SECTION 7.           MISCELLANEOUS.

 

7.1           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, each of which shallremain in full force and effect and is hereby ratified, approved and confirmedin each and every respect.  After theeffectiveness of this Amendment in accordance with its terms, all references tothe Loan Agreement, the Subsidiary Loan Documents and each Loan Document in theLoan Documents or the Subsidiary Loan Documents or in any other document,instrument, agreement or writing shall be deemed to refer to such document asamended hereby.

 

7.2           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) inconnection with the drafting, negotiation, execution, delivery andeffectiveness of this Amendment.

 

7.3           Mayer Brown Expenses. Without limiting the generality of Section 7.2, the Borroweragrees to pay, within ten (10) Business Days of receipt of an invoice, thefees and expenses of Mayer Brown LLP, counsel to the Lender, incurred inconnection with the representation of the Lender in this matter.

 

7.4           General Loan Agreement Compliance. All provisions of the Loan Agreement, the Subsidiary Loan Documents andthe other Loan Documents (as expressly amended in Sections 1, 2and 3)****shall continue in full force andeffect in accordance with the provisions thereof and the 

 

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Borrower and the Guarantors reaffirm all theiragreements under the Loan Agreement, the Subsidiary Loan Documents and theother Loan Documents.  The Borrower andthe Guarantors shall comply with the provisions of their respective LoanDocuments and Subsidiary Loan Documents, including, without limitation, thetimely payment of all scheduled principal and interest payments.

 

7.5           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 behalfof the Borrower’s Derivative/Successor Persons, hereby knowingly andvoluntarily, unconditionally and irrevocably, absolutely, finally and foreverreleases, acquits and discharges each Lender Released Party from any Claimrelating in any manner whatsoever to any of the Loan Documents, including anytransaction contemplated thereby or undertaken in connection therewith, orotherwise to the Borrower’s or Guarantors’ credit relationship with the Lender, which relates or may relate in anymanner whatsoever to any facts, known or unknown, in existence on or at anytime prior to the Amendment Effective Date (each a “Borrower-RelatedClaim”).

 

The Borrower and each Guarantor herebyknowingly and voluntarily, unconditionally and irrevocably, absolutely finallyand forever covenants that it shall refrain, and further shall direct anyDerivative/Successor Person to refrain, from commencing or otherwiseprosecuting any action, suit or other proceeding of any kind, nature,character, or description, including in law or in equity, against any LenderReleased Party on account of any Borrower-Related Claim.  Each Lender Released Party shall be entitledto enforce this covenant through specific performance.  In addition to any other liability whichshall accrue upon the breach of this covenant, the breaching party (including,any Derivative/Successor Person of the Borrower or any Guarantor that commencesor prosecutes any such action, suit or other proceeding) shall be liable tosuch Lender Released Party for all reasonable attorneys’ fees and costsincurred by such party in the defense of any such action, suit or otherproceeding.

 

The following termsshall have the following definitions when used in this Section 7.5:

 

“Claims” shall mean, with respect to theBorrower and/or any Guarantor, any and all claims, counterclaims, actions,causes of action (including, any relating in any manner to any existinglitigation 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 (including attorneys’ fees and expenses) or othersimilar items of any kind, type, nature, character or description, including,whether in law, equity or otherwise, whether now known or unknown, whether incontract or in tort, whether choate or inchoate, whether contingent or vested,whether liquidated or unliquidated, whether fixed or unfixed, whether maturedor 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 theBorrower and/or any Guarantor, through the Borrower and/or any Guarantor orotherwise on the behalf of the Borrower and/or any Guarantor (including thosewhich may be asserted on any derivative basis), which have existed at any timeon or prior to the date hereof.

 

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“Derivative/SuccessorPerson” shall mean, with respect to the Borrower or any Guarantor, anyperson 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 mayattempt to assert any Claim by or otherwise belonging to the Borrower or anysuch Guarantor, through the Borrower or such Guarantor or otherwise on behalfof the Borrower or such Guarantor (including on any derivative basis).

 

“Lender Released Parties” shall mean the Lenderand 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.

 

7.6           Severability. Any provision of this Amendment which is prohibited or unenforceable inany jurisdiction shall, as to such provision and such jurisdiction, beineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions of this Amendment or affecting thevalidity or enforceability of such provision in any other jurisdiction.

 

7.7           Headings.  The variousheadings of this Amendment are inserted for convenience only and shall notaffect the meaning or interpretation of this Amendment or any provisionshereof.

 

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

 

7.9           Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNEDBY 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-LAWPROVISIONS.

 

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

 

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

 
|   | BRAD FOOTE GEAR WORKS,  INC.   |
|--------|--------------------------------|
|   |                           |
|   |                           |
|   | By:                            | /s/ J. Cameron Drecoll |
|   | Name:                          | J. Cameron Drecoll |
|   | Title:                         | Chief Executive Officer |
|   |                           |   |
|   |                           |   |
|   | 1309 SOUTH CICERO AVENUE,  LLC |
|   |                           |   |
|   |                           |   |
|   | By:                            | /s/ Ralph Placzek |
|   | Name:                          | Ralph Placzek |
|   | Title:                         | Vice President of Finance  and Treasurer |
|   |                           |   |
|   |                           |   |
|   | 5100 NEVILLE ROAD, LLC         |
|   |                           |   |
|   |                           |   |
|   | By:                            | /s/ Ralph Placzek |
|   | Name:                          | Ralph Placzek |
|   | Title:                         | Vice President of Finance  and Treasurer |

 

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|   | BANK OF AMERICA, N.A., as  Lender |
|--------|-----------------------------------|
|   |                              |   |
|   |                              |   |
|   | By:                               | /s/  Sandra H. Bennett |
|   | Name:                             | Sandra  H. Bennett |
|   | Title:                            | Senior Vice President |

 

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EXHIBIT AREAFFIRMATION

 

THIS REAFFIRMATION (this “Reaffirmation”)dated as of August     , 2009, is made by each of theundersigned (each, an “Undersigned”), in favor of the Lender (as definedbelow).

 

RECITALS:

 

1.             BradFoote Gear Works, Inc. (the “Borrower”) and Bank of America, N.A.,as lender (in such capacity, the “Lender”) are parties to that certainLoan and Security Agreement, dated as of January 17, 1997 (as amended todate and in effect on the date hereof, the “Existing Loan Agreement”).

 

2.             TheBorrower and the Lender have agreed to amend the Existing Loan Agreementpursuant to that certain Third Omnibus Amendment Agreement (the “OmnibusAmendment Agreement”) of even date herewith (the Existing Loan Agreement,as amended by the Omnibus Amendment Agreement, and as such may be further amended,modified, restated or supplemented from time to time, the “Loan Agreement”).

 

3.             Eachof the Undersigned is party to one or more Loan Documents (collectively, the “ReaffirmedDocuments”) relating to the Loan Agreement.

 

4.             Itis a condition precedent to the occurrence of the Amendment Effective Date (asdefined in the Omnibus Amendment Agreement) that each of the Undersignedexecute and deliver this Reaffirmation.

 

NOW THEREFORE, for good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,and in order to induce the Lender to enter into the Omnibus AmendmentAgreement, each Undersigned agrees, for the benefit of the Lender, as follows:

 

ARTICLE I.DEFINITIONS

 

Capitalized terms used herein that aredefined in the Loan Agreement shall have the same meanings when used hereinunless otherwise defined herein.

 

ARTICLE II.REAFFIRMATION

 

Each Reaffirmed Document remains in fullforce and effect and is hereby ratified and confirmed, and from and after thedate hereof, each reference that appears in any of the Reaffirmed Documents tothe Existing Loan Agreement shall be deemed to be a reference to the LoanAgreement.

 

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ARTICLEIII.MISCELLANEOUS PROVISIONS

 

SECTION 3.1.  LoanDocument.  This Reaffirmation is aLoan Document executed pursuant to the Loan Agreement and shall (unlessotherwise expressly indicated herein) be construed, administered and applied inaccordance with the terms and provisions thereof.

 

SECTION 3.2.  Severability.  Any provision of this Reaffirmation which isprohibited or unenforceable in any jurisdiction shall, as to such provision andsuch jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions of thisReaffirmation or affecting the validity or enforceability of such provision inany other jurisdiction.

 

SECTION 3.3.  Headings.  The various headings of this reaffirmationare inserted for convenience only and shall not affect the meaning orinterpretation of this Amendment or any provisions hereof.

 

SECTION 3.4.  Execution in Counterparts.  This Reaffirmation may be executed by theparties hereto in several counterparts, each of which shall be deemed to be anoriginal and all of which shall constitute together but one and the sameagreement.

 

SECTION 3.5  Governing Law.  THIS REAFFIRMATION SHALL BE DEEMED TO BE ACONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS(INCLUDING 735 ILCS SECTION 105/5-5), BUT OTHERWISE WITHOUT GIVING EFFECTTO ANY OF SUCH STATE’S CONFLICTS-OF-LAW PROVISIONS.

 

SECTION 3.6  Successors and Assigns.  This Reaffirmation shall be binding upon andshall inure to the benefit of the parties hereto and their respectivesuccessors and assigns.

 

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IN WITNESS WHEREOF, the parties hereto, bytheir officers duly authorized, have caused this Reaffirmation to be dulyexecuted and delivered as of the date first above written.

 
|   | BROADWIND  ENERGY, INC.        |
|--------|--------------------------------|
|   |                           |   |
|   |                           |   |
|   | By:                            |   |
|   | Name:                          |   |
|   | Title:                         |   |
|   |                           |   |
|   |                           |   |
|   | 1309  SOUTH CICERO AVENUE, LLC |
|   |                           |   |
|   |                           |   |
|   | By:                            |   |
|   | Name:                          |   |
|   | Title:                         |   |
|   |                           |   |
|   |                           |   |
|   | 5100  NEVILLE ROAD, LLC        |
|   |                           |   |
|   |                           |   |
|   | By:                            |   |
|   | Name:                          |   |
|   | Title:                         |   |

 

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