Exhibit 10.1


 


THIRTY SECOND AMENDMENT TO LOAN AND SECURITY
AGREEMENT


 


THIS THIRTY SECOND AMENDMENT TO LOAN AND
SECURITY AGREEMENT (this “Amendment”) is dated as of December 9,
2008 between BRAD FOOTE GEAR WORKS, INC. f/k/a BFG Acquisition Corp., an
Illinois corporation (“Borrower”) and BANK OF AMERICA, N.A., a national banking
association, as successor by merger to LaSalle Bank National Association f/k/a
LaSalle National Bank f/k/a LaSalle Bank NI (“Lender”).


 


WHEREAS, Borrower
and Lender have entered in that certain Loan and Security Agreement dated as of
January 17, 1997, as amended by those certain letter amendments dated February 28,
1997 and July 23, 1997 and those certain Third, Fourth, Fifth, Sixth,
Seventh, Eighth, Ninth, Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth,
Sixteenth, Seventeenth, Eighteenth, Nineteenth, Twentieth, Twenty-First,
Twenty-Second, Twenty-Third, Twenty-Fourth, Twenty-Fifth, Twenty-Sixth,
Twenty-Seventh, Twenty-Eighth, Twenty-Ninth, Thirtieth and Thirty-First
Amendments to Loan and Security Agreement dated as of March 30, 1998, December 1,
1998, June 1, 1999, December 19, 2000, May 1, 2001, July 1,
2001, April 30, 2002, April 29, 2003, July 3, 2003, April 29,
2004, November 15, 2004, April 29, 2005, June 15, 2005, February 1,
2006, April 29, 2006, November 10, 2006, January 8, 2007, April 29,
2007, June 30, 2007,  October       ,
2007, October 18, 2007, November 1, 2007, January 15, 2008, January 31,
2008,  April       ,
2008, June 30, 2008, August 30, 2008 and September 29, 2008,
respectively, and that certain letter amendment (herein, the “Tenth Amendment”)
dated October 17, 2002 (such agreement, as so amended, the “Loan Agreement”)
with regard to the following loans made by Lender to Borrower: (i) a
$10,000,000.00 revolving line of credit loan (the “Revolving Loan”), (ii) a
consolidated term loan in the original principal sum of $7,899,332.98 (the “Term
Loan”), (iii) an $11,000,000.00 non-revolving equipment line of credit
loan with term conversion feature (the “Equipment Loan”), (iv) a
$9,000,000.00 non-revolving equipment line of credit loan with term conversion
feature (the “Equipment Loan No. 2”) and (v) all other Indebtedness
(as defined in the Loan Agreement); and


 


WHEREAS, Lender has
been asked to  (i) reduce the amount of the
Revolving Loan from $10,000,000.00 to $7,000,000.00; (ii) waive Borrower’s
violation of certain financial covenants set forth in the Loan Agreement; (iii) modify
the interest rate charged on the Term Loan, the Equipment Loan and the
Equipment Loan No. 2; and (iv) make certain other modifications
thereto as described below; and


 


WHEREAS, Lender has
agreed to the foregoing loan requests provided, among other conditions, that
Borrower executes and delivers this Amendment and complies with its terms;


 


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NOW, THEREFORE, for
valuable consideration, the receipt of which is hereby acknowledged, and in
consideration of the foregoing premises, the parties hereto agree as follows:


 


1.             The capitalized
terms used herein without definition shall have the same meaning herein as such
terms have in the Loan Agreement.


 


2.             The definitions of “Commitment
Amount” and “Revolving Loan” in Section 1.1 of the Loan Agreement, are
each amended in their entirety to read as follows:


 


“Commitment Amount”
shall mean, as of any applicable date of determination, Seven Million and
00/100 ($7,000,000.00) Dollars.


 


“Revolving Loan”
shall mean the $7,000,000.00 revolving line of credit loan extended by the
Lender to the Borrower under Section 2 of this Agreement, and any and all
extensions, renewals, amendments, modifications, refinancings, conversions,
consolidations and increases thereof or thereto.


 


3.             The first sentence
of the first paragraph in Section 2.3 of the Loan Agreement is amended to
read as follows:


 


“2.3    Revolving
Note.  The Revolving Loan shall be
evidenced by an amended and restated renewal revolving note, executed by the
Borrower, dated December 9, 2008 and payable to the Lender on January 15,
2009, and in the principal sum of Seven Million and 00/100 ($7,000,000.00)
Dollars (the “Revolving Note”).”


 


Hereafter, all references in the Loan Agreement and in this Amendment
to the term “Revolving Note” shall be deemed to refer to the aforesaid amended
and restated renewal revolving note dated December 9, 2008 in the
principal sum of $7,000,000.00, executed by Borrower, payable to the order of
Lender on January 15, 2009, together with interest payable monthly as
therein described.


 


4.             Lender hereby
waives Borrower’s violation of the following covenants set forth in the Loan
Agreement: (i) Borrower’s violation of the Cash Flow Coverage covenant set
forth in Section 14.1 (e) of the Loan Agreement for the fiscal
quarter ended September 30, 2008, and (ii) Borrower’s violation of
the Minimum EBITDA covenant set forth in Section 14.1 (f) of the Loan
Agreement for the nine month period ended September 30, 2008.  Said waivers are limited solely to such
specific covenant violations for such periods, and shall not waive, suspend, or
affect any other default by Borrower under the Loan Agreement, and Lender
expressly reserves all of its rights and remedies with respect to any such
other default(s).


 


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5.             Section 2 of
the Loan Agreement is hereby amended to add the following new last paragraphs
thereto:


 


“Borrower hereby represents to the Lender that the outstanding
principal balance of the Revolving Loan was paid down by the amount of Three
Million Dollars ($3,000,000.00) from a loan made by Broadwind Energy, Inc.,
which funds were paid to the Lender on December 8, 2008, and Borrower
further covenants and agrees that the Borrower will not repay any portion of
such loan to Broadwind Energy, Inc. without the prior written consent of
the Lender.  The Lender hereby consents
to such debt and agrees that the limitations on Indebtedness owed to or by
Affiliates set forth in Section 14.1 shall not be deemed to prohibit or
apply to such loan.


 


Borrower covenants to the Lender that Borrower will immediately conform
its monthly Borrowing Base Certificate to the Lender’s field examiner
recommended borrowing base calculation dated September 30, 2008, a copy of
which has previously been delivered to Borrower.”


 


6.             The Borrower
acknowledges and agrees that the Loan Agreement is and as amended hereby shall
remain in full force and effect, and that the Collateral is and shall remain
subject to the lien and security interest granted and provided for by the Loan
Agreement as amended hereby, for the benefit and security of (a) all
obligations and indebtedness heretofore, now or hereafter owed by Borrower to
Lender, including, without limitation, the indebtedness evidenced by the
Revolving Note, the Term Note, the Equipment Note, the Equipment No. 2  and all other Indebtedness (including,
without limitation, the repayment of all sums when due under the Subsidiary
Guaranty).


 


7.             Without limiting
the foregoing, the Borrower hereby agrees that, notwithstanding the execution
and delivery hereof, (i) all rights and remedies of the Lender under the
Loan Agreement, (ii) all obligations and indebtedness of the Borrower
thereunder, and (iii) the lien and security interest granted and provided
for thereby are and as amended hereby shall remain in full force and effect for
the benefit and security of all obligations and indebtedness of the Borrower
thereunder, including, without limitation, the indebtedness evidenced by the
Revolving Note, the Term Note, the Equipment Note, the Equipment Note No. 2
and all other Indebtedness (including, without limitation, the repayment of all
sums when due under the Subsidiary Guaranty), it being specifically understood
and agreed that this Amendment shall constitute and be an acknowledgment and
continuation of the rights, remedies, lien and security interest in favor of
the Lender, and the obligations and indebtedness of the Borrower to the Lender,
which exist under the Loan Agreement as amended hereby, each and all of which
are and shall remain applicable to the Collateral.


 


This Amendment confirms and assures a lien and continuing first
priority security interest in the Collateral heretofore granted in favor of the
Lender under the Loan Agreement, and nothing contained herein shall in any
manner impair the priority of such lien and security interest.


 


8.             In order to induce
Lender to enter into this Amendment, the Borrower hereby represents and
warrants to the Lender that as of the date hereof, each of the representations
and warranties


 


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set forth in the Loan Agreement, as amended hereby, are true and
correct in all material respects and the Borrower is in full compliance with
all of the terms and conditions of the Loan Agreement, as amended hereby, and
after giving effect to this Amendment no Event of Default or Default has
occurred and is continuing.


 


9.             Except as
specifically amended and modified hereby, all of the terms and conditions of
the Loan Agreement shall stand and remain unchanged and in full force and
effect.  This instrument shall be
construed and governed by and in accordance with the laws of the State of
Illinois (exclusive of choice of law principles).


 


10.           Borrower agrees to
concurrently pay to Lender a $25,000.00 covenant waiver fee for the financial
covenant waivers set forth above.   Borrower
agrees to pay the Lender for an updated equipment appraisal being ordered by
the Lender on Borrower’s equipment.   In
addition, Borrower further agrees to reimburse the Lender for its reasonable
legal fees incurred in documenting the aforesaid covenant waivers, the
modification of the Borrower’s promissory notes, and all other all other loan
modifications hereinabove described, and any updated search fees and other
out-of-pocket costs incurred by the Lender in connection herewith.


 


(The
signature page follows.)


 


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IN WITNESS WHEREOF, the parties have entered into this Thirty-Second
Amendment to Loan and Security Agreement as of date first above written.


 


Borrower:


 


BRAD FOOTE GEAR WORKS, INC.


 


 


	
  By:

  	
  /s/

  	
  Ralph Placzek

  	
   

  
	
   

  	
  Ralph Placzek

  	
   

  
	
  Title:

  	
  Vice President of Finance

  	
   

  



 


 


Lender:


 


BANK OF AMERICA, N.A.,


a national banking association


as successor by merger to LaSalle Bank


National Association


 


 


	
  By:

  	
  /s/

  	
  Katherine Novey

  	
   

  
	
   

  	
  Katherine Novey

  	
   

  
	
  Title:

  	
  Senior Vice President

  	
   

  



 


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