Document:

Exhibit 10.2

 

AMENDED AND RESTATED RENEWAL REVOLVING NOTE

 

	
  Amount: $7,000,000.00

  	
   

  	
   

  	
  Date: December 9, 2008

  
	
   

  	
   

  	
   

  	
  Chicago, Illinois

  

 

On or before January 15,
2009 (the “Maturity Date”), the undersigned, BRAD FOOTE GEAR WORKS, INC., f/k/a
BFG Acquisition Corp., an Illinois corporation (the “Borrower”), with its chief
executive office located at 1309 S. Cicero Avenue, Cicero, Illinois 60804, for
value received, hereby promises to pay to the order of 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 (collectively,
together with any holder hereof, the “Bank”), at the Bank’s main offices at 135
South LaSalle Street, Chicago, Illinois 60603, or such other address hereafter
designated by the Bank in writing, the principal sum of Seven Million and
00/100 ($7,000,000.00) Dollars (U.S.), or if less, the aggregate unpaid
principal amount of all advances (“Advances”) made by the Bank to the Borrower
under this Note, plus all accrued and unpaid interest calculated and payable at
the applicable rates and in the manner described below.   Except as otherwise specifically provided
herein and subject to the terms and conditions set forth in the Loan Agreement
(as hereinafter defined), amounts borrowed hereunder may be repaid and
reborrowed at any time and from time to time until the Maturity Date.

 

The outstanding principal
balance of each Advance under this Note shall bear interest, at the Borrower’s
option to be selected in the manner hereinafter set forth, at the Base Rate (as
hereinafter defined) or “Adjusted LIBOR” (as hereinafter defined).  Interest accruing on Advances bearing
interest at the Base Rate shall be calculated on the basis of a year consisting
of 360 days and shall be paid for the actual number of days elapsed.  Interest accruing on Advances bearing
interest at Adjusted LIBOR shall be calculated on the basis of a year
consisting of 360 days and shall be paid for the actual number of days elapsed
from the first day of the applicable Interest Period (as hereinafter defined)
but not including the last day thereof.

 

Any amount of principal  which is not paid when due, whether at the
stated maturity, by acceleration, or otherwise, shall bear interest payable on
demand at a fluctuating interest rate per annum equal at all times to the Base
Rate plus three percent (the “Default Rate”). 
In addition, a late charge equal to three percent (3%) of each late
payment may be charged on any payment not received by the Bank within five (5) calendar
days after the payment due date, but acceptance of payment of this charge shall
not waive any Default or Event of Default.

 

Interest on the unpaid balance
of each outstanding Advance bearing interest at the Base Rate shall be payable
monthly on the last Banking Day of each month.

 

The term “Base Rate” shall mean
the “Prime Rate”.   The term “Prime Rate”
at any time means the rate of interest in effect from time to time as set by
the Bank and called its Prime Rate.

 

1

 

The effective date of any change in the Prime
Rate shall for purposes hereof be the date the rate is changed by the
Bank.  The Bank shall not be obligated to
give notice of any change in the Prime Rate. 
It is expressly agreed that the use of the term “Prime Rate” is not
intended nor does it imply that said rate of interest is a preferred rate of
interest or one which is offered by the Bank to its most creditworthy
customers.

 

At any time and from time to
time, the Borrower may identify no more than five (5) portions of the
outstanding principal balance of this Note (each such portion herein, a “LIBOR
Loan”) which will bear interest at “Adjusted LIBOR”.   Each LIBOR Loan must equal a minimum of  $250,000.00, or if greater, in integral
multiples of $50,000.00.  “Adjusted LIBOR”
means a rate of interest equal to two and one-half percent (2.5%) per annum in
excess of the per annum rate of interest at which U.S. dollar deposits in an
amount comparable to the amount of the relevant LIBOR Loan and for a period
equal to the relevant “Interest Period” (as hereinafter defined) are offered
generally to the Bank  in the London
Interbank Eurodollar market at 11.00 a.m. (London time) two Banking Days
prior to the commencement of each Interest Period, as displayed in the
Bloomberg Financial Markets system, or other authoritative source selected by
the Bank in its sole discretion, divided by a number determined by subtracting
from 1.00 the maximum reserve percentage for determining reserves to be
maintained by member banks of the Federal Reserve System for Eurocurrency
liabilities, such rate to remain fixed for such Interest Period.  “Interest Period” shall mean successive 30
day periods as selected from time to time by the Borrower by written notice
given to the Bank not less than three Banking Days prior to the first day of
each respective Interest Period; provided that: (i) each such 30 day
period occurring after such initial period shall commence on the day on which
the next preceding period expires; (ii) the final Interest Period shall be
such that its expiration occurs on or before the Maturity Date; (iii) at
any time any Interest Period expires less than 30 days before the Maturity
Date, then for the period commencing on such expiration date and ending on the
Maturity Date, such LIBOR Loan shall convert to a loan bearing interest at the
Base Rate plus two and one-half percent (2.5%) per annum; (iv) any
Interest Period which commences on the last Banking Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate subsequent calendar month; and (v)  each Interest Period which
would otherwise end on a day which is not a Banking Day shall end on the next
succeeding Banking Day, or, if such next succeeding Banking Day falls in the
next succeeding calendar month, on the next preceding Banking Day.  Interest on each LIBOR Loan shall be payable
on the last Banking Day of each Interest Period, at maturity, after maturity on
demand, and on the date of  any payment
hereon on the amount paid.  The Borrower
hereby further promises to pay to the order of the Bank, on demand, interest on
the unpaid principal amount of each LIBOR Loan after maturity (whether by
acceleration or otherwise) at the Default Rate. 
As used herein, “Banking Day(s)” shall mean each and all days other than
a Saturday, Sunday or a legal holiday on which national banks are authorized or
required to be closed for the conduct of commercial banking business in
Chicago, Illinois.

 

The Bank’s determination of
Adjusted LIBOR as provided above shall be conclusive, absent manifest
error.  Furthermore, if the Bank
determines, in good faith (which determination shall be conclusive, absent
manifest error) prior to the commencement of any Interest Period that: (a) U.S.
dollar deposits of sufficient amount and maturity for funding any LIBOR Loan
are not available to the Bank in the London Interbank Eurodollar market in the
ordinary course of business, or (b) by reason of circumstances affecting
the London Interbank Eurodollar market, adequate and fair means 

 

2

 

do not exist for ascertaining the rate of
interest to be applicable to the relevant LIBOR Loan, the Bank shall promptly
notify the Borrower and such LIBOR Loan shall automatically convert on the last
day of its then-current Interest Period to a loan bearing interest at the Base
Rate plus two and one-half percent (2.5%) per annum.

 

If, after the date hereof, the
introduction of, or any change in, any applicable law, treaty, rule,  regulation, or guideline, or in the
interpretation or administration thereof by any governmental authority or any central
bank or other fiscal, monetary or other authority having jurisdiction over the
Bank or its lending office (a “Regulatory Change”) shall, in the opinion of
counsel to the Bank, make it  unlawful or
impossible for the Bank to make or maintain any LIBOR Loan evidenced hereby,
then the Bank shall promptly notify the Borrower and such LIBOR Loan shall
automatically convert on the last day of its then-current Interest Period (or
earlier if required by such Regulatory Change) to a loan bearing interest at
the Base Rate plus two and one-half percent (2.5%) per annum.

 

If, for any reason, any LIBOR
Loan is paid prior to the last Banking Day of its then-current Interest Period,
the Borrower agrees to indemnify the Bank against any loss (including any loss
on redeployment of the funds repaid), cost or expense incurred by the Bank as a
result of such prepayment.

 

If any Regulatory Change
(whether or not having the force of law) shall (a)  impose, modify or deem
applicable any assessment, reserve, special deposit or similar requirement
against assets held by, or deposits in or for the account of, or loans by, or
any other acquisition of funds or disbursements by, the Bank; (b) subject
the Bank or any LIBOR Loan to any tax, duty, charge, stamp tax or fee or change
in the basis of taxation of payments to the Bank of principal or interest due
from the Borrower to the Bank hereunder (other than a change in the taxation of
the overall net income of the Bank); or (c) impose on the Bank any other
condition regarding such LIBOR Loan or the Bank’s funding thereof, and the Bank
shall determine (which determination shall be conclusive, absent manifest
error) that the result of the foregoing is to increase the cost to the Bank of
making or maintaining such LIBOR Loan or to reduce the amount of principal or
interest received by the Bank hereunder, then the Borrower shall pay to the
Bank, on demand, such additional amounts as the Bank shall, from time to time,
determine are sufficient to compensate and indemnify the Bank for such
increased cost or reduced amount.

 

Borrower acknowledges and
agrees that if no interest rate option is selected by Borrower for any one or
more Advances for any applicable period during the term of this Note, such
Advance(s) shall bear interest at Adjusted LIBOR.

 

The amount and date of each
Advance, its applicable interest rate, its Interest Period, if any, and the
amount and date of any repayment shall be noted on Bank’s records, which
records shall be conclusive evidence thereof, absent manifest error; provided,
however, any failure by Bank to make any such notation, or any error in any
such notation, shall not relieve Borrower of its obligations to repay Bank the
amount of any Advances, all accrued and unpaid interest thereon, and all other
amounts payable by Borrower to Bank under or pursuant to this Note.

 

Unless otherwise agreed, all
payments shall be first applied to accrued interest to the date of payment,
then to unpaid principal, and any remaining amount toward Bank’s costs and
expenses 

 

3

 

incurred in collecting or attempting to
collect this Note or incurred in any other matter or proceeding relating to
this Note.

 

This Note is issued pursuant
to, is entitled to the benefits of, and is secured by,  among other documents, the Loan and Security
Agreement dated as of January 17, 1997 between the Bank and the Borrower
(such agreement, as amended, restated, supplemented or otherwise modified from
time to time hereafter, the “Loan Agreement”), to which reference is hereby
made for a more complete statement of the terms and conditions under which the
revolving loan evidenced hereby is made, and the terms and conditions governing
the collateral security for the obligations of the Borrower hereunder.  Capitalized terms used in this Note without
definition shall have the meaning set forth in the Loan Agreement.

 

This Note evidences an
amendment and restatement of, decrease to, and replacement and substitution
for, Borrower’s Amended and Restated Renewal Revolving Note dated January 15,
2008 in the principal sum of $10,000,000.00 (as modified and extended to date, the
“Prior Note”).  The outstanding
indebtedness evidenced by the Prior Note is continuing indebtedness evidenced
hereby, and nothing herein shall be deemed to constitute a payment, settlement
or novation of the Prior Note, or to release or otherwise adversely affect any
lien, mortgage or security interest securing such indebtedness or any rights of
the Bank against any guarantor, surety or other party primarily or secondarily
liable for such indebtedness.

 

If any Event of Default shall
occur, then this Note and all other Indebtedness, at the option of the Bank,
shall immediately become due and payable, without notice or demand on the
Borrower, together with all expenses, costs and attorneys’ fees incurred or
expended by the Bank in enforcing its rights hereunder which shall become
additional indebtedness immediately due and payable hereon, and the Bank may
exercise any of the remedies provided by the Loan Agreement, or any other document
securing this Note, or under the Illinois Uniform Commercial Code or other
applicable law.

 

The Bank may, at any time or
times hereafter, after an Event of Default shall occur, appropriate and apply
toward the payment of this Note any moneys, credits, deposits, checks,
accounts, drafts, securities, certificates of deposit or other property
belonging to the Borrower, in the possession of or under the control of the
Bank, as well as any indebtedness of the Bank to the Borrower, then due or to
become due.

 

Borrower hereby waives
presentment, demand, notice of dishonor and all other notices and demands in
connection with the enforcement of the Bank’s rights hereunder.  Any failure of the Bank to exercise any right
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right at any other time.

 

The Borrower hereby authorizes
the Bank to rely upon the telephonic or written instructions of any person
identifying himself or herself as an officer or employee designated by the
Borrower from time to time in any schedule or certificate, which schedule or
certificate shall become effective when received by Bank, and upon any
signature which it believes to be genuine, and the Borrower shall be bound
thereby in the same manner as if such person were actually authorized or such
signature were genuine.  The Borrower
also agrees to indemnify the Bank and hold it harmless from 

 

4

 

any and all claims, damages, liabilities,
losses, costs and expenses (including, without limitation, reasonable attorneys’
fees) which may arise or be created by the acceptance of instructions for
making Advances hereunder, and to pay all legal and other costs and expenses
(including, without limitation, reasonable attorneys’ fees) incurred by the
Bank in obtaining payment of the amounts payable by the Borrower.  The Bank will perform a verification as to
validity of signatures under its normal established procedures.

 

Borrower agrees to reimburse the holder or owner of this Note upon
demand for any and all costs and expenses (including, without limit, court
costs, legal expenses and reasonable attorney’s fees, whether inside or outside
counsel is used, whether or not suit is instituted, and, if suit is instituted,
whether at the trial court level, appellate level, in a bankruptcy, probate or
administrative proceeding or otherwise) incurred in collecting or attempting to
collect this Note or incurred in any other matter or proceeding relating to
this Note.    Any amounts payable with
respect to the loan evidenced by this Note which shall not be paid when due,
including, without limitation, principal, interest and the aforesaid costs  and expenses, shall bear interest at the Default
Rate from the date payable until the date they are paid in full.

 

Borrower hereby represents that
the principal amount of the loan (including all Advances hereafter made
hereunder) is a business loan, that the proceeds thereof shall be used for
business purposes only and that the same is exempt from limitations upon lawful
interest, pursuant to the terms of Section 205/4 of Chapter 8l5 of the
Illinois Compiled Statutes.

 

This Note may not be amended,
modified or changed nor shall any waiver of any of the provisions hereof be
effective, except only by an instrument in writing, signed by the party against
whom enforcement of any waiver, amendment, change, modification or discharge is
sought.

 

No reference herein to the Loan
Agreement, and no provision of this Note, the Loan Agreement, or any of the
other Loan Documents, shall alter or impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.

 

The provisions of this Note
shall be binding upon Borrower, its successors and assigns, and shall inure to
the benefit of and extend to the Bank and any holder hereof.

 

THIS
NOTE HAS BEEN EXECUTED AND DELIVERED TO BANK AND ACCEPTED BY BANK IN THE STATE
OF ILLINOIS, IN WHICH STATE IT SHALL BE PERFORMED BY BORROWER.  THIS NOTE SHALL, IN ALL RESPECTS, BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAW PROVISIONS) OF THE STATE OF ILLINOIS, INCLUDING ALL MATTERS OF
INTERPRETATION, ENFORCEMENT, CONSTRUCTION, VALIDITY, PERFORMANCE AND EFFECT.

 

EXCEPT
AS PROVIDED IN THE FOLLOWING PARAGRAPH, THE BANK AND BORROWER AGREE THAT ALL
DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, AND 

 

5

 

WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN COOK
COUNTY, ILLINOIS.   BORROWER WAIVES IN
ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.

 

BORROWER
AGREES THAT THE BANK SHALL HAVE THE RIGHT TO PROCEED AGAINST BORROWER OR ITS
PROPERTY IN A COURT IN ANY LOCATION NECESSARY TO ENABLE THE BANK TO OBTAIN A
JUDGMENT AGAINST THE BORROWER OR TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF THE BANK.   BORROWER
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE BANK HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH.

 

BORROWER
AND THE BANK EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE BANK AND
BORROWER ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE. INSTEAD,
ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A
JURY.

 

Bank  hereby  notifies  Borrower  that  pursuant  to  the requirements  of  the  USA Patriot Act (Title III of Pub. L. 107-56, signed into  law  October  26,  2001)  (the  “Act”),  and  Bank’s  policies  and practices,  Bank  is  required  to  obtain,  verify  and  record  certain information  and  documentation that identifies Borrower, which information includes  the  name and address of Borrower and such other information that will allow  Bank  to  identify  Borrower in accordance with the Act.  In addition,  Borrower  shall (a) ensure that no person who owns a controlling interest in or otherwise controls Borrower or any subsidiary of  Borrower is or shall be listed on the Specially Designated Nationals and Blocked Person List  or  other  similar  lists  maintained by the Office of Foreign Assets Control  (“OFAC”),  the  Department  of  the  Treasury  or  included in any Executive Orders, (b) not use or permit the use of the proceeds of this Note to  violate  any  of  the  foreign asset control regulations of OFAC or any enabling  statute  or Executive Order relating thereto, and (c) comply, and cause  any  of its subsidiaries to comply, with all applicable Bank Secrecy Act (“BSA”) laws and regulations, as amended.
 

[signature
page follows]

 

6

 

IN WITNESS WHEREOF, the
Borrower has caused this Note to be duly executed and delivered as of the date
first above written.

 

 

	
   

  	
   

  	
  BRAD FOOTE GEAR WORKS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ralph Placzek

  
	
   

  	
   

  	
   

  	
     Ralph Placzek

  
	
   

  	
   

  	
  Title:

  	
     Vice President of Finance

  
					

 

7Exhibit
10.3

 

NOTE MODIFICATION AGREEMENT

 

This Note Modification Agreement
(the “Agreement”) is dated as of December 9, 2008 and is made by and 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 (the “Bank”).

 

R E C I T A L S

 

A.            Borrower
has previously delivered to the Bank its Consolidated Term Note dated February
1, 2006 in the principal amount of $7,899,332.98 (the “Note”), evidencing a
consolidated term loan made by the Bank to the Borrower; and

 

B.            The
Note currently bears interest at a variable rate equal to the prime rate option
set forth in the Note; and

 

C.            The
Borrower and Bank have agreed to modify the interest rate charged on the Note;

 

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

 

1.             Effective December 9, 2008 and for
the balance of the term of this Note, the interest rate charged on this Note
shall be Adjusted LIBOR (as hereinafter defined). To effect such change, the
Note is hereby amended to add the following additional provisions thereto:

 

“The term “LIBOR Loan” as
used herein shall mean the outstanding principal balance of this Note at the
beginning of each Interest Period (as hereinafter defined) or any other
applicable time. “Adjusted LIBOR” means a rate of interest equal to two and
one-half percent (2.5%) per annum in excess of the per annum rate of interest
at which U.S. dollar deposits in an amount comparable to the amount of the
relevant LIBOR Loan and for a period equal to the relevant “Interest Period”
(as hereinafter defined) are offered generally to the Bank  in the London Interbank Eurodollar market at
11.00 a.m. (London time) two Banking Days prior to the commencement of each
Interest Period, as displayed in the Bloomberg Financial Markets system, or
other authoritative source selected by the Bank in its sole discretion, divided
by a number determined by subtracting from 1.00 the maximum reserve percentage
for determining reserves to be maintained by member banks of the Federal
Reserve System for Eurocurrency liabilities, such rate to remain fixed for such
Interest Period. “Interest Period” shall mean successive 30 day periods
commencing on December 9, 2008; provided that: (i) each such 30 day period
occurring after such initial period shall commence on the day on which the next
preceding period expires; (ii) the final Interest Period shall be such that its
expiration occurs on or before the Maturity Date; (iii) any Interest Period
which commences on the last Banking Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Banking Day of the appropriate subsequent
calendar month; (iv) if the final Interest Period before the Maturity Date is less
then 30 days, this Note shall continue to bear interest at Adjusted LIBOR for
such final Interest Period; and (v)  each
Interest 

 

1

 

Period
which would otherwise end on a day which is not a Banking Day shall end on the
next succeeding Banking Day, or, if such next succeeding Banking Day falls in
the next succeeding calendar month, on the next preceding Banking Day. Interest
on each LIBOR Loan shall be payable on the last Banking Day of each Interest
Period, at maturity, after maturity on demand, and on the date of  any payment hereon on the amount paid. The
Borrower hereby further promises to pay to the order of the Bank, on demand,
interest on the unpaid principal amount of each LIBOR Loan after maturity
(whether by acceleration or otherwise) at the Default Rate (as defined in this
Note). As used herein, “Banking Day(s)” shall mean each and all days other than
a Saturday, Sunday or a legal holiday on which national banks are authorized or
required to be closed for the conduct of commercial banking business in
Chicago, Illinois.

 

The Bank’s determination of
Adjusted LIBOR as provided above shall be conclusive, absent manifest error. Furthermore,
if the Bank determines, in good faith (which determination shall be conclusive,
absent manifest error) prior to the commencement of any Interest Period that:
(a) U.S. dollar deposits of sufficient amount and maturity for funding any
LIBOR Loan are not available to the Bank in the London Interbank Eurodollar
market in the ordinary course of business, or (b) by reason of circumstances
affecting the London Interbank Eurodollar market, adequate and fair means do
not exist for ascertaining the rate of interest to be applicable to the
relevant LIBOR Loan, the Bank shall promptly notify the Borrower and such LIBOR
Loan shall automatically convert on the last day of its then-current Interest
Period to a loan bearing interest at the Prime Rate plus two and one-half
percent (2.5%) per annum.

 

If, after the date hereof,
the introduction of, or any change in, any applicable law, treaty, rule,  regulation, or guideline, or in the
interpretation or administration thereof by any governmental authority or any
central bank or other fiscal, monetary or other authority having jurisdiction
over the Bank or its lending office (a “Regulatory Change”) shall, in the
opinion of counsel to the Bank, make it 
unlawful or impossible for the Bank to make or maintain any LIBOR Loan
evidenced hereby, then the Bank shall promptly notify the Borrower and such
LIBOR Loan shall automatically convert on the last day of its then-current
Interest Period (or earlier if required by such Regulatory Change) to a loan
bearing interest at the Prime Rate plus two and one-half percent (2.5%) per
annum.

 

If, for any reason, any
LIBOR Loan is paid prior to the last Banking Day of its then-current Interest
Period, the Borrower agrees to indemnify the Bank against any loss (including
any loss on redeployment of the funds repaid), cost or expense incurred by the
Bank as a result of such prepayment.

 

If any Regulatory Change
(whether or not having the force of law) shall (a)  impose, modify or deem applicable any
assessment, reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of, or loans by, or any other acquisition
of funds or disbursements by, the Bank; (b) subject the Bank or any LIBOR Loan
to any tax, duty, charge, stamp tax or fee or change in the basis of taxation
of payments to the Bank of principal or interest due from the Borrower to the
Bank hereunder (other than a change in the taxation of the overall net income
of the Bank); or (c) impose on the Bank any other condition regarding such
LIBOR Loan or the Bank’s funding thereof, and the Bank shall determine (which
determination shall be conclusive, absent manifest error) that the result of
the foregoing is to increase the cost to the Bank of making or maintaining such
LIBOR Loan or to reduce the amount of principal or 

 

2

 

interest
received by the Bank hereunder, then the Borrower shall pay to the Bank, on
demand, such additional amounts as the Bank shall, from time to time, determine
are sufficient to compensate and indemnify the Bank for such increased cost or
reduced amount.

 

The outstanding principal
balance of this Note, the applicable interest rate for each Interest Period, each
applicable Interest Period, and the amount and date of any repayment shall be
noted on Bank’s records, which records shall be conclusive evidence thereof,
absent manifest error; provided, however, any failure by Bank to make any such
notation, or any error in any such notation, shall not relieve Borrower of its
obligations to repay Bank the outstanding principal balance of this Note, all
accrued and unpaid interest thereon, and all other amounts payable by Borrower
to Bank under or pursuant to this Note.”

 

2.             All
references in the Note to an option to convert the interest rate on the Note to
the “Fixed Rate” and all applicable provisions pertaining to such fixed rate
option are hereby deleted without substitution.

 

3.             In
the event of any conflict between the terms of this Agreement and the Note, the
terms of this Agreement shall govern.

 

4.             Borrower
acknowledges and irrevocably agrees that the payment and performance of the
Note, as modified hereby, shall continue to be secured by Collateral Documents
(as such term is defined in the Loan and Security Agreement dated January 17,
1997 between the Borrower and the Bank, as amended from time to time).

 

5.             Except
as expressly modified by this Agreement, all terms and provisions of the Note
shall stand and remain in full force and effect.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and  year first above written.

 

	
  BORROWER:

  	
   

  
	
   

  	
   

  
	
  BRAD FOOTE GEAR WORKS,
  INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
        /s/
  Ralph Placzek

  	
   

  
	
   

  	
        Ralph
  Placzek

  	
   

  
	
  Title:

  	
        Vice
  President of Finance

  	
   

  
	
   

  	
   

  	
   

  
	
  BANK:

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
        /s/
  Katherine Novey

  	
   

  
	
   

  	
        Katherine
  Novey

  	
   

  
	
  Title:

  	
        Senior
  Vice President

  	
   

  

 

3

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