Document:

Exhibit 10.28

 

TWENTY-SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS
TWENTY-SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”)
is dated as of January 15, 2008 between BRAD FOOTE GEAR WORKS, INC. f/k/a
BFG Acquisition Corp., an Illinois corporation (“Borrower”) and 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 and Twenty-Fifth 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 and November 1, 2007, 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
$8,000,000.00 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”), and (iv) a $9,000,000.00
non-revolving equipment line of credit loan with term conversion feature (the “Equipment
Loan No. 2”); and

 

WHEREAS, Borrower has
asked Lender to (i) increase the amount of the Revolving Loan to
$10,000,000.00, (ii) modify the borrowing base formula for the Revolving
Loan, and (iii) make certain other changes to the Loan Agreement; and

 

WHEREAS, Lender has
agreed to the foregoing loan requests provided Borrower executes and delivers
such documents and instruments required by Lender, including, the promissory
note described below and this Amendment;

 

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 “Borrowing Base”,
“Commitment Amount” and “Revolving Loan” in Section 1.1 of the Loan
Agreement, are each amended in its entirety to read as follows:

 

“Borrowing
Base” shall mean, as of any applicable date of determination, an amount
equal to the sum of (i) eighty percent (80%) of Borrower’s Eligible
Accounts, and (ii) the lesser 

 

1

 

of
(a) fifty percent (50%) of Borrower’s Eligible Inventory, or (b) Four
Million Dollars ($4,000,000.00).

 

“Commitment
Amount” shall mean, as of any applicable date of determination, Ten Million
and 00/100 ($10,000,000.00) Dollars.

 

“Revolving
Loan” shall mean the $10,000,000,00 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 January 15,
2008, payable to the Lender on June 30, 2008, and in the principal sum of
Ten Million and 00/100 ($10,000,000.00) 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 January 15, 2008 in the principal sum of $10,000,000.00, executed by
Borrower, payable to the order of Lender on June 30, 2008, together with interest
payable monthly as therein described.

 

4.             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.

 

5.             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,
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.

 

2

 

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.

 

6.             In order to induce Lender to enter
into this Amendment, the Borrower hereby represents and warrants to the Lender
that as of the date hereto, each of the representations and warranties set
forth in the Loan Agreement, as amended hereby, are true and correct and the
Borrower is in full compliance with all of the terms and conditions of the Loan
Agreement, as amended hereby, and no Event of Default or Default has occurred
and is continuing.

 

7.             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).

 

8.             Borrower further agrees to
reimburse the Lender for its legal fees incurred in documenting the aforesaid
Revolving Loan increase and other modifications hereinabove described.

 

[signature page follows]

 

3

 

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

 

	
  Borrower:

  	
   

  
	
   

  	
   

  	
   

  
	
  BRAD FOOTE GEAR WORKS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Steven A. Huntington

  	
   

  
	
   

  	
       Steven A. Huntington

  	
   

  
	
  Title:  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lender:

  	
   

  
	
   

  	
   

  	
   

  
	
  LASALLE BANK NATIONAL ASSOCIATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Stephen P. Mares

  	
   

  
	
   

  	
       Stephen P. Mares

  	
   

  
	
  Title:  FVP

  	
   

  

 

4Exhibit 10.30

 

TWENTY-EIGHTH AMENDMENT TO LOAN
AND SECURITY AGREEMENT

 

THIS
TWENTY-EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
(this “Amendment”) is dated as of April 11, 2008 between BRAD FOOTE GEAR WORKS, INC. f/k/a BFG Acquisition Corp., an Illinois corporation (“Borrower”) and 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 and
Twenty-Seventh 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 4 2007, October 18,
2007, November 1, 2007, January 15, 2008 and January 31, 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 waive Borrower’s violation of certain
financial covenant set forth in the Loan Agreement and to make certain other
modifications thereto; and

 

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

 

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 

 

 

1

 

herein as such terms have in the Loan Agreement.

 

2.             Lender hereby waives Borrower’s violation of the
foregoing covenants set forth in the Loan Agreement: (i) Borrower’s
violation of the Senior Debt to EBITDA covenant set forth in Section 14.1(d) of
the Loan Agreement for the fiscal quarters ended December 31, 2007 and March 31,
2008, and (ii) Borrower’s violation of the Cash Flow Coverage covenant set
forth in Section 14.1(e) of the Loan Agreement for the fiscal year
ended December 31, 2007. 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).

 

3.             Section 14.1 of the Loan
Agreement is amended in its entirety to read as follows:

 

“14.1  Financial
Covenants.  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, except as expressly permitted by Section 14.3(i) hereof.
This covenant will be measured at all times.

 

(b)           Limitation on
Debts Owed To Or By Affiliates. 
Indebtedness owed by Borrower to
Affiliates and/or from Affiliates to Borrower will not exceed Five Hundred
Thousand Dollars ($500,000.00) in the aggregate at all times. The
foregoing sentence shall not be deemed to prohibit or apply to the approximate
$25,000,000.00 in aggregate principal debt (hereafter, the “Tontine Debt”) owed by Broadwind Energy, Inc.
f/ka Tower Tech Holdings Inc. (“Broadwind  Energy”) to Tontine Overseas Funds, Ltd., Tontine Partners, L.P. and
Tontine Capital Overseas  Master
Fund, L.P., which debt shall be evidenced by senior subordinated convertible
promissory  notes executed by
Broadwind Energy in favor of such payees, and subordinated to all present and
future indebtedness owed by Borrower to
Lender pursuant to written subordination agreements  in form acceptable to Lender. Any other
indebtedness (including inter-company payables) owed by Borrower to
Affiliates (other than described in the two preceding sentences) will be
subordinated to all present and future indebtedness owed by Borrower to Lender
in a manner satisfactory to the Lender.

 

(c)           Subordinated Debt
Payments.  Borrower will not make any
payments on Subordinated Debt except for interest payments thereon permitted in
accordance with Section 14.3(i) hereof.

 

(d)           Senior Debt to
EB11DA.  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.

 

(e)           Cash Flow
Coverage.  As of the end of each of
its fiscal quarters beginning 

 

 

2

 

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, and (ii) 2.0 to 1.0 June 30,
2008 and thereafter (to be tested quarterly by the Lender commencing with the
quarter ended March 31, 2008).

 

(f)            Minimum EBITDA.  As of the
end of each of its fiscal quarters beginning with the quarter ended June 30,
2008, the Borrower shall maintain minimum EBITDA of not less than the
following:  (i) $7,500,000 at
June 30, 2008, (ii) $15,000,000
at September 30, 2008, and
(iii) $22,500,000 at December 31, 2008 and thereafter. This covenant will
be tested quarterly beginning with the fiscal quarter ended June 30, 2008.

 

(g) Minimum Excess Borrowing Availability.  Borrower will at all times on and after May 15, 2008, have  $3,000,000.00 in excess of borrowing availability under the Revolving Loan.

 

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 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 

 

3

 

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,  of 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 (iii) distributions.

 

“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
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 means, 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.

 

The
financial requirements set forth hereinabove shall be computed in accordance
with 

 

4

 

GAAP.”

 

4.           All other references in the Loan Agreement to “Tower
Tech Holdings Inc.” are amended to read Broadwind Energy, Inc.
f/k/a Tower Tech Holdings Inc.

 

5.           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).

 

6.             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.

 

7.             In
order to induce Lender to enter into this Amendment, the Borrower hereby
represents and warrants to the Lender that as of the date hereto, each of the
representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct and the Borrower is in full
compliance with all of the terms and conditions of the Loan Agreement, as
amended hereby, and no Event of Default or
Default has occurred and is continuing.

 

8.             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).

 

 

5

 

9.             Borrower further agrees to reimburse the Lender for its reasonable legal
fees incurred in documenting the aforesaid
modifications hereinabove described.

 

[signature page follows]

 

 

6

 

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

 

Borrower:

 

BRAD FOOTS GEAR WORKS, INC.

 

	
  By:

  	
  

  
	
   

  	
  J. Cameron Drecoll

  
	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Lender:

  
	
   

  	
   

  
	
  LASALLE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
  

  
	
   

  	
   

  

 

 

7

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