Document:

EXHIBIT 10.24

 

NINETEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS NINETEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”)
is dated as of November 10, 2006 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
and Eighteenth 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 and April 29, 2006, 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 $3,500,000.00 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”), and (iii) a
$7,100,000.00 non-revolving equipment line of credit loan with term conversion
feature (the “Equipment Loan”); and

 

WHEREAS, Borrower has asked Lender to (i) increase the
Revolving Loan from $3,500,000.00 to $5,000,000.00, and (ii) increase the
amount of the Equipment Loan to $11,000,000.00 and change the conversion date
to April 29, 2007, and (iii) make certain other changes to the Loan
Agreement; and

 

WHEREAS, Lender has agreed to the foregoing requests
provided Borrower executes and delivers such documents and instruments required
by Lender, including, the promissory notes 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 “Commitment
Amount” and “EBITDA” in Section 1.1 of the Loan Agreement are each amended
in its entirety to read as follows:

 

“Commitment Amount” shall mean, as of any applicable date of
determination, Five Million and 00/100 ($5,000,000.00) Dollars.

 

“EBITDA” shall mean, as of any applicable date of
determination, with respect to Borrower, the sum of the amounts for such
periods, of (i) Net Income, plus (ii) depreciation and amortization
expense, plus (iii) Cash Interest Expense, plus (iv) federal and
state income taxes 

 

1

 

(including
the Illinois replacement tax), minus (v) unfinanced capital expenditures,
minus (vi) distributions.

 

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 November 10, 2006, payable to the Lender
on April 29, 2007, and in the principal sum of Five Million and 00/100
($5,000,000.00) 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 November 10, 2006 in the principal sum of
$5,000,000.00, executed by Borrower, payable to the order of Lender on April 29,
2007, together with interest payable monthly as therein described.

 

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

 

“SECTION 3A. EQUIPMENT LOAN.

 

3A.1        Equipment Line of Credit.  The Lender agrees to extend to the Borrower a
non-revolving equipment line of credit in the principal amount of Eleven
Million and 00/100 ($11,000,000.00) Dollars (such loan, together with any and
all extensions, renewals, amendments, refinancings, modifications, conversions
or consolidations thereof or thereto, the “Equipment Loan”). The Equipment Loan
shall be evidenced by an amended and restated equipment line note dated November 10,
2006 executed by Borrower in the principal sum of Eleven Million and 00/100
($11,000,000.00) Dollars (such note, together with any and all extensions,
renewals, amendments, refinancings, modifications, conversions or
consolidations thereof or thereto, hereafter called the “Equipment Note”). The
Equipment Note shall be payable to the order of the Lender in installments of
principal and interest, calculated at the applicable rate set forth in the
Equipment Note, the terms of which are incorporated herein by reference.

 

The
proceeds of the Equipment Loan shall be used by Borrower solely to purchase new
and used equipment to be used in Borrower’s business. Lender shall advance one
hundred percent (100%) against the invoice cost (excluding all soft costs) of
the equipment being purchased. Borrower will provide the Lender with copies of
the invoices and any purchase agreements for such equipment.

 

3A.2.       Prepayment Penalty.  If the Equipment Note provides that Borrower
is required to pay a prepayment penalty in connection with any prepayment
thereon, upon the occurrence of each prepayment on such Equipment Note, the
Borrower shall pay the Lender the prepayment penalty calculated in accordance
with the terms of the Equipment Note.”

 

5.             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:

 

 

2

 

(a)           Minimum Tangible Net Worth.  Borrower will maintain at all times a minimum
Tangible Net Worth of not less than $4,000,000.00 (to be tested quarterly by
the Lender).

 

(b)           Cash Flow Coverage.  Borrower will maintain at the end of each
fiscal year of Borrower a Cash Flow Coverage of not less than 1.3 to 1.0 (to be
tested annually by the Lender).

 

(c)           Total Unsubordinated Debt to
Tangible Net Worth.  Borrower
will maintain at all times a ratio of total unsubordinated Debt to Tangible Net
Worth of not greater than 3.5 to 1.0 (to be tested quarterly by the Lender).

 

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

 

6.             The first paragraph of Section 10
of the Loan Agreement is hereby amended in its entirety to read as follows:

 

“As
soon as available, but not later than ninety (90) days after the end of each
fiscal year of Borrower, commencing with the fiscal year ended December 31,
2007, Borrower shall furnish the Lender with annual audited financial
statements of Borrower, containing the balance sheet of the Borrower as of the
close of each such fiscal year, statements of income and retained earnings and
a statement of cash flows for each such fiscal year; and such other comments
and financial details as are usually included in similar reports. Such
financial statements shall (a) be in form and reporting basis satisfactory
to the Lender, (b) be prepared in accordance with GAAP by an independent
certified public accounting firm selected by Borrower and acceptable to the
Lender (“Borrower’s Accounting Firm”), and (c) contain unqualified
opinions as to the fairness of the statements therein contained. Borrower shall
also provide to the Lender any management letters that may accompany the
statements.”

 

7.             The last paragraph of Section 10
of the Loan Agreement is hereby amended in its entirety to read as follows:

 

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

 

8.             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 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 and all other Indebtedness.

 

 

3

 

9.             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 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.

 

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.

 

10.           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.

 

11.           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.

 

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

 

 

4

 

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

 

Borrower:

 

	
  BRAD
  FOOTE GEAR WORKS, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  J. Cameron Drecoll

  	
   

  
	
  Title:
  

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Joan M. Drecoll

  	
   

  
	
  Title:
  

  	
  Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
  Lender:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LASALLE
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Stephen P. Mares

  	
   

  
	
  Title:
  

  	
  Vice
  President

  	
   

  

 

 

5Exhibit 10.25

 

TWENTY-SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

                THIS
TWENTY-SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”)
is dated as of June 30, 2007 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 and Twenty-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 and April 29, 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 $6,500,000.00 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”), and (iii) an
$11,000,000.00 non-revolving equipment line of credit loan with term conversion
feature (the “Equipment Loan”); and

 

                WHEREAS,
Borrower has asked Lender to (i) renew the Revolving Loan until June 30,
2008, and (ii) make Borrower a new $9,000,000.00 non-revolving equipment
line of credit loan with term conversion feature, (iii) eliminate one of
Borrower’s financial covenants set forth in the Loan Agreement, and (iv) 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 “Loans”, “Notes”,
and “Termination Date” in Section 1.1 of the Loan Agreement, are each
amended in its entirety to read as follows:

 

                “Loans”
shall mean collectively, the Revolving Loan, the Term Loan, the Equipment Loan,
the Equipment Loan No. 2, all future loans made by the Lender to the
Borrower, and all

 

 

1

 

extensions,
renewals, amendments, refinancings, modifications, consolidations, conversions,
and increases thereof or thereto.

 

                “Notes” shall mean
collectively, the Revolving Note, the Term Note, the Equipment Note, the
Equipment Note No. 2, all notes executed by Borrower evidencing future
loans made by Lender to Borrower, and all extensions, renewals, amendments,
refinancings, modifications, consolidations and conversions thereof or thereto.

 

                “Termination
Date” shall mean June 30, 2008, or such earlier date upon which
the Revolving Note becomes due and payable.

 

3.             Section 1.1 of the Loan
Agreement is amended to add the following new definitions:

 

                “Equipment
Loan No. 2” shall have the meaning set forth in Section 3B
hereof.

 

                “Equipment
Note No. 2” shall have the meaning set forth in Section 3B
hereof.

 

4.             In Section 1.1 of the Loan
Agreement, the definition of “Indebtedness” is amended to add the following new
subsection therein following Subsection (2A) therein:

 

“(2B)
the Equipment Loan No. 2, together with all extensions, renewals,
amendments, refinancings, modifications, consolidations and conversions
thereof; and”

 

5.             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 a renewal revolving note,
executed by the Borrower, dated June 30, 2007, payable to the Lender on June 30,
2008, and in the principal sum of Six Million Five Hundred Thousand and 00/100
($6,500,000.00) 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 renewal revolving note dated June 30,
2007 in the principal sum of $6,500,000.00, executed by Borrower, payable to
the order of Lender on June 30, 2008, together with interest payable
monthly as therein described.

 

6.             The Loan Agreement is hereby
amended to add the following new subsection 3B thereto:

 

“              SECTION 3B. EQUIPMENT LOAN
NO. 2.

 

                3B.1        Equipment Line of Credit.  The Lender agrees to extend to the Borrower a
non-revolving equipment line of credit in the principal amount of Nine Million
and 00/100 ($9,000,000.00) Dollars (such loan, together with any and all
extensions, renewals, amendments, refinancings, modifications, conversions or
consolidations thereof or thereto, the “Equipment Loan No. 2”).  The Equipment Loan No. 2 shall be evidenced
by an equipment line note dated June 30, 2007 executed by Borrower in the
principal sum of Nine Million and 00/100

 

 

2

 

($9,000,000.00)
Dollars (such note, together with any and all extensions, renewals, amendments,
refinancings, modifications, conversions or consolidations thereof or thereto,
the “Equipment Note No. 2”).  The
Equipment Note No. 2 shall be payable to the order of the Lender in
installments of principal and interest, calculated at the applicable rate set
forth in the Equipment Note No. 2, the terms of which are incorporated
herein by reference.

 

                The proceeds of the Equipment
Loan No. 2 shall be used by Borrower solely to purchase new and used
equipment to be used in Borrower’s business. 
Lender shall advance one hundred percent (100%) against the invoice cost
(excluding all soft costs) of the equipment being purchased.  Borrower will provide the Lender with copies
of the invoices and any purchase agreements for such equipment.

 

                3B.2.       Prepayment Penalty. 
If the Equipment Note No. 2 provides that Borrower is required to
pay a prepayment penalty in connection with any prepayment thereon, upon the
occurrence of each prepayment on such Equipment Note No. 2, the Borrower
shall pay the Lender the prepayment penalty calculated in accordance with the
terms of the Equipment Note No. 2.”

 

7.             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)           Cash Flow Coverage. 
Borrower will maintain at the end of each fiscal year of Borrower a Cash
Flow Coverage of not less than 1.3 to 1.0 (to be tested annually by the
Lender).

 

                (b)           Total Unsubordinated Debt to Tangible Net Worth.  Borrower will maintain at all times a ratio
of total unsubordinated Debt to Tangible Net Worth of not greater than 3.5 to
1.0 (to be tested quarterly by the Lender).

 

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

 

8.             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 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.

 

9.             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 

 

 

3

 

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.

 

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.

 

10.           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.

 

11.           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.

 

12.           Borrower further agrees to reimburse
the Lender for its legal fees incurred in documenting the aforesaid loan
renewal, new equipment loan and other modifications hereinabove described.

 

 

4

 

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

 

Borrower:

 

BRAD
FOOTE GEAR WORKS, INC.

 

	
  By:

  	
  /s/
  J. Cameron Drecoll

  	
   

  
	
   

  	
  J.
  Cameron Drecoll

  	
   

  
	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Joan M. Drecoll

  	
   

  
	
   

  	
  Joan
  M. Drecoll

  	
   

  
	
  Title:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
  Lender:

  	
   

  
	
   

  	
   

  
	
  LASALLE
  BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
  By:

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 

5

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