Document:

Exhibit 10.2

 

THIRTIETH AMENDMENT TO LOAN AND SECURITY
AGREEMENT

 

THIS THIRTIETH AMENDMENT TO LOAN AND SECURITY
AGREEMENT (this “Amendment”) is dated as of August 30,
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,
Twenty-Seventh, Twenty-Eighth and Twenty-Ninth 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, January 31, 2008, April 11, 2008 and June 30, 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 extend the maturity date of the Revolving Loan from August 30,
2008 to October 31, 2008 and to make certain modifications to the Loan
Agreement; and

 

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

 

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 definition of “Termination Date”
in Section 1.1 of the Loan Agreement, is amended in its entirety to read
as follows:

 

“Termination Date” shall mean October 31, 2008, or such earlier date upon which the
Revolving Note becomes due and payable.

 

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, as modified by Note Extension Agreements dated as of June 30, 2008
and August 30, 2008, payable to the Lender on October 31, 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, as modified by Note Extension Agreements
dated as of June 30, 2008 and August 30, 2008, payable to the order
of Lender on October 31, 2008, together with interest payable monthly as
therein described.

 

4.             In Section 14.1 of the Loan Agreement, the
following subsection (g) entitled “Minimum Excess Borrowing
Availability” is hereby deleted without substitution:

 

“(g)         Minimum Excess Borrowing
Availability. Borrower will at all times on and after May 15, 2008,
have a minimum $3,000,000.00 of Excess Borrowing Availability.”

 

1

 

5.             All references in the Loan
Agreement to any requirement for J. Cameron Drecoll to maintain a life
insurance policy in place as security for the Revolving Loan are hereby
deleted. The Bank agrees to execute and deliver to Borrower such releases as
shall be required to effect such release.

 

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 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.

 

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 further
agrees to reimburse the Lender for its reasonable legal fees incurred in
documenting the aforesaid loan extension hereinabove described.

 

[signature page follows]

 

2

 

IN
WITNESS WHEREOF, the parties have entered into this Thirtieth 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: 

  	
   Chief Executive Officer

  
	
   

  
	
   

  
	
  Lender:

  
	
   

  
	
  LASALLE
  BANK NATIONAL ASSOCIATION

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Katherine M. Novey

  	
   

  
	
  Title: 

  	
  Vice President

  	
   

  
					

 

3Exhibit 10.3

 

NOTE EXTENSION AGREEMENT

 

This
Note Extension Agreement (the “Agreement”) is dated as of August 30, 2008
and is made by and between BRAD FOOTE GEAR WORKS, INC., f/k/a BFG Acquisition
Corp., an Illinois corporation (“Borrower”) and LASALLE BANK NATIONAL BANK
f/k/a LaSalle National Bank f/k/a LaSalle Bank NI, a national banking
association (the “Bank”).

 

R E C I T A L S

 

A.            Borrower has
previously delivered to the Bank its Amended and Restated Renewal Revolving
Note dated January 15, 2008 in the principal amount of $10,000,000.00, as
modified and extended by Note Extension Agreement dated as of June 30,
2008 (the “Note”), evidencing a revolving line of credit loan extended by the
Bank to the Borrower; and

 

B.            The Note matures on August 30,
2008, and Borrower has asked the Bank to extend the maturity date of the Note
until October 31, 2008; and

 

C.            The Bank has
consented to such loan request, on the terms hereinafter provided.

 

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.             In the first line
of the first paragraph on page 1 of the Note, the date “August 30,
2008” is hereby deleted, and the date “October 31, 2008” is substituted
therefor. Borrower confirms to the Bank that the Note shall mature on October 31,
2008.

 

2.             Borrower
acknowledges and irrevocably agrees that the payment and performance of the
Note, as extended 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).

 

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

 

SIGNATURE PAGE FOLLOWS

 

1

 

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/ J.
  Cameron Drecoll

  	
   

  
	
   

  	
  J. Cameron Drecoll

  
	
  Title:

  	
  Chief Executive Officer

  
	
   

  
	
   

  
	
  BANK:

  
	
   

  
	
  LASALLE
  BANK NATIONAL ASSOCIATION

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Katherine M. Novey

  	
   

  
	
  Title: 

  	
  Vice President

  	
   

  
					

 

2

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