Exhibit 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
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