EXHIBIT 10.18
THIRD AMENDMENT TO LOAN AND
SECURITY AGREEMENT
This Third Amendment to Loan and Security Agreement is dated as of
March 30, 1998 between BRAD FOOTE GEAR WORKS, INC. f/k/a BFG
Acquisition Corp., an Illinois corporation (“Borrower”)
and LASALLE NATIONAL BANK formerly known as 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 (such agreement, as amended, the “Loan
Agreement”) with regard to a $2,200,000.00 revolving line of
credit loan (the “Revolving Loan”) extended by Lender
to Borrower, and a $2,700,000.00 (the “Term Loan”) made
by Lender to Borrower; and
WHEREAS, Borrower has requested that Lender make Borrower an
equipment loan of up to $1,500,000.00 (the “Equipment
Loan”) and extend to Borrower an $850,000.00 non-revolving
equipment line of credit (the “Equipment Line of
Credit”); and
WHEREAS, Borrower has further requested that Lender
(i) release the existing guaranties of Dennis Palmer and
Patrick Rosmonowski, (ii) limit the existing guaranty of J.
Cameron Drecoll to the sum of $750,000.00, and (iii) make
certain changes to the Loan Agreement; and
WHEREAS, Lender has agreed to the foregoing requests provided
(a) Borrower executes and delivers such documents and
instruments required by Lender, including, promissory notes to
evidence the Equipment Loan and Equipment Line of Credit and this
Amendment, and (b) J. Cameron Drecoll executes and delivers to
the Lender an Amendment and Reaffirmation of Guaranty and Consent;
and
WHEREAS, as a condition precedent to making the Equipment Loan and
Equipment Line of Credit, the Lender requires that the Borrower
confirm and assure that the Collateral (as defined in the Loan
Agreement) will secure payment of the Equipment Loan and Equipment
Line of Credit, and all other Indebtedness (as defined in the Loan
Agreement).
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.
Section 1.1 of the Loan Agreement is amended to add the
following new definitions:
(a)
“Equipment Line of Credit” shall mean the equipment
line of credit described in Section 3B hereof and all
extensions, renewals, amendments, refinancings, modifications,
consolidations and conversions thereof or thereto.
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(b)
“Equipment Line Note” shall mean the promissory note
evidencing the Equipment Line of Credit executed by Borrower in
accordance with Section 3B hereof and all extensions,
renewals, amendments, refinancings, modifications, consolidations
and conversions thereof or thereto.
(c)
“Equipment Loan” shall mean the equipment loan
described in Section 3A hereof and all extensions, renewals,
amendments, refinancings, modifications, consolidations, and
conversions thereof or thereto.
(d)
“Equipment Note” shall mean the promissory note
evidencing the Equipment Loan executed by Borrower in accordance
with Section 3A hereof and all extensions, renewals,
amendments, refinancings, modifications, consolidations, and
conversions thereof or thereto.
3.
The following definitions in Section 1.1 of the Loan Agreement
are amended as follows:
(a)
the definition of “Guarantors” is hereby deleted, and
the following definition is hereby substituted therefor:
“Guarantor” shall mean J. Cameron Drecoll.
(b)
the definition of “Guaranties” is hereby deleted, and
the following definition is hereby substituted therefor:
“Guaranty” shall mean the continuing guaranty to be
executed by the Guarantor in accordance with Section 5 hereof,
pursuant to which the Guarantor unconditionally guarantees
repayment to the Lender of all the Indebtedness, subject to the
limitation of liability described in Section 5.
(c)
the definition of the term “Loans” is hereby amended in
its entirety to read as follows:
“Loans” shall mean collectively, the Revolving Loan,
the Term Loan, the Equipment Loan, the Equipment Line of Credit,
and all extensions, renewals, amendments, refinancings,
modifications, consolidations, conversions, and increases thereof
or thereto.
(d)
the definition of the term “Notes” is hereby amended in
its entirety to read as follows:
“Notes” shall mean collectively, the Revolving Note,
the Term Note, the Equipment Note, the Equipment Line Note, and all
extensions, renewals, amendments, refinancings, modifications,
consolidations and conversions thereof or thereto.
4.
In the second paragraph of Section 2.3 of the Loan Agreement,
the words “plus one-half percent” in the fourth line
are deleted and the words “minus one-half percent” are
substituted therefor.
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5.
Section 2.4 of the Loan Agreement entitled “ Lock
Box ” is hereby amended to add the following new last
paragraph thereto:
“Notwithstanding anything contained in this Section 2.4
to the contrary, so long as no Event of Default shall have occurred
and be continuing, the requirement of maintaining the Lock Box
shall be at Borrower’s option, and not mandatory. However, if
an Event of Default shall occur and be continuing, the maintenance
of the Lock Box shall become mandatory, and Borrower shall
forthwith strictly comply with all of the terms of this
Section 2.4.”
6.
In the twelfth line of the first paragraph of Section 3.1 of
the Loan Agreement, the words “plus one-half percent”
are deleted, and the words “minus one-half percent” are
substituted therefor.
7.
The Loan Agreement is hereby amended to insert the following new
Section 3A and Section 3B thereto:
“SECTION 3A. EQUIPMENT LOAN.
3A.1 Equipment
Loan . The Lender agrees to make the Borrower a secured
equipment loan in the principal amount of up to One Million Five
Hundred Thousand and no/100 ($1,500,000.00) Dollars (herein, the
“Equipment Loan”). The Equipment Loan shall be
evidenced by an equipment note dated March 30, 1998, executed
by Borrower, in the principal sum of One Million Five Hundred
Thousand and no/100 ($1,500,000.00) Dollars (the “Equipment
Note”), payable to the order of the Lender in eighty-three
(83) successive equal monthl
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