Exhibit 10.27
TWENTY-NINTH AMENDMENT TO LOAN
AND SECURITY AGREEMENT
THIS TWENTY-NINTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT (this “Amendment”) is dated as of
June 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 and
Twenty-Eighth 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, November 1, 2007, January 15,
2008, January 31, 2008 and
April , 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 June 30, 2008 to
August 30, 2008 and to make certain other modifications
thereto; and
WHEREAS, Lender has agreed to the foregoing loan
extension request 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:
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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
August 30, 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 Agreement
dated as of June 30, 2008, payable to the Lender on
August 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, as modified
by Note Extension Agreement dated as of June 30, 2008, payable
to the order of Lender on August 30, 2008, together with
interest payable monthly as therein described.
4.
Section 10 of the Loan
Agreement is hereby amended in its entirety to read as
follows:
“ SECTION 10.
FINANCIAL REPORTING AND AUDITS.
As soon as available, but not later
than one hundred twenty (120) days after the end of each fiscal
year of Borrower, 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.
As soon as available, but not later
than one hundred twenty (120) days after the end of each fiscal
year of Broadwind Energy, Inc. and its Subsidiaries
(hereafter, collectively
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“Broadwind”), Borrower
shall furnish the Lender with annual audited financial statements
of Broadwind, containing the balance sheet of Broadwind 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. Borrower shall also provide to the
Lender any management letters that may accompany such
statements.
As soon as available, but not later
than forty-five (45) days after the end of each quarter, Borrower
shall furnish the Lender with (i) internally prepared
quarterly financial statements of Borrower, in form and content
satisfactory to Lender, and (ii) a quarterly covenant
compliance certificate, in form and content satisfactory to Lender
(including a certificate by the chief executive or financial
officer of Borrower containing a computation of, and showing
compliance with, each of the financial covenants contained in
Section 14.1 hereof). The validity and accuracy of said
financial statements shall be certified by the chief executive or
financial officer of the Borrower, in a form satisfactory to the
Lender.
Borrower shall deliver the following
to the Lender on a monthly basis within fifteen (15) days after
month-end, in form acceptable to Lender: (i) a monthly
Borrowing Base Certificate, and (ii) a monthly accounts
receivable aging and a monthly accounts payable aging.
Borrower shall also promptly provide
the Lender with such other information, financial or otherwise,
concerning the Borrower or Broadwind, as the Lender may reasonably
request from time to time.
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.”
5.
Lender hereby waives
Borrower’s violation in failing to provide Lender with
audited annual financial statements for the Borrower for the fiscal
year ended December 31, 2007. Said waiver is limited solely to
such specific reporting violation for such period, 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).
6.
Borrower covenants to provide to
Lender with internally prepared annual financial statements for the
Borrower for the fiscal year ended December 31, 2007 no later
than June 30, 2008, in form acceptable to Lender.
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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)
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 EBITDA
. 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 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). For the periods ended March 31, 2008,
June 30, 2008 and September 30, 2008, Cash Flow Coverage
shall be defined as (i) year-to-date EBITDA divided by
(i) year-to-date principal payments of
