EXHIBIT 10.26
TWENTY-THIRD AMENDMENT TO LOAN
AND SECURITY AGREEMENT
THIS
TWENTY-THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
(this
“Amendment”) is dated as of October 4, 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, Twenty-First and
Twenty-Second 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
and June 30, 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) increase the amount of the Revolving Loan to
$7,000,000.00, and (ii) modify the borrowing base formula for
the Revolving Loan to provide for advances against eligible
inventory, and (iii) 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
“Borrowing Base”, “Commitment Amount” and
“Revolving Loan” in Section 1.1 of the Loan
Agreement, are each amended in its entirety to read as
follows:
“Borrowing
Base” shall mean, as of any applicable date of
determination, an amount equal to the sum of (i) eighty
percent (80%) of Borrower’s Eligible Accounts, and
(ii) the lesser
1
of (a) twenty-five
percent (25%) of Borrower’s Eligible Inventory, or
(b) Two Million Dollars ($2,000,000.00).
“Commitment
Amount” shall mean, as of any applicable date of
determination, Seven Million and 00/100 ($7,000,000.00)
Dollars.
“Revolving
Loan” shall mean the $7,000,000.00 revolving line of
credit loan extended by the Lender to the Borrower under
Section 2 of this Agreement, and any and all extensions,
renewals, amendments, modifications, refinancings, conversions,
consolidations and increases thereof or thereto.
3.
Section 1.1 of the
Loan Agreement is hereby amended to add the following additional
definition:
“Eligible
Inventory” shall mean such items of Inventory included in
a Borrowing Base Certificate which, as of the date of such
Borrowing Base Certificate and at all times thereafter:
(i) satisfy the requirements for eligibility as described in
Section 2.6A of this Agreement, (ii) do not violate the
negative covenants and other provisions of this Agreement and do
satisfy the affirmative covenants and other provisions of this
Agreement, and (iii) are deemed by Lender, in its sole credit
judgment, to be Eligible Inventory.
4.
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
October 4, 2007, payable to the Lender on June 30, 2008,
and in the principal sum of Seven Million and 00/100
($7,000,000.00) 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
October 4, 2007 in the principal sum of $7,000,000.00,
executed by Borrower, payable to the order of Lender on
June 30, 2008, together with interest payable monthly as
therein described.
5.
The Loan Agreement is
hereby amended to add the following new subsection 2.6A
thereto:
“2.6A.
Eligible Inventory . Upon Borrower’s delivery to
Lender of a Borrowing Base Certificate, Lender shall determine, in
its sole discretion, which Inventory li
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