Exhibit 10.2
THIRTY-FIFTH AMENDMENT AND WAIVER TO LOAN AND
SECURITY AGREEMENT
THIS THIRTY-FIFTH AMENDMENT AND
WAIVER TO LOAN AND SECURITY AGREEMENT, dated as of May 8, 2009
(this “ Amendment ”), is by and between BRAD
FOOTE GEAR WORKS, INC. (f/k/a BFG Acquisition Corp.), an Illinois
corporation (the “ Borrower ”) and BANK OF
AMERICA, N.A., (f/k/a LaSalle Bank National Association, f/k/a
LaSalle National Bank, f/k/a LaSalle Bank N.I.) (the “
Lender ”).
WHEREAS, the Borrower and the Lender
are party to that certain Loan and Security Agreement, dated as of
January 17, 1997 (as amended to date, the “ Loan
Agreement ”; capitalized terms used herein, but not
otherwise defined herein, shall have the meanings given them in (or
by reference in) the Loan Agreement);
NOW, THEREFORE, in consideration of
the premises and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the
parties hereto agree to amend the Loan Agreement as
follows:
SECTION 1.
AMENDMENTS. Effective as of
the Amendment Effective Date (as hereinafter defined), the Loan
Agreement shall be amended as follows:
1.1
The fifth paragraph of
Section 10 of the Loan Agreement shall be amended and restated
in its entirety to read as follows:
“As soon as available, but not
later than (i) fifteen (15) days after the end of each
calendar month other than March, June, September and
December and (ii) twenty-five (25) days after the end of
each of the calendar months of March, June, September and
December, Borrower shall deliver to the Lender (i) a monthly
accounts receivable aging and a monthly accounts payable aging and
(ii) internally prepared monthly financial statements of
Borrower and Parent, in form and content satisfactory to Lender,
which monthly statements shall include an income statement, balance
sheet and cash flow statement for the most recently ended calendar
month and on a year to date basis, and shall show a comparison for
such calendar month and on a year to date basis versus the same
period of the prior calendar year. The validity and accuracy
of such financial statements shall be certified by the chief
executive or financial officer of the Borrower or Parent, as
applicable, in a form satisfactory to the Lender.”
1.2
Sections 14.1(d) through
(f) of the Loan Agreement shall be amended and restated in
their entirety to read as follows:
“(d)
Senior Debt to EBITDA
. As of the end of each fiscal
quarter set forth below, the Borrower shall maintain a ratio of
Senior Debt to trailing twelve (12) month EBITDA of not greater
than the ratio set forth below across from such period:
|
Period
|
|
Maximum Ratio
|
|
|
|
|
|
|
|
fiscal quarter ended March 31,
2009
|
|
3.4 to 1.0
|
|
|
|
|
|
|
|
fiscal quarter ended June 30,
2009
|
|
8.4 to 1.0
|
|
|
fiscal quarter ended September 30,
2009
|
|
3.4 to 1.0
|
|
|
|
|
|
|
|
fiscal quarter ended December 31, 2009 and
each fiscal quarter thereafter
|
|
3.0 to 1.0
|
|
(e)
Cash Flow Coverage
. As of the end of each fiscal
quarter set forth below, the Borrower shall maintain a Cash Flow
Coverage of not less than the ratio set forth below across from
such period; provided , however , that this
covenant shall not be measured for the fiscal quarter ended
June 30, 2009:
|
Period
|
|
Minimum Ratio
|
|
|
|
|
|
|
|
fiscal quarter ended March 31,
2009
|
|
0.35 to 1.0
|
|
|
|
|
|
|
|
fiscal quarter ended June 30,
2009
|
|
N/A
|
|
|
|
|
|
|
|
fiscal quarter ended September 30,
2009
|
|
0.80 to 1.0
|
|
|
|
|
|
|
|
fiscal quarter ended December 31,
2009
|
|
1.10 to 1.0
|
|
|
|
|
|
|
|
fiscal quarter ended March 31, 2010 and
each fiscal quarter thereafter
|
|
1.25 to 1.0
|
|
(f)
Minimum EBITDA
. As of the end of each
calendar month set forth below, the Borrower shall maintain a
minimum cumulative EBITDA commencing January 1 of the
applicable calendar year and ending on the last day of such
calendar month of not less than the amount set forth below across
from such month in the applicable calendar year.
|
Period
|
|
Minimum EBITDA
2009
|
|
Minimum EBITDA
2010 and 2011
|
|
|
January
|
|
|
|
$
|
1,046,000
|
|
|
February
|
|
|
|
$
|
1,838,000
|
|
|
March
|
|
$
|
611,000
|
|
$
|
2,571,000
|
|
|
April
|
|
$
|
1,205,000
|
|
$
|
2,340,000
|
|
|
May
|
|
$
|
986,000
|
|
$
|
3,312,000
|
|
|
June
|
|
$
|
1,674,000
|
|
$
|
4,099,000
|
|
|
July
|
|
$
|
2,527,000
|
|
$
|
4,940,000
|
|
|
August
|
|
$
|
3,607,000
|
|
$
|
5,878,000
|
|
|
September
|
|
$
|
4,891,000
|
|
$
|
6,982,000
|
|
|
October
|
|
$
|
6,167,000
|
|
$
|
8,044,000
|
|
|
November
|
|
$
|
7,434,000
|
|
$
|
8,835,000
|
|
|
December
|
|
$
|
8,685,000
|
|
$
|
9,919,000
|
”
|
2
SECTION 2.
WAIVER.
2.1
The Lender hereby waives:
(a)
the Borrower’s failure to
deliver the documents required by and as set forth in the fifth
paragraph of Section 10 of the Loan Agreement solely for the
calendar month of March 2009;
(b)
the Borrower’s failure to
deliver the updated Schedule 10.1 as set forth in the seventh
paragraph of Section 10 of the Loan Agreement solely for the
quarter ended March 31, 2009;
(c)
the Borrower’s failure to
deliver the certification by the chief executive or financial
officer of the Borrower of the validity and accuracy of the
Borrower’s financial statements delivered pursuant to the
fifth paragraph of Section 10 of the Loan Agreement solely for
the calendar months of January 2009, February 2009 and
March 2009;
(d)
the Borrower’s failure to
deliver the certified monthly financial statements of the Parent
pursuant to the fifth paragraph of Section 10 of the Loan
Agreement at any time prior to the date hereof;
(e)
the Borrower’s failure to
deliver the monthly accounts receivable aging or the monthly
account payable aging pursuant to the fifth paragraph of
Section 10 of the Loan Agreement solely for the calendar month
of February 2009; and
(f)
the Borrower’s violation of
the financial covenants set forth in
(i) Section 14.1(d) of the Loan Agreement solely for
the fiscal quarter ended March 31, 2009 but only to the extent
that such failure would not cause any Default or Event of Default
under the Loan Agreement as amended hereby,
(ii) Section 14.1(e) of the Loan Agreement solely
for the fiscal quarter ended March 31, 2009 but only to the
extent that such failure would not cause any Default or Event of
Default under the Loan Agreement as amended hereby,
(iii) Section 14.1(f) of the Loan Agreement solely
for each of the calendar months of January 2009, and
February 2009 and (iv) Section 14.1(f) of the
Loan Agreement solely for each of the calendar months of
March 2009 and April 2009, but only to the extent that
such failure would not cause any Default or Event of Default under
the Loan Agreement as amended hereby (each of the foregoing
clauses (a) , (b) ,
(c) , (d) , (e) and
(f) collectively the “ Known Defaults
”).
2.2
Consistent with the foregoing,
nothing contained herein shall be deemed to be a waiver or
abandonment of (i) any other Event of Default (whether
presently or subsequently existing) other than the Known Defaults,
including any such other Event of Default or breach that is of the
same nature or type (or arises under the same provision of the Loan
Agreement, Loan Documents or Subsidiary Loan Documents) as any of
the Known Defaults, or (ii) any rights, powers and/or remedies
presently or subsequently available to the Lender against the
Borrower or any Guarantor (including any of its property) and/or
any other Person or entity (including any of such Person’s or
entity’s property) under the Loan Agreement, any of the
Subsidiary Loan Documents or any of the other Loan Documents,
applicable law or otherwise, relating to any matter other than
solely with respect to the Known Defaults, each of which rights,
powers or remedies is hereby specifically and expressly
reserved.
3
SECTION 3.
CONDITIONS PRECEDENT. This
Amendment shall become effective on the date (the “
Amendment Effective Date ”) when the Lender shall have
received the following:
3.1
Amendment . This Amendment, duly executed by the
parties hereto.
3.2
Amendment and Wavier Fee;
Expenses . Payment
by the Borrower in immediately available funds of a $25,000
amendment and waiver fee, as well as all reasonable fees and
expenses required to be reimbursed or paid by the Borrower pursuant
to Section 5.2 hereof, including, without limitation,
the fees and expenses of Mayer Brown LLP, counsel to the Lender,
incurred in connection with the drafting, negotiation, execution,
delivery and effectiveness of this Amendment. For the
avoidance of any doubt, the amendment and waiver fee payable
pursuant to this Section 3.2 shall be in addition to,
and shall not affect the amount or payment dates of, the extension
fee set forth in Section 14.4 of the Loan
Agreement.
3.3
Reaffirmation
. A Reaffirmation,
substantially in the form attached hereto as Exhibit A
, executed by the Parent, 1309 and 5100.
3.4
Outstanding
Deliverables . The
following items, each in form and substance reasonably satisfactory
to the Lender:
(a)
internally prepared monthly
financial statements of Borrower for the calendar month of
March 2009, which monthly statements shall include an income
statement, balance sheet and cash flow statement for such month and
on a year to date basis, and which shall show a comparison for such
calendar month and on a year to date basis versus the same period
of the prior calendar year, certified by the chief executive or
financial officer of the Borrower;
(b)
internally prepared monthly
financial statements of the Parent for each of the calendar months
of January 2009, February 2009 and March 2009, which
monthly statements shall include an income statement, balance sheet
and cash flow statement for such month and on a year to date basis,
and which shall show a comparison for such calendar month and on a
year to date basis versus the same period of the prior calendar
year, certified by the chief executive or financial officer of the
Parent; and
(c)
an updated Schedul
