**Exhibit 10.5**

** **

**THIRTYFIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT**

 

**THIS THIRTY FIRST AMENDMENT TO LOAN AND SECURITYAGREEMENT** (this “Amendment”)is dated as of September 29, 2008 between BRAD FOOTE GEAR WORKS, INC.f/k/a BFG Acquisition Corp., an Illinois corporation (“Borrower”) and LASALLEBANK 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 SecurityAgreement dated as of January 17, 1997, as amended by those certain letteramendments dated February 28, 1997 and July 23, 1997 and thosecertain 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, Twenty-Eighth, Twenty-Ninth andThirtieth 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,  April       ,2008, June 30, 2008 and August 30, 2008, respectively, and thatcertain letter amendment (herein, the “Tenth Amendment”) dated October 17,2002 (such agreement, as so amended, the “Loan Agreement”) with regard to thefollowing loans made by Lender to Borrower: (i) a $10,000,000.00 revolvingline of credit loan (the “Revolving Loan”), (ii) a consolidated term loanin 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 conversionfeature (the “Equipment Loan”), (iv) a $9,000,000.00 non-revolvingequipment line of credit loan with term conversion feature (the “Equipment LoanNo. 2”) and (v) all other Indebtedness (as defined in the LoanAgreement); and

 

**WHEREAS,** Lender has been asked to extend the maturity date of the RevolvingLoan from October 31, 2008 to January 15, 2009 and to make certainmodifications to the Loan Agreement as described below; and

 

**WHEREAS,** Lender has agreed to the foregoing loanrequests provided, among other conditions, that Borrower executes and delivers tothis Amendment and the note extension agreement described below;

 

**NOW, THEREFORE,** for valuable consideration, the receipt ofwhich 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 withoutdefinition shall have the same meaning herein as such terms have in the LoanAgreement.

 

2.             The definition of “Termination Date” in Section 1.1of the Loan Agreement, is amended in its entirety to read as follows:

 

**“Termination Date”** shall mean January 15, 2009, or suchearlier date upon which the Revolving Note becomes due and payable.

 

3.             The first sentence of the first paragraph in Section 2.3of the Loan Agreement is amended to read as follows:

 

“2.3 Revolving Note.  TheRevolving Loan shall be evidenced by an amended and restated renewal revolvingnote, executed by the Borrower, dated January 15, 2008, as modified byNote Extension Agreements dated as of June 30, 2008, August 30, 2008and September 29, 2008, payable to the Lender on January 15, 2009,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 Amendmentto the term “Revolving Note” shall be deemed to refer to the aforesaid amendedand restated renewal revolving note dated January 15, 2008 in theprincipal sum of $10,000,000.00, executed by Borrower, as modified by NoteExtension Agreements dated as of June 30, 2008, August 30, 2008 and September 29,2008, payable to the order of Lender on January 15, 2009, together withinterest payable monthly as therein described.

 

4.             The Loan Agreement is hereby amended to addthe following new subsection 3A thereto:

 

“Borrower hereby covenants to the Lender that the outstanding principalbalance of the Revolving Loan will be paid down by the amount of Three MillionDollars ($3,000,000.00) from a loan made by Broadwind Energy, Inc. by nolater than September 30, 2008, and further that the Borrower will notrepay any portion of such loan to Broadwind Energy, Inc. without the priorwritten consent of the Lender.

 

5.             Section 10 of the Loan Agreement ishereby amended to add the following new paragraph thereto:

 

“As soon as available, but not later than fifteen (15) days after theend of each month, Borrower shall furnish the Lender with internally preparedmonthly financial statements of Borrower, in form and content satisfactory toLender, which monthly statements shall include an income statement, balancesheet and cash flow statement.  Thevalidity and accuracy of said financial statements shall be certified by thechief executive or financial officer of the Borrower, in a form satisfactory tothe Lender.”

 

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6.             In Section 14.1 of the Loan Agreement,the following subsection (f) entitled “MinimumEBITDA” ishereby amended in its entirety to read as follows:

 

“(f)          Minimum EBITDA.   Asof the end of each of its fiscal quarters beginning with the quarter ended June 30,2008, the Borrower shall maintain minimum EBITDA of not less than thefollowing: (i) $7,500,000 for the six months ended June 30, 2008, (ii) $12,500,000for the nine months ended September 30, 2008, and (iii) $16,500,000for the twelve months ended  December 31,2008 and for each trailing twelve month period thereafter to be tested at eachfiscal quarter end.”

 

7.             The Borrower acknowledges and agrees that theLoan Agreement is and as amended hereby shall remain in full force and effect,and that the Collateral is and shall remain subject to the lien and securityinterest granted and provided for by the Loan Agreement as amended hereby, forthe benefit and security of (a) all obligations and indebtednessheretofore, now or hereafter owed by Borrower to Lender, including, withoutlimitation, the indebtedness evidenced by the Revolving Note, the Term Note,the Equipment Note, the Equipment No. 2 and all other Indebtedness (including, without limitation, the repaymentof all sums when due under the Subsidiary Guaranty).

 

8.             Withoutlimiting the foregoing, the Borrower hereby agrees that, notwithstanding theexecution and delivery hereof, (i) all rights and remedies of the Lenderunder the Loan Agreement, (ii) all obligations and indebtedness of theBorrower thereunder, and (iii) the lien and security interest granted andprovided for thereby are and as amended hereby shall remain in full force andeffect for the benefit and security of all obligations and indebtedness of theBorrower thereunder, including, without limitation, the indebtedness evidencedby the Revolving Note, the Term Note, the Equipment Note, the Equipment Note No. 2and all other Indebtedness (including, without limitation, the repayment of allsums when due under the Subsidiary Guaranty), it being specifically understoodand agreed that this Amendment shall constitute and be an acknowledgment andcontinuation of the rights, remedies, lien and security interest in favor ofthe Lender, and the obligations and indebtedness of the Borrower to the Lender,which exist under the Loan Agreement as amended hereby, each and all of whichare and shall remain applicable to the Collateral.

 

This Amendment confirms and assures a lien and continuing firstpriority security interest in the Collateral heretofore granted in favor of theLender under the Loan Agreement, and nothing contained herein shall in anymanner impair the priority of such lien and security interest.

 

9.             In order to induce Lender to enter into thisAmendment, the Borrower hereby represents and warrants to the Lender that as ofthe date hereto, each of the representations and warranties set forth in theLoan Agreement, as amended hereby, are true and correct and the Borrower is infull compliance with all of the terms and conditions of the Loan Agreement, asamended hereby, and no Event of Default or Default has occurred and iscontinuing.

 

10.           Except as specifically amended and modifiedhereby, all of the terms and conditions of the Loan Agreement shall stand andremain unchanged and in full force and effect. This 

 

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instrument shall be construed and governed by and in accordance withthe laws of the State of Illinois (exclusive of choice of law principles).

 

11.           Borrowerfurther agrees to reimburse the Lender for its reasonable legal fees incurredin documenting the aforesaid loan extension and other modifications hereinabovedescribed.

 

**[signature page follows]**

 

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IN WITNESS WHEREOF, the parties have entered into this Thirty-First Amendmentto Loan and Security Agreement as of date first above written.

 
| Borrower:                         |                    |
|-----------------------------------|-------------------------|
|                              |                    |
| BRAD FOOTE GEAR WORKS, INC.       |                    |
|                              |                    |
|                              |                    |
| By:                               | /s/ J. Cameron Drecoll  |   |
|                              | J.  Cameron Drecoll     |   |
| Title:                            | Chief Executive Officer |   |
|                              |                    |
|                              |                    |
| Lender:                           |                    |
|                              |                    |
| LASALLE BANK NATIONAL ASSOCIATION |                    |
|                              |                    |
|                              |                    |
| By:                               | /s/ Katherine M.  Novey |   |
| Title:                            | Vice President          |   |
|                                   |                         |  |  |  |  |

 

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