**Exhibit 10.5**

 

**THIRTY FIRST AMENDMENT TO LOAN AND SECURITYAGREEMENT**

 

**THIS THIRTY FIRST AMENDMENT TO LOAN ANDSECURITY AGREEMENT** (this “Amendment”) is dated as of September 29,2008 between BRAD FOOTE GEAR WORKS, INC. f/k/a BFG Acquisition Corp., anIllinois corporation (“Borrower”) and LASALLE BANK NATIONAL ASSOCIATION f/k/aLaSalle National Bank f/k/a LaSalle Bank NI (“Lender”).

 

**WHEREAS,** Borrowerand Lender have entered in that certain Loan and Security Agreement dated as ofJanuary 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, Twenty-Eighth, Twenty-Ninth and Thirtieth Amendments to Loanand 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 hasbeen asked to extend the maturity date of the Revolving Loan from October 31,2008 to January 15, 2009 and to make certain modifications to the Loan Agreementas described below; and

 

**WHEREAS,** Lender hasagreed to the foregoing loan requests provided, among other conditions, thatBorrower executes and delivers to this Amendment and the note extensionagreement described below;

 

**NOW, THEREFORE,** forvaluable consideration, the receipt of which is hereby acknowledged, and inconsideration of the foregoing premises, the parties hereto agree as follows:

 

1.             The capitalizedterms used herein without definition shall have the same meaning herein as suchterms have in the Loan Agreement.

 

2.             The definition of “TerminationDate” in Section 1.1 of the Loan Agreement, is amended in its entirety toread as follows:

 

**“Termination Date”**shall mean January 15, 2009, or such earlier date upon which the RevolvingNote becomes due and payable.

 

3.             The first sentenceof the first paragraph in Section 2.3 of the Loan Agreement is amended toread as follows:

 

“2.3 Revolving Note.  The Revolving Loan shall be evidenced by anamended and restated renewal revolving note, executed by the Borrower, dated January 15,2008, as modified by Note Extension Agreements dated as of June 30, 2008, August 30,2008 and 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 the principalsum of $10,000,000.00, executed by Borrower, as modified by Note ExtensionAgreements 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 Agreementis hereby amended to add the 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.

 

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5.             Section 10 ofthe Loan Agreement is hereby amended to add the following new paragraphthereto:

 

“As soon as available, but not later thanfifteen (15) days after the end of each month, Borrower shall furnish theLender with internally prepared monthly financial statements of Borrower, inform and content satisfactory to Lender, which monthly statements shall includean income statement, balance sheet and cash flow statement.  The validity and accuracy of said financialstatements shall be certified by the chief executive or financial officer ofthe Borrower, in a form satisfactory to the Lender.”

 

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

 

“(f)          MinimumEBITDA.   As of the end of each ofits fiscal quarters beginning with the quarter ended June 30, 2008, theBorrower shall maintain minimum EBITDA of not less than the following: (i) $7,500,000for the six months ended June 30, 2008, (ii) $12,500,000 for the ninemonths ended September 30, 2008, and (iii) $16,500,000 for the twelvemonths ended  December 31, 2008 andfor each trailing twelve month period thereafter to be tested at each fiscalquarter end.”

 

7.             The Borroweracknowledges and agrees that the Loan Agreement is and as amended hereby shallremain in full force and effect, and that the Collateral is and shall remainsubject to the lien and security interest granted and provided for by the LoanAgreement as amended hereby, for the benefit and security of (a) allobligations and indebtedness heretofore, now or hereafter owed by Borrower toLender, including, without limitation, the indebtedness evidenced by theRevolving Note, the Term Note, the Equipment Note, the Equipment No. 2  and all other Indebtedness (including,without limitation, the repayment of all sums when due under the SubsidiaryGuaranty).

 

8.             Without limitingthe foregoing, the Borrower hereby agrees that, notwithstanding the executionand delivery hereof, (i) all rights and remedies of the Lender under theLoan Agreement, (ii) all obligations and indebtedness of the Borrowerthereunder, and (iii) the lien and security interest granted and providedfor thereby are and as amended hereby shall remain in full force and effect forthe benefit and security of all obligations and indebtedness of the Borrowerthereunder, including, without limitation, the indebtedness evidenced by theRevolving 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 and continuationof the rights, remedies, lien and security interest in favor of the Lender, andthe obligations and indebtedness of the Borrower to the Lender, which existunder the Loan Agreement as amended hereby, each and all of which are and shallremain 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 induceLender to enter into this Amendment, the Borrower hereby represents andwarrants to the Lender that as of the date hereto, each of the representationsand warranties set forth in the Loan Agreement, as amended hereby, are true andcorrect and the Borrower is in full compliance with all of the terms andconditions of the Loan Agreement, as amended hereby, and no Event of Default orDefault has occurred and is continuing.

 

10.           Except asspecifically amended and modified hereby, all of the terms and conditions ofthe Loan Agreement shall stand and remain unchanged and in full force andeffect.  This instrument shall beconstrued and governed by and in accordance with the laws of the State ofIllinois (exclusive of choice of law principles).

 

11.           Borrower furtheragrees to reimburse the Lender for its reasonable legal fees incurred indocumenting 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-FirstAmendment to 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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