**Exhibit 10.3**

 

**NOTE EXTENSION AGREEMENT**

 

ThisNote Extension Agreement (the “Agreement”) is dated as of August 30, 2008and is made by and between BRAD FOOTE GEAR WORKS, INC., f/k/a BFG AcquisitionCorp., an Illinois corporation (“Borrower”) and LASALLE BANK NATIONAL BANKf/k/a LaSalle National Bank f/k/a LaSalle Bank NI, a national bankingassociation (the “Bank”).

 

**R E C I T A L S**

 

A.            Borrower haspreviously delivered to the Bank its Amended and Restated Renewal RevolvingNote dated January 15, 2008 in the principal amount of $10,000,000.00, asmodified and extended by Note Extension Agreement dated as of June 30,2008 (the “Note”), evidencing a revolving line of credit loan extended by theBank to the Borrower; and

 

B.            The Note matures on August 30,2008, and Borrower has asked the Bank to extend the maturity date of the Noteuntil October 31, 2008; and

 

C.            The Bank hasconsented to such loan request, on the terms hereinafter provided.

 

**NOW, THEREFORE,**in consideration of the foregoing, and forvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties agree as follows:

 

1.             In the first lineof the first paragraph on page 1 of the Note, the date “August 30,2008” is hereby deleted, and the date “October 31, 2008” is substitutedtherefor. Borrower confirms to the Bank that the Note shall mature on October 31,2008.

 

2.             Borroweracknowledges and irrevocably agrees that the payment and performance of theNote, as extended hereby, shall continue to be secured by Collateral Documents(as such term is defined in the Loan and Security Agreement dated January 17,1997 between the Borrower and the Bank, as amended from time to time).

 

3.             Except as expresslymodified by this Agreement, all terms and provisions of the Note shall standand remain in full force and effect.

 

**SIGNATURE PAGE FOLLOWS**

 

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| **IN WITNESS WHEREOF,** the undersigned have executed this  Agreement as of the day and year first above written. |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                              |   |
| **BORROWER:**                                                                                                     |   |
|                                                                                                              |   |
| BRAD  FOOTE GEAR WORKS, INC.                                                                                      |   |
|                                                                                                              |   |
|                                                                                                              |   |
| By:                                                                                                               | /s/ J.  Cameron Drecoll |   |
|                                                                                                              | J.  Cameron Drecoll |   |
| Title:                                                                                                            | Chief  Executive Officer |   |
|                                                                                                              |   |
|                                                                                                              |   |
| **BANK:**                                                                                                         |   |
| ** **                                                                                                        |   |
| LASALLE  BANK NATIONAL ASSOCIATION                                                                                |   |
|                                                                                                              |   |
|                                                                                                              |   |
| By:                                                                                                               | /s/ Katherine M. Novey |   |
| Title:                                                                                                            | Vice  President |   |
|                                                                                                                   |  |  |  |  |

 

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