Exhibit 10.5


 


THIRTY FIRST AMENDMENT TO LOAN AND SECURITY
AGREEMENT


 


THIS THIRTY FIRST AMENDMENT TO LOAN AND
SECURITY AGREEMENT (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 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,
Twenty-Second, Twenty-Third, Twenty-Fourth, Twenty-Fifth, Twenty-Sixth,
Twenty-Seventh, Twenty-Eighth, Twenty-Ninth and Thirtieth 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 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 $10,000,000.00 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”), (iii) an
$11,000,000.00 non-revolving equipment line of credit loan with term conversion
feature (the “Equipment Loan”), (iv) a $9,000,000.00 non-revolving
equipment line of credit loan with term conversion feature (the “Equipment Loan
No. 2”) and (v) all other Indebtedness (as defined in the Loan
Agreement); and


 


WHEREAS, Lender has
been 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 Agreement
as described below; and


 


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


 


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


 


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


 


3.             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 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 Amendment
to the term “Revolving Note” shall be deemed to refer to the aforesaid amended
and restated renewal revolving note dated January 15, 2008 in the principal
sum of $10,000,000.00, executed by Borrower, as modified by Note Extension
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 with
interest payable monthly as therein described.


 


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


 


“Borrower hereby covenants to the Lender that the outstanding principal
balance of the Revolving Loan will be paid down by the amount of Three Million
Dollars ($3,000,000.00) from a loan made by Broadwind Energy, Inc. by no
later than September 30, 2008, and further that the Borrower will not
repay any portion of such loan to Broadwind Energy, Inc. without the prior
written consent of the Lender.


 


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


 


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


 


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


 


“(f)          Minimum
EBITDA.   As of 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 the following: (i) $7,500,000
for the six months ended June 30, 2008, (ii) $12,500,000 for the nine
months ended September 30, 2008, and (iii) $16,500,000 for the twelve
months ended  December 31, 2008 and
for each trailing twelve month period thereafter to be tested at each fiscal
quarter end.”


 


7.             The Borrower
acknowledges and agrees that the Loan 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 security interest granted and provided for by the Loan
Agreement as amended hereby, for the benefit and security of (a) all
obligations and indebtedness heretofore, now or hereafter owed by Borrower to
Lender, including, without limitation, 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 repayment of all sums when due under the Subsidiary
Guaranty).


 


8.             Without limiting
the foregoing, the Borrower hereby agrees that, notwithstanding the execution
and delivery hereof, (i) all rights and remedies of the Lender under the
Loan Agreement, (ii) all obligations and indebtedness of the Borrower
thereunder, and (iii) the lien and security interest granted and provided
for thereby are and as amended hereby shall remain in full force and effect for
the benefit and security of all obligations and indebtedness of the Borrower
thereunder, including, without limitation, the indebtedness evidenced by the
Revolving Note, the Term Note, the Equipment Note, the Equipment Note No. 2
and all other Indebtedness (including, without limitation, the repayment of all
sums when due under the Subsidiary Guaranty), it being specifically understood
and agreed that this Amendment shall constitute and be an acknowledgment and continuation
of the rights, remedies, lien and security interest in favor of the 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 which are and shall
remain applicable to the Collateral.


 


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


 


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


 


10.           Except as
specifically amended and modified hereby, all of the terms and conditions of
the Loan Agreement shall stand and remain unchanged and in full force and
effect.  This instrument shall be
construed and governed by and in accordance with the laws of the State of
Illinois (exclusive of choice of law principles).


 


11.           Borrower further
agrees to reimburse the Lender for its reasonable legal fees incurred in
documenting the aforesaid loan extension and other modifications hereinabove
described.


 


[signature page follows]


 


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IN WITNESS WHEREOF, the parties have entered into this Thirty-First
Amendment 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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