Exhibit 10.3

 

CONTINUING GUARANTY

 

JANUARY 15, 2009

 

FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in
consideration of credit and/or financial accommodation heretofore or hereafter
from time to time made or granted to Brad Foote Gear Works, Inc. (“Brad Foote”),
1309 South Cicero Avenue, LLC and 5100 Neville Road, LLC (whether one or more,
the “Borrower”) by BANK OF AMERICA, N.A. and any other subsidiaries or
affiliates of Bank of America Corporation and its successors and assigns
(collectively the “Lender”), the undersigned Guarantor (the “Guarantor”) hereby
furnishes its guaranty of the Guaranteed Obligations (as hereinafter defined) as
follows:

 

1.             Guaranty.  The Guarantor hereby absolutely and unconditionally
guarantees, as a guaranty of payment and performance and not merely as a
guaranty of collection, prompt payment when due, whether at stated maturity, by
required prepayment, upon acceleration, demand or otherwise, and at all times
thereafter, of any and all existing and future indebtedness and liabilities of
every kind, nature and character, direct or indirect, absolute or contingent,
liquidated or unliquidated, voluntary or involuntary and whether for principal,
interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of
the Borrower to the Lender, whether associated with any credit or other
financial accommodation made to or for the benefit of the Borrower by the Lender
or otherwise and whenever created, arising, evidenced or acquired, including,
without limitation, (i) all Indebtedness arising under that certain Loan and
Security Agreement dated as of January 17, 1997 between Brad Foote and the
Lender (as amended from time to time, the “Loan Agreement”; capitalized terms
used herein, but not otherwise defined herein, shall have the meanings given
such terms in (or by reference in) the Loan Agreement), and (ii) all
indebtedness and liabilities of the Borrower arising under (A) the Subsidiary
Loan Documents, (B) the other Loan Documents, (C) any interest rate, currency or
commodity swap agreement, cap agreement or collar agreement and any other
agreement or arrangement designed to protect 1309 and 5100 against fluctuations
in interest rates, currency exchange rates or commodity prices and (D) any
treasury management services provided to 1309 and/or 5100 by the Lender or any
Affiliate of the Lender (including, in each case, all renewals, extensions,
amendments, refinancings and other modifications thereof and all costs,
attorneys’ fees and expenses incurred by the Lender in connection with the
collection or enforcement thereof), and whether recovery upon such indebtedness
and liabilities may be or hereafter become unenforceable or shall be an allowed
or disallowed claim under any proceeding or case commenced by or against the
Guarantor or the Borrower under the Bankruptcy Code (Title 11, United States
Code), any successor statute or any other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally (collectively, “Debtor Relief
Laws”), and including interest that accrues after the commencement by or against
the Borrower of any proceeding under any Debtor Relief Laws (collectively, the
“Guaranteed Obligations”).  The Lender’s books and records showing the amount of
the Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, and shall be binding upon the Guarantor and conclusive for the
purpose of establishing the amount of the Guaranteed Obligations.  This Guaranty
shall not be affected by the genuineness, validity, regularity or

 

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enforceability of the Guaranteed Obligations or any instrument or agreement
evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, non-perfection or extent of any collateral therefor,
or by any fact or circumstance relating to the Guaranteed Obligations which
might otherwise constitute a defense to the obligations of the Guarantor under
this Guaranty, and the Guarantor hereby irrevocably waives any defenses it may
now have or hereafter acquire in any way relating to any or all of the
foregoing.

 

2.             No Setoff or Deductions; Taxes; Payments.  The Guarantor
represents and warrants that it is organized and resident in the United States
of America.  The Guarantor shall make all payments hereunder without setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Guarantor is compelled by law to make such
deduction or withholding.  If any such obligation (other than one arising with
respect to taxes based on or measured by the income or profits of the Lender) is
imposed upon the Guarantor with respect to any amount payable by it hereunder,
the Guarantor will pay to the Lender, on the date on which such amount is due
and payable hereunder, such additional amount in U.S. dollars as shall be
necessary to enable the Lender to receive the same net amount which the Lender
would have received on such due date had no such obligation been imposed upon
the Guarantor.  The Guarantor will deliver promptly to the Lender certificates
or other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Guarantor hereunder.  The obligations of
the Guarantor under this paragraph shall survive the payment in full of the
Guaranteed Obligations and termination of this Guaranty.

 

3.             Rights of Lender.  The Guarantor consents and agrees that the
Lender may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof: 
(a) amend, extend, renew, compromise, discharge, accelerate or otherwise change
the time for payment or the terms of the Guaranteed Obligations or any part
thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect,
sell, or otherwise dispose of any security for the payment of this Guaranty or
any Guaranteed Obligations; (c) apply such security and direct the order or
manner of sale thereof as the Lender in its sole discretion may determine; and
(d) release or substitute one or more of any endorsers or other guarantors of
any of the Guaranteed Obligations.  Without limiting the generality of the
foregoing, the Guarantor consents to the taking of, or failure to take, any
action which might in any manner or to any extent vary the risks of the
Guarantor under this Guaranty or which, but for this provision, might operate as
a discharge of the Guarantor.

 

4.             Certain Waivers.  The Guarantor waives (a) any defense arising by
reason of any disability or other defense of the Borrower or any other
guarantor, or the cessation from any cause whatsoever (including any act or
omission of the Lender) of the liability of the Borrower; (b) any defense based
on any claim that the Guarantor’s obligations exceed or are more burdensome than
those of the Borrower; (c) the benefit of any statute of limitations affecting
the Guarantor’s liability hereunder; (d) any right to require the Lender to
proceed against the Borrower, proceed against or exhaust any security for the
Indebtedness, or pursue any other remedy in the Lender ‘s power whatsoever;
(e) any benefit of and any right to participate in any security now or hereafter
held by the Lender; and (f) to the fullest extent permitted by law, any

 

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and all other defenses or benefits that may be derived from or afforded by
applicable law limiting the liability of or exonerating guarantors or sureties. 
The Guarantor expressly waives all setoffs and counterclaims and all
presentments, demands for payment or performance, notices of nonpayment or
nonperformance, protests, notices of protest, notices of dishonor and all other
notices or demands of any kind or nature whatsoever with respect to the
Guaranteed Obligations, and all notices of acceptance of this Guaranty or of the
existence, creation or incurrence of new or additional Guaranteed Obligations.

 

5.             Obligations Independent.  The obligations of the Guarantor
hereunder are those of primary obligor, and not merely as surety, and are
independent of the Guaranteed Obligations and the obligations of any other
guarantor, and a separate action may be brought against the Guarantor to enforce
this Guaranty whether or not the Borrower or any other person or entity is
joined as a party.

 

6.             Subrogation.  The Guarantor shall not exercise any right of
subrogation, contribution, indemnity, reimbursement or similar rights with
respect to any payments it makes under this Guaranty until all of the Guaranteed
Obligations and any amounts payable under this Guaranty have been indefeasibly
paid and performed in full and any commitments of the Lender or facilities
provided by the Lender with respect to the Guaranteed Obligations are
terminated.  If any amounts are paid to the Guarantor in violation of the
foregoing limitation, then such amounts shall be held in trust for the benefit
of the Lender and shall forthwith be paid to the Lender to reduce the amount of
the Guaranteed Obligations, whether matured or unmatured.

 

7.             Termination; Reinstatement.  This Guaranty is a continuing and
irrevocable guaranty of all Guaranteed Obligations now or hereafter existing and
shall remain in full force and effect until all Guaranteed Obligations and any
other amounts payable under this Guaranty are indefeasibly paid in full in cash
and any commitments of the Lender or facilities provided by the Lender with
respect to the Guaranteed Obligations are terminated.  Notwithstanding the
foregoing, this Guaranty shall continue in full force and effect or be revived,
as the case may be, if any payment by or on behalf of the Borrower or the
Guarantor is made, or the Lender exercises its right of setoff, in respect of
the Guaranteed Obligations and such payment or the proceeds of such setoff or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Lender in its discretion) to be repaid to a trustee,
receiver or any other party, in connection with any proceeding under any Debtor
Relief Laws or otherwise, all as if such payment had not been made or such
setoff had not occurred and whether or not the Lender is in possession of or has
released this Guaranty and regardless of any prior revocation, rescission,
termination or reduction.  The obligations of the Guarantor under this paragraph
shall survive termination of this Guaranty.

 

8.             Fraudulent Conveyance.  Notwithstanding any other provision of
this Guaranty or any other Loan Document to the contrary, in the event that any
action or proceeding is brought in whatever form and in whatever forum seeking
to invalidate the Guarantor’s obligations under this Guaranty or any other Loan
Document under any fraudulent conveyance, fraudulent transfer theory, or similar
avoidance theory, whether under state or federal law, the Guarantor,
automatically and without any further action being required of the Guarantor,
the Lender or any other Person, shall be liable under this Guaranty only for an
amount equal to the maximum

 

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amount of liability that could have been incurred under applicable law by the
Guarantor with respect to the Guaranteed Obligations (or any portion thereof) at
the time of the execution and delivery of this Guaranty (or, if such date is
determined not to be the appropriate date for determining the enforceability of
the Guarantor’s obligations hereunder for fraudulent conveyance or transfer (or
similar avoidance) purposes, on the date determined to be so appropriate)
without rendering any such hypothetical obligation voidable under applicable law
relating to fraudulent conveyance, fraudulent transfer, or any other grounds for
avoidance (such highest amount determined hereunder being the “Maximum
Obligation Amount”), and not for any greater amount, as if the Guaranteed
Obligations had instead been the Maximum Obligation Amount.  This Section is
intended solely to preserve the rights of Lender under this Guaranty and the
other Loan Documents to the maximum extent not subject to avoidance under
applicable law, and neither the Guarantor nor any other Person shall have any
right or claim under this Section with respect to the limitation described in
this Guaranty, except to the extent necessary so that the obligations of the
Guarantor under this Guaranty shall not be rendered voidable under applicable
law.  Without limiting the generality of the foregoing, the determination of the
Maximum Obligations Amount pursuant to the provisions of the second preceding
sentence of this Section shall not in any manner reduce or otherwise affect any
of the obligations of the Guarantor under the provisions of this Guaranty.

 

9.             Subordination.  The Guarantor hereby subordinates the payment of
all obligations and indebtedness of the Borrower owing to the Guarantor, whether
now existing or hereafter arising, including but not limited to any obligation
of the Borrower to the Guarantor as subrogee of the Lender or resulting from the
Guarantor’s performance under this Guaranty, to the indefeasible payment in full
in cash of all Guaranteed Obligations.  If the Lender so requests, any such
obligation or indebtedness of the Borrower to the Guarantor shall be enforced
and performance received by the Guarantor as trustee for the Lender and the
proceeds thereof shall be paid over to the Lender on account of the Guaranteed
Obligations, but without reducing or affecting in any manner the liability of
the Guarantor under this Guaranty.

 

10.          Stay of Acceleration.  In the event that acceleration of the time
for payment of any of the Guaranteed Obligations is stayed, in connection with
any case commenced by or against the Guarantor or the Borrower under any Debtor
Relief Laws, or otherwise, all such amounts shall nonetheless be payable by the
Guarantor immediately upon demand by the Lender.

 

11.          Expenses.  The Guarantor shall pay on demand all out-of-pocket
expenses (including reasonable attorneys’ fees and expenses and the allocated
cost and disbursements of internal legal counsel) in any way relating to the
enforcement or protection of the Lender’s rights under this Guaranty or in
respect of the Guaranteed Obligations, including any incurred during any
“workout” or restructuring in respect of the Guaranteed Obligations and any
incurred in the preservation, protection or enforcement of any rights of the
Lender in any proceeding any Debtor Relief Laws.  The obligations of the
Guarantor under this paragraph shall survive the payment in full of the
Guaranteed Obligations and termination of this Guaranty.

 

12.          Miscellaneous.  No provision of this Guaranty may be waived,
amended, supplemented or modified, except by a written instrument executed by
the Lender and the Guarantor.  No failure by the Lender to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any

 

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right, remedy or power hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.  The remedies herein
provided are cumulative and not exclusive of any remedies provided by law or in
equity.  The unenforceability or invalidity of any provision of this Guaranty
shall not affect the enforceability or validity of any other provision herein. 
Unless otherwise agreed by the Lender and the Guarantor in writing, this
Guaranty is not intended to supersede or otherwise affect any other guaranty now
or hereafter given by the Guarantor for the benefit of the Lender or any term or
provision thereof.

 

13.          Condition of Borrower.  The Guarantor acknowledges and agrees that
it has the sole responsibility for, and has adequate means of, obtaining from
the Borrower and any other guarantor such information concerning the financial
condition, business and operations of the Borrower and any such other guarantor
as the Guarantor requires, and that the Lender has no duty, and the Guarantor is
not relying on the Lender at any time, to disclose to the Guarantor any
information relating to the business, operations or financial condition of the
Borrower or any other guarantor (the guarantor waiving any duty on the part of
the Lender to disclose such information and any defense relating to the failure
to provide the same).

 

14.          Setoff.  If and to the extent any payment is not made when due
hereunder, the Lender may setoff and charge from time to time any amount so due
against any or all of the Guarantor’s accounts or deposits with the Lender.

 

15.          Representations and Warranties.  The Guarantor represents and
warrants that (a) it is duly organized and in good standing under the laws of
the jurisdiction of its organization and has full capacity and right to make and
perform this Guaranty, and all necessary authority has been obtained; (b) this
Guaranty constitutes its legal, valid and binding obligation enforceable in
accordance with its terms; (c) the making and performance of this Guaranty does
not and will not violate the provisions of any applicable law, regulation or
order, and does not and will not result in the breach of, or constitute a
default or require any consent under, any material agreement, instrument, or
document to which it is a party or by which it or any of its property may be
bound or affected; and (d) all consents, approvals, licenses and authorizations
of, and filings and registrations with, any governmental authority required
under applicable law and regulations for the making and performance of this
Guaranty have been obtained or made and are in full force and effect.

 

16.          Indemnification and Survival.  Without limitation on any other
obligations of the Guarantor or remedies of the Lender under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Lender from and against, and shall pay on demand, any
and all damages, losses, liabilities and expenses (including reasonable
attorneys’ fees and expenses and the allocated cost and disbursements of
internal legal counsel) that may be suffered or incurred by the Lender in
connection with or as a result of any failure of any Guaranteed Obligations to
be the legal, valid and binding obligations of the Borrower enforceable against
the Borrower in accordance with their terms.  The obligations of the Guarantor
under this paragraph shall survive the payment in full of the Guaranteed
Obligations and termination of this Guaranty.

 

17.          GOVERNING LAW; Assignment; Jurisdiction; Notices.  THIS GUARANTY
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE

 

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WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS (INCLUDING 735 ILCS
SECTION 105/5-5) BUT OTHERWISE WITHOUT GIVING EFFECT TO ANY OF SUCH STATE’S
CONFLICTS-OF-LAW PROVISIONS.  This Guaranty shall (a) bind the Guarantor and its
successors and assigns, provided that the Guarantor may not assign its rights or
obligations under this Guaranty without the prior written consent of the Lender
(and any attempted assignment without such consent shall be void), and (b) inure
to the benefit of the Lender and its successors and assigns and the Lender may,
without notice to the Guarantor and without affecting the Guarantor’s
obligations hereunder, assign, sell or grant participations in the Guaranteed
Obligations and this Guaranty, in whole or in part.  The Guarantor hereby
irrevocably (i) submits to the non-exclusive jurisdiction of any United States
Federal or State court sitting in Cook County, Illinois in any action or
proceeding arising out of or relating to this Guaranty, and (ii) waives to the
fullest extent permitted by law any defense asserting an inconvenient forum in
connection therewith.  Service of process by the Lender in connection with such
action or proceeding shall be binding on the Guarantor if sent to the Guarantor
by registered or certified mail at its address specified below or such other
address as from time to time notified by the Guarantor.  The Guarantor agrees
that the Lender may disclose to any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations of
all or part of the Guaranteed Obligations any and all information in the
Lender’s possession concerning the Guarantor, this Guaranty and any security for
this Guaranty.  All notices and other communications to the Guarantor under this
Guaranty shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier to the
Guarantor at its address set forth below or at such other address in the United
States as may be specified by the Guarantor in a written notice delivered to the
Lender at such office as the Lender may designate for such purpose from time to
time in a written notice to the Guarantor.

 

18.          WAIVER OF JURY TRIAL; FINAL AGREEMENT.  TO THE EXTENT ALLOWED BY
APPLICABLE LAW, THE GUARANTOR AND THE LENDER EACH IRREVOCABLY WAIVES TRIAL BY
JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON, ARISING OUT OF OR
RELATING TO THIS GUARANTY OR THE GUARANTEED OBLIGATIONS.  THIS GUARANTY
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

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This Unconditional Guaranty is duly executed as of the date first above written.

 

 

 

BROADWIND ENERGY INC.

 

 

 

 

 

By:

/s/ J. Cameron Drecoll

 

Name: J. Cameron Drecoll

 

Title: Chief Executive Officer

 

 

 

 

 

Address:

47 E. Chicago Avenue, Suit 332,
Naperville, IL 60540

 

Parent Guaranty Signature Page

 

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