Exhibit 10.4


 


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.
(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 (collectively,
the “Guarantor”, jointly and severally) 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, all Indebtedness arising under that certain Loan and Security
Agreement dated as of January 17, 1997 between the Borrower 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 all indebtedness and
liabilities arising under the Subsidiary Loan Documents and the other Loan
Documents (including 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 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 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


 


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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 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


 


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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 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


 


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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 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


 


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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.


 


 


	
   

  	
  1309 SOUTH CICERO AVENUE, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ralph
  Placzek

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Ralph
  Placzek

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  47 E.
  Chicago Avenue, Suite 332,

  Naperville, IL 60540

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5100 NEVILLE ROAD, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ralph
  Placzek

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Ralph
  Placzek

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  47 E.
  Chicago Avenue, Suite 332,

  Naperville, IL 60540

  
								



 


1309/5100 Guaranty Signature Page


 


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