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 


 

















 


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 


 


2

















 


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 


 


3

















 


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 


 


4

















 


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 


 


5

















 


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.


 


6

















 


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


 


S-1