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 sub
