EXHIBIT 10.22
GUARANTY
FOR VALUABLE CONSIDERATION, the receipt and adequacy of which is hereby
acknowledged, and to induce the Noteholders, as defined below and XXXXXX XXXXXX
& CO., LLC as representative of the Noteholders ("Secured Party") to accept the
Notes (as defined below) from TARPON INDUSTRIES, INC. ("Debtor"), the
undersigned STEELBANK, INC. ("Guarantor"), does hereby covenant and agree with
the Noteholders and the Secured Party as follows:
1. DEFINITIONS. In this Guaranty, unless the context otherwise requires:
A. "INDEBTEDNESS" is used in its most comprehensive form and means
all Indebtedness, whether direct or indirect, absolute or contingent, now
due and owing or which may hereafter, from time-to-time, be or become due
and owing under or with respect to the following: (i) the Notes
identified below; (ii) renewals, extensions, modifications or
substitutions of the Notes; and (iii) interest and costs, including
attorney fees and disbursements, on the foregoing.
B. "NOTES" means the 8% Junior Secured Promissory Notes issued to
certain investors (the "Noteholders") pursuant to Debtor's Private
Placement memorandum dated March 26, 2004 in the aggregate principal
amount of Two Million and 00/100 ($2,000,000.00) Dollars with interest,
and all renewals, replacements, modifications and extensions thereof.
2. STATEMENT OF GUARANTY. Guarantor hereby unconditionally and absolutely
guarantees to the Noteholders and the Secured Party the full and prompt payment
when due, or declared due of all Indebtedness. The Noteholders and the Secured
Party will have immediate recourse against Guarantor for full and immediate
payment of the Indebtedness at any time after the Indebtedness, or any part
thereof, has not been paid in full as and when due (whether at fixed maturity,
or by acceleration).
3. GUARANTY OF PAYMENT. This is a continuing and an unconditional guaranty
of payment, and not of collection. The Noteholders and the Secured Party shall
not be obligated, prior to or after seeking recourse against or receiving
payment from Guarantor, to do any of the following (although the Noteholders and
the Secured Party may do so, in whole or in part, at their sole option), the
performance of which are hereby unconditionally waived by Guarantor:
A. Take any steps whatsoever to collect from Debtor or to file any
claim of any kind against Debtor; or
B. Take any steps whatsoever to accept, perfect the Noteholders and
the Secured Party's interest in or foreclose or realize upon collateral
security, if any, for the payment of the Indebtedness, or any other
guarantee of the Indebtedness; or
C. In any other respect exercise any diligence whatsoever in
collecting or at tempting to collect the Indebtedness from Debtor by any
means.
4. NO IMPAIRMENT. Guarantor's liability for payment of the Indebtedness
shall be absolute and unconditional, and nothing whatsoever except actual full
payment to the Noteholders and the Secured Party of the Indebtedness shall
operate to discharge Guarantor's liability
hereunder. Guarantor unconditionally and irrevocably waives each and every
defense which, under principles of guaranty or suretyship law or equity, would
otherwise operate to impair or diminish the liability of Guarantor for the
Indebtedness. Without limiting the generality of the foregoing waiver, none of
the following acts, omissions or occurrences shall diminish or impair the
liability of Guarantor in any respect (any and all of which acts, omissions or
occurrences shall not require notice of any kind by the Noteholders and the
Secured Party to Guarantor):
A. Any extension, modification, indulgence, compromise, settlement
or variation of any of the terms of the Indebtedness;
B. The discharge or release of any obligations of Debtor by reason
of the operation of bankruptcy or insolvency laws or otherwise;
C. The acceptance or release by the Noteholders and the Secured
Party of any collateral security or other guaranty, or compromise,
settlement or extension with respect to any collateral security or
guaranty;
D. The creation of any new indebtedness by Debtor; and
E. The making of a demand, or absence of demand, for payment of the
Indebtedness, or giving or failing to give any notice of dishonor or
protest or any other notice, except as required by the terms of the Note.
5. WAIVER OF DEFENSES. Guarantor unconditionally waives:
A. Any subrogation to the rights of the Noteholders and the Secured
Party against Debtor until the Indebtedness to Secured Party has been paid
in full;
B. Any notice of acceptance of this Guaranty or the Noteholders' or
Secured Party's present or future action or intention to act in reliance
on this Guaranty; and
C. Notice of default by Debtor, any guarantor or any surety, xxxxxxx
or any party granting Debtor security under any security document.
6. EVENTS OF DEFAULT. The occurrence of any one of the following events
shall, at the election of the Noteholders and the Secured Party, be deemed a
default by Guarantor ("Event of Default") under this Guaranty:
A. Any breach by Guarantor of any of its representations,
warranties, covenants or agreements under this Guaranty which continues
uncured for ten days after receipt of notice by Guarantor;
B. The occurrence of any event of default under this Agreement, the
Notes or the General Subordinated Security Agreement of even date (the
"Security Agreement); or
C. The appointment of a conservator for all or any portion of
Guarantor's assets.
7. SECURITY. Guarantor's performance under this Guaranty is secured by a
lien on all of Guarantor's assets, subordinate only to the lien of Guarantor's
Senior Indebtedness (as defined in the Security Agreement) and subject to the
terms of the Subordination Agreement dated May
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17, 2004 between the Secured Party as representative of the Noteholders and
Greenfield Commercial Credit (Canada), Inc.
8. ELECTION OF REMEDIES. Upon the occurrence of an Event of Default under
this Guaranty, the Noteholders and the Secured Party has such rights and
remedies as are provided by law or in equity or under this Guaranty including,
without limitation, the right to proceed to suit against Guarantor regardless of
whether suit has been commenced against Debtor, and in any such suit Debtor may
be joined (but need not be joined) as a party with Guarantor. The Noteholders
and the Secured Party shall not be required to proceed against any other party,
or against any other security or collateral, or to pursue any right or remedy
under this Guaranty or under any other instrument. No right, power or remedy
conferred by this Guaranty upon the Noteholders and the Secured Party shall be
exclusive of any other right available at law, in equity, by statute or
otherwise, and all such rights, powers and remedies shall be cumulative and in
addition to all others. No failure or delay on the part of the Noteholders and
the Secured Party in exercising any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude a
later or further exercise thereof or the exercise of any right, power or remedy.
No course of dealing on behalf of the Noteholders and the Secured Party shall
operate as a waiver of any right, power, privilege or remedy.
9. CONSIDERATION. Guarantor acknowledges receipt of good and valuable
consideration for this Guaranty, the benefit conferred on Debtor by the giving
of this Guaranty and the reliance by the Noteholders and the Secured Party on
the existence and enforceability of this Guaranty.
10. NOTICES. Any notice, demand or request by the Noteholders and the
Secured Party, or their successors or assigns, to Guarantor shall be in writing,
and shall be deemed to have been received upon: (i) personal delivery; (ii)
telex; (iii) facsimile; or (iv) within 24 hours following deposit with an
overnight courier or international courier. Notice may be given to Guarantor at
0000 Xxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0.
11. JOINT AND SEVERAL LIABILITY. Guarantor's liability under this Guaranty
shall be joint and several with any other party liable for the Indebtedness,
including Debtor.
12. ASSIGNMENT. This Guaranty shall inure to the benefit of the
Noteholders and the Secured Party and their successors and assigns. In the event
that there shall be more than one such holder or owner, this Guaranty shall be
deemed a separate contract with each such holder and owner. In the event that
any person other than the Noteholders and the Secured Party shall become a
holder or owner of any of the Indebtedness, each such other person shall become
a holder or owner of any of the Indebtedness, each reference to the Noteholders
and the Secured Party hereunder shall be construed as if it referred to each
such other holder or owner.
13. INFORMATION. Guarantor shall have the responsibility of keeping
advised of Debtor's dealings and all matters which are or may become subject to,
or covered by, this Guaranty. The Noteholders and the Secured Party shall have
no obligation or liability to Guarantor whatsoever in connection therewith.
14. CHOICE OF LAWS. The laws of the State of Michigan shall govern this
Guaranty and all rights and obligations hereunder, including matters of
construction, validity and performance.
15. SEVERABILITY. If any provision or clause of this Guaranty or the
application hereof is to be held invalid, that invalidity shall not affect
other provisions or applications of this Guaranty which can be given effect
without the invalid provision or application, and to this end the provisions of
this Guaranty are declared to be severable.
16. CAPTIONS. Captions to paragraphs of this Guaranty are inserted for
convenience only and are not a part of this Guaranty. In interpreting this
Guaranty, they shall not be deemed in any manner to modify, explain, enlarge or
restrict any of the provisions of this Guaranty.
17. GUARANTY FREELY DELIVERED. This Guaranty has been freely and
voluntarily given to the Noteholders and the Secured Party by Guarantor,
without any duress or coercion and after Guarantor has either consulted with
counsel or been given an opportunity to do so. Guarantor has carefully and
completely read all of the terms and provisions of this Guaranty.
18. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon Guarantor
and its successors and assigns.
THIS GUARANTY has been executed on this 18th day of May, 2004.
STEELBANK, INC.
"Guarantor"
/s/ Xxxxx Xxxxxx
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By: Xxxxx Xxxxxx
Its: President (without personal
liability whatsoever)
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