GUARANTY
GUARANTY dated as of the 1st day of January, 1996 by XXXXXX X.
XXXXXXXXXXX ("Guarantor") for the benefit of THE XXXXXXX X. REASON IRREVOCABLE
TRUST FOR THE BENEFIT OF XXXXXXXX XXXXXXX AND XXXXX XXXXXX DATED OCTOBER 12,
1992 ("Promisee").
R E C I T A L S:
X. Xxxxx International, Ltd. (the "Company"), Promisee,
Xxxxxxx X. Reason, individually and as Trustee of his Revocable
Living Trust dated April 9, 1979, Monroe Engineering Products, Inc.
("Monroe"), and Guarantor have entered into that certain Stock
Purchase Agreement dated as of January 1, 1996 (the "Agreement").
B. In order to induce Promisee to consummate the transactions
contemplated by the Agreement, Guarantor has agreed to guaranty the full and
prompt payment of the April 30, 1997 payment in the amount of Five Hundred
Thousand and 00/100 Dollars ($500,000.00) (the "1997 Payment"), under a certain
promissory note issued to Promisee by the Company pursuant to the Agreement in
the principal amount of Two Million Two Hundred Thirty-One Thousand and 00/100
Dollars ($2,231,000.00) (the "Note").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Guarantor hereby agrees as
follows:
1. Guaranty of Payment. Guarantor hereby unconditionally and
irrevocably guaranties to Promisee the full and prompt payment when due, whether
by acceleration or otherwise, of the 1997 Payment, as such term is defined under
the Note, and any default interest accruing thereon, if any, under the Note.
Guarantor agrees that this Guaranty is a present and continuing guaranty of
payment and not of collectibility, and, except as provided below, that Promisee
shall not be required to prosecute collection, enforcement or other remedies
against the Company before calling on Guarantor for payment. Guarantor agrees
that if, for any reason, the Company shall fail or be unable to pay, punctually
and fully, the 1997 Payment, Guarantor shall pay such obligations to Promisee in
full five (5) days after receiving written demand therefor from Promisee.
Guarantor agrees that one or more successive actions may be brought against him,
as often as Promisee deems advisable, until all of the 1997 Payment is paid in
full.
2. Continuing Guaranty. Guarantor agrees that the obligations of
Guarantor pursuant to Paragraph 1 above shall be a primary obligation of
Guarantor, shall not be subject to any counterclaim, set-off, abatement,
deferment or defense based upon any claim that Guarantor may have against
Promisee, the Company, Monroe or any other person or entity, and shall remain in
full force and effect without regard to, and shall not be released, discharged
or affected in any way by any circumstance or condition
(whether or not Guarantor shall have any knowledge thereof),
including without limitation:
(a) any lack of validity of enforceability of the Note or the
Agreement;
(b) any termination, amendment, modification or other change
in the Note or the Agreement;
(c) any failure, omission or delay on the part of Company,
Guarantor or Promisee to conform or comply with any term of the Note or the
Agreement or any failure of Promisee to give notice of any default thereunder;
(d) any waiver, compromise, release, settlement or extension
of time of payment or performance or observance of any of the obligations or
agreements contained in the Note or the Agreement;
(e) any action or inaction by Promisee under or in respect of
the Note or the Agreement, any failure, lack of diligence, omission or delay on
the part of Promisee to enforce, assert or exercise any right, power or remedy
conferred on it in the Note or the Agreement, or any other action or inaction on
the part of Promisee;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit of
creditors, composition, receivership, liquidation, marshalling of assets and
liabilities or similar events or proceedings with respect to the Company, or any
of its property or creditors, or any action taken by any trustee or receiver or
by any court in such proceeding;
(g) any merger or consolidation of the Company, or any sale,
lease or transfer of any of the assets of the Company;
(h) any change in the ownership of the capital stock of the
Company or any change in the relationship between the Company and Guarantor, or
any termination of any such relationship;
(i) to the extent permitted by law, any release or discharge
by operation of law of the Company from any obligation or agreement contained in
the Note or the Agreement; or
(j) to the extent permitted by law, any other occurrence,
circumstance, happening or event, whether similar or dissimilar to the foregoing
and whether foreseen or unforeseen, which otherwise might constitute a legal or
equitable defense or discharge of the liabilities of a
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guarantor or surety or which otherwise might limit recourse against the Company
or Guarantor.
3. Waivers. Guarantor unconditionally waives, to the extent permitted
by law, (i) notice of any of the matters referred to in Paragraph 2 above, (ii)
all notices which may be required by statute, rule of law or otherwise, now or
hereafter in effect, to preserve intact any rights against Guarantor, including,
without limitation, any demand, presentment and protest, proof of notice of
non-payment under the Note or the Agreement and notice of any default or any
failure on the part of Guarantor or the Company to perform or comply with any
covenant, agreement, term or condition of the Note or the Agreement, (iii) any
right to the enforcement, assertion or exercise against Guarantor or the Company
of any right or remedy conferred under the Note or the Agreement, (iv) any
requirement of diligence, and (v) any requirement to exhaust any remedies or to
mitigate the damages resulting from any default under the Note or the Agreement
(subject to the limitations set forth in Paragraph 1 above).
4. Subordination. Guarantor agrees that any and all present and future
debts and obligations of the Company to Guarantor are hereby subordinated to the
claims of Promisee and are hereby assigned by Guarantor to Promisee as security
for the payment of the 1997 Payment under the Note.
5. Subrogation. Guarantor agrees that notwithstanding any payment or
performance by Guarantor pursuant to this Guaranty, for so long as the 1997
Payment remains unpaid, the Guarantor shall not be entitled to enforce any right
to be subrogated to any rights of Promisee and Guarantor waives and releases all
rights and claims to indemnification, reimbursement and contribution Guarantor
now has or at any time hereafter may have against the Company until the Note is
performed and paid in full.
6. Reinstatement. The obligations of Guarantor pursuant to this
Guaranty shall continue to be effective or automatically be reinstated, as the
case may be, if at any time payment of the 1997 Payment is rescinded or
otherwise must be restored or returned as a result of Company's insolvency,
bankruptcy, dissolution, or liquidation or reorganization of the Guarantor or
the Company or for any other reason, all as though such payment had not been
made.
7. Successors and Assigns. This Guaranty shall inure to the benefit of
Promisee, and its successors and assigns. This Guaranty shall be binding on
Guarantor, his heirs, successors and assigns, and shall continue in full force
and effect until the Note is paid and performed in full.
8. No Waiver of Rights. Neither any delay in exercising, nor any
failure on the part of Promisee to exercise any right, power or privilege under
this Guaranty or the Note or Agreement
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shall operate as a waiver thereof, and no single or partial exercise of any
right, power or privilege shall preclude any other or further exercise thereof
or the exercise of any other power or right, or be deemed to establish a custom
or course of dealing or performance between the parties hereto. The rights and
remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law. No notice to or demand on Guarantor in any case shall
entitle such Guarantor to any other or further notice or demand in the same,
similar or other circumstance.
9. Modification. The terms of this Guaranty may be waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. No
amendment, modification, waiver or other change of any of the terms of this
Guaranty shall be effective without the prior written consent of Promisee.
10. Costs and Expenses. Guarantor agrees to pay on demand all costs and
expenses incurred by or on behalf of Promisee (including, without limitation,
reasonable attorneys' fees and expenses) in enforcing the obligations of
Guarantor under this Guaranty.
11. Notices. All notices required hereunder shall be proper if made in
compliance with Section 12.2 of the Agreement.
12. Applicable Law. This Guaranty shall be governed as to validity,
interpretation, effect and in all other respects by laws and decisions of the
State of Michigan.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
first above written.
WITNESSES: GUARANTOR:
/s/ Xxxxxxx Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxx
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