GUARANTY
GUARANTY, dated _______________, 1997, (the "Guaranty"), given
by STANDARD AUTOMOTIVE CORPORATION, a Delaware corporation (the "Guarantor"),
and extended to XXXX XXXXXXX (the "Creditor"), for the benefit of AJAX
MANUFACTURING COMPANY, a New Jersey corporation (the "Debtor").
W I T N E S S E T H :
WHEREAS, pursuant to a Stock Purchase and Redemption Agreement
(the "Stock Purchase Agreement") by and among Guarantor and Creditor of even
date herewith, Debtor is the Maker of a non-negotiable promissory note, payable
to Creditor, in the principal amount of _______________ ($_________) Dollars
(the "Note"); and
WHEREAS, without this Guaranty, the Creditor would be
unwilling to accept the Note as partial payment of the Purchase Price under the
Stock Purchase Agreement, and the parties, therefore, would be unable to
consummate the transactions contemplated by the Stock Purchase Agreement; and
WHEREAS, Guarantor has agreed to guarantee to Creditor the
payment of the Note.
NOW THEREFORE, in consideration of the premises and other good
and valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Guarantor agrees as
follows:
1. The Guarantor absolutely and unconditionally guarantees the
payment when due, upon maturity, acceleration or otherwise, of any and all
indebtedness of the Debtor to the Creditor under the Note. The Guarantor further
agrees to pay any and all reasonable expenses which may be incurred or paid by
Creditor in enforcing its rights under this Guaranty, including, but not limited
to, all reasonable attorneys' fees and costs and court costs. Guarantor shall
render reasonable assistance to Creditor in his efforts to collect the
indebtedness due to Creditor under the Note, and shall not during the course of
such collection efforts sell, transfer, or otherwise dispose of any of the
assets of Guarantor so as to impair its ability to perform under this Guaranty.
2. This Guaranty is and shall be construed to be an absolute
guaranty of collection, regardless of the present and future composition of
Debtor. All of the Debtor's indebtedness under the Note to which this Guaranty
applies, shall be conclusively presumed to have been created in reliance hereon.
3. The Guarantor agrees that the Creditor may, in his sole
discretion, without notice or demand (except as shall be required by applicable
statute), and without affecting or impairing Guarantor's liability hereunder,
from time to time (a) renew, compromise, extend, increase, accelerate, or
otherwise change the time for payment of, or otherwise change the terms of any
obligation of Debtor under the Note (or any part thereof), including an increase
or decrease of the rate of interest thereon,
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(b) take and hold security for the payment of any such obligations and exchange,
enforce, waive, and release any such security, (c) apply such security and
direct the order or manner of sale thereof as the Creditor in his sole
discretion may determine, and (d) release or substitute any one or more
endorsers, guarantors, or other obligors.
4. Payment of any amounts owed to the Guarantor by the Debtor
are hereby subordinated in right of payment to the payment in full of the
Debtor's obligations under the Note; and after the occurrence and during the
continuance of an Event of Default (as defined in the Note), such subordinate
obligations of the Debtor to the Guarantor, if the Creditor so requests, shall
be collected, enforced, and received by the Guarantor as trustee for the
Creditor and be paid over to the Creditor on account of such obligations of the
Debtor to the Creditor under the Note, but without affecting or impairing in any
manner the liability of the Guarantor under this Guaranty. Any instruments now
or hereafter evidencing any such obligations of the Debtor to the Guarantor
shall be marked with a legend that the same are subject to this Guaranty and, if
the Creditor so requests, shall be delivered to the Creditor.
5. The Guarantor represents that (i) it is duly authorized and
empowered to execute and deliver this Guaranty in favor of the Creditor and (ii)
at the time of the execution and delivery of this Guaranty, nothing exists to
impair the effectiveness of the obligations of the Guarantor to the Creditor
hereunder, or the immediate taking effect of this Agreement between
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the Guarantor and the Creditor with respect to becoming a guarantor of all
indebtedness owed by the Debtor to the Creditor under the Note.
6. This Guaranty and the liability and obligations of the
Guarantor hereunder are binding upon the Guarantor, its successors and assigns,
and inures to the benefit of and is enforceable by the Creditor and his heirs,
transferees and assigns, except as enforcement thereof may be subject to (a) the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally and (b) general principles of
equity (regardless of whether such enforcement is sought in a proceeding in
equity or at law.)
7. No right or power of the Creditor hereunder shall be deemed
to have been waived by any act or conduct on the part of the Creditor, or by any
neglect to exercise such right or power, or by any delay in so doing; and every
right or power shall continue in full force and effect until specifically waived
or released by an instrument in writing executed by the Creditor.
8. This Guaranty shall be deemed to be made under and shall be
governed by the internal laws of the State of New York in all respects,
including matters of construction, validity, and performance, without regard to
conflict of laws principles. The terms and provisions hereof may not be waived,
altered, modified, or amended except in writing duly signed by the Creditor and
by the Guarantor.
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9. The Guarantor agrees and consents to the exclusive
jurisdiction of any Court of competent jurisdiction in the State of New York, or
in such other state as the Creditor may select in his sole discretion, in any
and all actions and proceedings arising hereunder or pursuant hereto, and
irrevocably agrees to service of process by certified mail, return receipt
requested, to the Guarantor's address set forth herein, or such address as may
appear in the Creditor's records.
10. If any of the provisions of this Guaranty shall contravene
or be held invalid under the laws of the State of New York, this Guaranty shall
be construed as if not containing those provisions and the rights and
obligations of the parties hereto shall be construed and enforced accordingly.
11. All rights and remedies of the Creditor hereunder are
cumulative and not alternative.
12. This Guaranty shall terminate upon the expiration of the
applicable bankruptcy preference period immediately following the payment in
full of all indebtedness of the Debtor to the Creditor under the Note.
13. Anything contained herein to the contrary notwithstanding,
this Guaranty and the rights of the Creditor hereunder are subject to
subordination pursuant to Section 9.3 of the Stock Purchase Agreement.
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IN WITNESS WHEREOF, the undersigned Guarantor has executed
this Guaranty on the date first above written.
STANDARD AUTOMOTIVE CORPORATION
By:____________________________
Name:__________________________
Title:_________________________
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