CONTINUING GUARANTY
GUARANTY. To induce NBD Bank, N.A. (the "Bank"), of 611 Woodward Avenue,
Detroit, Michigan 48226-3497 at its option, to make loans, extend or
continue credit or some other benefit, including letters of credit and
foreign exchange contracts, present or future, direct or indirect, and
whether several, joint or joint and several (referred to collectively as
"Liabilities"), to Interface Systems, Inc., and its successors (the
"Borrower"), and because the undersigned (the "Guarantor") has determined
that executing this Guaranty is in its interest and to its financial
benefit, the Guarantor absolutely and unconditionally guaranties to the
Bank, as primary obligor and not merely as surety, that the Liabilities will
be paid when due, whether by acceleration or otherwise. The Guarantor will
not only pay the Liabilities, but will also reimburse the Bank for accrued
and unpaid interest, and any expenses, including reasonable attorneys' fees,
that the Bank may pay in collecting from the Borrower or the Guarantor, and
for liquidating any collateral.
LIMITATION: The Guarantor's obligation under this Guaranty is UNLIMITED.
Notwithstanding the foregoing, if these blank lines are completed,
regardless of the amount of Liabilities outstanding at any time, the
Guarantor's obligation under this Guaranty shall not exceed the principal
amount of N/A and 00/100 DOLLARS ($ N/A ), plus
interest, expenses, and fees. Unless otherwise specified below. the
Guarantor's obligation shall be payable in U.S. Dollars.
CONTINUED RELIANCE: The Bank may continue to make loans or extend credit to
the Borrower based on this Guaranty until it receives written notice of
termination from the Guarantor. That notice shall be effective at the
opening of the Bank for business on the day after receipt of the notice. If
terminated, the Guarantor will continue to be liable to the Bank for any
Liabilities created, assumed or committed to at the time the termination
becomes effective, and all subsequent renewals, extensions, modifications
and amendments of the Liabilities.
SECURITY. As security for the Guaranty, the Guarantor grants to the Bank a
continuing security interest in the following described property and all of
its additions, substitutions, increments, proceeds and products, whether now
owned or later acquired (the "Collateral"):
1. All securities and other property of the Guarantor in the custody,
possession or control of the Bank (other than property held by the
Bank solely in a fiduciary capacity);
2. All property or securities declared or acknowledged to constitute
security for any past, present or future liability, direct or
indirect of the Guarantor to the Bank;
3. All balances of deposit accounts of the Guarantor with the Bank;
4. The following additional property of the Guarantor: accounts
receivable, inventory, machinery & equipment, general intangibles,
and all other assets .
The Bank has the right at any time to apply its own debt or liability to the
Guarantor in whole or partial payment of this Guaranty or other present or
future liabilities, direct or indirect, without any requirement for mutual
maturity.
If the Guarantor fails to pay any amount owing under this Guaranty, the Bank
shall has all of the rights and remedies provided by law or under any other
agreement to liquidate or foreclose on and sell the Collateral, including
but not limited to the rights and remedies of a secured party under the
Uniform Commercial Code. These rights and remedies are cumulative and not
exclusive. If the Guarantor is entitled to notice, that requirement is met
if the Bank sends notice at least seven (7) days prior to the date of sale,
disposition or other event which requires notice. The proceeds of any sale
shall be applied first to expenses, then toward payment of the amount owing
under this Guaranty. The Bank may cause all or any part of the Collateral
to be transferred to or registered in its name or in the name of any other
person or business entity, with or without designation of the capacity of
that nominee.
INCORPORATION: (This paragraph applies if the blanks are filled in.) The
Guarantor agrees that as long as any Liability remains outstanding, the
covenants and events of default in the Credit Authorization Agreement dated
February 19, 1997 between NBD Bank and the Guarantor, as amended (the
"Agreement"), are incorporated by reference. Those covenants and events
remain in force until this Guaranty is no longer in force, notwithstanding
any termination of the Agreement.
NEGATIVE PLEDGE: The Guarantor will not allow any lien to exist on any of
its property, except liens known to the Bank and existing on the date of
this Guaranty, and new liens which, in aggregate, total less than $ N/A .
For purposes of the following paragraphs, "any collateral" shall
include the Guarantor's Collateral and any other collateral securing
the Liabilities.
ACTION REGARDING BORROWER: If any monies become available that the Bank can
apply to the Liabilities, the Bank may apply them in any manner it chooses,
including but not limited to applying them against liabilities which are not
covered by this Guaranty. The Bank may take any action against the
Borrower, any collateral, or any other person liable for any of the
Liabilities. The Bank may release the Borrower or anyone else from the
Liabilities, either in whole or in part, or release any collateral, and need
not perfect a security interest in any collateral. The Bank does not have
to exercise any rights that it has against the Borrower or anyone else, or
make any effort to realize on any collateral or right of set-off. If the
Borrower requests more credit or any other benefit, the Bank may grant it
and the Bank may grant renewals, extensions, modifications and amendments of
the Liabilities and otherwise deal with the Borrower or any other person as
the Bank sees fit and as if this Guaranty were not in effect. The
Guarantor's obligations under this Guaranty shall not be released or
affected by (a) any act or omission of the Bank, (b) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially
all of the assets of the Borrower, or any receivership, insolvency,
bankruptcy, reorganization, or other similar proceedings affecting the
Borrower or any of its assets, or (c) any change in the composition or
structure of the Borrower or Guarantor, including a merger or consolidation
with any other person or entity.
NATURE OF GUARANTY: This Guaranty is a guaranty of payment and not of
collection. Therefore, the Bank may insist that the Guarantor pay
immediately, and the Bank is not required to attempt to collect first from
the Borrower, any collateral, or any other person liable for the
Liabilities. The obligation of the Guarantor shall be subject to no
conditions of any kind, and shall be absolute, regardless of the
unenforceability of any provisions of any agreement between the Borrower and
the Bank, or the existence of any defense, setoff or counterclaim which the
Borrower may assert.
OTHER GUARANTORS: If there is more than one Guarantor, the obligations
under this Guaranty shall be joint and several. In addition, each Guarantor
shall be jointly and severally liable with any other guarantor of the
Liabilities. If the Bank elects to enforce its rights against less than all
guarantors of the Liabilities, that election shall not release Guarantor
from its obligations under this Guaranty. The compromise or release of any
of the obligations of any of the other guarantors or the Borrower shall not
serve to waive, alter or release the Guarantor's obligations. This Guaranty
is not conditioned on anyone else executing this or any other guaranty.
RIGHTS OF SUBROGATION: The Guarantor agrees not to enforce any rights of
subrogation, contribution, or indemnification that it has against the
Borrower, any entity liable for the Liabilities, or any collateral, until
the Liabilities are fully paid, even if all Liabilities are not covered by
this Guaranty. The Guarantor further agrees that if any payments to the
Bank on the Liabilities are in whole or in part invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy act or code, state or
federal law, common law or equitable doctrine, this Guaranty and the Bank's
interest in any collateral remain in full force and effect (or be reinstated
as the case may be) until payment in full of those amounts. That payment is
due on demand.
WAIVERS: The Guarantor waives any right it may have to receive notice of
the following matters before the Bank enforces any of its rights: (a) the
Bank's acceptance of this Guaranty, (b) any credit that the Bank extends to
the Borrower, (c) the Borrower's default, (d) any demand, or (e) any action
that the Bank takes regarding the Borrower, anyone else, any collateral, or
any Liability, which it might be entitled to by law or under any other
agreement. Any waiver shall affect only the specific terms and time period
stated in the waiver. The Bank may waive or delay enforcing any of its
rights without losing them. No modification or waiver of this Guaranty
shall be effective unless it is in writing and signed by the party against
whom it is being enforced.
REPRESENTATIONS BY GUARANTOR: Each Guarantor represents that: (a) the
execution and delivery of this Agreement and the performance of the
obligations it imposes do not violate any law, conflict with any agreement
by which it is bound, or require the consent or approval of any governmental
authority or any third party; (b) this Agreement is a valid and binding
agreement enforceable according to its terms; and (c) all balance sheets,
profit and loss statements, and other financial statements furnished to the
Bank are accurate and fairly reflect the financial condition of the
organizations and persons to which they apply on their effective dates,
including contingent liabilities of every type, which financial condition
has not changed materially and adversely since those dates. Each Guarantor,
other than a natural person, further represents that: (a) it is duly
organized, existing and in good standing under the laws where it is
organized; and (b) the execution and delivery of this note and the
performance of the obligations it imposes (i) are within its powers; (ii)
have been duly authorized by all necessary action of its governing body; and
(iii) do not contravene the terms of its articles of incorporation or
organization, its by-laws or any agreement governing its affairs.
NOTICES: Notice from one party to another relating to this Guaranty shall
be deemed effective if made in writing (including telecommunications) and
delivered to the recipient's address, telex number or telecopier number set
forth under its name by any of the following means: (a) hand delivery, (b)
registered or certified mail, postage prepaid, with return receipt
requested, (c) first class or express mail, postage prepaid, (d) Federal
Express, Purolator Courier or like overnight courier service or (e)
telecopy, telex or other wire transmission with request for assurance of
receipt in a manner typical with respect to communications of that type.
Notice made in accordance with this section shall be deemed delivered on
receipt if delivered by hand or wire transmission, on the third business day
after mailing if mailed by first class. registered or certified mail, or on
the next business day after mailing or deposit with an overnight courier
service if delivered by express mail or overnight courier. Notwithstanding
the foregoing, notice of termination of this Guaranty shall be deemed
received only upon the receipt of actual written notice by the Bank in
accordance with the paragraph above labeled "Continued Reliance."
LAW AND JUDICIAL FORUM THAT APPLY: This agreement is governed by Michigan
law. The Guarantor agrees that any legal action or proceeding against it
with respect to any of its obligations under this Guaranty may be brought in
any state or federal court located in the State of Michigan, as the Bank in
its sole discretion may elect. By the execution and delivery of this
Guaranty, the Guarantor submits to and accepts, with regard to any such
action or proceeding, for itself and in respect of its property, generally
and unconditionally. the jurisdiction of those courts. The Guarantor waives
any claim that the State of Michigan is not a convenient forum or the proper
venue for any such suit, action or proceeding.
FOREIGN CURRENCY. (This paragraph applies if the blanks are filled in.)
This Guaranty arises in the context of an international transaction, and the
specification of payment in the following currency
("Foreign Currency") at
("Conversion Location") is of the essence. The Foreign Currency is the
currency of account and payment under this Guaranty. The obligation of the
Guarantor is not discharged by an amount paid in any other currency or at
another place, whether pursuant to a judgment or otherwise, to the extent
that the amount so paid, on prompt conversion into the Foreign Currency and
transfer to the Conversion Location under normal banking procedure, does not
yield the amount of Foreign Currency due under this Guaranty.
MISCELLANEOUS: The Guarantor's liability under this Guaranty is independent
of its liability under any other guaranty previously or subsequently
executed by the Guarantor or any one of them, singularly or together with
others, as to all or any part of the Liabilities. and may be enforced for
the full amount of this Guaranty regardless of the Guarantor's liability
under any other guaranty. This Guaranty binds the Guarantor and its heirs,
successors and assigns, and benefits the Bank and its successors and
assigns. The use of headings shall not limit the provisions of this
Guaranty. All discussions and documents arising between this Guaranty and
the last guaranty signed by the Guarantor as to the Borrower are merged into
this Guaranty.
WAIVER OF JURY TRIAL: The Bank and the Guarantor, after consulting or
having had the opportunity to consult with counsel, knowingly, voluntarily
and intentionally waive any right either of them may have to a trial by jury
in any litigation based upon or arising out of this Guaranty or any related
instrument or agreement, or any of the transactions contemplated by this
Guaranty, or any course of conduct, dealing, statement (whether oral or
written), or actions of either of them. Neither the Bank nor the Guarantor
shall seek to consolidate, by counterclaim or otherwise, any action in which
a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to
have been modified in any respect or relinquished by either the Bank or the
Guarantor except by a written instrument executed by both of them.
Dated: February 19, 1997
GUARANTOR:
I.G.K. Industries, Inc.
Address:
7232 Jackson Road By: David O. Schupp
Ann Arbor, MI 48103 Its: Treasurer