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EXHIBIT 10.26
GUARANTY
THIS GUARANTY, is made this 6th day of February , 1995, by
McClain Industries, Inc., whose address is 6200 Elmridge, Sterling Heights,
Michigan 48310 ("Guarantor") to and with Standard Federal Bank, a federal
savings bank ("Standard Federal").
WITNESSETH:
WHEREAS, Galion Holding Company, a Michigan corporation, Galion Solid
Waste Equipment, Inc., a Michigan corporation and Galion Dump Bodies, Inc., a
Michigan corporation ("Borrower"), may from time to time request loans,
advances or other financial accommodations from Standard Federal and Standard
Federal may, in its discretion, honor such requests in whole or part and
thereby Borrower may from time to time be indebted to Standard Federal; and
WHEREAS, Standard Federal is unwilling to make loans, advances or extend
other financial accommodations to or otherwise do business with Borrower unless
Guarantor unconditionally guarantees payment of all present and future
indebtedness and obligations of Borrower to Standard Federal; and
WHEREAS, Guarantor will directly benefit from Standard Federal's making of
loans advances or extending other financial accommodations to or otherwise
doing business with Borrower.
NOW, THEREFORE, in order to induce Standard Federal to make loans,
advances or extend other financial accommodations to and otherwise do business
with Borrower and for other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, Guarantor hereby covenants and
agrees with Standard Federal as follows:
SECTION 1. GUARANTY.
1.1 Guarantor hereby irrevocably and unconditionally guarantees to Standard
Federal and its successors and assigns: (a) the full and prompt payment and
performance when due of the Indebtedness, as hereinafter defined; and (b) the
payment, compliance with and performance of all other obligations, covenants,
representations and warranties of every kind, nature and description in
accordance with all instruments and documents executed by the Borrower in favor
of Standard Federal, whether now owing or existing or heretofore or hereafter
created or arising, regardless of whether such obligations, covenants,
representations or warranties are held to be unenforceable, void or of no
effect against the Borrower and including without limitation, those under any
loan agreement and/or promissory note executed and delivered by Borrower to
Standard Federal, and any extensions, modifications or renewals thereof. The
term "Indebtedness" shall mean all principal, interest, attorneys' fees,
commitment fees, liabilities for costs and expenses and all other indebtedness,
obligations and liabilities
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under and in accordance with the terms of all instruments and documents
executed by Borrower in favor of Standard Federal, whether direct or indirect,
absolute or contingent and whether now owing or existing or heretofore or
hereafter created or arising, and regardless of whether such indebtedness,
obligations or liabilities are held to be unenforceable, void or of no effect
against the Borrower, and all costs, expenses and fees, including reasonable
attorneys' fees, arising in connection with the collection or enforcement of
any or all amounts, indebtedness, obligations and liabilities of Borrower to
Standard Federal, as described above, regardless of whether the Borrower is
held to be liable for such amounts. Guarantor acknowledges and agrees that any
indebtedness of the Borrower to Standard Federal as evidenced by any promissory
note may be extended or renewed upon maturity at the sole discretion of
Standard Federal and that the Indebtedness as defined herein, the payment of
which is hereby guaranteed, shall include, without limitation, all indebtedness
and other obligations as extended or renewed and as may be evidenced by any
renewal promissory note.
1.2 This is an irrevocable, unconditional and absolute guaranty of payment,
and not of collection, and the undersigned agrees that its liability on this
Guaranty shall be immediate and Standard Federal may have immediate recourse
against the undersigned for full and immediate payment of the Indebtedness at
any time after the Indebtedness or any part thereof, has not been paid when due
(whether by acceleration or otherwise) or the Borrower has defaulted or
otherwise failed to perform when due any of its obligations, covenants,
representations or warranties to Standard Federal.
SECTION 2. LIABILITY OF GUARANTOR.
2.1 The liability of Guarantor on this Guaranty shall not be contingent upon
the exercise or enforcement by Standard Federal of whatever remedies it may
have against the Borrower or others, or the enforcement of any lien or
realization upon any security or collateral Standard Federal may at any time
possess. Any one or more successive and/or concurrent actions may be brought
hereon against Guarantor either in the same action, if any, brought against
Borrower or in separate actions, as often as Standard Federal, in it sole
discretion, may deem advisable. No election to proceed in one form of action
or proceeding, or against any party, or on any obligation, shall constitute a
waiver of Standard Federal's right to proceed in any other form of action or
proceeding or against other parties unless Standard Federal has expressly
waived such right in writing. Specifically, but without limiting the
generality of the foregoing, no action or proceeding by Standard Federal
against Borrower under any document or instrument evidencing or securing the
Indebtedness shall serve to diminish the liability of Guarantor, except to the
extent Standard Federal realizes payment by such action or proceeding,
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notwithstanding the effect of any such action or proceeding upon Guarantor's
right of subrogation against Borrower. Receipt by Standard Federal of payment
or payments with knowledge of the breach of any provision with respect to any
of the Indebtedness shall not, as to the Guarantor, be deemed a waiver of such
breach. All rights, powers and remedies of Standard Federal hereunder and
under any other agreement now or at any time hereafter in force between
Standard Federal and the Guarantor shall be cumulative and not alternative and
shall be in addition to all rights, powers and remedies given to Standard
Federal by law.
2.2 Guarantor agrees that its liability hereunder is absolute and
unconditional and that Standard Federal shall not be obligated (although it may
do so at its sole option) before being entitled to direct recourse against
Guarantor to take any steps, whatsoever to preserve, protect, accept, perfect
Standard Federal's interest in, foreclose upon or realize on collateral
security, if any, for the payment of the Indebtedness or any other guaranty of
the Indebtedness or in any other respect exercise any diligence whatever in
collecting or attempting to collect the Indebtedness by any means.
2.3 The liability of the Guarantor shall in no way be affected or impaired by:
(a) any amendment, alteration, extension, renewal, waiver, indulgence or other
modification of the Indebtedness; (b) any settlement or compromise in
connection with the Indebtedness; (c) any subordination of payments under the
Indebtedness to any other debt or claim; (d) any substitution, exchange,
release or other disposition of all or any part of the Indebtedness; (e) any
failure, delay, neglect, act or omission by Standard Federal to act in
connection with the Indebtedness; (f) any advances for the purpose of
performing any covenant of agreement of the Borrower, or curing any breach; (g)
the filing by or against Borrower of bankruptcy, insolvency, reorganization or
other debtor's relief afforded Borrower pursuant to the present or future
provisions of the Bankruptcy Code or any other state or federal statute or by
the decision of any court; or (h) any other matter whether similar or
dissimilar to the foregoing. The obligations of Guarantor are unconditional,
notwithstanding any defect in the genuineness, validity, regularity or
enforceability of the Indebtedness or any other circumstances whether or not
referred to herein, which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor.
2.4 The Guarantor hereby waives each and every defense which, under principles
of guaranty or suretyship law or otherwise, would otherwise operate to impair
or diminish the liability of Guarantor hereunder, including, without
limitation: (a) notice of acceptance of this Guaranty and of creations of
Indebtedness of Borrower to Standard Federal; (b) any subrogation to the
rights of Standard Federal against Borrower until the Indebtedness has been
paid in full; (c) presentment and demand for payment of any Indebtedness
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of Borrower; (d) protest, notice or protest, and notice of dishonor or default
to the Guarantor or to any other party with respect to any of the Indebtedness;
(e) all other notices to which the Guarantor might otherwise be entitled; (f)
any demand for payment under this Guaranty; (g) any defense arising by reason
of any disability or other defense of Borrower by reason of the cessation from
any cause whatsoever of the liability of the Borrower; (h) any rights to
extension, composition or otherwise under the Bankruptcy Code or any amendments
thereof, or under any state or other federal statute; and (i) any right or
claim or claim of right to cause a marshalling of Borrower's assets. No notice
to or demand on the Guarantor shall be deemed to be a waiver of the obligation
of the Guarantor or of the right of Standard Federal to take further action
without notice or demand as provided herein; nor in any event shall any
modification or waiver of the provisions of this Guaranty be effective unless
in writing nor shall any such waiver be applicable except in the specific
instance for which given.
SECTION 3. WARRANTIES AND REPRESENTATIONS.
3.1 Guarantor represents, warrants and covenants to Standard Federal that, as
of the date of this Guaranty: the fair salable value of Guarantor's assets
exceeds its liabilities, including the liability undertaken pursuant to this
Guaranty; Guarantor is meeting its current liabilities as they mature; any
financial statements of Guarantor furnished Standard Federal are true and
correct and include in the footnotes thereto all contingent liabilities of
Guarantor: since the date of said financial statements there has been no
material adverse change in the financial condition of Guarantor; there are not
now pending any material court or administrative proceedings or undischarged
judgments against Guarantor and no federal or state tax liens have been filed
or threatened against Guarantor, nor is Guarantor in default or claimed default
under any agreement for borrowed money.
3.2 Guarantor agrees to immediately give Standard Federal written notice of
any material adverse change in its financial condition, including but not
limited to litigation commenced, tax liens filed, default claimed under its
indebtedness for borrowed money or bankruptcy proceedings commenced by or
against Guarantor. Guarantor agrees to deliver, timely to Standard Federal,
annual financial statements for the preceding fiscal year; and at such
reasonable times as Standard Federal requests to furnish its current financial
statements to Standard Federal and permit Standard Federal or its
representatives to inspect at Guarantor's offices, its financial records and
properties and make extracts therefrom in order to evaluate the financial
condition of Guarantor. Guarantor is fully aware of the financial condition of
the Borrower. Guarantor delivers this Guaranty based solely upon its own
independent investigation and in no part upon any representation or statement
of Standard Federal with respect
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thereto. Guarantor is in a position to and hereby assumes full responsibility
for obtaining any additional information concerning Borrower's financial
condition as Guarantor may deem material to its obligations hereunder; and
Guarantor is not relying upon nor expecting Standard Federal to furnish it any
information in Standard Federal's possession concerning Borrower's financial
condition.
SECTION 4. MISCELLANEOUS.
4.1 This Guaranty shall inure to the benefit of Standard Federal and its
successors and assigns, including each and every holder or owner of any of the
indebtedness guaranteed hereby. 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
Standard Federal shall become a holder or owner of any of the Indebtedness,
each reference to Standard Federal hereunder shall be construed as if it
referred to each such holder or owner.
4.2 This Guaranty shall be binding upon Guarantor and its successors and
assigns. Guarantor agrees that recourse may be had against its earnings and
separate property for all of Guarantor's obligations under this Guaranty.
4.3 The liability of each Guarantor executing this Guaranty shall be joint and
several and the term "Guarantor" shall mean each and all such Guarantors.
4.4 This Guaranty and all rights and obligations hereunder, including matters
of construction, validity and performance, shall be governed by the laws of the
State of Michigan.
4.5 THIS GUARANTY IS FREELY AND VOLUNTARILY GIVEN TO STANDARD FEDERAL BY
GUARANTOR, JOINTLY AND SEVERALLY, WITHOUT ANY DURESS OR COERCION, AND AFTER
GUARANTOR, JOINTLY AND SEVERALLY, HAS EITHER CONSULTED WITH COUNSEL OR BEEN
GIVEN AN OPPORTUNITY TO DO SO, AND GUARANTOR, JOINTLY AND SEVERALLY, HAS
CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF THIS
GUARANTY.
IN WITNESS WHEREOF, this Guaranty was executed and delivered by the
undersigned on the day and year first above written.
WITNESSES: GUARANTOR:
McClain Industries, Inc., a
Michigan corporation
By:
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E. James Zabinski
Its: Treasurer
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STANDARD FEDERAL BANK, a federal
savings bank
2600 W. Big Beaver Road
Troy, Michigan 48084
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