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EXHIBIT 10.69
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BOND GUARANTY AGREEMENT
between
MCCLAIN OF ALABAMA, INC.
and
LASALLE NATIONAL BANK
DATED AS OF APRIL 1, 1997
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BOND GUARANTY AGREEMENT between MCCLAIN OF ALABAMA, INC., a
corporation organized under the laws of Michigan (herein called the "Company"),
and LASALLE NATIONAL BANK, a national banking association in its capacity as
trustee under the Trust Indenture to which reference is hereinafter made (said
Bank being herein called the "Trustee"),
R E C I T A L S
Contemporaneously with the execution and delivery of this
Guaranty Agreement, The Industrial Development Board of the City of Demopolis,
a public corporation and instrumentality organized under the laws of the State
of Alabama (herein called the "Board") will enter into a Trust Indenture dated
as of April 1, 1997 (herein called the "Indenture") with the Trustee, under
which the Board will issue its Industrial Revenue Bonds, McClain of Alabama,
Inc. Series 1997 (herein called the "Bonds"), in the aggregate principal amount
of $5,225,000. The proceeds of the Bonds will be used to finance the costs of
the construction of improvements to a manufacturing plant and the acquisition
and installation therein of certain items of machinery, equipment and other
personal property (the real property on which said plant is located, said plant
and said machinery, equipment and other personal property herein together
called the "Project"), all for lease to the Company. Also contemporaneously
with the execution and delivery of this Guaranty Agreement, the Board will
enter into a Lease Agreement dated as of April 1, 1997 (herein called the
"Lease") whereby the Board will lease the Project to the Company at and for a
rental sufficient to pay the principal of and the interest (and premium, if
any) on the Bonds as said principal, interest and premium, respectively, become
due and to provide for the purchase of Bonds in accordance with the provisions
of the Indenture.
In order to induce the original purchaser of the Bonds to
purchase the Bonds and in order to enhance the marketability of the Bonds to
subsequent purchasers, thereby achieving a lower interest rate on the Bonds
which will be reflected in a lower rental cost of the Project to the Company,
the Company has entered into this Guaranty Agreement with the Trustee for the
benefit of all who shall at any time be holders of any of the Bonds.
NOW, THEREFORE, in consideration of the premises and of the
respective agreements herein contained, it is hereby agreed among the Company,
the Trustee, and the holders of all the Bonds issued under the Indenture (the
holders of the Bonds evidencing their consent hereto by their acceptance of the
Bonds and the Company and the Trustee evidencing their consent hereto by their
execution hereof), each with each of the others, as follows:
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SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants that it is a corporation duly
organized and in good standing under the laws of the State of Michigan; that it
is not in violation of any provisions of its certificate of incorporation, or
the laws of the State of Michigan; that it is duly qualified and in good
standing as a foreign corporation in the State of Alabama; that it has power to
enter into this Guaranty Agreement and has duly authorized the execution and
delivery of this Guaranty Agreement by proper corporate action; and that no
provision of this Guaranty Agreement violates or constitutes a default under
any agreement, instrument, or indenture to which it is a party, or violates any
provision of its certificate of incorporation, or contravenes any other
requirement of law to which it may be subject.
SECTION 2. GUARANTY OF THE BONDS. The Company hereby
unconditionally guarantees to the Trustee for the benefit of the holders from
time to time of the Bonds (a) the full and prompt payment of the principal of
the Bonds and the premium, if any, payable on redemption thereof when and as
the same shall become due, whether at the stated maturity thereof, by
acceleration, call for redemption or otherwise, (b) the full and prompt payment
of the interest on the Bonds when and as the same shall become due and (c) the
full and prompt payment of all amounts required for the purchase of Bonds
pursuant to the Indenture when and as the same shall become due. All payments
by the Company on account of this Guaranty Agreement shall be paid in lawful
money of the United States of America. The guarantee of the Company herein
shall be for the equal and pro rata protection and benefit of the holders,
present and future, of the Bonds, if, as, when and to the extent issued,
equally, and ratably, without preference, priority or distinction of any over
others by reason of priority in issuance or acquisition or otherwise. Each and
every default in payment of the principal of, the premium, if any, payable on
redemption of, or the interest on any of the Bonds, or the purchase price of
any Bond shall give rise to a separate cause of action hereunder, and separate
suits may be brought hereunder as each cause of action arises.
SECTION 3. OBLIGATIONS ABSOLUTE AND UNCONDITIONAL. The
obligations of the Company under this Guaranty Agreement shall be absolute and
unconditional and shall remain in full force and effect (except where a longer
period is specified) until the principal of, the premium (if any) and the
interest on all of the Bonds shall have been paid or provision for the payment
thereof shall have been made in accordance with the terms of the Indenture, and
such obligation shall not be discharged, impaired, modified or otherwise
affected upon the happening from time to time of any event, including, without
limitation thereto, any of the following, whether or not with notice to, or the
consent of, the Company:
(a) The compromise, settlement, release or termination of
any or all of the obligations, covenants or agreements of the Board or
the Company under the Lease or the Indenture;
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(b) The failure to give notice to the Company of the
occurrence of an event of default under the terms and provisions of
the Lease, the Indenture or this Guaranty Agreement;
(c) The assignment, pledge or mortgaging or the purported
assignment, pledge or mortgaging of all or any part of the interest of
the Board in the Lease or the Project or the revenues therefrom;
(d) The waiver of the payment, performance or observance
by the Board or the Company of any of the obligations, covenants or
agreements of either of them contained in the Lease, the Indenture or
this Guaranty Agreement;
(e) The extension of the time for payment of the
principal of, the premium (if any) or the interest on, any of the
Bonds or the extension of the time for the performance of any other
obligations, covenants or agreements of the Board or the Company under
the Lease, the Indenture or this Guaranty Agreement or under any
renewals or extensions thereof or successor agreements thereto;
(f) The modification or amendment (whether material or
otherwise) of any obligation, covenant or agreement on the part of the
Board or the Company contained in the Lease, the Indenture or this
Guaranty Agreement;
(g) Any failure, omission, delay or lack on the part of
the Board or the Trustee, or any assignee or successor of either of
them, to enforce, assert or exercise any right, power or remedy
conferred upon the Trustee by this Guaranty Agreement or upon the
Board or the Trustee by the Lease or the Indenture or any other act or
acts on the part of the Board, the Trustee, or any of the holders from
time to time of the Bonds;
(h) The bankruptcy, insolvency, reorganization,
appointment of a receiver for, or (except as otherwise permitted in
the Lease, the Indenture or this Guaranty Agreement) dissolution of
the Company, the Board, or the Trustee, or the entering by any or all
of them into an agreement of composition with creditors, or the making
by any or all of them of an assignment for the benefit of creditors;
(i) The assertion of any rights of set-off, recoupment or
counterclaim which the Company might otherwise have against the Board
or the Trustee;
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(j) The default or failure of the Company to fully
perform any of its obligations, covenants or agreements contained in
the Lease;
(k) The release or discharge of the Company by operation
of law from the performance or observance of any obligation, covenant
or agreement contained in the Lease;
(l) The release or discharge of the Company by operation
of law, to the extent that such release or discharge may be lawfully
avoided, from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty Agreement; and
(m) The invalidity or unenforceability of the Lease or
the Indenture or of any provision of any thereof.
SECTION 4. REMEDIES. In the event of a default in the
payment of the principal of any of the Bonds or the premium, if any, payable on
redemption thereof when and as the same shall become due, whether at the stated
maturity thereof, by acceleration, call for redemption or otherwise, or in the
event of a default in the payment of any interest on any of the Bonds when and
as the same shall become due, or in the event of a default in the payment of
the purchase price of any Bond required to be purchased pursuant to the
Indenture, the Trustee may proceed directly, and if requested in writing so to
do by the holders of twenty-five per cent (25%) in aggregate principal amount
of the Bonds then outstanding, shall be obligated, upon the furnishing of
satisfactory indemnity as hereinafter provided, to proceed directly against the
Company under this Guaranty Agreement without first resorting to any other
remedies which it may have and without resorting to any other security held by
the Board or the Trustee. Before taking any action hereunder the Trustee may
require that satisfactory indemnity be furnished by the holders of the Bonds
then outstanding for the reimbursement of all expenses of the Trustee and for
the protection of the Trustee against all liabilities, except liabilities which
are adjudicated to have resulted from its own gross negligence or willful
misconduct.
SECTION 5. RIGHT OF ENFORCEMENT VESTED IN TRUSTEE. The right
to enforce this Guaranty Agreement is (except to the extent otherwise
specifically provided) vested exclusively in the Trustee for the equal and pro
rata benefit of all holders at any time of the Bonds, unless the Trustee
refuses or neglects to act within a reasonable time after being requested in
writing so to do by the holders of twenty-five per cent (25%) in aggregate
principal amount of the Bonds then outstanding and after being furnished
satisfactory indemnity as aforesaid, in which event the holder of any of the
Bonds may thereupon so act in the name and behalf of the Trustee; provided,
however, that no such holder shall be entitled to take any action to enforce
this Guaranty Agreement if and to the extent that the taking of such action
would under applicable
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law result in a surrender, impairment, waiver or loss of the rights under this
Guaranty Agreement of any other holders of any of the Bonds. Except to the
extent allowed above, no holder of any of the Bonds shall have the right to
enforce this Guaranty Agreement, and then only for the equal and pro rata
benefit of the holders of all of the Bonds.
SECTION 6. WAIVERS. The Company hereby expressly waives
notice in writing or otherwise from the Trustee or from the holders at any time
of the Bonds of their or any of their acceptance and reliance on this Guaranty
Agreement. The obligations of the Company hereunder shall attach absolutely
and unconditionally when the Lease shall have been executed and delivered by
the Board and the Bonds shall have been sold and issued under the Indenture.
The Company further waives, as to the enforcement of this Guaranty Agreement,
all rights of exemption that it may have under the constitution and laws of the
State of Alabama or any other state as to any levy on and sale of property; and
it will pay all reasonable costs, expenses and fees, including any reasonable
attorneys' fees, that may be incurred by the Trustee or any holder of the Bonds
in enforcing, or attempting to enforce, this Guaranty Agreement following any
default on the part of the Company hereunder, whether the same shall be
enforced by suit or otherwise, but if and only if any such party entitled to
enforce this Guaranty Agreement is successful in such efforts or a final
judgment for such party is rendered by a court of competent jurisdiction.
SECTION 7. COMPANY TO MAINTAIN EXISTENCE. So long as this
Guaranty Agreement shall remain effective, the Company will maintain its
existence and will not merge, consolidate or dispose of all or substantially
all its assets (either in a single transaction or in a series of related
transactions) except as permitted in the Lease.
SECTION 8. DELAY NO WAIVER. No delay in the exercise of, or
failure to exercise any, right, remedy or power accruing upon any default or
failure in the performance of any obligation under this Guaranty Agreement
shall impair any such right, remedy or power or shall be construed to be a
waiver thereof, but any such right, remedy or power may be exercised from time
to time and as often as may be deemed expedient. In order to entitle the
Trustee or any holder or former holder of a Bond to exercise any right, remedy
or power reserved to it in this Guaranty Agreement, it shall not be necessary
to give any notice, other than such notice as may be herein expressly required.
If the Company should default in the performance of any obligation under this
Guaranty Agreement and such default should thereafter be waived by the Trustee,
such waiver shall be limited to the particular default so waived. No waiver,
amendment, release or modification of this Guaranty Agreement shall be
established by conduct, custom or course of dealing, but solely by an
instrument in writing duly executed by the Trustee.
SECTION 9. NOTICES. All notices, demands, requests and other
communications hereunder shall be deemed sufficient and properly given if in
writing and delivered in person to the following addresses or received by
certified or registered mail, postage prepaid, at such addresses:
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(a) If to the Board:
The Industrial Development Board of the
City of Demopolis
City Hall
Demopolis, Alabama 36732
(b) If to the Company:
McClain of Alabama, Inc.
6200 Elmridge
Sterling Heights, Michigan 48313
(c) If to the Trustee:
LaSalle National Bank - Corporate Trust
135 South LaSalle Street
Chicago, Illinois 60603
Any of the above-mentioned parties may, by like notice, designate any further
or different addresses to which subsequent notices shall be sent. A copy of
any notice given to the Board, the Company or the Trustee pursuant to the
provisions of this Guaranty Agreement shall also be given to the other parties
to whom notice is not herein required to be given, but the failure to give a
copy of such notice to any party claiming the right to receive it pursuant to
this sentence shall not invalidate such notice or render it ineffective unless
notice to such party is otherwise herein expressly required. Any notice
hereunder signed on behalf of the notifying party by a duly authorized attorney
at law shall be valid and effective to the same extent as if signed on behalf
of such party by a duly authorized officer or employee.
SECTION 10. AMENDMENTS. This Guaranty Agreement may only be
amended as provided in the Indenture.
SECTION 11. BINDING EFFECT. This Guaranty Agreement shall be
binding upon, and shall inure to the benefit of, the Company, the Trustee and
the holders from time to time of the Bonds and their respective successors and
assigns.
SECTION 12. TERMINATION UPON PAYMENT OF BONDS. The Company's
obligations hereunder shall cease and terminate upon full payment of the
principal of and the interest and premium (if any) on the Bonds as provided in
the Indenture.
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SECTION 13. SEVERABILITY. The provisions of this Guaranty
Agreement are severable. In the event any portion, provision, section or
clause hereof is held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any of
the remaining portions, provisions, sections or clauses hereof. This Guaranty
Agreement shall be governed exclusively by the applicable laws of the State of
Alabama.
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IN WITNESS WHEREOF, the Company and the Trustee have caused
this Guaranty Agreement to be executed in their respective names, the Company
and the Trustee have caused their respective corporate seals to be hereunto
affixed and has caused this Guaranty Agreement to be attested, all by their
duly authorized officers, in six (6) counterparts, each of which shall be
deemed an original, and the Company and the Trustee have caused this Guaranty
Agreement to be dated as of April 1, 1997.
McCLAIN OF ALABAMA, INC.
By
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Its
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Attest:
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Its Secretary
LASALLE NATIONAL BANK
By
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Its Assistant Vice President
Attest:
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Its Assistant Secretary
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STATE OF _______________ )
:
COUNTY OF _______________ )
I, the undersigned, a Notary Public in and for said county in
said state, hereby certify that ______________________________, whose name as
_______________________ of MCCLAIN OF ALABAMA, INC., a Michigan corporation, is
signed to the foregoing instrument and who is known to me, acknowledged before
me on this day that, being informed of the contents of the within instrument,
he, as such officer and with full authority, executed the same voluntarily for
and as the act of said corporation.
GIVEN under my hand and official seal of office, this _____
day of _______________, 1997.
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Notary Public
[NOTARIAL SEAL] My Commission Expires:
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STATE OF _______________ )
:
COUNTY OF _______________ )
I, the undersigned, a Notary Public in and for said county in
said state, hereby certify that ESTELITA TUCKER, whose name as Assistant Vice
President of LASALLE NATIONAL BANK, a national banking association, is signed
to the foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of the within instrument, she, as
such officer and with full authority, executed the same voluntarily for and as
the act of said association.
GIVEN under my hand and official seal of office, this ____ day
of _______________, 1997.
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Notary Public
[NOTARIAL SEAL] My Commission Expires:
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