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EXHIBIT 10.5
GUARANTY
The undersigned, for value received, unconditionally and absolutely
guarantees to Comerica Bank, in its capacity as Agent for the Banks under the
Credit Agreement (defined below) ("Agent"), a Michigan banking corporation of
One Detroit Center, Detroit, Michigan 48226 and to Agent's successors and
assigns, payment when due, whether by stated maturity, demand, acceleration or
otherwise, of all existing and future indebtedness to the Agent of VELTRI METAL
PRODUCTS CO., a Nova Scotia corporation whose address is 900 Wilshire, Suite
203, Troy, Michigan 48084, and also of any successor in interest, including
without limit any debtor-in-possession or trustee in bankruptcy which succeeds
to the interests of this party or person (jointly and severally the "Borrower")
incurred or evidenced by or under that certain Credit Agreement of even date
herewith between Borrower, certain other borrowers, Agent, and any of the Banks
from time to time party thereto ("Credit Agreement") and/or under any
agreements, notes, mortgages, assignments or instruments provided to Agent in
connection with the Credit Agreement, including Hedging Agreements (as defined
in the Credit Agreement), and: (a) any and all of the above-described
Indebtedness for which Borrower would otherwise be liable to Agent were it not
for the invalidity, irregularity or unenforceability of them by reason of any
bankruptcy, insolvency or other law or order of any kind, or for any other
reason, including without limit liability for interest and attorney fees on, or
in connection with, any of the Indebtedness from and after the filing by or
against Borrower of a bankruptcy petition; (b) any and all amendments,
modifications, renewals and/or extensions of any of the above, including without
limit amendments, modifications, renewals and/or extensions which are evidenced
by new or additional instruments, documents or agreements; and (c) all interest
on such principal amounts and costs of collecting Indebtedness, including
without limit reasonable attorney fees. (the "Indebtedness").
The undersigned waives notice of acceptance of this Guaranty and
presentment, demand, protest, notice of protest, dishonor, notice of dishonor,
notice of default, notice of intent to accelerate or demand payment of any
Indebtedness, and diligence in collecting any Indebtedness, and agrees that
Agent may modify the terms of any Indebtedness, compromise, extend, increase,
accelerate, renew or forbear to enforce payment of any or all Indebtedness, or
permit Borrower to incur additional Indebtedness, all without notice to the
undersigned and without affecting in any manner the unconditional obligation of
the undersigned under this Guaranty. The undersigned further waives any and all
other notices to which the undersigned might otherwise be entitled. The
undersigned acknowledges and agrees that the liabilities created by this
Guaranty are direct and are not conditioned upon pursuit by Agent of any remedy
Agent may have against Borrower or any other person or any security. No
invalidity, irregularity or unenforceability of any part or all of the
Indebtedness or any documents evidencing the same, by reason of any bankruptcy,
insolvency or other law or order of any kind or for any other reason, and no
defense or setoff available at any time to Borrower, shall impair, affect or be
a defense or setoff to the obligations of the undersigned under this Guaranty.
The undersigned delivers this Guaranty based solely on the
undersigneds' independent investigation of the financial condition of Borrower
and are not relying on any information furnished by Agent. The undersigned
assumes full responsibility for obtaining any further
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information concerning Borrower's financial condition, the status of the
Indebtedness or any other matter which the undersigned may deem necessary or
appropriate from time to time. The undersigned waives any duty on the part of
Agent, and agrees that it is not relying upon nor expecting Agent to disclose to
the undersigned any fact now or later known by Agent, whether relating to the
operations or condition of Borrower, the existence, liabilities or financial
condition of any co-guarantor of the Indebtedness, the occurrence of any default
with respect to the Indebtedness, or otherwise, notwithstanding any effect these
facts may have upon the undersigneds' risks under this Guaranty or the
undersigneds' rights against Borrower. The undersigned knowingly accepts the
full range of risk encompassed in this Guaranty, which risk includes without
limit the possibility that Borrower may incur Indebtedness to Agent after the
financial condition of Borrower, or its ability to pay its debts as they mature,
has deteriorated.
The undersigned represents and warrants that: (a) Agent has made no
representation to the undersigned as to the creditworthiness of Borrower; and
(b) the undersigned has established adequate means of obtaining from the
Borrower on a continuing basis financial and other information pertaining to
Borrower's financial condition. The undersigned agrees to keep adequately
informed of any facts, events or circumstances which might in any way affect the
risks of the undersigned under this Guaranty.
The undersigned grants to Agent a security interest in and the right of
setoff as to any and all property of the undersigned now or later in the
possession of Agent. The undersigned subordinates any claim of any nature that
the undersigned now or later has against the Borrower to and in favor of all
Indebtedness and agrees not to accept payment or satisfaction of any claim that
the undersigned now or later may have against Borrower without the prior written
consent of Agent in the event and so long as any default exists with respect to
Indebtedness. Upon an event of default with respect to the Indebtedness, and the
giving of any required notice and expiration of any applicable cure period,
should any payment, distribution, security, or proceeds, be received by the
undersigned upon or with respect to any claim that the undersigned now or may
later have against Borrower, the undersigned shall immediately deliver the same
to the Agent in the form received (except for endorsement or assignment by the
undersigned where required by the Agent) for application on the Indebtedness,
whether matured or unmatured, and until delivered the same shall be held in
trust by the undersigned as the property of the Agent. The undersigned further
assigns to the Agent as collateral for the obligations of the undersigned under
this Guaranty all claims of any nature that the undersigned now or later have
against the Borrower with full right on the part of the Agent, in its own name
or in the name of the undersigned, upon an event of default with respect to the
Indebtedness, and the giving of any required notice and expiration of any
applicable cure period, to collect and enforce these claims.
The undersigned agrees that no security now or later held by Agent for
payment of any Indebtedness, whether from Borrower, any guarantor, or otherwise,
and whether in the nature of a security interest, pledge, lien, assignment,
setoff, suretyship, guaranty, indemnity, insurance or otherwise, shall affect in
any manner the unconditional obligation of the undersigned under this Guaranty,
and Agent, in its sole discretion, without notice to the undersigned, may
release, exchange, enforce and otherwise deal with any security without
affecting in any manner the unconditional obligation of the undersigned under
this Guaranty. The undersigned acknowledges and agrees that Agent has no
obligation to acquire or perfect any lien on or security interest in
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any assets, whether realty or personalty, to secure payment of the Indebtedness,
and the undersigned is not relying upon any assets in which Agent has or may
have a lien or security interest for payment of the Indebtedness.
The undersigned acknowledges that the effectiveness of this Guaranty is
not conditioned on any or all of the Indebtedness being guaranteed by anyone
else.
Until the Indebtedness is irrevocably paid in full, the undersigned
waives any and all rights to be subrogated to the position of the Agent or to
have the benefit of any lien, security interest or other guaranty now or later
held by the Agent for the Indebtedness or to enforce any remedy which the Agent
now or later has against the Borrower or any other person. Until the
Indebtedness is irrevocably paid in full, the undersigned shall have no right of
reimbursement, indemnity, contribution or other right of recourse to or with
respect to the Borrower or any other person. The undersigned agrees to indemnify
and hold Agent harmless from and against any and all claims, actions, damages,
costs and expenses, including without limit reasonable attorneys' fees, incurred
by Agent in connection with the exercise of any right of subrogation,
contribution, indemnification or recourse with respect to this Guaranty by any
of the undersigned. The Agent has no duty to enforce or protect any rights which
the undersigned may have against the Borrower or any other person and the
undersigned assumes full responsibility for enforcing and protecting these
rights.
The Agent, in its sole discretion, may release any guarantor of
Indebtedness for any consideration which it deems adequate, and may fail or
elect not to prove a claim against the estate of any bankrupt, insolvency,
incompetent or deceased guarantor; and after that, without notice to any other
of the undersigned, the Agent may extend or renew any or all Indebtedness and
may permit the Borrower to incur additional Indebtedness, without affecting in
any manner the unconditional obligation of the undersigned. This action by the
Agent shall not, however, be deemed to affect any right to contribution which
may exist among the guarantors.
The undersigned may terminate its obligation under this Guaranty as to
future Indebtedness (except as provided below) by (and only by) delivering
written notice of termination to an officer of the Agent and receiving from an
officer of the Agent written acknowledgement of delivery; provided, the
termination shall not be effective until the opening of business on the
forty-fifth (45th) day following written acknowledgement of delivery. Any
termination shall not affect in any way the unconditional obligations of the
remaining guarantors, whether or not the determination is known to the remaining
guarantors. Any termination shall not affect in any way the unconditional
obligations of the terminating guarantors as to any Indebtedness existing at the
effective date of termination or any Indebtedness created after that pursuant to
any commitment or agreement of the Agent or any Borrower loan with the Agent
existing at the effective date of termination (whether advances or readvances by
the Agent are optional or obligatory), or any modifications, extensions or
renewals of any of this Indebtedness, whether in whole or in part, and as to all
of this Indebtedness and modifications, extensions or renewals of it, this
Guaranty shall continue effective until the same shall have been fully paid. The
Agent has no duty to give notice of termination by any guarantor to any
remaining guarantor. The undersigned shall indemnify the Agent against all
claims, damages, costs and expenses, including without limit reasonable attorney
fees, incurred by the Agent in connection with any suit, claim or action
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against the Agent arising out of any modification or termination of a Borrower
loan or any refusal by the Agent to extend additional credit arising, in either
event, in connection with the termination of this Guaranty.
Notwithstanding any prior revocation, termination, surrender or
discharge of this Guaranty (or of any lien, pledge or security interest securing
this Guaranty) in whole or in part, the effectiveness of this Guaranty, and of
all liens, pledges and security interests securing this Guaranty, shall
automatically continue or be reinstated, as the case may be, in the event that
any payment received or credit given by the Agent in respect of the Indebtedness
is returned, disgorged or rescinded as a preference, impermissible setoff,
fraudulent conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation, laws pertaining
to bankruptcy or insolvency, in which case this Guaranty, and all liens, pledges
and security interests securing this Guaranty, shall be enforceable against the
undersigned as if the returned, disgorged or rescinded payment or credit had not
been received or given by the Agent, and whether or not the Agent relied upon
this payment or credit or changed its position as a consequence of it. In the
event of continuation or reinstatement of this Guaranty and the liens, pledges
and security interests securing it, the undersigned agrees upon demand by the
Agent to execute and deliver to the Agent those documents which the Agent
determines are appropriate to further evidence (in the public records or
otherwise) this continuation or reinstatement, although the failure of the
undersigned to do so shall not affect in any way the reinstatement of
continuation. If the undersigned does not execute and deliver to the Agent upon
demand such documents, the Agent and each Agent officer is irrevocably appointed
(which appointment is coupled with an interest) the true and lawful attorney of
the undersigned (with full power of substitution) to execute and deliver such
documents in the name and on behalf of the undersigned.
The undersigned waives any right to require the Agent to: (a) proceed
against any person, including without limit the Borrower; (b) proceed against or
exhaust any security held from the Borrower or any other person; (c) give notice
of the terms, time and place of any public or private sale of personal property
security held from the Borrower or any other person, or otherwise comply with
the provisions of Section 9-504 of the Michigan or other applicable Uniform
Commercial Code; (d) pursue any other remedy in the Agent's power; or (e) make
any presentments or demands for performance, or give any notices of
nonperformance, protests, notices of protest, or notices of dishonor in
connection with any obligations or evidences of Indebtedness held by the Agent
as security, in connection with any other obligations or evidences of
indebtedness which constitute in whole or in part Indebtedness, or in connection
with the creation of new or additional Indebtedness.
The undersigned authorizes Agent, either before or after termination of
this Guaranty, without notice to or demand on the undersigned and without
affecting the undersigneds' liability under this Guaranty, from time to time to:
(a) apply any security and direct the order or manner of sale of it, including
without limit, a nonjudicial sale permitted by the terms of the controlling
security agreement, mortgage or deed of trust, as Agent in its discretion may
determine; (b) release or substitute any one or more of the endorsers or any
other guarantors of the Indebtedness; and (c) apply payments received by the
Agent from the Borrower to any indebtedness of the Borrower to the Agent, in
such order as the Agent shall determine in its sole discretion, whether or not
this indebtedness is covered by this Guaranty, and the undersigned
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waives any provision of law regarding application of payments which specifies
otherwise. The Agent may without notice assign this Guaranty in whole or in
part. Upon the Agent's request, the undersigned agrees to provide to the Agent
copies of the undersigned's financial statements.
The undersigned waives any defense based upon or arising by reason of
(a) any disability or other defense of Borrower or any other person; (b) the
cessation or limitation from any cause whatsoever, other than final and
irrevocable payment in full, of the Indebtedness; (c) any lack of authority of
any officer, director, partner, agent or any other person acting or purporting
to act on behalf of Borrower which is a corporation, partnership or other type
of entity, or any defect in the formation of Borrower; (d) the application by
Borrower of the proceeds of any Indebtedness for purposes other than the
purposes represented by Borrower to Agent or intended or understood by Agent or
the undersigned; (e) any act or omission by Agent which directly or indirectly
results in or aids the discharge of Borrower or any Indebtedness by operation of
law or otherwise; or (f) any modification of the Indebtedness, in any form
whatsoever including without limit any modification made after effective
termination, and including without limit the renewal, extension, acceleration or
other change in time for payment of the Indebtedness, or other change in the
terms of any Indebtedness, including without limit increase or decrease of the
interest rate. The undersigned waives any defense they may have based upon any
election of remedies by Agent which destroys the undersigneds' subrogation
rights or undersigneds' right to proceed against Borrower for reimbursement,
including without limit any loss of rights the undersigned may suffer by reason
of any rights, powers or remedies of Borrower in connection with any anti-
deficiency, appraisement or valuation laws or any other laws limiting,
qualifying or discharging any Indebtedness.
The undersigned acknowledges that Agent has the right to sell, assign,
transfer, negotiate, or grant participations in all or any part of the
Indebtedness and any related obligations, including without limit this Guaranty.
In connection with that right, the Agent may disclose any documents and
information which the Agent now or later acquire relating to the undersigned and
this Guaranty, whether furnished by the Borrower, the undersigned or otherwise.
The undersigned further agrees that Agent may disclose these documents and
information to Borrower.
The obligation under this Guaranty shall include any and all interest
on all Indebtedness and any and all costs and expenses of any kind, including
without limit reasonable attorney fees, incurred by Agent at any time for any
reason in enforcing any of the duties and obligations of the undersigned under
this Guaranty or otherwise incurred by Agent in any way connected with this
Guaranty, the Indebtedness or any other guaranty of the Indebtedness (including
without limit reasonable attorney fees and other expenses incurred in any suit
involving the conduct, Borrower or the undersigned). All of these costs and
expenses shall be payable immediately by the undersigned when incurred by Agent,
upon demand, and until paid shall bear interest at the highest per annum rate
applicable to any of the Indebtedness, but not in excess of the maximum rate
permitted by law. Any reference in this Guaranty to attorney fees shall be
deemed a reference to fees, charges, costs and expenses of both inhouse and
outside counsel and paralegals, whether or not a suit or action is instituted,
and to court costs if a suit or action is instituted, and whether attorney fees
or court costs are incurred at the trial court level, on appeal, in a
bankruptcy, administrative or probate proceeding or otherwise.
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The undersigned unconditionally and irrevocably waives each and every
defense and setoff of any nature which, under principles of guaranty or
otherwise, would operate to impair or diminish in any way the obligation of the
undersigned under this Guaranty, and acknowledges that each such waiver is by
this reference incorporated into each security agreement, collateral assignment,
pledge and/or other document from the undersigned now or later securing this
Guaranty and/or the Indebtedness, and acknowledges that as of the date of this
Guaranty no such defense or setoff exists. The undersigned acknowledges that the
effectiveness of this Guaranty is subject to no conditions of any kind.
This Guaranty shall remain effective with respect to successive
transactions which shall continue the Indebtedness until this Guaranty is
terminated in the manner and to the extent provided above.
The undersigned warrants and agrees that each of the waivers set forth
above are made with the undersigneds' full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable and
not contrary to public policy or law. If any of these waivers are determined to
be contrary to any applicable law or public policy, these waivers shall be
effective to the fees extent permitted by law.
This Guaranty constitutes the entire agreement of the undersigned and
Agent with respect to the subject matter of this Guaranty. No waiver, consent,
modification or change of the terms of this Guaranty shall bind any of the
undersigned or Agent unless in writing and signed by the waiving party or an
authorized officer of the waiving party, and then this waiver, consent,
modification or change shall be effective only in the specific instance and for
the specific purpose given. This Guaranty shall inure to the benefit of Agent
and its successors and assigns. This Guaranty shall be binding on the
undersigned and the undersigneds' respective heirs, legal representatives,
successors and assigns including, without limit, any debtor in possession or
trustee in bankruptcy for any of the undersigned. The undersigned has knowingly
and voluntarily entered into this Guaranty in good faith for the purpose of
inducing Agent to extend credit or make other financial accommodations to
Borrower, and the undersigned acknowledges that the terms of this Guaranty are
reasonable. If any provision of this Guaranty is unenforceable in whole or in
part for any reason, the remaining provisions shall continue to be effective.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MICHIGAN.
THE UNDERSIGNED AND AGENT ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
(OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS GUARANTY OR THE INDEBTEDNESS.
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IN WITNESS WHEREOF, the undersigned has signed this Guaranty on April 28, 1998.
TALON AUTOMOTIVE GROUP, INC.
By:_______________________________
Its:______________________________
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GUARANTY
The undersigned, for value received, unconditionally and absolutely
guarantees to Comerica Bank, in its capacity as Agent for the Banks under the
Credit Agreement (defined below) ("Agent"), a Michigan banking corporation of
One Detroit Center, Detroit, Michigan 48226 and to Agent's successors and
assigns, payment when due, whether by stated maturity, demand, acceleration or
otherwise, of all existing and future indebtedness to the Agent of TALON
AUTOMOTIVE GROUP, INC., a Michigan corporation, and VELTRI METAL PRODUCTS CO., a
Nova Scotia corporation, both of whose address is 900 Wilshire, Suite 203, Troy,
Michigan 48084, and also of any successor in interest, including without limit
any debtor-in-possession or trustee in bankruptcy which succeeds to the
interests of this party or person (jointly and severally the "Borrower")
incurred or evidenced by or under that certain Credit Agreement of even date
herewith between Borrower, certain other borrowers, Agent, and any of the Banks
from time to time party thereto ("Credit Agreement") and/or under any
agreements, notes, mortgages, assignments or instruments provided to Agent in
connection with the Credit Agreement, including Hedging Agreements (as defined
in the Credit Agreement), and: (a) any and all of the above-described
Indebtedness for which Borrower would otherwise be liable to Agent were it not
for the invalidity, irregularity or unenforceability of them by reason of any
bankruptcy, insolvency or other law or order of any kind, or for any other
reason, including without limit liability for interest and attorney fees on, or
in connection with, any of the Indebtedness from and after the filing by or
against Borrower of a bankruptcy petition; (b) any and all amendments,
modifications, renewals and/or extensions of any of the above, including without
limit amendments, modifications, renewals and/or extensions which are evidenced
by new or additional instruments, documents or agreements; and (c) all interest
on such principal amounts and costs of collecting Indebtedness, including
without limit reasonable attorney fees. (the "Indebtedness").
The undersigned waives notice of acceptance of this Guaranty and
presentment, demand, protest, notice of protest, dishonor, notice of dishonor,
notice of default, notice of intent to accelerate or demand payment of any
Indebtedness, and diligence in collecting any Indebtedness, and agrees that
Agent may modify the terms of any Indebtedness, compromise, extend, increase,
accelerate, renew or forbear to enforce payment of any or all Indebtedness, or
permit Borrower to incur additional Indebtedness, all without notice to the
undersigned and without affecting in any manner the unconditional obligation of
the undersigned under this Guaranty. The undersigned further waives any and all
other notices to which the undersigned might otherwise be entitled. The
undersigned acknowledges and agrees that the liabilities created by this
Guaranty are direct and are not conditioned upon pursuit by Agent of any remedy
Agent may have against Borrower or any other person or any security. No
invalidity, irregularity or unenforceability of any part or all of the
Indebtedness or any documents evidencing the same, by reason of any bankruptcy,
insolvency or other law or order of any kind or for any other reason, and no
defense or setoff available at any time to Borrower, shall impair, affect or be
a defense or setoff to the obligations of the undersigned under this Guaranty.
The undersigned delivers this Guaranty based solely on the
undersigneds' independent investigation of the financial condition of Borrower
and are not relying on any information
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furnished by Agent. The undersigned assumes full responsibility for obtaining
any further information concerning Borrower's financial condition, the status of
the Indebtedness or any other matter which the undersigned may deem necessary or
appropriate from time to time. The undersigned waives any duty on the part of
Agent, and agrees that it is not relying upon nor expecting Agent to disclose to
the undersigned any fact now or later known by Agent, whether relating to the
operations or condition of Borrower, the existence, liabilities or financial
condition of any co-guarantor of the Indebtedness, the occurrence of any default
with respect to the Indebtedness, or otherwise, notwithstanding any effect these
facts may have upon the undersigneds' risks under this Guaranty or the
undersigneds' rights against Borrower. The undersigned knowingly accepts the
full range of risk encompassed in this Guaranty, which risk includes without
limit the possibility that Borrower may incur Indebtedness to Agent after the
financial condition of Borrower, or its ability to pay its debts as they mature,
has deteriorated.
The undersigned represents and warrants that: (a) Agent has made no
representation to the undersigned as to the creditworthiness of Borrower; and
(b) the undersigned has established adequate means of obtaining from the
Borrower on a continuing basis financial and other information pertaining to
Borrower's financial condition. The undersigned agrees to keep adequately
informed of any facts, events or circumstances which might in any way affect the
risks of the undersigned under this Guaranty.
The undersigned grants to Agent a security interest in and the right of
setoff as to any and all property of the undersigned now or later in the
possession of Agent. The undersigned subordinates any claim of any nature that
the undersigned now or later has against the Borrower to and in favor of all
Indebtedness and agrees not to accept payment or satisfaction of any claim that
the undersigned now or later may have against Borrower without the prior written
consent of Agent in the event and so long as any default exists with respect to
Indebtedness. Upon an event of default with respect to the Indebtedness, and the
giving of any required notice and expiration of any applicable cure period,
should any payment, distribution, security, or proceeds, be received by the
undersigned upon or with respect to any claim that the undersigned now or may
later have against Borrower, the undersigned shall immediately deliver the same
to the Agent in the form received (except for endorsement or assignment by the
undersigned where required by the Agent) for application on the Indebtedness,
whether matured or unmatured, and until delivered the same shall be held in
trust by the undersigned as the property of the Agent. The undersigned further
assigns to the Agent as collateral for the obligations of the undersigned under
this Guaranty all claims of any nature that the undersigned now or later have
against the Borrower with full right on the part of the Agent, in its own name
or in the name of the undersigned, upon an event of default with respect to the
Indebtedness, and the giving of any required notice and expiration of any
applicable cure period, to collect and enforce these claims.
The undersigned agrees that no security now or later held by Agent for
payment of any Indebtedness, whether from Borrower, any guarantor, or otherwise,
and whether in the nature of a security interest, pledge, lien, assignment,
setoff, suretyship, guaranty, indemnity, insurance or otherwise, shall affect in
any manner the unconditional obligation of the undersigned under this Guaranty,
and Agent, in its sole discretion, without notice to the undersigned, may
release, exchange, enforce and otherwise deal with any security without
affecting in any manner the unconditional obligation of the undersigned under
this Guaranty. The undersigned acknowledges
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and agrees that Agent has no obligation to acquire or perfect any lien on or
security interest in any assets, whether realty or personalty, to secure payment
of the Indebtedness, and the undersigned is not relying upon any assets in which
Agent has or may have a lien or security interest for payment of the
Indebtedness.
The undersigned acknowledges that the effectiveness of this Guaranty is
not conditioned on any or all of the Indebtedness being guaranteed by anyone
else.
Until the Indebtedness is irrevocably paid in full, the undersigned
waives any and all rights to be subrogated to the position of the Agent or to
have the benefit of any lien, security interest or other guaranty now or later
held by the Agent for the Indebtedness or to enforce any remedy which the Agent
now or later has against the Borrower or any other person. Until the
Indebtedness is irrevocably paid in full, the undersigned shall have no right of
reimbursement, indemnity, contribution or other right of recourse to or with
respect to the Borrower or any other person. The undersigned agrees to indemnify
and hold Agent harmless from and against any and all claims, actions, damages,
costs and expenses, including without limit reasonable attorneys' fees, incurred
by Agent in connection with the exercise of any right of subrogation,
contribution, indemnification or recourse with respect to this Guaranty by any
of the undersigned. The Agent has no duty to enforce or protect any rights which
the undersigned may have against the Borrower or any other person and the
undersigned assumes full responsibility for enforcing and protecting these
rights.
The Agent, in its sole discretion, may release any guarantor of
Indebtedness for any consideration which it deems adequate, and may fail or
elect not to prove a claim against the estate of any bankrupt, insolvency,
incompetent or deceased guarantor; and after that, without notice to any other
of the undersigned, the Agent may extend or renew any or all Indebtedness and
may permit the Borrower to incur additional Indebtedness, without affecting in
any manner the unconditional obligation of the undersigned. This action by the
Agent shall not, however, be deemed to affect any right to contribution which
may exist among the guarantors.
The undersigned may terminate its obligation under this Guaranty as to
future Indebtedness (except as provided below) by (and only by) delivering
written notice of termination to an officer of the Agent and receiving from an
officer of the Agent written acknowledgement of delivery; provided, the
termination shall not be effective until the opening of business on the
forty-fifth (45th) day following written acknowledgement of delivery. Any
termination shall not affect in any way the unconditional obligations of the
remaining guarantors, whether or not the determination is known to the remaining
guarantors. Any termination shall not affect in any way the unconditional
obligations of the terminating guarantors as to any Indebtedness existing at the
effective date of termination or any Indebtedness created after that pursuant to
any commitment or agreement of the Agent or any Borrower loan with the Agent
existing at the effective date of termination (whether advances or readvances by
the Agent are optional or obligatory), or any modifications, extensions or
renewals of any of this Indebtedness, whether in whole or in part, and as to all
of this Indebtedness and modifications, extensions or renewals of it, this
Guaranty shall continue effective until the same shall have been fully paid. The
Agent has no duty to give notice of termination by any guarantor to any
remaining guarantor. The undersigned shall indemnify the Agent against all
claims, damages, costs and expenses, including without limit
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reasonable attorney fees, incurred by the Agent in connection with any suit,
claim or action against the Agent arising out of any modification or termination
of a Borrower loan or any refusal by the Agent to extend additional credit
arising, in either event, in connection with the termination of this Guaranty.
Notwithstanding any prior revocation, termination, surrender or
discharge of this Guaranty (or of any lien, pledge or security interest securing
this Guaranty) in whole or in part, the effectiveness of this Guaranty, and of
all liens, pledges and security interests securing this Guaranty, shall
automatically continue or be reinstated, as the case may be, in the event that
any payment received or credit given by the Agent in respect of the Indebtedness
is returned, disgorged or rescinded as a preference, impermissible setoff,
fraudulent conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation, laws pertaining
to bankruptcy or insolvency, in which case this Guaranty, and all liens, pledges
and security interests securing this Guaranty, shall be enforceable against the
undersigned as if the returned, disgorged or rescinded payment or credit had not
been received or given by the Agent, and whether or not the Agent relied upon
this payment or credit or changed its position as a consequence of it. In the
event of continuation or reinstatement of this Guaranty and the liens, pledges
and security interests securing it, the undersigned agrees upon demand by the
Agent to execute and deliver to the Agent those documents which the Agent
determines are appropriate to further evidence (in the public records or
otherwise) this continuation or reinstatement, although the failure of the
undersigned to do so shall not affect in any way the reinstatement of
continuation. If the undersigned does not execute and deliver to the Agent upon
demand such documents, the Agent and each Agent officer is irrevocably appointed
(which appointment is coupled with an interest) the true and lawful attorney of
the undersigned (with full power of substitution) to execute and deliver such
documents in the name and on behalf of the undersigned.
The undersigned waives any right to require the Agent to: (a) proceed
against any person, including without limit the Borrower; (b) proceed against or
exhaust any security held from the Borrower or any other person; (c) give notice
of the terms, time and place of any public or private sale of personal property
security held from the Borrower or any other person, or otherwise comply with
the provisions of Section 9-504 of the Michigan or other applicable Uniform
Commercial Code; (d) pursue any other remedy in the Agent's power; or (e) make
any presentments or demands for performance, or give any notices of
nonperformance, protests, notices of protest, or notices of dishonor in
connection with any obligations or evidences of Indebtedness held by the Agent
as security, in connection with any other obligations or evidences of
indebtedness which constitute in whole or in part Indebtedness, or in connection
with the creation of new or additional Indebtedness.
The undersigned authorizes Agent, either before or after termination of
this Guaranty, without notice to or demand on the undersigned and without
affecting the undersigneds' liability under this Guaranty, from time to time to:
(a) apply any security and direct the order or manner of sale of it, including
without limit, a nonjudicial sale permitted by the terms of the controlling
security agreement, mortgage or deed of trust, as Agent in its discretion may
determine; (b) release or substitute any one or more of the endorsers or any
other guarantors of the Indebtedness; and (c) apply payments received by the
Agent from the Borrower to any indebtedness of the Borrower to the Agent, in
such order as the Agent shall determine in its sole
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12
discretion, whether or not this indebtedness is covered by this Guaranty, and
the undersigned waives any provision of law regarding application of payments
which specifies otherwise. The Agent may without notice assign this Guaranty in
whole or in part. Upon the Agent's request, the undersigned agrees to provide to
the Agent copies of the undersigned's financial statements.
The undersigned waives any defense based upon or arising by reason of
(a) any disability or other defense of Borrower or any other person; (b) the
cessation or limitation from any cause whatsoever, other than final and
irrevocable payment in full, of the Indebtedness; (c) any lack of authority of
any officer, director, partner, agent or any other person acting or purporting
to act on behalf of Borrower which is a corporation, partnership or other type
of entity, or any defect in the formation of Borrower; (d) the application by
Borrower of the proceeds of any Indebtedness for purposes other than the
purposes represented by Borrower to Agent or intended or understood by Agent or
the undersigned; (e) any act or omission by Agent which directly or indirectly
results in or aids the discharge of Borrower or any Indebtedness by operation of
law or otherwise; or (f) any modification of the Indebtedness, in any form
whatsoever including without limit any modification made after effective
termination, and including without limit the renewal, extension, acceleration or
other change in time for payment of the Indebtedness, or other change in the
terms of any Indebtedness, including without limit increase or decrease of the
interest rate. The undersigned waives any defense they may have based upon any
election of remedies by Agent which destroys the undersigneds' subrogation
rights or undersigneds' right to proceed against Borrower for reimbursement,
including without limit any loss of rights the undersigned may suffer by reason
of any rights, powers or remedies of Borrower in connection with any anti-
deficiency, appraisement or valuation laws or any other laws limiting,
qualifying or discharging any Indebtedness.
The undersigned acknowledges that Agent has the right to sell, assign,
transfer, negotiate, or grant participations in all or any part of the
Indebtedness and any related obligations, including without limit this Guaranty.
In connection with that right, the Agent may disclose any documents and
information which the Agent now or later acquire relating to the undersigned and
this Guaranty, whether furnished by the Borrower, the undersigned or otherwise.
The undersigned further agrees that Agent may disclose these documents and
information to Borrower.
The obligation under this Guaranty shall include any and all interest
on all Indebtedness and any and all costs and expenses of any kind, including
without limit reasonable attorney fees, incurred by Agent at any time for any
reason in enforcing any of the duties and obligations of the undersigned under
this Guaranty or otherwise incurred by Agent in any way connected with this
Guaranty, the Indebtedness or any other guaranty of the Indebtedness (including
without limit reasonable attorney fees and other expenses incurred in any suit
involving the conduct, Borrower or the undersigned). All of these costs and
expenses shall be payable immediately by the undersigned when incurred by Agent,
upon demand, and until paid shall bear interest at the highest per annum rate
applicable to any of the Indebtedness, but not in excess of the maximum rate
permitted by law. Any reference in this Guaranty to attorney fees shall be
deemed a reference to fees, charges, costs and expenses of both inhouse and
outside counsel and paralegals, whether or not a suit or action is instituted,
and to court costs if a suit or action is instituted, and whether attorney fees
or court costs are incurred at the trial court level, on appeal, in a
bankruptcy, administrative or probate proceeding or otherwise.
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13
The undersigned unconditionally and irrevocably waives each and every
defense and setoff of any nature which, under principles of guaranty or
otherwise, would operate to impair or diminish in any way the obligation of the
undersigned under this Guaranty, and acknowledges that each such waiver is by
this reference incorporated into each security agreement, collateral assignment,
pledge and/or other document from the undersigned now or later securing this
Guaranty and/or the Indebtedness, and acknowledges that as of the date of this
Guaranty no such defense or setoff exists. The undersigned acknowledges that the
effectiveness of this Guaranty is subject to no conditions of any kind.
This Guaranty shall remain effective with respect to successive
transactions which shall continue the Indebtedness until this Guaranty is
terminated in the manner and to the extent provided above.
The undersigned warrants and agrees that each of the waivers set forth
above are made with the undersigneds' full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable and
not contrary to public policy or law. If any of these waivers are determined to
be contrary to any applicable law or public policy, these waivers shall be
effective to the fees extent permitted by law.
This Guaranty constitutes the entire agreement of the undersigned and
Agent with respect to the subject matter of this Guaranty. No waiver, consent,
modification or change of the terms of this Guaranty shall bind any of the
undersigned or Agent unless in writing and signed by the waiving party or an
authorized officer of the waiving party, and then this waiver, consent,
modification or change shall be effective only in the specific instance and for
the specific purpose given. This Guaranty shall inure to the benefit of Agent
and its successors and assigns. This Guaranty shall be binding on the
undersigned and the undersigneds' respective heirs, legal representatives,
successors and assigns including, without limit, any debtor in possession or
trustee in bankruptcy for any of the undersigned. The undersigned has knowingly
and voluntarily entered into this Guaranty in good faith for the purpose of
inducing Agent to extend credit or make other financial accommodations to
Borrower, and the undersigned acknowledges that the terms of this Guaranty are
reasonable. If any provision of this Guaranty is unenforceable in whole or in
part for any reason, the remaining provisions shall continue to be effective.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MICHIGAN.
THE UNDERSIGNED AND AGENT ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
(OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS GUARANTY OR THE INDEBTEDNESS.
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14
IN WITNESS WHEREOF, the undersigned has signed this Guaranty on April 28, 1998.
VS HOLDINGS, INC.
By:______________________________
Its:_____________________________
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15
GUARANTY
The undersigned, for value received, unconditionally and absolutely
guarantees to Comerica Bank, in its capacity as Agent for the Banks under the
Credit Agreement (defined below) ("Agent"), a Michigan banking corporation of
One Detroit Center, Detroit, Michigan 48226 and to Agent's successors and
assigns, payment when due, whether by stated maturity, demand, acceleration or
otherwise, of all existing and future indebtedness to the Agent of TALON
AUTOMOTIVE GROUP, INC., a Michigan corporation, and VELTRI METAL PRODUCTS CO., a
Nova Scotia corporation, both of whose address is 900 Wilshire, Suite 203, Troy,
Michigan 48084, and also of any successor in interest, including without limit
any debtor-in-possession or trustee in bankruptcy which succeeds to the
interests of this party or person (jointly and severally the "Borrower")
incurred or evidenced by or under that certain Credit Agreement of even date
herewith between Borrower, certain other borrowers, Agent, and any of the Banks
from time to time party thereto ("Credit Agreement") and/or under any
agreements, notes, mortgages, assignments or instruments provided to Agent in
connection with the Credit Agreement, including Hedging Agreements (as defined
in the Credit Agreement), and: (a) any and all of the above-described
Indebtedness for which Borrower would otherwise be liable to Agent were it not
for the invalidity, irregularity or unenforceability of them by reason of any
bankruptcy, insolvency or other law or order of any kind, or for any other
reason, including without limit liability for interest and attorney fees on, or
in connection with, any of the Indebtedness from and after the filing by or
against Borrower of a bankruptcy petition; (b) any and all amendments,
modifications, renewals and/or extensions of any of the above, including without
limit amendments, modifications, renewals and/or extensions which are evidenced
by new or additional instruments, documents or agreements; and (c) all interest
on such principal amounts and costs of collecting Indebtedness, including
without limit reasonable attorney fees. (the "Indebtedness").
The undersigned waives notice of acceptance of this Guaranty and
presentment, demand, protest, notice of protest, dishonor, notice of dishonor,
notice of default, notice of intent to accelerate or demand payment of any
Indebtedness, and diligence in collecting any Indebtedness, and agrees that
Agent may modify the terms of any Indebtedness, compromise, extend, increase,
accelerate, renew or forbear to enforce payment of any or all Indebtedness, or
permit Borrower to incur additional Indebtedness, all without notice to the
undersigned and without affecting in any manner the unconditional obligation of
the undersigned under this Guaranty. The undersigned further waives any and all
other notices to which the undersigned might otherwise be entitled. The
undersigned acknowledges and agrees that the liabilities created by this
Guaranty are direct and are not conditioned upon pursuit by Agent of any remedy
Agent may have against Borrower or any other person or any security. No
invalidity, irregularity or unenforceability of any part or all of the
Indebtedness or any documents evidencing the same, by reason of any bankruptcy,
insolvency or other law or order of any kind or for any other reason, and no
defense or setoff available at any time to Borrower, shall impair, affect or be
a defense or setoff to the obligations of the undersigned under this Guaranty.
The undersigned delivers this Guaranty based solely on the
undersigneds' independent investigation of the financial condition of Borrower
and are not relying on any information
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16
furnished by Agent. The undersigned assumes full responsibility for obtaining
any further information concerning Borrower's financial condition, the status of
the Indebtedness or any other matter which the undersigned may deem necessary or
appropriate from time to time. The undersigned waives any duty on the part of
Agent, and agrees that it is not relying upon nor expecting Agent to disclose to
the undersigned any fact now or later known by Agent, whether relating to the
operations or condition of Borrower, the existence, liabilities or financial
condition of any co-guarantor of the Indebtedness, the occurrence of any default
with respect to the Indebtedness, or otherwise, notwithstanding any effect these
facts may have upon the undersigneds' risks under this Guaranty or the
undersigneds' rights against Borrower. The undersigned knowingly accepts the
full range of risk encompassed in this Guaranty, which risk includes without
limit the possibility that Borrower may incur Indebtedness to Agent after the
financial condition of Borrower, or its ability to pay its debts as they mature,
has deteriorated.
The undersigned represents and warrants that: (a) Agent has made no
representation to the undersigned as to the creditworthiness of Borrower; and
(b) the undersigned has established adequate means of obtaining from the
Borrower on a continuing basis financial and other information pertaining to
Borrower's financial condition. The undersigned agrees to keep adequately
informed of any facts, events or circumstances which might in any way affect the
risks of the undersigned under this Guaranty.
The undersigned grants to Agent a security interest in and the right of
setoff as to any and all property of the undersigned now or later in the
possession of Agent. The undersigned subordinates any claim of any nature that
the undersigned now or later has against the Borrower to and in favor of all
Indebtedness and agrees not to accept payment or satisfaction of any claim that
the undersigned now or later may have against Borrower without the prior written
consent of Agent in the event and so long as any default exists with respect to
Indebtedness. Upon an event of default with respect to the Indebtedness, and the
giving of any required notice and expiration of any applicable cure period,
should any payment, distribution, security, or proceeds, be received by the
undersigned upon or with respect to any claim that the undersigned now or may
later have against Borrower, the undersigned shall immediately deliver the same
to the Agent in the form received (except for endorsement or assignment by the
undersigned where required by the Agent) for application on the Indebtedness,
whether matured or unmatured, and until delivered the same shall be held in
trust by the undersigned as the property of the Agent. The undersigned further
assigns to the Agent as collateral for the obligations of the undersigned under
this Guaranty all claims of any nature that the undersigned now or later have
against the Borrower with full right on the part of the Agent, in its own name
or in the name of the undersigned, upon an event of default with respect to the
Indebtedness, and the giving of any required notice and expiration of any
applicable cure period, to collect and enforce these claims.
The undersigned agrees that no security now or later held by Agent for
payment of any Indebtedness, whether from Borrower, any guarantor, or otherwise,
and whether in the nature of a security interest, pledge, lien, assignment,
setoff, suretyship, guaranty, indemnity, insurance or otherwise, shall affect in
any manner the unconditional obligation of the undersigned under this Guaranty,
and Agent, in its sole discretion, without notice to the undersigned, may
release, exchange, enforce and otherwise deal with any security without
affecting in any manner the unconditional obligation of the undersigned under
this Guaranty. The undersigned acknowledges
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17
and agrees that Agent has no obligation to acquire or perfect any lien on or
security interest in any assets, whether realty or personalty, to secure payment
of the Indebtedness, and the undersigned is not relying upon any assets in which
Agent has or may have a lien or security interest for payment of the
Indebtedness.
The undersigned acknowledges that the effectiveness of this Guaranty is
not conditioned on any or all of the Indebtedness being guaranteed by anyone
else.
Until the Indebtedness is irrevocably paid in full, the undersigned
waives any and all rights to be subrogated to the position of the Agent or to
have the benefit of any lien, security interest or other guaranty now or later
held by the Agent for the Indebtedness or to enforce any remedy which the Agent
now or later has against the Borrower or any other person. Until the
Indebtedness is irrevocably paid in full, the undersigned shall have no right of
reimbursement, indemnity, contribution or other right of recourse to or with
respect to the Borrower or any other person. The undersigned agrees to indemnify
and hold Agent harmless from and against any and all claims, actions, damages,
costs and expenses, including without limit reasonable attorneys' fees, incurred
by Agent in connection with the exercise of any right of subrogation,
contribution, indemnification or recourse with respect to this Guaranty by any
of the undersigned. The Agent has no duty to enforce or protect any rights which
the undersigned may have against the Borrower or any other person and the
undersigned assumes full responsibility for enforcing and protecting these
rights.
The Agent, in its sole discretion, may release any guarantor of
Indebtedness for any consideration which it deems adequate, and may fail or
elect not to prove a claim against the estate of any bankrupt, insolvency,
incompetent or deceased guarantor; and after that, without notice to any other
of the undersigned, the Agent may extend or renew any or all Indebtedness and
may permit the Borrower to incur additional Indebtedness, without affecting in
any manner the unconditional obligation of the undersigned. This action by the
Agent shall not, however, be deemed to affect any right to contribution which
may exist among the guarantors.
The undersigned may terminate its obligation under this Guaranty as to
future Indebtedness (except as provided below) by (and only by) delivering
written notice of termination to an officer of the Agent and receiving from an
officer of the Agent written acknowledgement of delivery; provided, the
termination shall not be effective until the opening of business on the
forty-fifth (45th) day following written acknowledgement of delivery. Any
termination shall not affect in any way the unconditional obligations of the
remaining guarantors, whether or not the determination is known to the remaining
guarantors. Any termination shall not affect in any way the unconditional
obligations of the terminating guarantors as to any Indebtedness existing at the
effective date of termination or any Indebtedness created after that pursuant to
any commitment or agreement of the Agent or any Borrower loan with the Agent
existing at the effective date of termination (whether advances or readvances by
the Agent are optional or obligatory), or any modifications, extensions or
renewals of any of this Indebtedness, whether in whole or in part, and as to all
of this Indebtedness and modifications, extensions or renewals of it, this
Guaranty shall continue effective until the same shall have been fully paid. The
Agent has no duty to give notice of termination by any guarantor to any
remaining guarantor. The undersigned shall indemnify the Agent against all
claims, damages, costs and expenses, including without limit
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18
reasonable attorney fees, incurred by the Agent in connection with any suit,
claim or action against the Agent arising out of any modification or termination
of a Borrower loan or any refusal by the Agent to extend additional credit
arising, in either event, in connection with the termination of this Guaranty.
Notwithstanding any prior revocation, termination, surrender or
discharge of this Guaranty (or of any lien, pledge or security interest securing
this Guaranty) in whole or in part, the effectiveness of this Guaranty, and of
all liens, pledges and security interests securing this Guaranty, shall
automatically continue or be reinstated, as the case may be, in the event that
any payment received or credit given by the Agent in respect of the Indebtedness
is returned, disgorged or rescinded as a preference, impermissible setoff,
fraudulent conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation, laws pertaining
to bankruptcy or insolvency, in which case this Guaranty, and all liens, pledges
and security interests securing this Guaranty, shall be enforceable against the
undersigned as if the returned, disgorged or rescinded payment or credit had not
been received or given by the Agent, and whether or not the Agent relied upon
this payment or credit or changed its position as a consequence of it. In the
event of continuation or reinstatement of this Guaranty and the liens, pledges
and security interests securing it, the undersigned agrees upon demand by the
Agent to execute and deliver to the Agent those documents which the Agent
determines are appropriate to further evidence (in the public records or
otherwise) this continuation or reinstatement, although the failure of the
undersigned to do so shall not affect in any way the reinstatement of
continuation. If the undersigned does not execute and deliver to the Agent upon
demand such documents, the Agent and each Agent officer is irrevocably appointed
(which appointment is coupled with an interest) the true and lawful attorney of
the undersigned (with full power of substitution) to execute and deliver such
documents in the name and on behalf of the undersigned.
The undersigned waives any right to require the Agent to: (a) proceed
against any person, including without limit the Borrower; (b) proceed against or
exhaust any security held from the Borrower or any other person; (c) give notice
of the terms, time and place of any public or private sale of personal property
security held from the Borrower or any other person, or otherwise comply with
the provisions of Section 9-504 of the Michigan or other applicable Uniform
Commercial Code; (d) pursue any other remedy in the Agent's power; or (e) make
any presentments or demands for performance, or give any notices of
nonperformance, protests, notices of protest, or notices of dishonor in
connection with any obligations or evidences of Indebtedness held by the Agent
as security, in connection with any other obligations or evidences of
indebtedness which constitute in whole or in part Indebtedness, or in connection
with the creation of new or additional Indebtedness.
The undersigned authorizes Agent, either before or after termination of
this Guaranty, without notice to or demand on the undersigned and without
affecting the undersigneds' liability under this Guaranty, from time to time to:
(a) apply any security and direct the order or manner of sale of it, including
without limit, a nonjudicial sale permitted by the terms of the controlling
security agreement, mortgage or deed of trust, as Agent in its discretion may
determine; (b) release or substitute any one or more of the endorsers or any
other guarantors of the Indebtedness; and (c) apply payments received by the
Agent from the Borrower to any indebtedness of the Borrower to the Agent, in
such order as the Agent shall determine in its sole
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19
discretion, whether or not this indebtedness is covered by this Guaranty, and
the undersigned waives any provision of law regarding application of payments
which specifies otherwise. The Agent may without notice assign this Guaranty in
whole or in part. Upon the Agent's request, the undersigned agrees to provide to
the Agent copies of the undersigned's financial statements.
The undersigned waives any defense based upon or arising by reason of
(a) any disability or other defense of Borrower or any other person; (b) the
cessation or limitation from any cause whatsoever, other than final and
irrevocable payment in full, of the Indebtedness; (c) any lack of authority of
any officer, director, partner, agent or any other person acting or purporting
to act on behalf of Borrower which is a corporation, partnership or other type
of entity, or any defect in the formation of Borrower; (d) the application by
Borrower of the proceeds of any Indebtedness for purposes other than the
purposes represented by Borrower to Agent or intended or understood by Agent or
the undersigned; (e) any act or omission by Agent which directly or indirectly
results in or aids the discharge of Borrower or any Indebtedness by operation of
law or otherwise; or (f) any modification of the Indebtedness, in any form
whatsoever including without limit any modification made after effective
termination, and including without limit the renewal, extension, acceleration or
other change in time for payment of the Indebtedness, or other change in the
terms of any Indebtedness, including without limit increase or decrease of the
interest rate. The undersigned waives any defense they may have based upon any
election of remedies by Agent which destroys the undersigneds' subrogation
rights or undersigneds' right to proceed against Borrower for reimbursement,
including without limit any loss of rights the undersigned may suffer by reason
of any rights, powers or remedies of Borrower in connection with any anti-
deficiency, appraisement or valuation laws or any other laws limiting,
qualifying or discharging any Indebtedness.
The undersigned acknowledges that Agent has the right to sell, assign,
transfer, negotiate, or grant participations in all or any part of the
Indebtedness and any related obligations, including without limit this Guaranty.
In connection with that right, the Agent may disclose any documents and
information which the Agent now or later acquire relating to the undersigned and
this Guaranty, whether furnished by the Borrower, the undersigned or otherwise.
The undersigned further agrees that Agent may disclose these documents and
information to Borrower.
The obligation under this Guaranty shall include any and all interest
on all Indebtedness and any and all costs and expenses of any kind, including
without limit reasonable attorney fees, incurred by Agent at any time for any
reason in enforcing any of the duties and obligations of the undersigned under
this Guaranty or otherwise incurred by Agent in any way connected with this
Guaranty, the Indebtedness or any other guaranty of the Indebtedness (including
without limit reasonable attorney fees and other expenses incurred in any suit
involving the conduct, Borrower or the undersigned). All of these costs and
expenses shall be payable immediately by the undersigned when incurred by Agent,
upon demand, and until paid shall bear interest at the highest per annum rate
applicable to any of the Indebtedness, but not in excess of the maximum rate
permitted by law. Any reference in this Guaranty to attorney fees shall be
deemed a reference to fees, charges, costs and expenses of both inhouse and
outside counsel and paralegals, whether or not a suit or action is instituted,
and to court costs if a suit or action is instituted, and whether attorney fees
or court costs are incurred at the trial court level, on appeal, in a
bankruptcy, administrative or probate proceeding or otherwise.
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20
The undersigned unconditionally and irrevocably waives each and every
defense and setoff of any nature which, under principles of guaranty or
otherwise, would operate to impair or diminish in any way the obligation of the
undersigned under this Guaranty, and acknowledges that each such waiver is by
this reference incorporated into each security agreement, collateral assignment,
pledge and/or other document from the undersigned now or later securing this
Guaranty and/or the Indebtedness, and acknowledges that as of the date of this
Guaranty no such defense or setoff exists. The undersigned acknowledges that the
effectiveness of this Guaranty is subject to no conditions of any kind.
This Guaranty shall remain effective with respect to successive
transactions which shall continue the Indebtedness until this Guaranty is
terminated in the manner and to the extent provided above.
The undersigned warrants and agrees that each of the waivers set forth
above are made with the undersigneds' full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable and
not contrary to public policy or law. If any of these waivers are determined to
be contrary to any applicable law or public policy, these waivers shall be
effective to the fees extent permitted by law.
This Guaranty constitutes the entire agreement of the undersigned and
Agent with respect to the subject matter of this Guaranty. No waiver, consent,
modification or change of the terms of this Guaranty shall bind any of the
undersigned or Agent unless in writing and signed by the waiving party or an
authorized officer of the waiving party, and then this waiver, consent,
modification or change shall be effective only in the specific instance and for
the specific purpose given. This Guaranty shall inure to the benefit of Agent
and its successors and assigns. This Guaranty shall be binding on the
undersigned and the undersigneds' respective heirs, legal representatives,
successors and assigns including, without limit, any debtor in possession or
trustee in bankruptcy for any of the undersigned. The undersigned has knowingly
and voluntarily entered into this Guaranty in good faith for the purpose of
inducing Agent to extend credit or make other financial accommodations to
Borrower, and the undersigned acknowledges that the terms of this Guaranty are
reasonable. If any provision of this Guaranty is unenforceable in whole or in
part for any reason, the remaining provisions shall continue to be effective.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MICHIGAN.
THE UNDERSIGNED AND AGENT ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
(OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS GUARANTY OR THE INDEBTEDNESS.
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21
IN WITNESS WHEREOF, the undersigned has signed this Guaranty on April 28, 1998.
VELTRI HOLDINGS USA, INC.
By:________________________________________
Its:_______________________________________
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22
EXHIBIT 10.5 (PART IV)
GUARANTEE
THIS AGREEMENT made as of the day of April, 1998.
BY:
VELTRI METAL PRODUCTS CO., an unlimited liability
company formed under the laws of the Province of
Nova Scotia
(the "Guarantor")
IN FAVOUR OF:
COMERICA BANK, as agent for the Banks under the
Credit Agreement (as hereinafter defined)
(the "Agent")
WHEREAS Talon Automotive Group, Inc. (the "Borrower") is or will become
indebted, liable and obligated to the Agent and the Banks (as hereinafter
defined) pursuant to a credit agreement dated as of the date hereof among the
Borrower, the Guarantor, the Agent and the Banks (as amended, supplemented,
restated or replaced from time to time, the "Credit Agreement");
AND WHEREAS the Guarantor will receive direct economic and financial
benefits from accommodations made available to the Borrower under the Credit
Agreement;
AND WHEREAS the Guarantor has determined that it is in its best interests
to enter into this Guarantee;
AND WHEREAS the Guarantor's entry into this Guarantee is an inducement to
the Agent and the Banks to enter into the Credit Agreement;
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NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantor, the Guarantor hereby covenants and agrees with
the Agent, on its own behalf and as agent for the Banks, as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINED TERMS. Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement. In this
Guarantee, the following terms shall have the following meanings:
"AFFECTED" means limited, lessened, prejudiced, mitigated, impaired,
released, discharged or otherwise affected in any way whatsoever and
"AFFECT" and "AFFECTING" have corresponding meanings;
"BANKS" means those financial institutions whose names appear as "Banks"
on the signature pages to the Credit Agreement, together with any
assignees thereof pursuant to Section 13.5 of the Credit Agreement, and
shall include the Canadian Swingline Lender under the Credit Agreement;
and "BANK" shall mean any one of the foregoing Banks.
"OBLIGATIONS" means all obligations, indebtedness and liabilities
of the Borrower to the Agent and each of the Banks, under, in
connection with or relating to the Documents, whether present or
future, direct or indirect, absolute or contingent, secured or
unsecured, material or not, wheresoever and howsoever incurred and
any ultimate unpaid balance thereof, in any currency, and whether
incurred prior to, at the time of or subsequent to the execution
of this Guarantee;
"GAAP" means generally accepted accounting principles applied in a manner
consistent with the application thereof used in the quarterly and annual
financial statements of the Guarantor; and
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"GUARANTOR'S LIABILITIES" means all obligations, indebtedness and
liabilities of the Guarantor under, in connection with or relating to
this Guarantee, including all costs and expenses (including counsel fees
and expenses) incurred by the Agent or any Bank in connection with the
enforcement of this Guarantee.
1.2 INTERPRETATION. This Guarantee shall be interpreted in accordance
with the following:
(1) words denoting the singular include the plural and vice versa and
words denoting any gender include all genders;
(2) headings shall not affect the interpretation of this Guarantee;
(3) references to "this Guarantee" refer to this entire Agreement
(including the indemnities in Article 7); references to "any guarantor" include
the Guarantor;
(4) "hereof", "hereto" and "hereunder" and similar expressions refer to
this Guarantee and not to any particular Article, Section or other subdivision;
and "Article", "Section" or other subdivision of this Guarantee followed by a
number refers to the specified Article, Section or other subdivision of this
Guarantee;
(5) the word "including" shall mean "including without limitation" and
"includes" shall mean "includes without limitation"; and
(6) in the computation of periods of time, unless otherwise expressly
provided, the word "from" means "from and including" and the words "to" and
"until" mean "to but excluding".
1.3 SEVERABILITY. If any provision of this Guarantee is, or becomes,
illegal, invalid or unenforceable, such provision shall be severed from this
Guarantee and be ineffective to the extent of such illegality, invalidity
or unenforceability. The remaining provisions hereof shall be unaffected by
such
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provision and shall continue to be valid and enforceable.
1.4 GOVERNING LAW.
(1) This Guarantee shall be governed by, and interpreted in accordance
with, the laws of the Province of Ontario and the laws of Canada applicable
therein (such laws being collectively referred to herein as the "Applicable
Law"), without giving effect to any conflicts of law rules thereof.
(2) The Guarantor hereby irrevocably attorns and submits to the
non-exclusive jurisdiction of the courts of the Province of Ontario with
respect to any matter arising under or relating to this Guarantee.
ARTICLE 2
GUARANTEE
2.1 GUARANTEE. The Guarantor hereby irrevocably, absolutely and
unconditionally guarantees to the Agent, on its own behalf and as agent for the
Banks, as and by way of a continuing guarantee, the due, prompt and complete
payment, performance and satisfaction of all the Obligations strictly in
accordance with the terms thereof. The Guarantor shall be primarily liable to
the Agent and the Banks for all the Obligations.
2.2 DEALINGS WITH BORROWER AND GUARANTORS. The Guarantor hereby
acknowledges receipt of complete communication of all the terms and conditions
of the Documents and consents to and approves the same. The Agent and each of
the Banks may deal with the Borrower and any other guarantor as the Agent or
such Bank may see fit, whether or not such dealings are in breach (intentional,
negligent or otherwise) of the Agent's or any of the Banks' Agreements (express
or implied) with the Borrower or such other guarantor, without Affecting any of
the Guarantor's Liabilities and without obtaining the consent of or giving
notice to the Guarantor. Without limiting the foregoing, the Agent and any of
the Banks may, without Affecting any of the Guarantor's Liabilities and without
obtaining the consent of or giving notice to the Guarantor: (i) amend,
supplement, waive or delete any terms and conditions of the Documents (except
for the terms and conditions of this Guarantee); (ii) grant time,
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renewals, extensions, indulgences, releases and discharges to, and accept
compositions from, the Borrower and any other guarantor; (iii) renew, extend,
rollover, convert, vary or terminate any Advance; (iv) take Liens and
guarantees from the Borrower or any other Person or abstain from taking,
perfecting, preserving, protecting, valuing, realizing or enforcing any such
Liens or guarantees; (v) renew, exchange, modify, release or discharge any Lien
or guarantee now or hereafter held against or from the Borrower or any other
guarantor, and (vi) prove or refrain from proving a claim in any bankruptcy,
winding-up, dissolution or liquidation of the Borrower or any other guarantor
and receive or refrain from receiving any dividends and other payments in
respect of any such claim.
2.3 GUARANTEE NOT AFFECTED. The Guarantor's Liabilities are absolute and
unconditional and shall not be Affected by:
(1) any assignment or participation of the Obligations or the Documents,
in whole or in part, by the Agent or any of the Banks, or any assignment by the
Borrower or any guarantor of any of their obligations, indebtedness and
liabilities under the Documents:
(2) any cessation or termination of the Obligations from any cause
whatsoever, whether by consent or by operation of law, except for the due,
prompt and complete payment performance and satisfaction of all the
Obligations;
(3) any amalgamation, merger, arrangement, consolidation, reorganization,
winding-up, dissolution, liquidation or termination of the Borrower or any
guarantor or their respective businesses or any change in the name, status,
composition, control or ownership of the Borrower or any guarantor;
(4) any disposition of, Lien on or other dealing with any Property of the
Borrower or any guarantor;
(5) any insolvency or bankruptcy of the Borrower or any voluntary or
involuntary participation by the Borrower or any guarantor in any assignment,
settlement, arrangement, composition or other proceeding for the benefit of its
creditors;
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(6) anything done, omitted, suffered or permitted by the Agent or any of
the Banks in connection with the Borrower, any guarantor, the Obligations or
the Guarantor's Liabilities or any Lien held by the Agent or any of the Banks;
(7) any loss in respect of any Lien held by the Agent or any of the Banks
against or from the Borrower or any guarantor, whether caused by the fault of
the Agent or any Bank or otherwise;
(8) any failure by the Agent or any of the Banks to pursue any recourse
which may otherwise be available, whether by deficiency judgment or otherwise;
(9) any defect, irregularity or informality in, omission from or lack of
validity or enforceability of any provision of any of the Documents, any
limitation, disability or incapacity of the Borrower or any guarantor or any
lack of authority of any director, officer or other Person purporting to be
acting on behalf of the Borrower or any guarantor; or
(10) any other act, omission, thing or circumstance which would or might,
but for this provision, constitute a legal or equitable discharge or defence of
a surety.
2.4 WAIVERS.
(1) The Guarantor hereby (A) waives: (i) demand, presentment, diligence,
protest, notice of dishonour, notice of acceptance and any other notices
whatsoever, and (ii) any duty on the part of the Agent or any of the Banks to
disclose to the Guarantor anything which the Agent or such Bank may now or
hereafter know concerning the Borrower, any guarantor or any other matter
whatsoever, even if the Agent or any of the Banks has reason to believe any
such information materially increases the risk beyond that which the Guarantor
intends to assume hereunder, (iii) any requirement that the Agent or any of the
Banks protect, secure, perfect or insure any Lien granted in respect of the
Obligations or exhaust any right or take any action against the Borrower or any
other Person or in respect of any Collateral, (iv) the filing of any claim with
a court in the event of receivership or bankruptcy of the Borrower, and (v) the
benefit of any statute of limitation; and (B) covenants and agrees that this
Guarantee will not be discharged except by the full and complete payment,
performance and satisfaction of the Obligations and any other
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obligations of the Guarantor contained herein.
(2) If, in the exercise of any of its rights and remedies, the Agent or
any of the Banks shall forfeit any of its rights or remedies, including its
right to enter a deficiency judgment against the Borrower or any other Person,
whether because of any Applicable Law pertaining to "election of remedies" or
the like, the Guarantor hereby consents to such action by the Agent or such
Bank and waives any claim based upon such action. Any election of remedies
which results in the denial or impairment of the right of the Agent or such
Bank to seek a deficiency judgment against the Borrower shall not impair the
obligation of the Guarantor to pay the full amount of the Obligations or any of
the Guarantor's Liabilities.
(3) The Guarantor agrees that notwithstanding the foregoing and without
limiting the generality of the foregoing, if, after the occurrence and during
the continuance of an Event of Default, the Agent and the Banks are prevented
by Applicable Law from exercising their respective rights to accelerate the
maturity of the Obligations, to collect interest on the Obligations, or to
enforce or exercise any other right or remedy with respect to the Obligations,
or the Agent is prevented from taking any action to realize on the Collateral,
the Guarantor agrees to pay to the Agent for the account of the Banks, upon
demand therefor, the amount that would otherwise have been due and payable had
such rights and remedies been permitted to be exercised by the Banks.
(4) The Guarantor consents and agrees that neither the Agent nor the Banks
shall be under any obligation to marshall any assets in favour of the Guarantor
or otherwise in connection with obtaining payment of any or all of the
Obligations from any Person or source.
2.5 SECURITY. The Guarantor has not taken and does not hold and shall not
take or hold, without the prior written consent of the Agent, any Lien from the
Borrower in connection with this Guarantee and any Lien so taken or held shall
be held in trust for the Agent and as security for the Guarantor's Liabilities
in accordance with Section 6.2.
2.6 NO SET-OFF BY GUARANTOR. The Guarantor shall, to the fullest extent
permitted by Applicable Law, make all payments and perform all obligations
hereunder without regard to any right or alleged right of set-off, counterclaim
or appropriation or the application of any Claim that the Borrower or
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the Guarantor may have or may allege to have against the Agent, any of the
Banks or any other Person.
2.7 EVIDENCE OF OBLIGATIONS. The Guarantor agrees that the account records
maintained by the Agent as to the amount of any of the Obligations or the
Guarantor's Liabilities or any judgment determining such amounts obtained by
the Agent and the Banks against the Borrower or the Guarantor, as the case may
be, shall be conclusive evidence against the Guarantor as to the amount of such
Obligations or Guarantor's Liabilities absent manifest error. The failure of
the Agent to correctly record any amount or date shall not Affect the
obligation of the Guarantor to pay amounts due hereunder to the Agent or any of
the Banks in accordance with this Guarantee.
2.8 TERMINATION. This Guarantee shall be additional to any other
guarantee or Lien now or hereafter held by the Agent or any of the Banks from
the Guarantor or any other guarantors and is in addition to any other rights
or remedies that the Agent or any of the Banks might have. This Guarantee
shall not be considered as released or satisfied by any intermediate payment or
satisfaction of the whole or any part of the Obligations but shall be a
continuing security and shall remain in force until all of the Guarantor's
Liabilities shall have been fully paid, performed and satisfied. This
Guarantee shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Obligations is rescinded or is
otherwise required to be returned by the Agent or any of the Banks upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as
though such payment had not been made.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES. The Guarantor hereby makes each of the
following representations and warranties in favour of the Agent, on its own
behalf and as agent for the Banks:
(1) STATUS AND POWER. The Guarantor is a corporation duly formed and
organized and validly subsisting under the laws of its jurisdiction of
incorporation, and has full corporate power and capacity to own its Assets and
to carry on its business as now conducted. The Guarantor has obtained all
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necessary authorizations required in respect of its operations, and is not in
default and has received no notice of any claim or default, with respect to any
such necessary authorizations. The Guarantor is duly qualified, licensed or
registered to carry on business in the jurisdictions in which the nature of its
Assets or the business carried on by it make such qualification necessary.
(2) CORPORATE AUTHORIZATION. The Guarantor has full corporate power and
capacity and full legal right to enter into and perform its obligations under
this Guarantee and all other Documents to which it is or will be a party and
will have by closing of the financing contemplated by the Credit Agreement
taken all corporate action necessary to be taken by it to authorize such acts.
(3) ENFORCEABILITY OF GUARANTEE. This Guarantee and any other Documents
to which the Guarantor is a party constitute legal, valid and binding
obligations of the Guarantor enforceable against the Guarantor in accordance
with their respective terms, subject only to any limitation under Applicable
Laws relating to: (i) bankruptcy, insolvency, reorganization, moratorium or
creditors' rights generally; and (ii) the discretion that a court may exercise
in the granting of equitable remedies.
(4) COMPLIANCE WITH OTHER INSTRUMENTS. The consummation of the
transactions hereby contemplated or contemplated by the other Documents and the
compliance with the terms, conditions and provisions of this Guarantee and any
other Documents to which the Guarantor is a party will not conflict with, or
result in a breach of, or constitute a default under any of the terms,
conditions or provisions of the certificate of incorporation, constating
documents or by-laws of the Guarantor or any material Agreement or instrument
to which the Guarantor is a party or by which it is bound.
(5) RESTRICTIVE DOCUMENTS. The Guarantor is not subject to, or a party
to, any charter or by-law restriction, any notice, any Applicable Law, any
claim, any contract or instrument, any Lien or any other restriction of any
kind or character which would prevent the consummation of the transactions
contemplated by this Guarantee or compliance by the Guarantor with the terms,
conditions and provisions hereof or of any other Documents to which it is a
party .
(6) RECITALS. All of the recitals hereto are in all respects true and
correct.
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3.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All the representations
and warranties of the Guarantor contained in Section 3.1 shall survive the
execution and delivery of this Guarantee and shall continue in full force and
effect until all the Guarantor's Liabilities have been paid, performed and
satisfied in full notwithstanding any investigation made at any time by or on
behalf of the Agent or any of the Banks. Each representation and warranty
contained in Section 3.1 shall be deemed to be repeated by the Guarantor on
each date on which the Borrower delivers a Request for Loan and on the date of
each Advance.
ARTICLE 4
COVENANTS
4.1 COVENANTS. Without derogating from the nature or extent of the
Obligations, so long as any of the Obligations or other Guarantor's Liabilities
are outstanding and so long as the Credit Agreement has not been terminated,
the Guarantor shall:
(1) CORPORATE EXISTENCE. Preserve and maintain its corporate existence,
rights (charter and statutory) and its Agreements, licenses, operations,
contracts, franchises and other arrangements, except to the extent that the
board of directors of the Guarantor shall determine that the preservation of
any Agreement, license, operations, contract, franchise or other arrangement is
no longer desirable in the conduct of its business and that the loss thereof is
not disadvantageous in any material respect to the Agent or the Banks.
(2) COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Applicable Laws.
(3) KEEPING OF BOOKS. Keep proper books, records and accounts, in which
full and correct entries shall be made of all financial transactions of the
Guarantor in accordance with GAAP.
(4) FURTHER ASSURANCES. At its cost and expense, upon request of the
Agent, duly execute and deliver or cause to be duly executed and delivered to
the Agent such further instruments and other documents and do and cause to be
done such further acts as may be necessary or desirable in the
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reasonable opinion of the Agent to carry out more effectually the provisions
and purposes of this Guarantee and any other Documents to which the Guarantor
is a party.
ARTICLE 5
DEFAULT AND ENFORCEMENT
5.1 DEFAULT. In the event that any Event of Default has occurred and is
continuing, the Agent may, at any time, demand from the Guarantor immediate
payment, performance and satisfaction of all the Obligations and other
Guarantor's Liabilities. Forthwith upon such demand, the Guarantor shall
immediately pay, perform and satisfy in full all of the Obligations and other
Guarantor's Liabilities. All payments received by the Agent pursuant to this
Guarantee will be applied in accordance with that certain demand debenture of
even date between the parties hereto.
5.2 [INTENTIONALLY DELETED]
5.3 ENFORCEMENT. If the Guarantor shall fail, forthwith after demand
hereunder, to pay, perform and satisfy in full the Obligations and other
Guarantor's Liabilities, the Agent may, at any time, enforce any or all of its
rights and remedies hereunder, enforce any Lien from or against the Guarantor
or on any of its Property and exercise any right or remedy available under
Applicable Law. Without limiting the foregoing, the Agent may proceed to
enforce such rights, remedies and Liens prior to, contemporaneously with or
after any action taken in respect of any Lien given to the Agent or any of the
Banks by the Borrower or any other guarantor. The Agent shall not be required
to take any action or proceeding against or demand payment from or otherwise
exhaust its recourse against the Borrower or any other Guarantor or pursue any
other right or remedy available to the Agent before being entitled to require
the Guarantor to pay, perform and satisfy the Obligations and other Guarantor's
Liabilities in full.
5.4 WAIVER. No failure on the part of the Agent or any of the Banks to
exercise, and no delay in exercising, any right or remedy under this Guarantee
shall operate as a waiver of such right or remedy; nor shall any single or
partial exercise of any right or remedy under this Guarantee preclude any other
or further exercise thereof or the exercise of any other right or remedy; nor
shall any waiver of one provision be deemed to constitute a waiver of any other
provision (whether or not similar). No waiver of any of the provisions of this
Guarantee shall be effective unless it is in writing duly executed by the
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waiving party.
5.5 SUBROGATION. This Guarantee shall apply to the ultimate balance
owing by the Borrower to the Agent and the Banks in respect of the Obligations
and until all of the Obligations have been paid, performed and satisfied
in full, the Guarantor shall not be entitled to share in any Lien held or money
received by the Agent or any of the Banks on account of the Obligations, to
stand in the place of the Agent or any of the Banks in respect of any Lien or
money, or to take any step to enforce any right or claim against the Borrower
in respect of any monies paid by the Guarantor to the Agent hereunder or
exercise any rights as surety in competition with the Agent or any of the
Banks. Any moneys paid by or recovered from the Guarantor hereunder shall be
deemed to be paid in discharge of the Guarantor's Liabilities, but not in
discharge of the Obligations. Any right of subrogation acquired by the
Guarantor by reason of payment under this Guarantee shall not be exercised
until the Obligations and all other Guarantor's Liabilities have been paid,
performed and satisfied in full. If any amount shall be paid to the Guarantor
on account of any subrogation rights at any time when any of the Obligations or
other Guarantor's Liabilities have not been paid, performed and satisfied in
full, such amount shall be held in trust for the benefit of the Agent and the
Banks and shall forthwith be paid to the Agent.
5.6 INSOLVENCY OF GUARANTOR. The Guarantor agrees that if it shall: (i)
become insolvent or generally not pay its debts as such debts become due; (ii)
admit in writing its inability to pay its debts generally, or make a general
assignment for the benefit of creditors; (iii) file a notice of intention to
file a proposal under any Applicable Law relating to bankruptcy, insolvency,
reorganization or relief of creditors; (iv) institute or have instituted
against it any proceeding seeking (x) to adjudicate it a bankrupt or insolvent,
(y) any liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any Applicable Law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
(z) the entry of an order for relief or the appointment of a receiver, trustee
or other similar official for it or for any substantial part of its assets,
and, in the case of any such proceeding instituted against it (but not
instituted by it), such proceeding shall remain undismissed or unstayed for a
period of 30 days or any of the actions sought in such proceeding (including
the entry of an order for relief against it or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its assets) shall occur; or (v) take any action to authorize any of the
foregoing events, and if any of such foregoing events shall occur at a time
when any of the Obligations and other
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Guarantor's Liabilities may not then be due and payable, the Guarantor will
forthwith pay to the Agent, on its own behalf and as agent for the Banks, the
full amount which would be payable hereunder by the Guarantor if all the
Obligations and other Guarantor's Liabilities were then due and payable,
without prejudice to any other right or recourse of the Agent or any of the
Banks under the Documents or at Applicable Law against the Borrower, the
Guarantor or any other Person.
5.7 AGENT AS ATTORNEY. The Guarantor hereby irrevocably appoints the
Agent and any Person designated by the Agent after the occurrence of an Event
of Default to sign, execute or do any deeds, documents, transfers,
demands, assignments, assurances, consents or things that the Guarantor is
required to sign, execute or do hereunder, and to commence, continue or defend
any proceedings authorized to be taken hereunder and generally to use the name
of the Guarantor in the exercise of all or any of the powers hereby conferred
on the Agent.
ARTICLE 6
POSTPONEMENT AND ASSIGNMENT
6.1 SUBORDINATION AND POSTPONEMENT. Upon the occurrence and during the
continuance of an Event of Default, all obligations, indebtedness, liabilities
and claims, present and future, of the Borrower to the Guarantor (the
"Postponed Obligations") and all Liens in favour of the Guarantor from or
against the Borrower or relating to the Postponed Obligations and from or
against any other Person (the "Postponed Liens") are hereby subordinated and
postponed to the Obligations and the Guarantor's Liabilities, and all monies
received by the Guarantor in respect thereof shall be received in trust for the
Agent and the Banks and forthwith upon receipt shall be paid over to the Agent,
without affecting the Guarantor's Liabilities. This Section 6.1 is independent
of the other provisions of this Guarantee and shall remain in full force and
effect until repayment in full of the Obligations and the Guarantor's
Liabilities and the termination of the Credit Agreement, notwithstanding that
the Guarantor's Liabilities may have been discharged or terminated.
6.2 ASSIGNMENT. As further continuing security for the Guarantor's
Liabilities, upon the occurrence and during the continuance of an Event of
Default, the Guarantor hereby unconditionally and
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irrevocably assigns to the Agent, on its own behalf and as agent for the Banks,
all the Postponed Obligations and the Postponed Liens, present and future. The
Guarantor hereby undertakes on demand by the Agent to take all such steps that
may be necessary to enable the Agent to enforce the rights assigned to the
Agent hereby. The Guarantor agrees that upon the occurrence and during the
continuance of an Event of Default, the Agent shall be entitled: (i) at any
time to notify the Borrower of this assignment; (ii) to collect and recover
from the Borrower any amounts covered thereby; and (iii) to compromise any
Postponed Obligations and to release and discharge any Postponed Liens hereby
assigned. The Guarantor hereby irrevocably authorizes the Agent to sign and
execute any and all documents on the Guarantor's behalf which may be necessary
to give effect to or to enforce the rights afforded to the Agent pursuant to
this assignment. If the Agent allows any payment to be made to the Guarantor
and allows the Guarantor to accept and retain such payment, the Agent shall not
consequently lose any of its rights as assignee hereunder to any balance of any
Postponed Obligations or Postponed Liens. No waiver, relaxation or omission on
the part of the Agent in the exercise of any of its rights as assignee in
respect of any Postponed Obligations or Postponed Liens hereunder shall
prejudice or otherwise affect the Guarantor's Liabilities. This Section 6.2 is
independent of the other provisions of this Guarantee and shall remain in full
force and effect until repayment in full of the Obligations and the Guarantor's
Liabilities, notwithstanding that the Guarantor's Liabilities may have been
discharged or terminated.
ARTICLE 7
INDEMNITIES AND TAXATION
7.1 INDEMNITIES. The Guarantor (as a primary obligor and as a separate and
independent obligation and liability from its liabilities and obligations under
Section 2.1 hereby irrevocably, absolutely and unconditionally agrees to
indemnify, exonerate and hold the Agent and each Bank and each of their
respective officers, directors, employees, agents and other representatives
(collectively, the "Indemnified Parties") free and harmless from and against
any claims and losses paid, incurred or suffered by, or asserted against the
Indemnified Parties or any of them, with respect to, or as a direct or indirect
result of the failure of the Borrower to duly, promptly and completely pay,
perform and satisfy all of the Obligations.
7.2 TAXATION ON PAYMENTS. (1) The Guarantor hereby agrees that all
payments to be made
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by the Guarantor under or in connection with this Guarantee shall be made
without deduction or withholding for or on account of any taxes. If any tax is
required to be deducted or withheld from any payment, the Guarantor's
Liabilities shall be increased to the extent necessary to remit to each
affected Bank the amount which would otherwise be payable, if not for the
payment of such tax. From time to time at the request of the Agent on behalf
of each such affected Bank, the Guarantor shall execute and deliver any and all
further instruments necessary or advisable to give full force and effect to
such increase in the amount of the Guarantor's Liabilities resulting from the
payment of such tax. The Guarantor shall also indemnify each such affected
Bank in respect of the delay or failure of the Guarantor to make any such
payment, including penalties relating thereto or interest thereon.
(2) If the Guarantor pays any additional amount under Section 7.2(1) (a
"Tax Payment") and the Agent or any Bank effectively obtains a refund or credit
against tax by reason of the Tax Payment (a "Tax Credit") and the Agent or such
Bank identifies the Tax Credit as being attributable to the Tax Payment, then
the Agent or such Bank after actual receipt of such Tax Credit shall promptly
reimburse the Guarantor for such amount as the Agent or such Bank shall in good
faith determine in its sole discretion to be the proportion of the Tax Credit
that will leave the Agent or such Bank (after that reimbursement) in no better
or worse position than it would have been in if the Tax Payment had not been
required; provided, however, that neither the Agent nor any Bank will be
required to make any reimbursement or part thereof hereunder to the extent it
reasonably believes the making of such reimbursement or part thereof would
cause it to lose the benefit of the Tax Credit. The Agent and each Bank shall
have absolute discretion as to whether to claim any Tax Credit, and if it does
so claim, the extent, order and manner in which it does so and the manner in
which it allocates Tax Credits to its various assets. Neither the Agent nor
any Bank shall be obliged to disclose information regarding its tax affairs or
computations to the Guarantor.
(3) The Agent and the Banks agree to co-operate with the Guarantor in
completing and delivering or filing tax-related forms which would reduce or
eliminate any amount of the nature referred to in Section 7.2(1) required to be
deducted or withheld on account of any payments made by the Guarantor under
this Guarantee; provided, however, that neither the Agent nor any Bank shall be
under any obligation to execute and deliver any such form if, in the opinion of
the Agent or such Bank, completion of any such form could result in an adverse
consequence with respect to the business or tax position of the Agent or such
Bank.
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7.3 JUDGMENT CURRENCY. (1) If, for the purposes of obtaining judgment
in any court, it is necessary to convert any sum due, or owing hereunder or
under any other Document to the Agent or any one or more of the Banks in
any currency (the "Original Currency") into another currency (the "Other
Currency"), the Guarantor agrees, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures the Agent could purchase the Original Currency with
the Other Currency on the Business Day preceding that on which final judgment
is granted.
(2) The obligations of the Guarantor in respect of any sum due in the
Original Currency from it to the Agent or any one or more of the Banks
hereunder shall, notwithstanding any judgment in any Other Currency, be
discharged only to the extent that on the Business Day following receipt by the
Agent of any sum adjudged to be so due or owing in such Other Currency, the
Agent may in accordance with normal banking procedures purchase the Original
Currency with such Other Currency. If the amount of the Original Currency so
purchased is less than the sum originally due or owing to the Agent or any one
or more of the Banks in the Original Currency, the Guarantor shall, as a
separate obligation and notwithstanding any such judgment, indemnify the Agent
or such Bank against such loss, and if the amount of the Original Currency so
purchased exceeds the sum originally due or owing to the Agent or such Bank in
the Original Currency, the Agent or such Bank shall remit such excess to the
Guarantor.
7.4 COMPUTATIONS OF INTEREST. (1) All computations of interest hereunder
shall be made by the Agent according to its practice daily, taking into account
the actual number of days occurring in the period for which such interest is
payable and on the basis of a year of 365 or 366 days in the case of a leap
year.
(2) Notwithstanding any provision to the contrary contained in this
Guarantee, in no event shall the aggregate "interest" (as defined in Section
347 of the Criminal Code (Canada), as the same may be amended, replaced or
re-enacted from time to time) payable under this Guarantee exceed the maximum
amount of interest on the "credit advanced" (as defined in that section) under
this Guarantee lawfully permitted under that section and, if any payment,
collection or demand pursuant to this Guarantee in respect of "interest" (as
defined in that section) is determined to be contrary to the provisions of that
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section, such payment, collection or demand shall be deemed to have been made
by mutual mistake of the Guarantor and the Agent and the Banks and the amount
of such payment or collection shall be refunded to the Guarantor. For purposes
of this Guarantee, the effective annual rate of interest shall be determined in
accordance with generally accepted actuarial practices and principles on the
basis of annual compounding of the lawfully permitted rate of interest and, in
the event of any dispute, a certificate of a Fellow of the Canadian Institute
of Actuaries appointed by the Agent will be conclusive for the purposes of such
determination.
ARTICLE 8
GENERAL PROVISIONS
8.1 RESPONSIBILITY. The Guarantor acknowledges and confirms that neither
the Agent nor any of the Banks has made any representations or warranties to
the Guarantor and that it is relying solely on its own knowledge and has
made all necessary and desirable investigations in connection with the making
of this Guarantee.
8.2 SETTLEMENTS. Any settlement or discharge between the Guarantor and the
Agent shall be conditional upon no Lien taken or held by or payment to the
Agent or any of the Banks being avoided or reduced by virtue of any Applicable
Law and the Agent and the Banks shall be entitled subsequently to recover from
the Guarantor the value or amount by which any such Lien or payment shall have
been avoided or reduced as if such settlement or discharge had not occurred.
8.3 RIGHTS CUMULATIVE. All rights and remedies of the Agent set out in
this Guarantee will be cumulative and no right or remedy contained herein is
intended to be exclusive but each will be in addition to every other right or
remedy contained herein or in the Documents and any other Lien now or hereafter
taken, held or acquired by the Agent or any of the Banks as security for the
Obligations. The taking of a judgment or judgments with respect to any of the
Obligations or other Guarantor's Liabilities will not operate as a merger of
any of the covenants contained in this Guarantee.
8.4 NOTICES. Any demand, notice or communication to be made or given
hereunder shall be in writing and shall be personally delivered to an officer
or other responsible employee of the addressee or
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sent by facsimile, charges prepaid, at or to the applicable addresses or
facsimile numbers, as the case may be, set out below the respective parties'
names as follows:
To the Guarantor: Veltri Metal Products Co.
c/o Talon Automotive Group
900 Wilshire Drive
Suite 270
Troy, Michigan
48084
Attention: David J. Woodward
Telecopy No.: (248) 362-7617
with a copy to:
Timmis & Inman
300 Talon Centre
Detroit, Michigan
48207
Attention: Richard Miettinen
Telecopy No.: (313) 396-4229
Cassels Brock & Blackwell
Scotia Plaza, Suite 2100
40 King Street West
Toronto, Ontario
M5H 3C2
Attention: Gordon Dickson
Telecopy No.: (416) 360-8877
To the Agent: Comerica Bank
500 Woodward Avenue
6th Floor
Detroit, Michigan
U.S.A. 48226
Attention: President
Telecopy No.: (313) 222-5759
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with a copy to:
Miller, Canfield, Paddock and Stone, P.L.C.
150 West Jefferson, Suite 2500
Detroit, Michigan
U.S.A. 48226
Attention: Mr. David K. McLeod
Telecopy No.: (313) 496-8450
Goodman Phillips & Vineberg
Barristers & Solicitors
Suite 2400
250 Yonge Street
Toronto, Ontario
M5B 2M6
Attention: Mr. Stephen Pincus
Telecopy No.: (416) 979-1234
or to such other address or addresses or facsimile number or numbers as any
party hereto may from time to time designate to the other parties in such
manner. Any communication which is personally delivered as aforesaid, shall be
deemed to have been validly and effectively given on the date of such delivery
if such date is a Business Day and such delivery was made during normal
business hours of the recipient; otherwise, it shall be deemed to have been
validly and effectively given on the Business Day next following such date of
delivery. Any communication which is transmitted by facsimile as aforesaid
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was made
during normal business hours of the recipient; otherwise, it shall be deemed to
have been validly and effectively given on the Business Day next following such
date of transmission.
8.5 TIME OF THE ESSENCE. Time shall be of the essence of this Guarantee.
8.6 ASSIGNMENT. The Guarantor may not assign or transfer any of its
obligations hereunder. The rights and obligations of the Agent and the Banks
hereunder may be assigned or participated in accordance with the Credit
Agreement.
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8.7 ENUREMENT. This Guarantee shall enure to the benefit of the Agent and
each of the Banks and their respective permitted assigns and participants
and be binding upon the Guarantor and its successors and assigns.
8.8 AMENDMENT. This Guarantee may be amended only by written agreement of
the Guarantor and the Agent.
8.9 RECEIPT OF COPY. The Guarantor acknowledges having received a signed
copy of this Guarantee.
IN WITNESS WHEREOF the Guarantor has executed this Guarantee as of the
date first above written.
VELTRI METAL PRODUCTS CO.
Per: _________________________________
Authorized Signing Officer