Exhibit 10.6
CONTINUING GUARANTY
DATE: June 13, 2014
TO: XXXXX FARGO BANK, NATIONAL ASSOCIATION
1. GUARANTY; DEFINITIONS. In consideration of any credit or other
financial accommodation heretofore, now or hereafter extended or made to
INDUSTRIAL SERVICES OF AMERICA, INC., a Florida corporation ("Parent"),
ISA INDIANA, INC., an Indiana corporation ("ISA Inc."), ISA LOGISTICS
LLC, a Kentucky limited liability company ("ISA Logistics"; Parent, ISA
Inc., and ISA Logistics, collectively referred to herein as "Borrowers"
and individually as a "Borrower"), or any of them by XXXXX FARGO BANK,
NATIONAL ASSOCIATION and its Affiliates (collectively, "Xxxxx Fargo"),
and for other valuable consideration, the undersigned, each of ISA REAL
ESTATE, LLC, a Kentucky limited liability company ("ISA Real Estate"),
ISA INDIANA REAL ESTATE, LLC, a Kentucky limited liability company
("Indiana Real Estate"), WESSCO, LLC, a Delaware limited liability
company ("Wessco"), 0000 XXXXX XXXX LLC, a Kentucky limited liability
company ("7021 Grade"), 0000 XXXXX XXXX LLC, a Kentucky limited
liability company ("7124 Grade"), and 0000 XXXXX XXXX LLC, a Kentucky
limited liability company ("7200 Grade"; ISA Real Estate, Indiana Real
Estate, Wessco, 7021 Grade, 7124 Grade, and 7200 Grade, collectively
referred to herein as "Guarantors" and individually as a "Guarantor"),
each jointly and severally unconditionally guarantee and promise to pay
to Xxxxx Fargo, or order, on demand in lawful money of the United States
of America and in immediately available funds, any and all Obligations
as such term is defined in that certain Credit Agreement among Xxxxx
Fargo, Borrowers and Guarantors, dated the date on or about the date
hereof (as at any time amended, the "Credit Agreement"; terms used but
not defined herein shall have the meanings as set forth in the Credit
Agreement) and as further described on Schedule I attached hereto and
hereby incorporated by reference. This Guaranty is a guaranty of
payment and not collection.
2. MAXIMUM LIABILITY; SUCCESSIVE TRANSACTIONS; NO REVOCATION;
OBLIGATION UNDER OTHER GUARANTIES; TERMINATION DATE. This Guaranty is a
continuing guaranty and all rights, powers and remedies hereunder shall
apply to all past, present and future Obligations, including that
arising under successive transactions which shall either continue the
Obligations, increase or decrease it, or from time to time create new
Obligations after all or any prior Obligations have been satisfied, and
notwithstanding the death, incapacity, dissolution, liquidation or
bankruptcy of any of the Borrowers or Guarantors or any other event or
proceeding affecting any of the Borrowers or Guarantors. To the fullest
extent permitted by applicable law, each Guarantor waives any right that
each such Guarantor may have to terminate or revoke this Guaranty. If,
notwithstanding the foregoing waiver, a Guarantor shall nevertheless
have any right under applicable law to terminate or revoke this
Guaranty, which right cannot be waived by such Guarantor, such
termination or revocation shall not be effective until a written notice
of such termination or revocation, specifically referring to this
Guaranty and signed by such Guarantor, is actually received by an
officer of Xxxxx Fargo who is familiar with Borrowers' account with
Xxxxx Fargo and this Guaranty; but any such termination or revocation
shall not affect the obligation of any Guarantor or any Guarantor's
successors or assigns with respect to any of the Obligations owing to
Xxxxx Fargo and existing at the time of the receipt by Xxxxx Fargo of
such revocation or to arise out of or in connection with any
transactions theretofore entered into by Xxxxx Fargo with or for the
account of Borrowers or Guarantors. If Xxxxx Fargo grants loans or
other extensions of credit to or for the benefit of Borrower or takes
other action after the termination or revocation by Guarantor but prior
to Xxxxx Fargo's receipt of such written notice of termination or
revocation, then the rights of Xxxxx Fargo hereunder with respect
thereto shall be the same as if such termination or revocation had not
occurred. Any payment by any Guarantor shall not reduce such
Guarantor's maximum obligation hereunder unless written notice to that
effect is actually received by Xxxxx Fargo at or prior to the time of
such payment. The obligations of each Guarantor under this Guaranty
shall be in addition to any obligations of such Guarantor under any
other guaranties of any liabilities or obligations of any of the
Borrowers or other persons heretofore or hereafter given to Xxxxx Fargo,
unless such other guaranties are expressly modified in writing pursuant
to the terms thereof; and this Guaranty shall not, unless expressly
provided for in this Guaranty, affect or invalidate any such other
guaranties. The liability of Guarantors hereunder shall not exceed at
any time the sum of (a) $35,600,000, (b) all accrued and unpaid interest
on the any Obligation, and (c) all costs and expenses pertaining to the
enforcement of this Guaranty and/or the collection of the Obligations.
Notwithstanding the foregoing, Xxxxx Fargo may permit the Obligations of
Borrowers to exceed Guarantors' liability. This Guaranty shall
terminate on June 13, 2021 (the "Termination Date"). Termination of
this Guaranty on the Termination Date shall not affect the liability of
the Guarantors with respect to Obligations created or incurred prior to
the Termination Date or amendments, modifications, substitutions,
extensions or renewals of, interest accruing on, or fees, costs or
expenses incurred with respect to the Obligations on or after the
Termination Date
3. OBLIGATIONS JOINT AND SEVERAL; SEPARATE ACTIONS; WAIVER OF
STATUTE OF LIMITATIONS; REINSTATEMENT OF LIABILITY. The obligations of
each Guarantor under this Guaranty are joint and several and independent
of the obligations of the Borrowers, and a separate action or actions
may be brought and prosecuted against any Guarantor, whether the action
is brought against any of the Borrowers or any other person, or whether
any of the Borrowers or any other persons are joined in any such action
or actions. Each Guarantor acknowledges that this Guaranty is absolute
and unconditional, that there are no conditions precedent to the
effectiveness of this Guaranty, and that this Guaranty is in full force
and effect and binding on such Guarantor as of the date written below,
regardless of whether Xxxxx Fargo obtains collateral or any guaranties
from others or takes any other action contemplated by such Guarantor.
Each Guarantor waives the benefit of any statute of limitations
affecting such Guarantor's liability hereunder or the enforcement
thereof, and such Guarantor agrees that any payment of any Obligations
or other act which shall toll any applicable statute of limitations
shall similarly toll the statute of limitations applicable to such
Guarantor's liability under this Guaranty. The liability of each
Guarantor hereunder shall be reinstated and revived and the rights of
Xxxxx Fargo shall continue if and to the extent for any reason any
amount at any time paid on account of any Obligations guaranteed hereby
is rescinded or must otherwise be restored by Xxxxx Fargo, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise,
all as though such amount had not been paid. The determination as to
whether any amount so paid must be rescinded or restored shall be made
by Xxxxx Fargo in its sole discretion; provided however, that if Xxxxx
Fargo chooses to contest any such matter at the request of any
Guarantor, such Guarantor agrees to indemnify and hold Xxxxx Fargo
harmless from and against all costs and expenses, including reasonable
attorneys' fees, expended or incurred by Xxxxx Fargo in connection
therewith, including without limitation, in any litigation with respect
thereto.
4. AUTHORIZATIONS TO XXXXX FARGO. Each Guarantor authorizes Xxxxx
Fargo either before or after revocation hereof, without notice to or
demand on such Guarantor, and without affecting such Guarantor's
liability hereunder, from time to time to: (a) alter, compromise, renew,
extend, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Obligations or any portion thereof,
including increase or decrease of the rate of interest thereon; (b) take
and hold security for the payment of this Guaranty or the Obligations or
any portion thereof, and exchange, enforce, waive, subordinate or
release any such security; (c) apply such security and direct the order
or manner of sale thereof, including without limitation, a non-judicial
sale permitted by the terms of the controlling security agreement,
mortgage or deed of trust, as Xxxxx Fargo in its discretion may
determine; (d) release or substitute any one or more of the endorsers or
any other guarantors of the Obligations, or any portion thereof, or any
other party thereto; and (e) apply payments received by Xxxxx Fargo from
any of the Borrowers to any portion of the Obligations, in such order as
Xxxxx Fargo shall determine in its sole discretion, whether or not such
Obligations are covered by this Guaranty, and such Guarantor hereby
waives any provision of law regarding application of payments which
specifies otherwise. Xxxxx Fargo may without notice assign this
Guaranty in whole or in part. Upon Xxxxx Fargo's request, each
Guarantor agrees to provide to Xxxxx Fargo copies of such Guarantor's
financial statements.
5. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and
warrants to Xxxxx Fargo that: (a) this Guaranty is executed at
Borrowers' request; (b) No Guarantor shall, without Xxxxx Fargo's prior
written consent, sell, lease, assign, encumber, hypothecate, transfer or
otherwise dispose of all or a substantial or material part of such
Guarantor's assets other than in the ordinary course of such Guarantor's
business; (c) Xxxxx Fargo has made no representation to such Guarantor
as to the creditworthiness of any of the Borrowers; and (d) such
Guarantor has established adequate means of obtaining from each of the
Borrowers on a continuing basis financial and other information
pertaining to Borrowers' financial condition. Each Guarantor agrees to
keep adequately informed of any facts, events or circumstances which
might in any way affect such Guarantor's risks hereunder, and such
Guarantor further agrees that Xxxxx Fargo shall have no obligation to
disclose to such Guarantor any information or material about any of the
Borrowers which is acquired by Xxxxx Fargo in any manner.
6. EACH GUARANTOR'S WAIVERS.
(a) Each Guarantor waives any right to require Xxxxx Fargo to: (i)
proceed against any of the Borrowers or any other person; (ii) marshal
assets or proceed against or exhaust any security held from any of the
Borrowers or any other person; (iii) give notice of the terms, time and
place of any public or private sale or other disposition of personal
property security held from any of Borrowers or any other person; (iv)
take any other action or pursue any other remedy in Xxxxx Fargo's power;
or (v) make any presentment or demand for performance, or give any
notice of nonperformance, protest, notice of protest or notice of
dishonor hereunder or in connection with any obligations or evidences of
Obligations held by Xxxxx Fargo as security for or which constitute in
whole or in part the Obligations guaranteed hereunder, or in connection
with the creation of new or additional Obligations.
(b) Each Guarantor waives any defense to its obligations hereunder
based upon or arising by reason of: (i) any disability or other defense
of any of the Borrowers or any other person; (ii) the cessation or
limitation from any cause whatsoever, other than payment in full, of the
Obligations; (iii) any lack of authority of any officer, director,
partner, agent or any other person acting or purporting to act on behalf
of any of the Borrowers which is a corporation, partnership or other
type of entity, or any defect in the formation of any such Borrower;
(iv) the application by any of the Borrowers of the proceeds of any
Obligations for purposes other than the purposes represented by the
Borrowers to, or intended or understood by, Xxxxx Fargo or such
Guarantor; (v) any act or omission by Xxxxx Fargo which directly or
indirectly results in or aids the discharge of any of the Borrowers or
any portion of the Obligations by operation of law or otherwise, or
which in any way impairs or suspends any rights or remedies of Xxxxx
Fargo against any of the Borrowers; (vi) any impairment of the value of
any interest in any security for the Obligations or any portion thereof,
including without limitation, the failure to obtain or maintain
perfection or recordation of any interest in any such security, the
release of any such security without substitution, and/or the failure to
preserve the value of, or to comply with applicable law in disposing of,
any such security; (vii) any modification of the Obligations, in any
form whatsoever, including any modification made after any purported
revocation hereof to any Obligations incurred prior to such revocation,
and including without limitation the renewal, extension, acceleration or
other change in time for payment of, or other change in the terms of,
the Obligations or any portion thereof, including increase or decrease
of the rate of interest thereon; or (viii) any requirement that Xxxxx
Fargo give any notice of acceptance of this Guaranty. Until all
Obligations has been paid in full, no Guarantor shall have right of
subrogation, and each Guarantor waives any right to enforce any remedy
which Xxxxx Fargo now has or may hereafter have against any of the
Borrowers or any other person, and waives any benefit of, or any right
to participate in, any security now or hereafter held by Xxxxx Fargo.
Each Guarantor further waives all rights and defenses such Guarantor may
have arising out of (A) any election of remedies by Xxxxx Fargo, even
though that election of remedies, such as a non-judicial foreclosure
with respect to any security for any portion of the Obligations,
destroys such Guarantor's rights of subrogation or such Guarantor's
rights to proceed against any of the Borrowers for reimbursement, or (B)
any loss of rights such Guarantor may suffer by reason of any rights,
powers or remedies of any of the Borrowers in connection with any anti-
deficiency laws or any other laws limiting, qualifying or discharging
the Obligations, whether by operation of law or otherwise, including any
rights such Guarantor may have to a fair market value hearing to
determine the size of a deficiency following any foreclosure sale or
other disposition of any real property security for any portion of the
Obligations.
7. XXXXX FARGO'S RIGHTS WITH RESPECT TO EACH GUARANTOR'S PROPERTY
IN ITS POSSESSION. In addition to all liens upon and rights of setoff
against the monies, securities or other property of each Guarantor given
to Xxxxx Fargo by law, Xxxxx Fargo shall have a lien upon and a right of
setoff against all monies, securities and other property of any
Guarantor now or hereafter in the possession of or on deposit with Xxxxx
Fargo, whether held in a general or special account or deposit or for
safekeeping or otherwise, and every such lien and right of setoff may be
exercised without demand upon or notice to any Guarantor. No lien or
right of setoff shall be deemed to have been waived by any act or
conduct on the part of Xxxxx Fargo, or by any neglect to exercise such
right of setoff or to enforce such lien, or by any delay in so doing,
and every right of setoff and lien shall continue in full force and
effect until such right of setoff or lien is specifically waived or
released by Xxxxx Fargo in writing.
8. SUBORDINATION. Any indebtedness of any of the Borrowers now or
hereafter held by any Guarantor is hereby subordinated to the
Obligations. Such indebtedness of Borrowers to any Guarantor is
assigned to Xxxxx Fargo as security for this Guaranty and the
Obligations and, if Xxxxx Fargo requests, shall be collected and
received by such Guarantor as trustee for Xxxxx Fargo and paid over to
Xxxxx Fargo on account of the Obligations but without reducing or
affecting in any manner the liability of such Guarantor under the other
provisions of this Guaranty. Any notes or other instruments now or
hereafter evidencing such indebtedness of any Borrower to any Guarantor
shall be marked with a legend that indicates that the notes or other
instruments are subject to this Guaranty and, if Xxxxx Fargo so
requests, such notes and instruments shall be delivered to Xxxxx Fargo.
Xxxxx Fargo is hereby authorized in the name of any Guarantor from time
to time to file financing statements and continuation statements and
execute such other documents and take such other action as Xxxxx Fargo
deems necessary or appropriate to perfect, preserve and enforce its
rights hereunder.
9. REMEDIES; NO WAIVER. All rights, powers and remedies of Xxxxx
Fargo hereunder are cumulative. No delay, failure or discontinuance of
Xxxxx Fargo in exercising any right, power or remedy hereunder shall
affect or operate as a waiver of such right, power or remedy; nor shall
any single or partial exercise of any such right, power or remedy
preclude, waive or otherwise affect any other or further exercise
thereof or the exercise of any other right, power or remedy. Any
waiver, permit, consent or approval of any kind by Xxxxx Fargo of any
breach of this Guaranty, or any such waiver of any provisions or
conditions hereof, must be in writing and shall be effective only to the
extent set forth in writing.
10. COSTS, EXPENSES AND ATTORNEYS' FEES. Each Guarantor shall pay
to Xxxxx Fargo immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys'
fees (to include outside counsel fees and, after the occurrence of an
Event of Default (as defined in the Credit Agreement), all allocated
costs of Xxxxx Fargo's in-house counsel), expended or incurred by Xxxxx
Fargo in connection with the enforcement of any of Xxxxx Fargo's rights,
powers or remedies and/or the collection of any amounts which become due
to Xxxxx Fargo under this Guaranty, and the prosecution or defense of
any action in any way related to this Guaranty, whether incurred at the
trial or appellate level, in an arbitration proceeding or otherwise, and
including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary
proceeding, contested matter or motion brought by Xxxxx Fargo or any
other person) relating to any Guarantor or any other person or entity.
All of the foregoing shall be paid by Guarantors with interest from the
date of demand until paid in full at the highest rate applicable to any
Obligations under the Credit Agreement (plus the Default Rate then in
effect).
11. SUCCESSORS; ASSIGNMENT. This Guaranty shall be binding upon
and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided
however, that no Guarantor may assign or transfer any of its interests
or rights hereunder without Xxxxx Fargo's prior written consent. Each
Guarantor acknowledges that Xxxxx Fargo has the right to sell, assign,
transfer, negotiate or grant participations in all or any part of, or
any interest in, the Obligations and any obligations with respect
thereto, including this Guaranty. In connection therewith, Xxxxx Fargo
may disclose all documents and information which Xxxxx Fargo now has or
hereafter acquires relating to any Guarantor and/or this Guaranty,
whether furnished by Borrowers, Guarantors or otherwise. Each Guarantor
further agrees that Xxxxx Fargo may disclose such documents and
information to Borrowers.
12. AMENDMENT. This Guaranty may be amended or modified only in
writing signed by Xxxxx Fargo and Guarantor.
13. APPLICATION OF SINGULAR AND PLURAL. In all cases where there is
but a single Borrower, then all words used herein in the plural shall be
deemed to have been used in the singular where the context and
construction so require; and when there is more than one Borrower named
herein, or when this Guaranty is executed by more than one Guarantor,
the word "Borrowers" and the word "Guarantor" respectively shall mean
all or any one or more of them as the context requires.
14. UNDERSTANDING WITH RESPECT TO WAIVERS; SEVERABILITY OF
PROVISIONS. Each Guarantor warrants and agrees that each of the waivers
set forth herein is made with such Guarantor's full knowledge of its
significance and consequences, and that under the circumstances, the
waivers are reasonable and not contrary to public policy or law. If any
waiver or other provision of this Guaranty shall be held to be
prohibited by or invalid under applicable public policy or law, such
waiver or other provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of
such waiver or other provision or any remaining provisions of this
Guaranty.
15. GOVERNING LAW. The validity of this Guaranty, the
construction, interpretation, and enforcement of this Guaranty and the
rights of the parties, as well as all claims, controversies or disputes
arising under or related to this Guaranty will be determined under,
governed by and construed in accordance with the laws of the
Commonwealth of Kentucky without regard to conflicts of laws principles.
16. JURISDICTION. All actions or proceedings arising in connection
with this Guaranty may be tried and litigated in the State of Georgia
and, to the extent permitted by applicable law, federal courts located
in the City of Atlanta and the County of Xxxxxx State of Georgia;
provided that any suit seeking enforcement against any Collateral or
other property may be brought, at Xxxxx Fargo's option, in the courts of
any jurisdiction where Xxxxx Fargo elects to bring such action or where
such Collateral or other property may be found. Each Guarantor and Xxxxx
Fargo waives, to the extent permitted under applicable law, any right
they may have to assert the doctrine of forum non conveniens or to
object to venue to the extent any proceeding is brought in accordance
with this Section 16.
SECTION 17. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED
BY APPLICABLE LAW, EACH GUARANTOR AND XXXXX FARGO WAIVES THEIR
RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY,
DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING
OUT OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
GUARANTY, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS,
AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH, A "CLAIM"). EACH
GUARANTOR AND XXXXX FARGO REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER
AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.
[Remainder of page intentionally left blank;
signatures appear on the following pages]
IN WITNESS WHEREOF, each of the undersigned Guarantors have executed
this Guaranty as of the date first written above.
ISA REAL ESTATE, LLC
By: Algar, Inc., its Manager
By: : /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
ISA INDIANA REAL ESTATE, LLC
By: Algar, Inc., its Manager
By: : /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
WESSCO, LLC
By: : /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Interim Chief Executive Officer
0000 XXXXX XXXX LLC
By: Algar, Inc., its Manager
By: : /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
0000 XXXXX XXXX LLC
By: Algar, Inc., its Manager
By: : /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
0000 XXXXX XXXX LLC
By: Algar, Inc., its Manager
By: : /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
Schedule I
Obligations
The "Obligations" shall mean (a) all loans (including the Advances and
the Term Loan), debts, principal, interest (including any interest that
accrues after the beginning of an Insolvency Proceeding, regardless of
whether allowed or allowable in whole or in part as a claim in any such
Insolvency Proceeding), reimbursement or indemnification obligations
with respect to Letters of Credit (irrespective of whether contingent),
premiums, liabilities (including all amounts charged to the Loan
Account), obligations (including indemnification obligations), fees,
Lender Expenses (including any fees or expenses that accrue after the
commencement of an Insolvency Proceeding, regardless of whether allowed
or allowable in whole or in part as a claim in any such Insolvency
Proceeding), guaranties, and all covenants and duties of any other kind
and description owing by Borrowers under or evidenced by this Guaranty,
the Credit Agreement or any of the other Loan Documents or otherwise
owing to Lender under any other present or future document, instrument
or agreement, and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, liquidated or
unliquidated, determined or undetermined, voluntary or involuntary, due,
not due or to become due, sole, joint, several or joint and several,
incurred in the past or now existing or hereafter arising, however
arising, and including all interest not paid when due, and all other
expenses or other amounts that Borrowers are required to pay or
reimburse by the Loan Documents or by law or otherwise in connection
with the Loan Documents, (b) all obligations indebtedness, liabilities,
reimbursement obligations, fees, or expenses owing by any Borrower to a
Bank Product Provider with respect to any Bank Product, whether direct
or indirect, absolute or contingent, liquidated or unliquidated,
determined or undetermined, voluntary or involuntary, due, not due or to
become due, incurred in the past or now existing or hereafter arising,
however arising. Any reference in this Guaranty or in the Loan Documents
to the Obligations will include all or any portion of the Obligations
and any extensions, modifications, renewals, or alterations of the
Obligations, both prior and subsequent to any Insolvency Proceeding and
(c) without limitation, all indebtedness evidenced by any promissory
notes from time to time made by any Borrower to the order of Lender,
including, without limitation, that certain Term Note dated the date
hereof and made by Borrowers to the order of Lender in the principal
amount of $2,800,000 and that certain Revolving Note dated the date
hereof and made by Borrowers to the order of Lender in the principal
amount of $15,000,000, in each case together with all amendments,
restatements, modifications, substitutions, extensions and renewals
thereof. Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.
