EXHIBIT 10.20
GUARANTY
FOR VALUABLE CONSIDERATION, the receipt and adequacy of which is hereby
acknowledged, and to induce Xxxxx Xxxxxx and Xxxxx Xxxxxx, residents of the
State of Maryland ("Secured Parties") to accept the Notes (as defined below)
from TARPON INDUSTRIES, INC. ("Debtor"), the undersigned EUGENE WELDING COMPANY
("Guarantor"), does hereby covenant and agree with Secured Parties as follows:
1. DEFINITIONS. In this Guaranty, unless the context otherwise requires:
A. "INDEBTEDNESS" is used in its most comprehensive form and means
all Indebtedness, whether direct or indirect, absolute or contingent, now
due and owing or which may hereafter, from time-to-time, be or become due
and owing under or with respect to the following: (i) the Notes identified
below; (ii) renewals, extensions, modifications or substitutions of the
Notes; and (iii) interest and costs, including attorney fees, on the
foregoing.
B. "NOTES" means the 8% Junior Secured Promissory Notes issued to
Secured Parties in the aggregate principal amount of up to One Hundred
Fifty Thousand and 00/100 ($150,000.00) Dollars with interest, and all
renewals, replacements, modifications and extensions thereof.
2. STATEMENT OF GUARANTY. Guarantor hereby unconditionally and absolutely
guarantees to Secured Parties the full and prompt payment when due, or declared
due of all Indebtedness. Secured Parties will have immediate recourse against
Guarantor for full and immediate payment of the Indebtedness at any time after
the Indebtedness, or any part thereof, has not been paid in full as and when due
(whether at fixed maturity, or by acceleration).
3. GUARANTY OF PAYMENT. This is a continuing and an unconditional guaranty
of payment, and not of collection. Secured Parties shall not be obligated, prior
to or after seeking recourse against or receiving payment from Guarantor, to do
any of the following (although Secured Parties may do so, in whole or in part,
at his sole option), the performance of which are hereby unconditionally waived
by Guarantor:
A. Take any steps whatsoever to collect from Debtor or to file any
claim of any kind against Debtor; or
B. Take any steps whatsoever to accept, perfect Secured Parties'
interest in or foreclose or realize upon collateral security, if any, for
the payment of the Indebtedness, or any other guarantee of the
Indebtedness; or
C. In any other respect exercise any diligence whatsoever in
collecting or attempting to collect the Indebtedness from Debtor by any
means.
4. NO IMPAIRMENT. Guarantor's liability for payment of the Indebtedness
shall be absolute and unconditional, and nothing whatsoever except actual full
payment to Secured Parties of the Indebtedness shall operate to discharge
Guarantor's liability hereunder. Accordingly, Guarantor unconditionally and
irrevocably waives each and every defense which, under principles of guaranty or
suretyship law or equity, would otherwise operate to impair or diminish the
liability of Guarantor for the Indebtedness. Without limiting the generality of
the
foregoing waiver, none of the following acts, omissions or occurrences shall
diminish or impair the liability of Guarantor in any respect (any and all of
which acts, omissions or occurrences shall not require notice of any kind by
Secured Parties to Guarantor):
A. Any extension, modification, indulgence, compromise, settlement
or variation of any of the terms of the Indebtedness;
B. The discharge or release of any obligations of Debtor by reason
of the operation of bankruptcy or insolvency laws or otherwise;
C. The acceptance or release by Secured Parties of any collateral
security or other guaranty, or compromise, settlement or extension with
respect to any collateral security or guaranty;
D. The creation of any new indebtedness by Xxxxxx; and
E. The making of a demand, or absence of demand, for payment of the
Indebtedness, or giving or failing to give any notice of dishonor or
protest or any other notice, except as required by the terms of the Note.
5. WAIVER OF DEFENSES. Guarantor unconditionally waives:
A. Any subrogation to the rights of Secured Parties against Debtor
until the Indebtedness to Secured Parties has been paid in full;
B. Any notice of acceptance of this Guaranty or Secured Parties'
present or future action or intention to act in reliance on this Guaranty;
and
C. Notice of default by Debtor, any guarantor or any surety, pledgor
or any party granting Debtor security under any security document.
6. EVENTS OF DEFAULT. The occurrence of any one of the following events
shall, at the election of Secured Parties, be deemed a default by Guarantor
("Event of Default") under this Guaranty:
A. Any breach by Guarantor of any of its representations,
warranties, covenants or agreements under this Guaranty which continues
uncured for ten days after receipt of notice by Guarantor;
B. The occurrence of any event of default under this Agreement or
the General Subordinated Security Agreement of even date (the "Security
Agreement); or
C. The appointment of a conservator for all or any portion of
Guarantor's assets.
7. SECURITY. Guarantor's performance under this Guaranty is secured by a
lien on all of Guarantor's assets, subordinate only to the lien of Guarantor's
Senior Indebtedness (as defined in the Security Agreement).
8. ELECTION OF REMEDIES. Upon the occurrence of an Event of Default under
this Guaranty, Secured Parties have such rights and remedies as are provided by
law or in equity or
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under this Guaranty including, without limitation, the right to proceed to suit
against Guarantor regardless of whether suit has been commenced against Debtor,
and in any such suit Debtor may be joined (but need not be joined) as a party
with Guarantor. Secured Parties shall not be required to proceed against any
other party, or against any other security or collateral, or to pursue any right
or remedy under this Guaranty or under any other instrument. No right, power or
remedy conferred by this Guaranty upon Secured Parties shall be exclusive of any
other right available at law, in equity, by statute or otherwise, and all such
rights, powers and remedies shall be cumulative and in addition to all others.
No failure or delay on the part of Secured Parties in exercising any right,
power or remedy shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude a later or further exercise thereof or the
exercise of any right, power or remedy. No course of dealing on behalf of
Secured Parties shall operate as a waiver of any right, power, privilege or
remedy.
9. CONSIDERATION. Guarantor acknowledges receipt of good and valuable
consideration for this Guaranty, the benefit conferred on Debtor by the giving
of this Guaranty and the reliance by Secured Parties on the existence and
enforceability of this Guaranty.
10. NOTICES. Any notice, demand or request by Secured Parties, or their
successors or assigns, to Guarantor shall be in writing, and shall be deemed to
have been received upon: (i) personal delivery; (ii) telex; (iii) facsimile; or
(iv) within 24 hours following deposit with an overnight courier or
international courier. Notice may be given to Guarantor at 0000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000.
11. JOINT AND SEVERAL LIABILITY. Guarantor's liability under this Guaranty
shall be joint and several with any other party liable for the Indebtedness,
including Debtor.
12. ASSIGNMENT. This Guaranty shall inure to the benefit of Secured
Parties and their successors and assigns including each and every subsequent
holder or owner of any of the Indebtedness guaranteed hereby. In the event that
there shall be more than one such holder or owner, this Guaranty shall be deemed
a separate contract with each such holder and owner. In the event that any
person other than Secured Party shall become a holder or owner of any of the
Indebtedness, each Secured Parties shall become a holder or owner of any of the
Indebtedness, each reference to Secured Parties hereunder shall be construed as
if it referred to each such holder or owner.
13. INFORMATION. Guarantor shall have the responsibility of keeping
advised of Xxxxxx's dealings and all matters which are or may become subject to,
or covered by, this Guaranty. Secured Parties shall have no obligation or
liability to Guarantor whatsoever in connection therewith.
14. CHOICE OF LAWS. The laws of the State of Michigan shall govern this
Guaranty and all rights and obligations hereunder, including matters of
construction, validity and performance.
15. SEVERABILITY. If any provision or clause of this Guaranty or the
application hereof is to be held invalid, that invalidity shall not affect other
provisions or applications of this Guaranty which can be given effect without
the invalid provision or application, and to this end the provisions of this
Guaranty are declared to be severable.
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16. CAPTIONS. Captions to paragraphs of this Guaranty are inserted for
convenience only and are not a part of this Guaranty. In interpreting this
Guaranty, they shall not be deemed in any manner to modify, explain, enlarge or
restrict any of the provisions of this Guaranty.
17. GUARANTY FREELY DELIVERED. This Guaranty has been freely and
voluntarily given to Secured Parties by Guarantor, without any duress or
coercion and after Guarantor has either consulted with counsel or been given an
opportunity to do so. Guarantor has carefully and completely read all of the
terms and provisions of this Guaranty.
18. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon Guarantor
and its successors and assigns.
THIS GUARANTY has been executed on this 26 day of April, 2004.
XXXXXX WELDING COMPANY
"Guarantee"
/s/ Xxxxxxx X. Xxxxxxx
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By:
Its:
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