EXHIBIT 10.58
CONTINUING GUARANTY AGREEMENT
FOR VALUE RECEIVED as of this 21ST day of December, 2001, the undersigned
(hereinafter referred to as "Guarantor") guarantees unconditionally the full and
prompt payment and performance to FLEET CAPITAL CORPORATION, a Rhode Island
corporation ("Fleet", and collectively with the other financial institution(s)
from time to time a party to the Loan Agreement defined below, "Lenders"), and
Fleet, as agent for Lenders ("Agent"), at Agent's office in Dallas County,
Texas, upon demand, of the following obligations and indebtedness of each of the
following (individually, a "Borrower" and collectively, the "Borrowers"): IDS
ENGINEERING, INC., a Texas corporation ("IDS Engineering"), THERMAIRE, INC., a
Texas corporation ("Thermaire"), CONSTANT POWER MANUFACTURING, INC., a Texas
corporation ("Constant Power"), INDUSTRIAL DATA SYSTEMS, INC., a Texas
corporation ("Data"), IDS ENGINEERING MANAGEMENT, LC, a Texas limited liability
company ("Management", and collectively with IDS Engineering, Thermaire, Data
and Constant Power, "New Borrowers"), PETROCON ENGINEERING, INC., a Texas
corporation ("Petrocon"), TRIANGLE ENGINEERS AND CONSTRUCTORS, INC., a Texas
corporation ("Triangle"), PETROCON SYSTEMS, INC., a Texas corporation ("Petrocon
Systems"), PETROCON ENGINEERING OF LOUISIANA, INC., a Louisiana corporation
("Petrocon Louisiana"), R.P.M. ENGINEERING, INC., a Louisiana corporation
("RPM"), PETROCON CONSTRUCTION RESOURCES, INC., a Texas corporation ("Petrocon
Construction"), PETROCON TECHNOLOGIES, INC., a Texas corporation ("Petrocon
Technologies"), and ALLIANCE ENGINEERING ASSOCIATES, INC., a Texas corporation
("Alliance", and collectively with Petrocon, Triangle, Petrocon Systems,
Petrocon Louisiana, RPM, Petrocon Construction and Petrocon Technologies,
"Original Borrowers").
Any and all indebtedness and obligations, whether direct or indirect,
absolute or contingent, primary or secondary, joint or several, and all
renewals, modifications and extensions thereof for which Borrower is now or
hereafter may become liable or indebted to Lenders, whether arising by loan
agreements, notes, drafts, acceptances, letters of credit, overdrafts,
assignments, participations, discounts or otherwise, and all interest accruing
thereon (including, without limitation, interest which would accrue but for the
commencement of a bankruptcy proceeding), fees charged in connection therewith
and reimbursable expenses incurred in connection therewith, whether by lapse of
time, acceleration of maturity, or otherwise, including such indebtedness and
obligations now or hereafter arising on account of (i) the Obligations, as
defined in that certain Second Amended and Restated Loan and Security Agreement,
dated as of the date hereof (as the same may be renewed, extended, modified or
replaced from time to time, the "Loan Agreement"), by and between Agent, Lenders
and Borrowers, as governed by the provisions of Section 1.7 of the Loan
Agreement, (ii) any document executed in connection with or as security for
payment of the Obligations or any renewal, extension, or modification thereof,
including, without limitation, that certain (A) Term Note, dated as of June 15,
1999, in the principal amount of $522,285.70, executed by Original Borrowers and
payable to the order of Fleet (as the same may be renewed, extended, modified,
or replaced from time to time) and (B) Amended and Restated Revolving Note,
dated as of the date hereof, in the principal amount of $15,000,000, executed by
Borrowers and payable to the order of Fleet (as the same may be renewed,
extended, modified, or replaced from time to time); and (iii) all costs,
reasonable
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attorneys' fees, and other expenses incurred by Lenders by reason of any default
by Borrower under any of the foregoing (all of the foregoing are hereinafter
referred to as the "Obligations").
At the time Guarantor pays any sum which may become due Lenders under the
terms of this Guaranty Agreement (this "Guaranty"), written notice of such
payment shall be delivered to Lenders by Guarantor, and in the absence of such
notice, any sum received by Lenders on account of any of the Obligations shall
be conclusively deemed paid by Borrower. All sums paid Lenders by Guarantor may
be applied by Lenders at their discretion upon any of the Obligations. To
further secure payment of the Obligations, Guarantor grants to Lenders, in
addition to all other contractual, legal, and equitable rights of Lenders, the
right to offset against any account, certificate of deposit, or other funds of
Guarantor in the possession of or under the control of Lenders.
Guarantor hereby waives notice of acceptance of this Guaranty and all other
notices in connection herewith or in connection with the Obligations, including
without limitation, notice of intent to accelerate and notice of acceleration,
and waives diligence, presentment, demand, protest, and suit on the part of
Lenders in the collection of any of the Obligations, and agrees that Lenders
shall not be required to first endeavor to collect any of the Obligations from
Borrower, or any other party liable for payment of the Obligations (hereinafter
referred to as an "Obligated Party"), before requiring Guarantor to pay the full
amount of the Obligations to the extent due. Without impairing the rights of
Lenders against Guarantor, any Obligated Party, or Borrower, suit may be brought
and maintained against Guarantor at the election of Lenders with or without
joinder of Borrower or any Obligated Party, any right to any such joinder being
hereby waived by Guarantor.
Guarantor acknowledges and represents to Lenders it is receiving a direct
and/or indirect benefit as a result of this Guaranty and the Obligations;
represents to Lenders that after giving effect to this Guaranty and the
contingent obligations evidenced hereby it is, and will be, solvent;
acknowledges that this Guaranty is operative and binding as to it without
reference to whether it is signed by a person under any legal disability;
acknowledges that its liability hereunder shall be cumulative and in addition to
any other liability or obligation to Lenders, whether the same is incurred
through the execution of a note, a similar guaranty, through endorsement, or
otherwise; and acknowledges that neither Lenders nor any officer, employee,
agent, attorney, or other representative of Lenders has made any representation,
warranty, or statement to Guarantor to induce it to execute this Guaranty.
Guarantor hereby agrees that, except as hereinafter provided, its
obligations under this Guaranty shall be continuing, absolute and unconditional,
irrespective of (i) the validity or enforceability of the Obligations or of any
promissory note or other document evidencing all or any part of the Obligations,
(ii) the absence of any attempt to collect the Obligations from Borrower or any
other Obligated Party or other action to enforce the same, (iii) the waiver or
amendment by Lenders with respect to any provision of any instrument evidencing
the Obligations, or any part thereof, or any other agreement now or hereafter
executed by Borrower and delivered to Lenders, (iv) failure by Lenders to take
any steps to perfect and maintain its security interest in, or to preserve its
rights to, any security or collateral for the Obligations, (v)
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the surrender, release, exchange, or alteration by Lenders of any security or
collateral for the Obligations, (vi) Lenders' election, in any proceeding
instituted under Chapter 11 of Title 11 of the United States Code (11 U.S.C.
(S)101 et seq.) (as amended from time to time, the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code, (vii) any borrowing or
grant of a security interest by Borrower, as debtor-in-possession, under Section
364 of the Bankruptcy Code, (viii) the disallowance of all or any portion of
Lenders' claim(s) for repayment of the Obligations under Section 502 of the
Bankruptcy Code, or (ix) any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.
No release, waiver, or discharge of Borrower or any Obligated Party from
liability for payment of any of the Obligations nor any renewal,
supplementation, modification, rearrangement or acceleration of any of the
Obligations, nor any amendment of any document evidencing any of the
Obligations, either express or implied, shall relieve Guarantor from liability
for payment of the full amount of the Obligations then or thereafter
outstanding; and Guarantor will immediately pay all Obligations, to the extent
due, to Lenders or other person entitled thereto, regardless of any defense
(other than payment), right of set-off, or counterclaim which Borrower or any
Obligated Party may have or assert, and regardless of whether Lenders or any
other party shall have taken any steps to enforce any rights against Borrower,
any Obligated Party, or any other party to collect such sum, and regardless of
any other condition or contingency, including, without limitation, any neglect,
delay, or omission of Lenders. Lenders are hereby authorized, without notice or
demand and without affecting the liability of Guarantor, to, from time to time:
(i) accept partial payments on the Obligations; (ii) take and hold security or
collateral for the payment of this Guaranty or any other guarantees of the
Obligations, and exchange, enforce, waive and release any such security or
collateral; and (iii) apply such security or collateral therefor in any manner,
without affecting or impairing the obligations of Guarantor hereunder.
Notwithstanding anything to the contrary contained herein, until the
Obligations shall have been indefeasibly paid in full as determined by Lenders,
Guarantor shall not have any right, claim or action, now or hereafter, against
Borrower or any other Obligated Party arising out of or in connection with this
Guaranty or any other document evidencing or securing the Obligations,
including, without limitation, any right or claim of subrogation, contribution,
reimbursement, exoneration, or indemnity, all such rights and claims being
hereby expressly and absolutely waived.
Guarantor is familiar with, and has independently reviewed the financial
condition of, Borrower and hereby assumes responsibility for keeping itself
informed of the financial condition of Borrower, and any and all endorsers
and/or other guarantors of any instrument or document evidencing all or any part
of the Obligations and of all other circumstances bearing upon the risk of
nonpayment of the Obligations or any part thereof that diligent inquiry would
reveal. Guarantor hereby agrees that Lenders shall have no duty to advise
Guarantor of information known to Lenders regarding such condition or any such
circumstances. Guarantor is not relying on the financial condition of Borrower
or the value of any collateral for the Obligations as an inducement to enter
into this Guaranty. If Lenders, in their sole discretion, undertake at any time
or from time to time to provide any such information to Guarantor, Lenders shall
be under no
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obligation (i) to undertake any investigation not a part of its regular business
routine, (ii) to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, Lenders wish to maintain confidential,
or (iii) to make any other or future disclosures of such information or any
other information to Guarantor.
Guarantor consents and agrees that Lenders shall be under no obligation to
marshal any assets in favor of Guarantor or against or in payment of any or all
of the Obligations. Guarantor further agrees that, to the extent that Borrower
makes a payment or payments to Lenders, or Lenders receive any proceeds of
collateral, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to Borrower, its estate(s), trustee(s), receiver(s) or any
other party, including, without limitation, Guarantor, under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the Obligations or part thereof which has been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred, and this Guaranty, if previously terminated, shall be reinstated for
the benefit of Lenders.
Lenders may, without notice to Guarantor or any other party, assign their
rights hereunder to any holder of the Obligations, in whole or in part, and upon
any such assignment all the terms and provisions of this Guaranty shall inure to
the benefit of such assignee, to the extent so assigned.
Lenders are relying and are entitled to rely upon each and all of the
provisions of this Guaranty; and, accordingly, if any provision of this Guaranty
should be held to be invalid or ineffective, then all other provisions shall
continue in full force and effect notwithstanding.
Any and all notices, requests and demands to or upon Guarantor to be
effective shall be in writing, and shall be sent by certified or registered
mail, return receipt requested, by personal delivery against receipt, or by
overnight courier or by facsimile transmission and, unless otherwise expressly
provided herein, shall be deemed to have been validly served, given, or
delivered immediately when delivered against receipt, or three (3) business days
after deposit in the mail, postage prepaid, or with an overnight courier or, in
the case of facsimile transmission, when sent, answerback received, in each case
addressed to the address set forth opposite Guarantor's signature below.
It is the intention of Borrower, Guarantor, and Lenders to conform strictly
to applicable usury laws. Accordingly, no agreements, conditions, provisions or
stipulations contained in this Guaranty or any other instrument, document or
agreement between Guarantor or Borrower and Lenders or default of Guarantor or
Borrower, or the exercise by Lenders of the right to accelerate the payment of
the maturity of principal and interest, or to exercise any option whatsoever
contained in this Guaranty or any other agreement between Guarantor or Borrower
and Lenders, or the arising of any contingency whatsoever, shall entitle Lenders
to charge or collect, in any event, interest exceeding the maximum rate of
interest permitted by applicable state or federal law in effect from time to
time hereafter (the "Maximum Legal Rate") and in no event shall Guarantor be
obligated to pay interest exceeding such Maximum Legal Rate and all agreements,
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conditions or stipulations, if any, which may in any event or contingency
whatsoever operate to bind, obligate or compel Guarantor to pay a rate of
interest exceeding the Maximum Legal Rate, shall be without binding force or
effect, at law or in equity, to the extent only of the excess of interest over
such Maximum Legal Rate. In the event any interest is charged or collected in
excess of the Maximum Legal Rate ("Excess Interest"), Guarantor acknowledges and
stipulates that any such charge or collection shall be the result of an accident
and bona fide error, and such Excess Interest shall be, first, applied to reduce
the Obligations; and second, returned to Guarantor, it being the intention of
the parties hereto not to enter at any time into a usurious or otherwise illegal
relationship. Guarantor recognizes that, with fluctuations in the applicable
rate on the Obligations and the Maximum Legal Rate, such an unintentional result
could inadvertently occur. By the execution of this Guaranty, Guarantor
covenants that (i) the credit or return of any Excess Interest shall constitute
the acceptance by Guarantor of such Excess Interest, and (ii) Guarantor shall
not seek or pursue any other remedy, legal or equitable, against Lenders, based
in whole or in part upon the contracting, charging or receiving of any interest
in excess of the maximum rate authorized by applicable law. For the purpose of
determining whether or not any Excess Interest has been contracted for, charged
or received by Lenders, all interest at any time contracted for, charged or
received by Lenders in connection with this Guaranty shall be amortized,
prorated, allocated and spread in equal parts during the entire term of this
Guaranty.
Anything contained in this Guaranty to the contrary notwithstanding, the
obligations of Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the largest amount that would not render Guarantor's obligations
hereunder subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of Title 11 of the United States Code or any applicable provisions
of comparable state law (collectively, the "Fraudulent Transfer Laws"), in each
case after giving effect to all other liabilities of Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws and after giving
effect as assets to the value (as determined under the applicable provisions the
Fraudulent Transfer Laws) of any rights to subrogation or contribution of
Guarantor pursuant to (i) applicable law or (ii) any agreement providing for an
equitable allocation among Guarantor and other affiliates of Borrower of
obligations under guaranties by such parties.
If the Indebtedness or any portion thereof is guaranteed by two or more
guarantors, the obligation of Guarantor shall be several and also joint, each
with all and also each with any one or more of the others, and may be enforced
at the option of Lenders against each severally, any two or more jointly, or
some severally and some jointly. Lenders, in their sole discretion, may release
any one or more of such guarantors for any consideration which it deems
adequate, and may fail or elect not to prove a claim against the estate of any
bankrupt, insolvent, incompetent or deceased guarantor; and thereafter without
notice to any other guarantor, Lenders may extend or renew any part or all of
any Obligations and may permit the Borrower to incur additional Obligations,
without affecting in any manner the unconditional obligation of the remaining
guarantor(s). Such action by Lenders shall not, however, be deemed to affect any
right to contribution which may exist among the guarantors.
If any sum due Lenders by Guarantor hereunder is placed in the hands of an
attorney for collection, or is collected through probate, bankruptcy, or other
court proceeding, then Guarantor
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promises to pay Lenders all reasonable costs, attorneys' fees, and other
expenses incurred by Lenders pursuant to such collection efforts.
The value of the consideration received and to be received by Guarantor as
a result of Lenders making extensions of credit to Borrower, and Guarantor
executing and delivering this Guaranty, is reasonably worth at least as much as
the liability and obligation of Guarantor hereunder, and such liability and
obligation and such extensions of credit may reasonably be expected to benefit
Guarantor directly or indirectly.
This Guaranty shall be terminated at such time as the Obligations are
fully, finally and irrevocably satisfied in full.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF TEXAS AND NOT THE LAWS OF CONFLICTS OF THE STATE
OF TEXAS. AS PART OF THE CONSIDERATION FOR NEW VALUE AND BENEFIT THIS DAY
RECEIVED BY GUARANTOR, GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN DALLAS COUNTY OF THE STATE OF TEXAS AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO
GUARANTOR AT THE ADDRESS STATED HEREIN AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON ACTUAL RECEIPT THEREOF. GUARANTOR WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN
AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE IN
ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN.
EXCEPT AS OTHERWISE PROVIDED FOR IN THIS GUARANTY, GUARANTOR WAIVES THE
RIGHT TO TRIAL BY JURY (WHICH LENDERS HEREBY ALSO WAIVE) IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
GUARANTY OR THE OBLIGATIONS.
THIS WRITTEN GUARANTY, TOGETHER WITH ALL OTHER INSTRUMENTS, AGREEMENTS AND
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CERTIFICATES EXECUTED BY THE PARTIES IN CONNECTION WITH THE OBLIGATIONS OR WITH
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REFERENCE HERETO OR THERETO, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
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AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
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ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
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THE PARTIES.
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
first above written.
INDUSTRIAL DATA SYSTEMS CORPORATION,
a Nevada corporation
By:
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Name:
---------------------------------
Title:
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