Exhibit 10.4

 

GUARANTY AGREEMENT

This Guaranty Agreement (as amended, amended and restated, supplemented or
otherwise modified, renewed or replaced from time to time, this “Guaranty
Agreement”), dated as of November 9, 2018, is executed by ISA INDIANA REAL
ESTATE, LLC, a Kentucky limited liability company (“ISA IN Real Estate”), ISA
LOGISTICS LLC, a Kentucky limited liability company (“ISA Logistics”), ISA
INDIANA, INC., an Indiana corporation (“ISA Indiana”), ISA REAL ESTATE, LLC, a
Kentucky limited liability company (“ISA Real Estate”), 7021 GRADE LANE LLC, a
Kentucky limited liability company (“7021 Grade Lane” and, together with ISA IN
Real Estate, ISA Logistics, ISA Indiana, and ISA Real Estate, individually and
collectively, jointly and severally, the “Guarantor”) in favor of BANK OF
AMERICA, N.A. (“Lender”). 

RECITALS

WHEREAS, pursuant to that certain Loan and Security Agreement dated as of the
date hereof by and among INDUSTRIAL SERVICES OF AMERICA, INC. a Florida
corporation (“ISA”), 7124 GRADE LANE LLC, a Kentucky limited liability company
(“7124 Grade Lane”)  and 7200 GRADE LANE LLC, a Kentucky limited liability
company (“7200 Grade Lane”; and together with ISA, each individually a
“Borrower” and collectively, the “Borrowers”) and Lender (including all annexes,
exhibits and schedules thereto, and as amended, amended and restated,
supplemented and otherwise modified, renewed or replaced from time to time, the
“Loan Agreement”), Lender has agreed to make loans and other financial
accommodations to Borrower; and

WHEREAS, each Guarantor is an direct and/or indirect subsidiary or affiliate of
Borrowers and, as a result thereof, Guarantor will benefit, directly or
indirectly, from the credit facility and other financial accommodations provided
to Borrower under the Loan Agreement; and

WHEREAS, it is a condition to the effectiveness of the Loan Agreement that this
Guaranty Agreement be executed and delivered by the parties hereto.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby agrees for the benefit of Lender as follows:

1.                  DEFINITIONS. Except as specifically defined in this Guaranty
Agreement, capitalized terms used herein shall have the respective meanings
given thereto in the Loan Agreement.

2.                  GUARANTY.

2.1              Guaranty.

(a)    Each Guarantor unconditionally and irrevocably, and jointly and severally
guarantees to Lender the due and punctual payment and performance of the
Obligations (the “Guaranteed Obligations”). Each Guarantor further agrees that
the Guaranteed Obligations may be extended or renewed, in whole or in part,
without notice or further assent from it, and it will remain bound upon this
Guaranty Agreement notwithstanding any extension or renewal of any Guaranteed
Obligation.

(b)    Each Guarantor, to the extent permitted by applicable law, waives (A)(i)
presentation to, demand for payment from and protest to, as the case may be,
Borrowers or any other guarantor of any of the Guaranteed Obligations; (ii)
notice of protest for nonpayment, notice of acceleration and notice of intent to
accelerate; and (iii) the future change to the time, manner or place of payment
of, or in any other term of all or any part of the Obligations.  The obligations
of Guarantor hereunder shall not be affected by: (B) (i) the failure of Lender
to assert any claim or demand or to exercise or enforce any right or remedy
against Borrowers or any other guarantor of any of the Guaranteed Obligations
under the provisions of the Loan Agreement or any other Loan Document or
otherwise; (ii) any extension or renewal of any provision hereof or of the Loan
Agreement or any of the Loan Documents; (iii) any rescission, waiver,
compromise, acceleration, amendment or modification of any of the terms or
provisions of the Loan Agreement or of any other Loan Document; (iv) the
discharge or release by Lender of  Guarantor from its Guaranteed Obligations (or
any portion thereof) or any other guarantor of such guarantor’s obligations (or
any portion thereof); or (v) the failure to perfect any security interest in or
the release, exchange, waiver or foreclosure of any security held by Lender for
the Guaranteed Obligations. Guarantor specifically acknowledges and agrees that
but for this Guaranty and the waivers made by Guarantor, Lender would not extend
financial accommodations to Borrowers.

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(c)    Guarantor further agrees that this Guaranty Agreement constitutes a
guaranty of performance and of payment when due and not just of collection, and
waives, to the fullest extent permitted by applicable law, any right to require
that any resort be had by Lender to any security held for payment of the
Guaranteed Obligations or to any balance of any deposit, account or credit on
the books of Lender in favor of Borrowers or any other guarantor of any of the
Guaranteed Obligations or to any other Person.

(d)    Guarantor hereby expressly acknowledges that Lender shall have no
responsibility to keep Guarantor informed of the financial condition of
Borrowers or any other guarantor of any of the Guaranteed Obligations or of any
circumstances affecting Borrowers’ collateral or the ability of Borrowers to
perform under the Loan Agreement.

(e)    This Guaranty Agreement shall not be affected by the genuineness,
validity, regularity or enforceability of the Guaranteed Obligations, or any
other instrument evidencing any of the Guaranteed Obligations, or by the
existence, validity, enforceability, perfection, or extent of any collateral
therefor or by any other circumstance relating to the Guaranteed Obligations
(other than final payment in full of the Guaranteed Obligations) which might
otherwise constitute a defense to this Guaranty Agreement. Lender makes no
representation or warranty in respect to any such circumstances and has no duty
or responsibility whatsoever to Guarantor in respect to the management and
maintenance of the Guaranteed Obligations or Borrowers’ collateral.

2.2    No Impairment of Guaranty. The obligations of Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim or waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense (other than by
payment of the Guaranteed Obligations in full) or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of Lender to
assert any claim or demand or to enforce any remedy hereunder or under the Loan
Agreement or any other Loan Document, by any waiver or delay, willful or
otherwise, in the performance of the Guaranteed Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of Guarantor or would otherwise
operate as a discharge of Guarantor as a matter of law, unless and until the
Guaranteed Obligations are paid in full.

2.3    Continuation and Reinstatement, etc.  Guarantor further agrees that its
guaranty hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or interest
on any Guaranteed Obligation is rescinded or must otherwise be restored by
Lender upon the bankruptcy or other reorganization of Borrowers or any other
guarantor of any of the Guaranteed Obligations or otherwise. In furtherance of
the provisions of this Guaranty Agreement, and not in limitation of any other
right which Lender may have at law or in equity against Borrowers or any other
guarantor of any of the Guaranteed Obligations, by virtue hereof, upon failure
of Borrower to pay any Obligation when and as the same shall become due, whether
at maturity, by acceleration, after notice or otherwise, Guarantor hereby
promises to and will, upon demand by Lender, forthwith pay or cause to be paid
to Lender an amount equal to the unpaid amount of all Guaranteed Obligations
arising in connection with the Loan Agreement, together with interest on the
portion thereof that represents outstanding Obligations at the rate provided for
in the Loan Agreement.

 

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All rights of Guarantor against Borrowers or any other guarantor of the
Obligations arising by way of right of subrogation or otherwise shall in all
respects be subordinate and junior in right of payment to the prior payment in
full of all the Guaranteed Obligations to Lender. In furtherance of the
foregoing, until the Guaranteed Obligations have been paid in full, (i)
Guarantor hereby postpones and agrees not to exercise any right of subrogation,
contribution or indemnification Guarantor has or may have as against Borrowers
or any other guarantor of the Obligations with respect to the Guaranteed
Obligations; (ii) Guarantor hereby postpones and agrees not to exercise any
right to proceed against Borrowers or any other Person now or hereafter liable
on account of the Obligations for contribution, indemnity, reimbursement, or any
other similar rights (irrespective of whether direct or indirect, liquidated or
contingent) with respect to the Guaranteed Obligations; and (iii) Guarantor
hereby postpones and agrees not to exercise any right it may have to proceed or
to seek recourse against or with respect to any property or asset of Borrowers
or any other Person now or hereafter liable on account of the Obligations in
respect of the Guaranteed Obligations. If an amount shall be paid to Guarantor
for the account of Borrowers in respect of the rights referred to in this
paragraph, such amount shall be held in trust for the benefit of Lender to be
credited and applied to the Guaranteed Obligations, whether matured or
unmatured.

2.4    Limitation on Guaranteed Amount.  Notwithstanding any other provision of
this Guaranty Agreement, the amount guaranteed by Guarantor hereunder shall be
limited to the extent, if any, required so that its obligations under this
Guaranty Agreement shall not be rendered voidable or avoidable under Section 548
of Chapter 11 of the Bankruptcy Code or to being set aside or annulled under any
applicable state law or foreign statute relating to fraud on creditors or under
common law. In determining the limitations, if any, on the amount of Guarantor’s
obligations hereunder pursuant to the preceding sentence, any rights of
subrogation or contribution which Guarantor may have under this Guaranty
Agreement or applicable statute shall be taken into account.

3.                  REPRESENTATIONS AND WARRANTIES.

Guarantor makes the following representations and warranties, all of which shall
survive the execution and delivery of the Loan Agreement and this Guaranty
Agreement:

(i)    the execution, delivery and performance of this Guaranty Agreement (a) to
Guarantor’s knowledge, will not violate any provision of applicable law, any
order of any court or other agency of the United States or any state thereof,
applicable to Guarantor or any of its properties or assets; (b) does not require
the consent or approval of any Person or entity, including but not limited to
any governmental authority, or any filing or registration of any kind except
those already obtained; and (c) is the legal, valid and binding obligation of
Guarantor enforceable against Guarantor in accordance with its terms, except to
the extent that enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors’ rights generally, and general
principles of equity;   

(ii)    in executing and delivering this Guaranty Agreement, Guarantor has (a)
without reliance on Lender or any information received from Lender and based
upon such documents and information it deems appropriate, made an independent
investigation of the transactions contemplated hereby and Borrowers, Borrowers’
businesses, assets, operations, prospects and condition, financial or otherwise,
and any circumstances which may bear upon such transactions, Borrowers or the
obligations and risks undertaken herein with respect to the Guaranteed
Obligations; (b) adequate means to obtain from Borrowers on a continuing basis
information concerning Borrowers; (c) has full and complete access to the Loan
Documents and any other documents executed in connection with the Loan
Documents; and (d) not relied and will not rely upon any representations or
warranties of Lender not embodied herein or any acts heretofore or hereafter
taken by Lender (including but not limited to any review by Lender of the
affairs of Borrowers);

(iii)    the execution, delivery and performance of this Guaranty Agreement will
not result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any properties or assets of Guarantor other than
pursuant to this Guaranty Agreement or the other Loan Documents to which it is a
party; and

(iv)    Guarantor (a) has received, or will receive, direct and/or indirect
benefit from the making of the Loans to Borrowers; and (b) has received, or will
receive, direct and/or indirect benefit from the making of this Guaranty
Agreement with respect to the Guaranteed Obligations.

 

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4.                  MISCELLANEOUS

4.1    Notices. All communications and notices hereunder shall be in writing and
given as provided in Section 12.3 of the Loan Agreement, provided that all
communications and notices hereunder to Guarantor shall be given to Guarantor at
the address set forth on the signature page hereof.

4.2    Binding Effect; Several Agreement; Assignments. Whenever in this Guaranty
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the executors, administrators, successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of Guarantor
that are contained in this Guaranty Agreement shall bind and inure to the
benefit of each party hereto and their respective executors, administrators,
successors and assigns.  This Guaranty Agreement shall become effective as to
Guarantor when a counterpart hereof executed on behalf of Guarantor shall have
been delivered to Lender, and a counterpart shall have been executed on behalf
of Lender, and thereafter shall be binding upon Guarantor and Lender and their
respective executors, administrators, successors and assigns, and shall inure to
the benefit of Guarantor, Lender, and their respective executors,
administrators, successors and assigns, except that Guarantor shall not have the
right to assign its rights or obligations hereunder or an interest herein (and
any such attempted assignment shall be void).

4.3     SERVICE OF PROCESS. GUARANTOR (I) HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK AND TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
OR BASED UPON THIS GUARANTY AGREEMENT, OR THE SUBJECT MATTER HEREOF BROUGHT BY
LENDER OR ITS SUCCESSORS AND ASSIGNS, (II) HEREBY WAIVES, AND AGREES NOT TO
ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION
OR PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION
OF THE ABOVE‑NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT
OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT
THIS GUARANTY AGREEMENT OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE
ENFORCED IN OR BY SUCH COURT, AND (III) HEREBY AGREES NOT TO ASSERT ANY OFFSETS
OR COUNTERCLAIMS (OTHER THAN COMPULSORY COUNTERCLAIMS) IN ANY SUCH ACTION, SUIT
OR PROCEEDING. GUARANTOR HEREBY CONSENTS TO SERVICE OF PROCESS IN THE MANNER
PROVIDED FOR NOTICES IN SECTION 4.1 HEREOF, PROVIDED, HOWEVER, THAT NOTHING IN
THIS GUARANTY AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.  A FINAL JUDGMENT AGAINST
GUARANTOR IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE
ENFORCED IN OTHER JURISDICTIONS (X) BY SUIT, ACTION OR PROCEEDING ON THE
JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE
FACT AND OF THE AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF GUARANTOR OR (Y) IN
ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION,
PROVIDED, HOWEVER, THAT LENDER MAY AT ITS OPTION BRING SUIT, OR INSTITUTE OTHER
JUDICIAL PROCEEDINGS AGAINST GUARANTOR OR ANY OF ITS ASSETS IN ANY STATE OR
FEDERAL COURT OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE GUARANTOR OR
SUCH ASSETS MAY BE FOUND.

4.4    GOVERNING LAW. THIS GUARANTY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (BUT WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICT OF LAWS).

4.5    No Waiver, etc. Neither a failure nor a delay on the part of Lender in
exercising any right, power or privilege under this Guaranty Agreement shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege. The
rights, remedies and benefits of Lender expressly specified herein are
cumulative and not exclusive of any other rights, remedies or benefits which
Lender may have under this Guaranty Agreement, at law, in equity, by statute, or
otherwise.

 

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4.6    Modification, etc. No modification, amend­ment or waiver of any provision
of this Guaranty Agreement, nor the consent to any departure by Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Lender, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on Guarantor in any case shall entitle Guarantor to any other or further
notice or demand in the same, similar or other circumstances.

4.7    Severability. If any one or more of the provisions contained in this
Guaranty Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall in no way be affected or impaired thereby.

4.8    Headings. Section headings used herein are for convenience of reference
only and are not to affect the construction of, or be taken into consideration
in interpreting, this Guaranty Agreement.

4.9    Counterparts. This Guaranty Agreement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken to
together shall constitute a single contract, and shall become effective as
provided in Section 4.2. Delivery of an executed signature page to this Guaranty
Agreement by facsimile or other electronic transmission shall be as effective as
delivery of a manually executed counterpart to this Guaranty Agreement.

4.10    WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, GUARANTOR HEREBY WAIVES AND COVENANTS (WHICH LENDER
HEREBY ALSO WAIVES AND COVENANTS) THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED
UPON THIS GUARANTY AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE.
GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY LENDER THAT THE PROVISIONS
OF THIS SECTION 4.10 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH LENDER HAS
RELIED, IS RELYING AND WILL RELY IN ENTERING INTO THIS GUARANTY AGREEMENT. 
GUARANTOR AND LENDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
4.10 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF GUARANTOR TO THE
WAIVER OF ITS RIGHTS TO TRIAL BY JURY.

4.11    Right of Setoff. If an Event of Default under the Loan Agreement shall
have occurred and be continuing, Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by Lender to or for
the credit or the account of Guarantor against any or all of the obligations of
Guarantor now or hereafter existing under this Guaranty Agreement and the other
Loan Documents held by Lender, irrespective of whether or not Lender shall have
made any demand under this Guaranty Agreement or any other Loan Document and
although such obligations may be unmatured.  The rights of Lender under this
Section 4.11 are in addition to the other rights and remedies (including other
rights of setoff) which Lender may have.

 

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IN WITNESS WHEREOF, Guarantor has executed this Guaranty Agreement as of the
date first written above.

Address for Guarantors:

 

7100 Grade Lane, Bldg. 1

            Louisville, KY 40213

Attn: Todd Phillips

 

GUARANTORS:

 

ISA INDIANA, INC.

 

By:         /s/ Todd L. Phillips                                          

Todd L. Phillips, President, Secretary and Treasurer 

 

 

ISA LOGISTICS LLC

 

BY: INDUSTRIAL SERVICES OF AMERICA, INC., Sole Member

 

By:         /s/ Todd L. Phillips                                          

Todd L. Phillips, Chief Executive Officer, President and Chief Financial
Officer 

 

 

ISA REAL ESTATE, LLC

 

BY: INDUSTRIAL SERVICES OF AMERICA, INC., Manager

 

By:         /s/ Todd L. Phillips                                          

Todd L. Phillips, Chief Executive Officer, President and Chief Financial
Officer 

 

 

7021 GRADE LANE LLC

 

BY: INDUSTRIAL SERVICES OF AMERICA, INC., Manager

 

By:         /s/ Todd L. Phillips                                          

Todd L. Phillips, Chief Executive Officer, President and Chief Financial
Officer 

 

 

ISA INDIANA REAL ESTATE, LLC

 

BY: INDUSTRIAL SERVICES OF AMERICA, INC., Manager

 

By:         /s/ Todd L. Phillips                                          

Todd L. Phillips, Chief Executive Officer, President and Chief Financial
Officer 

 

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