EXHIBIT 10.4
GUARANTY
Whereas, PFSWeb, Inc., among others, has requested that Fleet National Bank
enter into the Agreement (as such term is defined below) with Priority
Fulfillment Services, Inc.; and
Whereas, PFSWeb, Inc. is the majority holder and owner of all of the stock of
Priority Fulfillment Services, Inc. and also intends to benefit from the use of
the aircraft subject to the Agreement (in accordance with all applicable law,
including, without limitation, all applicable Federal Aviation Administration
rules and regulations); and
Whereas, in order to induce Fleet National Bank to enter into the Agreement with
Priority Fulfillment Services, Inc., PFSWeb, Inc., has offered and agreed to
guarantee all of the obligations of Priority Fulfillment Services, Inc. to Fleet
National Bank under, among other things, the Agreement; and
Whereas, Fleet National Bank has agreed to enter into the Agreement, subject to
the terms and conditions of the Agreement and its receipt of, among other
things, this Guaranty from PFSWeb, Inc.
This Guaranty (this "GUARANTY") is executed and delivered as of the date set
forth below by the undersigned guarantor (the "GUARANTOR") in favor of FLEET
NATIONAL BANK, located at c/o Fleet Capital Corporation, Xxx Xxxxxxxxx Xxxxx,
Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000-2305 ("FLEET"). Priority Fulfillment Services,
Inc. located at 000 Xxxxx Xxxxxxx Xxxxxxxxxx, 0xx Xxxxx, Xxxxx, Xxxxx 00000
("CUSTOMER") has requested that Fleet enter into that certain Lease (S/N 143)
dated as of August 25, 2004 (as amended, supplemented or restated from time to
time, and together with any and all other documents, instruments, certificates
and other agreements relating thereto, including, without limitation, any
promissory notes relating thereto, the "AGREEMENT"), between Fleet and Customer,
and this Guaranty is a condition to Fleet's entering into the Agreement. The
term "CUSTOMER," if defined to include more than one party, shall mean "CUSTOMER
AND EACH OF THEM" and this Guaranty shall secure payment of all of their
respective Obligations (hereinafter defined) to Fleet. Fleet is unwilling to
enter the Agreement with Customer, unless Guarantor absolutely and
unconditionally guarantees to Fleet the payment and performance of all such
Obligations of Customer at any time owing to Fleet. With knowledge that Xxxxx
will enter into the Agreement with or otherwise extend financial accommodations
to Customer in reliance upon the existence of this Guaranty and the validity and
enforceability of the obligations and liabilities of Guarantor to Fleet
contemplated hereby, Guarantor agrees with Fleet as follows:
1. GUARANTY. Guarantor guarantees to Fleet the prompt payment and/or performance
of all indebtedness, obligations and liabilities of Customer at any time owing
to Fleet, whether direct or indirect, matured or unmatured, primary or
secondary, certain or contingent, or acquired by or otherwise created in favor
of Fleet, including without limitation any and all rent, loan, purchase or other
installment payments, principal balances, taxes, indemnities, liquidated
damages, accelerated amounts, return deficiency charges, casualty value
payments, transaction expenses and other reimbursements, administrative charges,
all interest, including late charge interest, attorneys' fees or enforcement and
other costs, which may at any time be payable in connection with the Agreement,
together with all claims for damages arising from or in connection with the
failure to punctually and completely pay or perform such obligations, whether or
not such obligations are from time to time reduced or extinguished and
thereafter increased or incurred (collectively, the "OBLIGATIONS"). This
Guaranty is a guaranty of payment and performance, and not a guaranty of
collection, and Guarantor hereby undertakes and agrees, that if Customer or
Guarantor is in Default (defined below) hereunder for any reason, Guarantor
shall (i) punctually pay any such Obligations requiring the payment of money, as
an obligation for payment due and owing directly from Guarantor to Fleet and
without any abatement, reduction, setoff, defense, counterclaim or recoupment,
and (ii) punctually perform any and all Obligations not requiring the payment of
money for the benefit of Fleet, as an obligation for performance due and owing
directly from Guarantor to Fleet. Guarantor shall be deemed to be primarily
liable for each Obligation and not merely as a surety thereof.
2. ABSOLUTE, UNCONDITIONAL, JOINT AND SEVERAL NATURE OF GUARANTY. The
obligations of Guarantor hereunder are absolute, unconditional and irrevocable,
may not be cancelled, terminated, repudiated or rescinded for any reason, and
shall be joint and several with each Guarantor executing this Guaranty and each
other party that may be liable, directly or indirectly, for the payment or
performance of any Obligations. If this Guaranty is executed by more than one
party, the term "GUARANTOR" as used herein shall mean (unless the context
otherwise requires) "THE GUARANTOR AND EACH OF THEM" and each and every
undertaking shall be their joint and several undertaking. If Customer is a
partnership or a limited liability company, the obligations of Guarantor herein
contained shall remain in full force and effect notwithstanding any changes in
the individuals or members comprising the partnership or the limited liability
company, and the term "CUSTOMER" shall include any altered or successive
partnerships or limited liability companies. Guarantor shall not be released
from any obligations under or in respect of this Guaranty for any reason, nor
shall such obligations be reduced, diminished or discharged for any reason,
including:
(a) MODIFICATIONS ;INDULGENCES; PAYMENT APPLICATIONS. Any modifications,
renewals, or alterations of any agreement, document or instrument
relating to any Obligation; any indulgences, adjustments,
preferences, extensions or compromises made by Fleet in favor of
Customer or Guarantor or any other party; or the application of any
payments and receipts, by whomever paid and/or however realized, to
any amounts owing by Guarantor or Customer to Fleet in such manner
as Fleet shall determine in its sole discretion.
(b) CONDITION OF CUSTOMER OR GUARANTOR. Any insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability,
dissolution, appointment of a receiver for, or other similar
proceeding affecting Customer or Guarantor; any sale, lease or other
disposition of any of the assets of Customer or Guarantor; any
reorganization of, or change in the composition of the shareholders,
partners or members of, Customer or Guarantor; or any termination
of, or other change in, the relationship between Customer and
Guarantor.
(c) INVALIDITY OF OBLIGATIONS OR OTHER AGREEMENTS. The invalidity,
illegality or unenforceability of any Obligation for any reason
whatsoever, including, but not limited to: the existence of valid
defenses, counterclaims or off-sets to any Obligation; the violation
of applicable usury or other laws by any Obligation; or the lack of
authenticity or genuineness of any document or instrument relating
to the Obligations. This Guaranty shall be in addition to any other
guaranty or other security for the Obligations, and it shall not be
prejudiced or rendered unenforceable by the invalidity or
unenforceability of any such other guaranty or security.
(d) RELEASE OF CUSTOMER. Any complete or partial release of Customer or
any other party liable for any Obligation for any reason.
(e) RELEASE AND CARE OF COLLATERAL; STATUS OF LIENS. Any sale, transfer,
release, surrender, exchange, deterioration, waste, loss or
impairment of any property transferred or assigned by Customer,
Guarantor or any other party as collateral in respect of any
Obligation, or otherwise acquired by Fleet for lease to Customer, in
connection with the Agreement (collectively, the "COLLATERAL"),
whether negligent or willful; the failure of Fleet or any other
party to exercise reasonable care in the care, custody,
preservation, protection, sale or other treatment of any of any
Collateral; the failure of Fleet or any other party to create or
properly perfect Fleet's rights, title or interests in any
Collateral, or any mortgage, pledge, security interest, transfer or
assignment of any Collateral (a "LIEN"); the unenforceability of any
Lien; the creation of any lien or encumbrance on any Collateral in
favor of any other party, or the subordination of any Lien in favor
of Fleet to any such other lien or encumbrance; or the taking or
accepting by Fleet of any other security for, or assurance of
payment of, any Obligation.
(f) OTHER ACTION OR INACTION. Any other action or inaction on the part
of Fleet, whether or not such action or inaction prejudices
Guarantor or increases the likelihood or amount that Guarantor will
be required to pay or perform in connection with any Obligation
pursuant to the terms hereof.
It is the obligation of Guarantor to discharge the Obligations when due,
notwithstanding any occurrence, circumstance, event, action or omission
whatsoever, whether or not particularly described herein. Guarantor is not
entering into this Guaranty in reliance on the value or the availability of any
Collateral. Guarantor acknowledges that Guarantor may be required to pay the
Obligations, in full, without the assistance or support of any other party.
Guarantor has not been induced to enter into this Guaranty on the basis that any
party other than Customer will be liable to perform any Obligations or that
Fleet will look to any other party to perform any Obligation. Fleet may release,
or settle with, the Customer, any Guarantor, or any other party liable, directly
or indirectly, for the performance of any Obligation, all without affecting the
liability of any other party to this Guaranty. To the extent that this Guaranty
is secured by property of Guarantor, Fleet shall not be obligated to release its
security interest in such property until all applicable preference periods have
passed with respect to payments of Obligations made to Fleet.
3. WAIVERS. Guarantor waives:
(a) ACTION AGAINST OTHERS. Any right to require Fleet to: institute suit
or exhaust remedies against Customer or any other party liable for
any Obligation; enforce Fleet's rights in any of the Collateral or
other security which is at any time given to secure any Obligation;
enforce Fleet's rights against any other Guarantor or any other
party liable on any Obligation; join Customer or any other party
liable for any Obligation in any action seeking to enforce this
Guaranty; or exhaust any other remedies available to Fleet or resort
to any other means of obtaining payment or performance of any
Obligation.
(b) NOTICES. Notice of the execution, delivery or acceptance by Fleet,
Customer or any other party, of this Guaranty or any document,
agreement or instrument evidencing any Obligation; notice of the
amount of credit extended by Fleet to Customer at any time, whether
primary or secondary; notice of modifications or extensions of any
Obligation; notice of defaults, or other non-performance by Customer
in connection with any Obligation; notice of the transfer or
disposition by Fleet of any Obligation; notice of the repossession,
sale or other disposition of any of the Collateral; notice of the
acceptance of this Guaranty by Fleet; demand and presentation for
payment upon Customer or any other party liable for any Obligation;
protest, notice of intention to accelerate or notice of acceleration
of any Obligation, notice of protest and diligence in bringing suit
against Customer or any other party; and any other action or
inaction on the part of Fleet in connection with this Guaranty or
any Obligation.
(c) SUBROGATION. Any right which Guarantor may at any time have against
Customer, or any other party liable for any Obligation, as a result
of the performance by Guarantor of its obligations under this
Guaranty, including, but not limited to contractual, statutory and
common law rights of subrogation, reimbursement, indemnification,
set-off or contribution, until all Obligations owing to Fleet have
been paid and performed in full.
(d) SURETYSHIP DEFENSES. Any defenses which Guarantor may have or assert
against the enforcement of this Guaranty or any Obligation based
upon suretyship principles or any impairment of Collateral.
4. REPRESENTATIONS; WARRANTIES; COVENANTS. Guarantor hereby represents,
warrants, covenants and agrees that:
(a) BENEFIT. Guarantor is the owner of 50% or more of the capital stock
or membership interests or other equity ownership of the Customer,
and has received, or will receive, substantial benefit from the
agreements and transactions giving rise to the Obligations and this
Guaranty.
(b) AUTHORIZATION; ENFORCEABILITY. Guarantor has the form of business
organization indicated below and is and will remain duly organized
and existing in good standing under the laws of the state of its
organization and is duly qualified to do business wherever necessary
to perform its obligations under this Guaranty. This Guaranty has
been duly authorized by all necessary action on the part of
Guarantor consistent with its form of organization, does not require
the approval of, or giving of notice to, any governmental authority
and does not contravene Guarantor's certificate or articles of
incorporation or organization or by-laws or partnership or operating
certificate or agreement or similar organizational documents, This
Guaranty does not contravene or constitute a default under any
applicable laws, or any contract, mortgage, agreement, indenture, or
other instrument to which Guarantor is a party or by which it may be
bound. This Guaranty has been duly executed and delivered by
Guarantor and constitutes the legal, valid and binding obligations
of Guarantor enforceable in accordance with their terms except to
the extent that the enforcement of remedies hereunder may be limited
under applicable bankruptcy and insolvency laws, and the equitable
discretion of any court of competent jurisdiction. To Guarantor's
knowledge, there are no actions or proceedings pending or threatened
against or affecting Guarantor or any of Guarantor's property before
any court, administrative officer or administrative agency that, if
decided adversely, could affect the financial condition or
operations of Guarantor or the ability of Guarantor to perform its
obligations hereunder.
(c) ACCESS TO INFORMATION; NO REPRESENTATION BY FLEET. Guarantor has
adequate means to obtain continuing and sufficient information
concerning the financial and business condition of the Customer and
other parties liable in respect of the Obligations. Neither Fleet
nor any other party has made any representation, warranty or
statement to Guarantor in order to induce Guarantor to execute this
Guaranty.
(d) SUBORDINATION. All present and future indebtedness of Customer to
Guarantor ("SUBORDINATED DEBT") shall be and hereby is subordinated
to the prior payment and performance of all Obligations, and is
hereby assigned and transferred to Fleet and pledged as additional
security for the payment of the Obligations of the Customer and the
obligations of the Guarantor hereunder. Except for the
capitalization of the Subordinated Debt, Guarantor shall not demand
or accept payment of, or otherwise cancel, set-off or otherwise
discharge any part of, the Subordinated Debt without the prior
written consent of Fleet, provided, however, that for so long as
there is no default hereunder or in connection with the Obligations
or the Subordinated Debt, Guarantor may receive and Customer may pay
(but not prepay ,whether or not permitted or contemplated by the
terms of the Subordinated Debt) principal and/or interest or other
scheduled installment payments of Subordinated Debt from Customer.
Upon the request of Fleet, Guarantor shall deliver to Fleet a
certified statement of the outstanding Subordinated Debt, specifying
in detail the time at which permitted payments of Subordinated Debt
were made, if any, and such other information as Fleet may request.
(e) FINANCIAL CONDITION; SOLVENCY. As of the date hereof, and after
giving effect to this Guaranty and the contingent obligations
contained herein, Guarantor is solvent and has assets which, when
fairly valued, exceed its liabilities. The performance of the
obligations of Guarantor hereunder will not cause Guarantor to
exceed its ability to pay its debts as they mature, and this
Guaranty is made without any intent to hinder, delay or defraud
either present or future creditors, purchasers or other interested
persons.
(f) FINANCIAL REPORTS. Guarantor will provide Fleet with: (i) (A)
Guarantor's consolidated balance sheet and related consolidated
statements of income and retained earnings certified by a recognized
firm of certified public accountants (acceptable to Fleet), within
90 days of the close of each fiscal year of Guarantor, (B) if
requested by Xxxxx, Guarantor's quarterly consolidated balance sheet
and consolidated related statements of income and retained earnings
certified by the chief financial officer of Guarantor, within
forty-five (45) days of the close of each fiscal quarter of
Guarantor, (C) all of Guarantor's Forms 10-K and 10-Q, if any, filed
with the SEC within thirty (30) days after the date on which they
are filed (by furnishing these SEC Forms, or making them publicly
available in electronic form, Guarantor shall be deemed to have
satisfied the requirements of clauses (i)(A), (B), or (C)); and (ii)
such other reports or information relating to the Guarantor and/or
Customer (or any affiliates of Guarantor or Customer) promptly upon
Fleet's request. Financial reports provided pursuant to clauses
(i)(A) and (i)(B) above shall be prepared in accordance with
generally accepted accounting principles consistently applied, each
on a comparative basis with the corresponding period of the prior
year. All credit, financial and other information provided by
Guarantor or at Guarantor's direction is, and all such information
hereafter furnished will be, true, correct and complete in all
material respects.
(g) ASSIGNMENT. Fleet may, at any time and without the consent of, or
notice to, Guarantor, assign all or any portion of its rights
hereunder to any other party to which all or any portion of the
Obligations are transferred, assigned or negotiated (an "ASSIGNEE").
Guarantor shall promptly execute and deliver to Fleet or its
Assignee an acknowledgment of assignment in form and substance
satisfactory to the requesting party which, among other things,
reaffirms the basic terms and conditions of the Obligations and this
Guaranty, and shall comply with the reasonable demands of Fleet or
any such Assignee in order to perfect any such assignment or
transfer. This Guaranty shall not be deemed to create any right in
any party except as provided herein and shall inure to the benefit
of, and be binding upon, the successors and assigns of Guarantor and
Fleet, provided that Guarantor shall not assign or delegate any of
its rights or obligations hereunder without the prior written
consent of Fleet.
(h) FURTHER ASSURANCES. Guarantor will promptly execute any documents
and other records, including, amendments to this Guaranty, and will
take such further action as Fleet may reasonably request in order to
carry out more effectively the intent and purposes of this Guaranty
and to establish, perfect and protect Xxxxx's rights and remedies
hereunder and in any Collateral or Subordinated Debt.
5. DEFAULT; PERFORMANCE OF OBLIGATIONS. If (a) Customer defaults in the payment
or performance of any Obligation, or (b) if there exists any event or condition
which, with notice and/or the passage of time, would constitute a default under
the Agreement (including any default relating to Guarantor or this Guaranty), or
(c) any representation or warranty of Guarantor herein or in any certificate,
agreement, statement or document furnished at any time to Fleet by or on behalf
Guarantor (including without limitation, any financial information), shall prove
to be or to have been false or incorrect in any material respect; or (d)
Guarantor shall fail to perform or observe any covenant (including without
limitation, any financial covenants), condition or agreement required to be
performed or observed by it hereunder or in connection with any Obligation, and
such failure shall continue for 10 days after written notice thereof to
Guarantor; or (e) if there is a liquidation, bankruptcy, assignment for the
benefit of creditors or similar proceeding affecting the status, existence,
assets or obligations of Customer or any Guarantor or other party liable to
Fleet in respect of the Obligations (each of the foregoing being hereinafter
referred to as a "DEFAULT"), then the Obligations of Customer shall, at the sole
option of Fleet, be deemed to be accelerated and become immediately due and
payable by Guarantor for all purposes of this Guaranty, and Guarantor shall (i)
immediately pay directly to Fleet all such Obligations owing to Fleet by reason
of acceleration or otherwise (including without limitation, any rent, liquidated
damages, principal or interest payments or balances, fees, other installments or
any other accrued or unaccrued amounts with respect to such Obligations),
irrespective of whether a Default exists relating to Customer, and
notwithstanding any stay, injunction or other prohibition preventing
acceleration of any Obligations against Customer, and (ii) promptly perform all
other Obligations. Guarantor shall be liable, as principal obligor and not as a
surety or guarantor only, for all attorneys' fees and other costs and expenses
incurred by Fleet in connection with Fleet's enforcement of this Guaranty,
together with interest on all amounts recoverable under this Guaranty,
compounded monthly in arrears, from the time such amounts become due and payable
until the date of payment at the lesser of Fleet's then current late charge rate
of interest or the highest rate permitted by applicable law. If Fleet is
required to return any payment made to Fleet by or on behalf of Customer,
whether as a result of Customer's bankruptcy, reorganization or otherwise,
Guarantor acknowledges that this Guaranty covers all such amounts,
notwithstanding that the original of this Guaranty may have been returned to
Guarantor and/or otherwise canceled.
6. GOVERNING LAW; MISCELLANEOUS. THIS GUARANTY AND THE LEGAL RELATIONS OF THE
PARTIES HERETO SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
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REGARDING THE CHOICE OF LAW. GUARANTOR CONSENTS TO THE JURISDICTION AND VENUE OF
THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES COURTS FOR THE SOUTHERN
DISTRICT OF NEW YORK, AS FLEET MAY ELECT OR IN ANY OTHER STATE OR FEDERAL COURT
AS FLEET SHALL DEEM APPROPRIATE, IN CONNECTION WITH FLEET'S ENFORCEMENT OF ANY
OBLIGATIONS UNDER OR IN RESPECT OF THIS GUARANTY. GUARANTOR HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO
THIS GUARANTY. Time is of the essence in the payment and performance of all
Obligations and all of Guarantor's obligations and liabilities owing to Fleet
hereunder. This Guaranty constitutes the entire agreement of Guarantor and Fleet
relative to the subject matter hereof, and there are no prior or contemporaneous
understandings or agreements, whether oral or in writing, between the parties
hereto with respect to the subject matter hereof. No subsequent modification of,
or supplement to, this Guaranty shall be enforceable against any party hereto
unless the same is in writing and is duly signed by an authorized officer or
representative of the party against whom enforcement is sought. All
communications and notices provided for herein shall be in writing and shall
become effective (i) upon hand delivery, (ii) upon delivery by an overnight
delivery service, (iii) upon two (2) business days after being deposited in the
U.S. mail with proper postage for first-class mail prepaid, sent by registered
or certified mail, return receipt requested, and addressed to Fleet or Guarantor
at their respective addresses set forth herein, or such other address as either
party may hereafter designate by written notice to the other, or (iv) when sent
by telecopy (with customary confirmation of receipt of such telecopy) on the
business day when sent or upon the next business day if sent on other than a
business day.
The undersigned, pursuant to due corporate, limited liability company or
partnership authority, as appropriate, has or have caused this Guaranty to be
executed as of the date set forth below.
Dated as of: August 25, 2004
Witness/Attest/Notary Public: PFSWeb, Inc., a Delaware corporation
(Organization ID: 3062550)
_______________________________ By:________________________________
Print Name:__________________________ Print Name: _________________________
Print Address:_______________________ Print Title:_________________________
GUARANTOR NOTICE ADDRESS:________________ Guarantor's Taxpayer ID:___________
________________
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