GUARANTY
Exhibit 10.4
THIS GUARANTY (this “Guaranty”) is made as of the 24 day of March,
2008, by US DRY CLEANING CORPORATION
(the “Guarantor”), to and with NEWSTAR FINANCIAL, INC., a
Delaware corporation with an address at 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxxxxxxx 00000 (hereinafter referred to as the “Lender”).
NOW, THEREFORE, in order to induce the
Lender to enter into the aforesaid loan transactions and in consideration of the
premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby covenants and
agrees as follows:
Section 1. Definitions. Capitalized terms used in
this Agreement without definition have the identical meanings assigned to them
in the Time Note.
Section
2. Agreement
to Guaranty. The
Guarantor, as primary obligor and not merely as surety, hereby, absolutely,
unconditionally and irrevocably, guarantees: (i) the due and punctual payment in full
(and not merely the collectibility) by the Borrower of the principal of the Time Note, and the
interest thereon, when due and payable, according to the terms of the Time Note,
whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§ 362(a)), (ii) all costs of collection and expenses, including
reasonable attorneys’ fees incurred by the Lender to collect the Guaranteed
Obligations from any party liable for the payment thereof, whether as maker,
endorser, guarantor, surety or otherwise, or in protecting, enforcing or
realizing upon the Lender’s rights in connection with any collateral securing
the Guaranteed Obligations or any guaranty thereof (all of the indebtedness, obligations and
liabilities described in this Section 2 are collectively hereinafter called
the “Guaranteed
Obligations”).
Section
3. Further
Agreements. The Guarantor also agrees: that this
Guaranty shall not be impaired by any modification, release or other alteration
of any of the Guaranteed Obligations or arrangements whatsoever with the
Borrower or anyone else; that the liability of the Guarantor is direct and
unconditional and may be enforced without requiring the Lender first to resort
to any other right, remedy or security; that if the Borrower or Guarantor should
at any time become insolvent or make a general assignment, or if any petition in
bankruptcy or any insolvency or reorganization proceedings shall be filed or
commenced by, against or in respect of the Borrower or the Guarantor, any and
all Guaranteed Obligations of the Guarantor shall, at the Lender’s option,
forthwith become due and payable without notice; that the Lender’s books and
records showing the account between the Lender and the Borrower shall be
admissible in any action or proceedings, and shall constitute prima facie proof
thereof; that this Guaranty is a continuing Guaranty; that nothing shall
discharge or satisfy the liability of the Guarantor hereunder except the full
payment and performance of all of the Borrower’s said debts and Guaranteed
Obligations to the Lender with interest; and that any and all present and future
debts and obligations of the Borrower to the Guarantor are hereby waived and
postponed in favor of and subordinated to the full payment and performance of
the Obligations.
Section
4. Waivers
by Guarantor. The Guarantor waives, for the benefit of Lender: (a) any
right to require the Lender, as a condition of payment or performance by the
Guarantor, to (i) proceed against the Borrower, any other guarantor of the
Guaranteed Obligations or
any other Person, (ii) proceed against or exhaust any security held from the
Borrower, any such other guarantor or any other Person, (iii) proceed against or
have resort to any balance of any deposit account or credit on the books of the
Lender in favor of the Borrower or any other Person, or (iv) pursue any other
remedy in the power of the Lender whatsoever; (b) any defense arising by reason
of the incapacity, lack of authority or any disability or other defense of the
Borrower or any other guarantor including any defense based on or arising out of
the lack of validity or the unenforceability of the Guaranteed Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
the Borrower or any other guarantor from any cause other than payment or set-off
in full of the Guaranteed Obligations; (c) any defense based upon any statute or
rule of law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon the Lender’s errors or omissions in the
administration of the Guaranteed Obligations, except behavior which amounts to
bad faith, willful misconduct or gross negligence; (e) (i) any principles or
provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof and any legal or equitable discharge of the Guarantor’s
obligations hereunder, (ii) any rights to set-offs, recoupments and
counterclaims other than as provided in the Time Note, and
(iii) promptness, diligence and any requirement that the Lender protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) except as expressly provided for herein, notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Loan Documents or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notices of any extension of credit to the
Borrower and any right to consent to any thereof; (g) any right of
subrogation, reimbursement or indemnity whatsoever, and any right of recourse to
security for the debts and Guaranteed Obligations of the Borrower to the Lender
and the Guarantor until all of the Guaranteed Obligations are paid in full;
and (h) any defenses or benefits
that may be derived from or afforded by law that limit the liability of or
exonerate guarantors or sureties, or which may conflict with the terms
hereof.
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The
Guarantor waives any objection to the issuance of such prejudgment remedy based
on any offsets, claims, defenses or counterclaims to any action brought by the
Lender (other than payment in full of the Guaranteed Obligations or full set-off
under the Time Note).
Section
5. Transfer
of Guarantor’s Property. Without the Lender’s prior written consent after
full disclosure, the Guarantor shall not transfer any material portion of the
Guarantor’s property, real or personal, or release any contract right or claim
which constitutes a material portion of the Guarantor’s net worth, either
voluntarily or involuntarily, absolutely or collaterally, without receiving full
fair market value therefor. The Guarantor agrees that any transfer or
release in violation of the foregoing provisions shall per se be deemed to have
occurred with an intent to defraud creditors. For purposes of the
foregoing, the term “material” shall be defined as any transfer or release
involving more than thirty percent (30%) of the Guarantor’s net worth in any
calendar year.
Section
6. Valid and
Binding Guaranty. This Guaranty shall be valid and binding
upon the Guarantor, regardless of any invalidity, irregularity, defect or
unenforceability of or in any of the Guaranteed Obligations. The
Guarantor further agrees that this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment of all or any part of the
Guaranteed Obligations is rescinded or otherwise must be restored by the Lender
to the Borrower or to the creditors of the Borrower or any representative of the
Borrower or representative of its creditors upon the insolvency, bankruptcy or
reorganization of the Borrower, or to the Guarantor or the creditors of the
Guarantor or any representative of the Guarantor or representative of the
creditors of the Guarantor upon the insolvency, bankruptcy or reorganization of
the Guarantor, or otherwise, all as though such payments had not been
made.
Section
7. Notices. All notices hereunder shall
be in writing and sent by certified or registered mail, return receipt
requested, or by overnight delivery service, with all charges prepaid, or
personally delivered, to the applicable party at the addresses set forth below,
or by facsimile transmission (including, without limitation, computer generated
facsimile), promptly confirmed in writing sent by first class mail, to the FAX
numbers and addresses set forth below.
If to Lender:
NEWSTAR FINANCIAL
INC.
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X.
Xxxxxxxxx, Managing Director
FAX No.: (000)
000-0000
With, except in the case of routine
correspondence, a copy (which shall not constitute notice)
to:
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Xxxx Xxxxx, Esq.
Xxxxxxx Xxxxxx Xxxxxx & Dodge
LLP
000 Xxxxxxxxxx
Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx
00000
FAX No.: (000)
000-0000
If to Guarantor:
US DRY CLEANING
CORPORATION
0000 XxxXxxxxx
Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx
00000
Attention: Xx. Xxxxxx X.
(Xxxxxx) Xxx, Chief Executive Officer
FAX No.: (000)
000-0000
With, except in the case of routine
correspondence, a copy (which shall not constitute notice)
to:
Xxxxxx,
Neale, Bender, Xxxxxx & Brill L.L.P.
00000
Xxxxxxxxxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx.
Xxxxxx Xxxxx
FAX
No.: (000) 000-0000
and
Xxxxxxxxx
Xxxxxxx, LLP
The Met
Life Building
000 Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attention: Xxxxxxx
X. Xxxxxxx, Esq.
FAX
No.: (000) 000-0000
or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
party complying as to delivery with the terms of this Section. All such notices
and correspondence shall be deemed given upon the earliest to occur of (i)
actual receipt, (ii) if sent by certified or registered mail, three (3) Business
Days after being postmarked, (iii) if sent by overnight delivery service, when
received at the above stated addresses or when delivery is refused or (iv) if
sent by facsimile transmission, when receipt of such transmission is
acknowledged.
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Section
8. Waiver of
Jury Trial. GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER
TO MAKE THE TIME LOAN AND ACCEPT THIS AGREEMENT.
Section
9. Consent
to Jurisdiction. Guarantor hereby submits to the jurisdiction of
the courts of the Commonwealth of Massachusetts and the United States District
Court for the District of Massachusetts, as well as to the jurisdiction of all
courts from which an appeal may be taken or other review sought from the
aforesaid courts, for the purpose of any suit, action or other proceeding
arising out of any Guaranteed Obligations under or with respect to this
Guaranty, the Time Note, or any of the transactions contemplated hereby, and
expressly waives any and all objections it may have as to venue in any of such
courts. Guarantor expressly submits and consents in advance to such
jurisdiction in any action or proceeding commenced in such courts, hereby
waiving personal service of the summons and complaint, or other process or
papers issued therein, and agreeing that service of such summons and complaint,
or other process or papers, may be made by registered or certified mail
addressed to Guarantor at the address set forth herein. Should
Guarantor fail to appear or answer any summons, complaint, process or papers so
served within thirty (30) days after the mailing thereof, it shall be deemed in
default and an order and/or judgment may be entered against it as demanded or
prayed for in such summons, complaint, process or papers. The
exclusive choice of forum set forth herein shall not be deemed to preclude the
enforcement of any judgment obtained in such forum or the taking of any action
under this Guaranty to enforce the same in any appropriate
jurisdiction.
Section
10. Commercial
Transaction. THE GUARANTOR ACKNOWLEDGES THAT THE TRANSACTIONS
UNDER WHICH THIS GUARANTY IS A PART ARE COMMERCIAL TRANSACTIONS.
Section
11. Successors
and Assigns. This Guaranty shall be binding upon the heirs,
executors, administrators, successors and assigns of the Guarantor and
shall inure to the benefit of the Lender’s successors and assigns. For the
purposes of this Guaranty, “Borrower” shall mean and
include any successor of the Borrower, including any representative of the
Borrower under the provisions of any state or federal law governing bankruptcy,
insolvency, receivership or reorganization.
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IN WITNESS WHEREOF, the Guarantor has
caused this Guaranty to be duly executed as of the 24th day of March, 2008.
GUARANTOR:
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US
DRY CLEANING CORPORATION
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By: __________________________
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Name:
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Title:
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